Tuesday, November 24, 2015

Significant Increase in Assets Exempton for Persons Receiving Brititsh Columbia Disability Benefits

Earlier this month the Ministry of Social Development and Social Innovation announced that a person receiving Persons with Disabilities benefits from the Government of British Columbia will be able to have funds of up to $100,000 without it affecting his or her eligibility to receive the benefits. Here is an excerpt from the press release:

Beginning Dec. 1, 2015, the amount of assets that people receiving disability assistance may hold without losing eligibility for assistance will rise to $100,000 for an individual with the Persons with Disabilities (PWD) designation, and $200,000 for a couple where both have PWD designation. Currently, the asset limits are $5,000 and $10,000 respectively.

And for the first time in B.C., persons with disabilities will be able to receive cash gifts with no effect on their eligibility for assistance. Under current policy, people receiving income and disability assistance can only receive one-time gifts without affecting their eligibility.

In the case of an inheritance, the higher asset limits will free up many clients from having to set aside that money in a trust.

For those of my clients making wills leaving a significant amount of money to a child or other beneficiary who is receiving Persons with Disabilities benefits in British Columbia, I will continue to suggest in many cases that they create a discretionary trust for the beneficiary, rather than an outright gift. First, if the amount exceeds the new limit, then a trust will still be necessary for the beneficiary to continue to be eligible for the benefits. Secondly, the rules may change in the future, and perhaps the exemption may be lowered again.

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