Reporting an Inheritance to ODSP in Ontario: Timing and Penalties

An inheritance can be welcome news and a worry at the same time if you receive Ontario Disability Support Program (ODSP) benefits. The rules about income and assets are strict, and a sum that seems small can still change your benefits.

This article explains what ODSP asks you to report, how an inheritance is generally counted, ways to protect it, and what can happen if it is not reported. Your own situation may turn on details, so use this as a starting point for questions.

What you have to report

You must report to ODSP any income or other money that you or anyone in your family receives, and a windfall such as an inheritance is listed as an example. You must also tell your caseworker about an inheritance you expect to receive, not only one you already have.

Asset changes and new assets can be reported online through MyBenefits, by phone or by mail. Your report should include the nine-digit member ID shown on your monthly statement. The reporting guidance does not give a set number of days, so the safest approach is to report as soon as you know about the inheritance and ask your caseworker what timing applies to you.

How an inheritance is counted

Inherited money is generally treated as income in the month you receive it. Any amount you still hold the following month is treated as an asset.

There is an allowance. You and each family member can receive up to $10,000 in total in a 12-month period from gifts, inheritances, trust and life insurance payments and lottery winnings without affecting your income support. Amounts above $10,000 count as income in the month received, unless they are used for an approved disability-related item or service.

Assets matter too. The limit on non-exempt assets is $40,000 for a single person and $50,000 for a couple. These figures are current guidance and can change, so confirm them before you rely on them.

Inherited property and trusts

If you inherit property or possessions rather than cash, they are treated as assets, not income. Some are exempt, such as a home you live in or a car used as your primary vehicle.

Trusts can change the picture. Up to $100,000 of a trust may be exempt as an asset if it was funded by an inheritance or life insurance. A trust set up in a will for an inheritance is not considered income, and inherited money placed in a trust within six months may also qualify for the exemption. Whether a particular trust qualifies depends on how it is written, so it is worth having a lawyer review it before money is moved.

What happens if you do not report

Failing to report creates an overpayment, which is money you received but were not eligible to receive. It must be repaid, including after you leave ODSP. While you are still on ODSP, deductions are taken from your monthly income support until it is repaid.

What to do next

• Tell your caseworker about the inheritance, including one you only expect to receive.
• Have your member ID from your monthly statement ready.
• Keep copies of the will, estate correspondence and bank records showing when money arrived.
• Do not spend or move the money until you understand how it will be counted.
• Ask a lawyer about a trust or other planning before the funds are paid to you.

If you are thinking of refusing an inheritance, speak to a lawyer first. A refusal in Ontario may itself be treated as a gift or income for ODSP purposes, and the tax and benefit effects can differ.

Frequently asked questions