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ODSP Disputes at the Conclusion of Catastrophic Claims

Rhona WaxmanTHE 8TH ANNUAL ADVOCACY CONFERENCE - APRIL 23RD 2008
Presented to: The Hamilton Law Association
Prepared by: Rhona L. Waxman Law Offices

At the conclusion of a personal injury claim issues often arise with respect to the Ontario Disability Support Program (ODSP).  There can be an issue as to whether or not ODSP is entitled to reimbursement. There can also be an issue with respect to whether the client is entitled to continue to receive ODSP.

Generally, the settlement or judgement is income in the month that it is received and is an asset thereafter.

Payments for lost income, for income replacement benefits and disability benefits are income. For the months they are received, they will disentitle the client to ODSP and ODSP will have a right of subrogation to the lost income for the period of time that it was paid.

Payments for pain and suffering, prejudgement interest on pain and suffering, and payments for expenses actually and reasonably incurred or to be incurred as a result of the injury or death are exempt from income up to $100,000.00.

The appropriate sections of the Regulation are Ontario Regulation 222/98, sections

  1. (1)(4) Subject to subsections (2) and (5), an amount received as damages or compensation for,

    1. pain and suffering as a result of injury to or the death of a member of the benefit unit, or
    2. expenses actually and reasonably incurred or to be incurred as a result of injury to or the death of a member of the benefit unit.

  2.  (1)(4.1) Subject to subsections (2) and (5), an amount received as an award for damages under clause 61(2) (e) of the Family Law Act to compensate for loss of guidance, care and companionship as a result of death or injury.

  3. (2) The total amount allowed under paragraph 13 of section 41 and paragraphs 4 and 4.1 of subsection (1) shall not exceed $100,000 unless the Director is satisfied that the amount exceeding $100,000,

    1. is paid with respect to expenses referred to in subparagraph 4 ii of subsection (1) and is used or is to be used for those expenses; or
    2. is used or is to be used for a purpose set out in paragraph 9 of subsection (1). O. Reg. 394/04, s. 10 (9); O. Reg. 262/06, s. 5.

The recent case of Mule v. The Director of Ontario Disability Support Program et al., Court File No.: DC-06-365 (Divisional Court), held that interest on general damages for pain and suffering constitutes exempt income.

With respect to assets, a person in receipt of ODSP may not have assets greater than $5,000.00 and still receive ODSP (s. 27(1) of O. Reg. 222/98).

Section 28 of the Regulations list assets that are exempt from the $5,000.00 limit. The list of exempt assets include damages or compensation for pain and suffering, expenses actually and reasonably incurred as a result of injury or death and compensation under the Family Law Act for loss of guidance, care and companionship.

Pursuant to the Mule case, prejudgement interest on these damages would also be exempt.

The maximum amount of the exemption for assets is $100,000.00. This is under s. 28(2) of the Regulations.
The appropriate sections are,

  1. (1) (14) Subjection to subsection (2), an amount received as damages or compensation for,

    1. pain and suffering as a result of injury to or the death or a member of the benefit unit, or
    2. expenses actually and reasonably incurred or to be incurred as a result of injury to or the death of a member of the benefit unit.

  2. (1) (14.1) Subject to subsection (2), an amount received as an award for damages under clause 61 (2) (e) of the Family Law Act to compensate for loss of guidance, care and companionship as a result of death or injury.

  3. (2) The total amount allowed under paragraphs 14, 14.1 and 14.2 of subsection (1) shall not exceed $100,000 unless the Director is satisfied that the person has made an appropriate arrangement for the administration of the amount exceeding $100,000 and that the amount exceeding $100,000,

    1. is paid with respect to expenses referred to in subparagraph 14 ii of subsection (1) and is used or is to be used for those expenses; or
    2. is used or is to be used for a purpose set out in paragraph 9 of subsection 43(1). O. Reg. 262/06, s. 2 (2).

Both with respect to income and assets, the Director has discretion to increase that $100,000.00 cap. The Director also has discretion to increase the $5,000.00 cap on non-exempt assets.
Asking the Director to exercise his or her discretion to increase the caps on income and assets can be of benefit to your client as it may permit your client to obtain the settlement and remain on ODSP. It may also have implications with respect to the amount of ODSP’s subrogated claim.

The Director can increase the cap over $100,000.00 if the amount represents money paid with respect to expenses actually and reasonably incurred or to be incurred, or if the money is to be used with respect to injury or disability.

The $5,000.00 cap can be increased if the asset is to be used to purchase an item or service the Director considers necessary for the health of the client or for disability related items or services as approved by the Director.

In order to get the Director to exercise his discretion, you need to write to him or her. The letter should be addressed to Legal Services Branch, Ministry of the Attorney General, 17th Floor, 56 Wellesley Street West, Toronto, Ontario, M7A 1E9.

In the letter, include the following:

  1. A brief biography of your client.
  2. Details of the accident.
  3. Details of the injuries.
  4. Settlement details, including heads of damages and the amounts received under each head of damage.
  5. Details of ODSP received.
  6. The expenses that are incurred or are to be incurred with respect to the injury.
  7. Cost of future care.
  8. Plan with respect to the use of the funds.
  9. Details of any structured settlement.
  10. Set out why you believe it is appropriate for the Director to exercise his or her discretion. Usually, this would be because there are insufficient funds to cover the costs of the expenses and care to be incurred.
  11. You should include copies of all medicals and, most importantly, the cost of future care report.

It is also vital that you contact ODSP prior to setting up a plan and certainly prior to the disbursal of any funds. Generally, I would call first and speak to somebody before sending the letter.

It would be extremely foolhardy not to get approval of a plan by ODSP prior to putting that plan in place.

In most cases where there have been insufficient funds to pay for the cost of future care, the Director is likely to exercise discretion and increase the maximums.

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