Structuring Child Support So It Would Not Cost a Disabled Son His ODSP

The situation

Hua drives for a rideshare app around Scarborough. Her partner Senthil does residential landscaping. Together their household runs on well under $45,000 a year, and neither of them owns much beyond a car and some tools. It is a blended family: Hua's son Pratheep, seventeen, lives with them, and Senthil has taken on a steady role in his day-to-day care alongside Hua and Pratheep's father, who lives separately.

Pratheep has a significant intellectual disability. He will need support for daily living indefinitely, and everyone in his life has always known that turning eighteen would not change that. What was changing was the paperwork. Hua and Pratheep's father had never formalized child support after their relationship ended years earlier, working it out informally instead. With Pratheep approaching adulthood and planning to apply to the Ontario Disability Support Program (ODSP) shortly after his eighteenth birthday, his father wanted to put something in writing. He found a template separation agreement online, filled in the numbers himself, and sent it to Hua to sign.

What the review found

Hua brought the draft to Treadstone Law before signing, mostly to check that the support amount was reasonable. It was the mechanics of the agreement, not the amount, that turned out to matter most.

Under the Family Law Act, a parent's duty to support a child does not automatically end at eighteen if the child cannot withdraw from parental care because of a disability. That part of the draft was sound in principle: Pratheep's father intended to keep paying support of about $450 a month past Pratheep's eighteenth birthday, which was fair given the household's modest income and his own.

The problem was where that money was going to land. The template directed monthly support payments straight into an account in Pratheep's own name once he turned eighteen — the ordinary approach for an adult child, and the wrong one here. ODSP treats most income received directly by an applicant as unearned income and reduces the monthly benefit by close to a dollar for every dollar received, after only a small monthly amount is disregarded. Structured this way, the $450 in monthly child support would not add to Pratheep's total support at all once he started receiving ODSP. It would simply replace ODSP dollars with support dollars, month after month, indefinitely. His father would keep paying, and Pratheep would end up no better off than if no agreement existed. Worse, if the support was ever paid as a lump sum or backdated amount rather than monthly, it also risked pushing his personal savings over the modest asset limit ODSP allows, which can suspend a benefit altogether until the excess is spent down.

None of this was obvious from reading the draft. It read like a normal, well-intentioned child support agreement. The trap was entirely about timing and structure, not the number itself, and it would not have shown up as a problem until months after everyone had already signed and Pratheep's ODSP application was underway.

What we did

1. Flagged the issue before the agreement was signed. Because Hua brought the draft in ahead of time rather than after signing, there was no clawback to undo, no benefit to reapply for, and no awkward conversation with ODSP about repaying an overpayment. The fix could happen on paper, quietly, before Pratheep's eighteenth birthday.
2. Explained the alternative to both parents. The practical answer was to route support into a trust for Pratheep's benefit instead of paying it to him directly. An absolute discretionary trust set up correctly for a person with a disability, sometimes called a Henson trust, is generally not counted by ODSP against either the income test or the asset test, because the beneficiary has no legal right to demand funds from it — the trustee decides when and how money is used for their benefit. Support paid into that kind of trust does not reduce the ODSP cheque the way support paid directly to Pratheep would.
3. Drafted a trust structure sized to the family's means. This did not need to be an elaborate estate planning trust. Given the household had few assets and modest support amounts, we built a simple trust document naming Hua as trustee, with Senthil as an alternate, holding the monthly support payments for Pratheep's benefit — covering things like transportation, personal items, and activities that fall outside what ODSP itself provides.
4. Rewrote the separation agreement to route payments correctly. The agreement was revised so that support of $450 a month continued exactly as Pratheep's father intended, but the payment clause directed funds to the trust rather than to Pratheep personally once he turned eighteen. We also added a clause addressing any support that had accrued but gone unpaid before signing, directing that amount into the trust as well rather than as a lump sum to Pratheep, to avoid tripping the asset limit.
5. Coordinated timing with the ODSP application. We advised the family to have the trust and the revised agreement fully in place before Pratheep applied, so that his application would show the correct picture from day one rather than requiring a later correction. We also flagged, in plain terms, that Pratheep's own future earnings from any part-time work would be treated differently by ODSP and pointed them to the program's own guidance for that question rather than guessing at figures that change over time.

The outcome

Pratheep's father signed the revised agreement without objection once the reasoning was explained to him — the support amount he had already agreed to did not change, only where it went. The trust was in place two months before Pratheep's eighteenth birthday. When he applied to ODSP shortly after, the caseworker reviewing his application saw a properly structured trust with no direct support income to count against him, and his benefit was assessed at its full amount.

Over a year, that difference meant Pratheep received the equivalent of roughly $5,400 in child support on top of his full ODSP benefit, rather than watching the two offset each other to a near standstill. Nobody in the family ever saw a clawback letter, an overpayment notice, or a benefit suspension, because the structure was right before the first payment under the new terms was ever made.

Hua and Senthil have since kept the trust as the standing mechanism for any future support adjustments, gifts from extended family, or savings set aside for Pratheep, so the same issue will not need solving twice. When Pratheep's grandmother wanted to leave him something in her will the following year, she was able to direct her lawyer to name the same trust rather than leaving funds to him outright, avoiding a second version of the exact problem this family had already solved once.

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