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Wednesday, April 11, 2007

Great idea, if they do it right this time 

This savings plan for parents of disabled children is an excellent idea -- with one possible Catch-22: provincial welfare rules.
Parent Dave Lareau liked what he heard.
"The bottom line is that kids with disabilities, depending on their ability to work and earn an income, are going to be on welfare, which is way below the poverty line, so what kind of quality of life will they have?" he asked. "It's all about what we can do to augment that without losing the benefit of welfare and other things so all of the right factors are built into this."
The problem is whether provinces will be required to give someone welfare if they have money available to them in a Registered Disability Savings Plan. Apparently the March Budget only "suggests" that disabled people be able to receive both RDSP payments and provincial income support.
The Finance department's Expert Panel on Financial Security for Children with Severe Disabilities reported on this problem when it made the RDSP recommendation:
All of the provinces and territories impose a means test on the social assistance that is made available to persons with disabilities. All impose a limit on the assets that a person can have in order to qualify for social assistance payments. All also impose an income test in order to qualify for social assistance and, in most cases, the amount of income received by a person with disabilities reduces (usually on a dollar-for-dollar basis) the amount of social assistance payable. Each province and territory has its own limits and exceptions. However, since the proposed Registered Disability Savings Plan is a new plan, there is no provision made for its capital value to be exempt from the asset test or for Disability Savings Payments to be exempt from the income test. Without some such exemptions there will be no point in establishing a Disability Savings Plan for those most in need of it as the result would be no more than a transfer from the federal treasury to provincial and territorial treasuries. It is also important that other provincial programs such as prescription drug programs that are income tested not be reduced as a result of the receipt by a Beneficiary of Disability Savings Payments.
And I sure hope their follow-through on this promise turns out to be better than their follow-through on the "equalization" promise.

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