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.
What happens if you don't report the inheritance, is there a T4 at the end of the year?
ReplyDeleteThere 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.
DeleteLynne
My daughter inherited her dads house when he died.It was appraised at over 300.000 and has a lot owing on it.She can not afford the mortgage and utilities and wants to rent it out.Can she?Or does she have to sell it.
ReplyDeleteIf she has inherited the house, it's hers to do with as she pleases. Just one thing though...the debts of an estate should be paid before the assets are distributed so the mortgage should have been paid before she received it. Unless of course the will says otherwise.
DeleteLynne
My friend just inherited 45,000. Is going be able to put that in his account without welfare cutting him off or taking some of it?
ReplyDeleteMost likely, inheriting this amount of money will cause your friend to be cut off. This is because social assistance benefits in most provinces have an "asset test" which sets how much money a person can own while still qualifying to get public support.
DeleteHowever, the rule is not quite that simple. Most plans will allow a person to use gifts such as this to pay for certain things such as a vehicle or a home without affecting benefits. Since you have asked specifically about whether your friend can put it into his account, I suspect he will not use it for one of those allowed purchases.
Lynne
Hi Lynn, is the government notified when someone receives an inheritance?
ReplyDeleteAs a general rule, no. In an average estate where an executor or administrator sell a few assets and write cheques to the beneficiaries, no notice needs to be given.
DeleteHowever, in some cases they are notified because of the nature of the asset or the way in which the distribution is done.
For example, say you inherit an RRSP from your father. When the bank de-registers the plan and pays it to you, Canada Revenue Agency is notified. This is because you are jointly liable with the estate for the payment of tax on the RRSP.
As another example, individuals who receive provincial disability benefits or income support have to report their inheritance because it might affect their eligibility for the program.
So, to sum up, there is no requirement that ALL inheritances be reported but some specific situations require reporting.
Lynne
Is a person receiving disability welfare allowed to inherit a small some of money without losing their cheque?
ReplyDelete