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Friday, April 1, 2011

Do I have to report an inheritance if I receive provincial benefits for handicapped persons?

Provincial government benefits for individuals who can't support themselves due to a handicap are based on both an asset test and an income test. This means that a person who has more money than the maximum amounts allowed by the provincial law can't receive the benefits. An individual's financial picture is assessed at the time benefits are first applied for, but the assessment is also ongoing while the person is receiving the benefits.

Recently I was asked whether a person receiving the benefits must report an inheritance. Inheriting money could, and sometimes does, push an individual over the maximum limit allowed, causing the person to lose the provincial benefits they had been receiving. Many families who receive provincial benefits tell me that the monthly cheque for the handicapped person is valuable, but not nearly as valuable as the subsidized access to medical, dental and optical care. Therefore losing the benefits can be a real detriment to many individuals.

This isn't a problem if the inheritance is millions of dollars, as receiving that much money would ensure that the individual would always be able to afford care. But for most of us, an inheritance is much more modest.

The answer to the original question is yes. You must report any changes in your financial situation, even if that means you might lose the government benefits. The question came from a reader in Alberta, so I am attaching a link here to a Tip Sheet for reporting changes to AISH. All provinces and territories have a similar reporting requirement.

2 comments:

  1. What happens if you don't report the inheritance, is there a T4 at the end of the year?

    ReplyDelete
    Replies
    1. There should only be a T-slip from an estate if interest earned on assets is being allocated out to the beneficiaries. Sometimes executors choose to do it that way because it makes it easier and cleaner to wrap up the estate. I couldn't say for sure whether there would be one in your case, but there isn't always one issued.

      Lynne

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