How is my personal injury lawsuit affected if I am on OW or ODSP?

Posted on May 6, 2017

You were injured in a car accident and you are now a plaintiff in a personal injury action. There was a time after your accident when you received Ontario Works benefits or Ontario Disability Support Program benefits. In fact, maybe you are still receiving benefits when your lawsuit ends.

Take note: When you win your lawsuit or settle out of court, the Ontario government has the authority to “claw back” some of the damages (money) you receive from your lawsuit.The money clawed back reimburses the government for what it has paid to you in support benefits after the accident. The government claws back as much money as it can to fully reimburse itself but it cannot claw back more than what it has paid to you since the date of your accident.

The rationale for the claw back is: As a condition of initial and ongoing eligibility for financial support from OW or ODSP, a person has to have less than a certain amount of income and assets to their name. The government considers damages you receive from your lawsuit to be retroactive income and assets. Put another way, if you actually had this money in your possession after the accident (instead of having to wait for it), you would not have been entitled to benefits. So you are technically paying the government back for what it never would have paid you if you had the money in your possession earlier.

Although it might be of small comfort, the government exempts some money from claw back:

• Under Ontario Works, the first $25,000.00 you receive in net damages for pain and suffering is exempt from claw back.
   
• Under Ontario Disability Support Program, the first $100,000.00 you receive in net damages for pain and suffering is exempt from claw back.

There are exceptions to the general claw back of any compensation over the exempt amount of $100,000.00 for ODSP. For example, if you have future care needs (e.g. round-the-clock nursing care or ongoing rehabilitation therapy), it might be possible to shelter all or some of your damages if it can be proved to the government that those damages were designated by the court (or on settlement) for payment of your future needs. Also, some assets, such as a house and car, are “exempt” from inclusion in the government’s calculation of benefits payable. If your damages are earmarked for purchase of an exempt asset, the government might not claw it back. Your lawyer will know about these and other exceptions and whether or not any apply to you.

This article is not a substitute for legal advice. If you have any questions, please contact us at 519-946-4300.