Did You Know That 77% of Canadian Adults with a Disability Live in Poverty?

It’s a staggering statistic but adults who are disabled in Canada and who are not able to work because of their disability, are entitled to receive financial assistance from their provincial government. But the maximum monthly benefit an person living away from the family home is entitled to receive, is well below that of the national poverty line. Did you know that people with a disability in receipt of social benefits, may not posses liquid assets in excess of $2,500 or up to $5,000 – depending on their local provincial regulations. Any income is clawed back and assets in excess of governments limits, will result in a loss of their disability benefits until they are spent down to the asset limit.

A person who receives disability benefits often live a precarious existence. Many spend 60% or more of their monthly benefit check on rental accommodation alone and they are forced to use the food bank to supplement their daily diet. With paying rent, transportation, telephone or cable TV there is nothing left over for food, clothes, household items and bedding. Living on a disability benefit is not “living in the the lap of luxury,” it’s barely an existence and still they are expected to get by. A future like this is not the kind of future picture that any parent would want for their child with a disability.

So the question is, what can you do about it? You can wait and watch to see what happens. You can stand by hoping for something lucky to happen and wonder if it will. Or you can make up your mind and decide now to make things happen. It’s totally up to you.

Proper planning for the future financial security of your child with a disability is absolutely essential. At the same time there is a concern that any planning should not jeopardize their future government disability benefits. Under these circumstances, parents must make proper plans in the event of their death for several other reasons:

* There must be full consideration for the future lifestyle of their child with a disability.

* There must be full consideration for the future lifestyle of their child with a disability.

* There must be full consideration for their child’s brothers and sisters or their inheritance could possibly be subsequently affected by the needs of their sibling with a disability.

Most parents believe in treating all their children equally, but this may not be the case for a child who is receiving government disability benefits. Many government programs will be reduced or discontinued if the child has assets in excess of the minimum asset limit. Parents are faced with the dilemma of maintaining government benefits while respecting the legislation and treating all their children equally. There are alternatives that can provide some security while protecting their child’s entitlement to disability benefits and other government services.

Option 1. An Absolute Discretionary trust:

With an absolute discretionary trust the assets and the income are not considered to be a liquid asset of the trust beneficiary. The funds in the trust will be spent for the benefit of the trust beneficiary at the absolute and unfettered discretion of the trustees. This protects the property in the trust from government benefits, because the beneficiary of the trust is deemed to legally not own the assets. On the occasion of a death of the beneficiary should it occur, any assets remaining in the trust can be distributed to the beneficiary’s siblings or else their grandchildren or they can be donated to a charity as a future gift.

A Living Legacy:

Another alternative is the use of a Life TRUST life insurance policy. This plan will pay a lifetime income into an Absolute Discretionary trust for a child with a disability without incurring estate costs and probate fees or reducing the inheritance of the child’s brothers and sister’s. The attraction of this type of plan is that the family can provide a lifetime income for their child without affecting the inheritance of their child’s brothers and sisters. For one parent families or families with limited estate assets this is an affordable alternative that will provide their child with an enhanced lifestyle after they’ve gone.

If people with a disability are to have the financial means to command a lifestyle above the poverty line its essential that families prepare a comprehensive plan for their child with a disability.

So the question is, will your disabled child have the resources to purchase recreational equipment, tickets to a theater or to a cultural event, be able to buy new clothes, have a vacation or even just have friends over for a pizza night? Have you got the plans in place to make that happen? Or will your child eke out a living limited to the allowance of a few government benefits? It’s up to you. You can make it happen.

Would you like more tax credit disability information, then visit John Dowson’s , Life-Trust site tohave your questions answered about Disability tax credits for your needs. Pick up the phone and give us a Toll Free call at 1-800-638-7256.