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Financial Health for Older Adults

15/11/2019

 

According to the Canadian Survey on Disability, just over 62% of Canada’s population aged 45 and over self-identify as having a disability which means that a large segment of our aging population will be living their retirement years with at least one disability. Having a disability comes with additional expenses and while there are many provincial and federal programs and benefits available to offset these costs, many are underutilized. Some are age dependent, while others are available to individuals of any age.

 

Under age 65

If you have a severe and prolonged disability (>12 months) and cannot work at any job on a regular basis, you may be eligible for the Canada Pension Plan Disability (CPPD) benefits provided you have made enough contributions to the CPP.

If you are ineligible for CPPD benefits, or the amount is low, and you require help with your living expenses, you may be eligible for the Ontario Disability Support Program (ODSP) which offers:

  • financial assistance with essential living expenses;
  • benefits including prescription drugs and vision care;
  • help finding/keeping a job, and career advancement.

If you already receive ODSP, it is very important to keep in mind that if you are expecting an inheritance, for example from your parents’ estate, this may jeopardize your eligibility in the program. There are tools available to ensure that your ODSP benefits are not compromised such as a Henson Trust or a Registered Disability Savings Plan (until age 59) among other things.

Just prior to age 65, you may be auto-enrolled (confirmed with a letter one month after turning age 64) or you will have to apply to start receiving the federal Old Age Security (OAS) and Guaranteed Income Supplements (GIS) and once they are in place, ODSP benefits will cease. OAS benefits are based on length of residency in Canada.

 

At age 65

You will automatically qualify for the Ontario Drug Benefit (ODB) program which helps pay for prescription drugs. Low income individuals may be able to have the ODB program’s $100 annual deductible waived and have the co-payments reduced to $2 per prescription.

Note: Some individuals may qualify for this program before age 65, if they are:

  • living in a long-term care home, home for special care or Community Homes for Opportunity
  • receiving professional home and community care services
  • receiving benefits from Ontario Works or Ontario Disability Support Program
  • enrolled in the Trillium Drug Program

 

No age limitations

 The federal Disability Tax Credit (DTC) is available for individuals with a severe and prolonged impairment (> 12 months) that requires life sustaining therapy (such as kidney dialysis) or impacts one or more of their daily activities of living – these being:

  • Seeing
  • Speaking
  • Hearing
  • Walking
  • Eliminating (bowel or bladder functions)
  • Feeding
  • Dressing
  • Mental functions necessary for everyday life

The DTC application form must be completed, signed by an appropriate medical practitioner and submitted to the Canada Revenue Agency who will determine whether or not you are approved. Being approved not only provides a reduction in the amount of payable income tax a person with a disability or their caregiver may have to pay, it also opens up eligibility to other programs such as the:

  • Medical Expense Tax Credit
  • Registered Disability Savings Plan
  • Home Buyers Tax Credit
  • Working Income Tax Benefit disability supplement
  • Home Accessibility Tax Credit

If you have high prescription-drug costs when compared to your household income (4% or more of your after-tax household income), you may qualify for the provincial Trillium Drug Program.

Should you require modifications to your home or vehicle as a result of a disability, you can apply for grant funding through the provincial Home and Vehicle Modification Program. Individuals who meet the program criteria can receive:

  • up to $15,000 lifetime maximum for home modifications, and/or
  • up to $15,000 every ten years for vehicle modifications

If you have a long-term physical disability, you can get up to 75% of the cost for equipment and supplies covered, such as wheelchairs and hearing aids, if you qualify for the provincial Assistive Devices Program.

 

For more information on how these can help with your financial planning, speak to a financial advisor/planner or accountant who is familiar with disability planning.

By Lisa Whittleton, Financial Advisor, True Life Insurance and Estate Solutions (www.truelifesolutions.ca)