Gifts, Loans and Donations
This section is an excerpt from the Ontario Works Act, 1997 prescribed by the Province of Ontario.
Ontario Works Regulations
Determination of assets
39. (1) For the purpose of section 38, the following are not included as assets:
10. That portion of a student or trainee loan, grant or award approved by the administrator, so long as the person for whose benefit the loan, grant or award is provided remains in attendance in the program of study or training for which it is intended.
17. That portion of a loan that the administrator is satisfied will be applied within a reasonable period to the payment of first and last month’s rent necessary to secure accommodation for the benefit unit.
18. That portion of a loan that the administrator is satisfied will be applied within a reasonable period to the purchase of a motor vehicle required for a participant’s employment assistance activities or for a person to maintain employment.
Calculating income – General rule
48. (1) Subject to sections 49 to 54, income shall be determined for a month by adding the total amount of all payments of any nature paid to or on behalf of or for the benefit of every member of the benefit unit during the period determined by the Director.
(2) For the purposes of subsection (1), income shall include the monetary value of items and services provided to the members of the benefit unit as well as amounts of income deemed to be available to members of the benefit unit.
54. (1) The following shall not be included in income:
1. That portion of a loan, approved by the administrator, that is,
i. applied or will be applied to the operation of a business,
ii. applied on an exceptional basis for medically necessary health related reasons if no other government program is available for the purpose,
iii. guaranteed under section 8 of the Ministry of Training, Colleges and Universities Act or made under the Canada Student Financial Assistance Act and, in either case, received by or on behalf of a student and relating to tuition, other compulsory fees, books, instructional supplies or transportation for the purpose of the definition of “education costs”in subsection 1 (1) of Regulation 774 of the Revised Regulations of Ontario, 1990 (Ontario Student Loans made before August 1, 2001) made under the Ministry of Training, Colleges and Universities Act of for the purpose of section 11 of Ontario Regulation 268/01 (Ontario Student Loans made after July 31, 2001) made under that Act,
iv. guaranteed under subsection 8 of the Ministry of Training, Colleges and Universities Act or made under the Canada Student Financial Assistance Act, if, in either case, the proceeds are received by or on behalf of a student who is,
A. a part time student,
B. a dependent adult who is not a spouse included in the benefit unit or a sole support student as defined in subsection 1 (1) of Regulation 774 of the Revised Regulations of Ontario, 1990, or
C. a child on whose behalf temporary care assistance is being paid and who is not a sole support student as defined in subsection 1 (1) of Regulation 774 of the Revised Regulations of Ontario, 1990 made under the Ministry of Training, Colleges and Universities Act,
v. applied or will be applied to the purchase of a motor vehicle required for employment assistance activities or to maintain employment, or
vi. applied or will be applied to the payment of first and last month’s rent necessary to secure accommodation for the benefit unit.
vii. applied to the purchase of household items necessary for the well-being of one or more members of the benefit unit and approved by the administrator.
2.1 The portion of a grant or award, other than an award or grant under paragraph 2, or loan, other than a loan under subparagraphs 1 iii and iv, that is approved by the administrator for training or post-secondary education and that is or will be applied within a reasonable period to the cost of tuition, other compulsory fees, books, instructional supplies and equipment and transportation, if the person for whose benefit the grant, award or loan is provided is attending or will be attending the training or program of study for which it is intended.
6. That portion of a payment received from the sale or other disposition of an asset that is applied, or if the administrator approves, will be applied towards,
i. the purchase by a member of the benefit unit of a principal residence used by the benefit unit,
ii. the purchase of any other asset that, in the opinion of the administrator, is necessary for the health or welfare of a member of the benefit unit,
iii. the purchase of or conversion to an asset that is not included as an asset under section 39, or
iv. the purchase of or conversion to an asset that does not result in the recipient exceeding the prescribed limit for assets under section 38.
7. A donation received from a religious, charitable or benevolent organization.
8. Gifts or other voluntary payments up to a maximum of $10,000 for any 12-month period.
8.1 A gift or voluntary payment received for any of the following purposes, if the gift or payment is applied as soon as practicable for the purpose for which it was intended:
i. The purchase of a principal residence for the benefit unit.
ii. The purchase of a motor vehicle referred to in paragraph 5 or 5.1 of subsection
iii. To pay the first and last month’s rent necessary to secure accommodation for the benefit unit.
This policy is one aspect of a comprehensive service planning strategy designed to assist clients in achieving and/or maintaining a stable living environment that will enable him or her to participate in Ontario Works (OW) and achieve employment and independence.
While in receipt of OW, an individual may receive financial help from relatives or friends. Determining the type, frequency, value and source of the payment will assist the caseworker in assessing if the income is chargeable or non-chargeable. Regardless of whether the income is chargeable or non-chargeable, a detailed action plan must be developed to identify community supports that the client can access to assist him or her to manage financially without the additional income.
A payment can be in the form of money or support-in-kind, which may include but is not limited to: food, diapers, clothing, furnishings, appliances and assistance with rental and/or bill payments.
Factors to Consider
When determining eligibility and developing an effective action plan specific to gifts, loans and donations, consideration must be given to:
- value of each payment that the client receives
Money or support-in-kind that is given as a present with no expectation of repayment.
Money that is borrowed from an institution or an individual with a written agreement outlining the repayment schedule.
Money or support-in-kind that is provided by a registered religious, charitable or benevolent organization. A donation is considered non-chargeable income.
One-time or short-term payments.
The amount of the payment must be taken into consideration.
Any payments from an individual who has a legal obligation to support the participant or their dependants will continue to be deducted at 100% unless the payment is for a specific occasion such as a holiday or birthday.
Gifts and voluntary payments of small value are exempt as income up to a maximum of $10,000 over a 12 month period.
In addition, the following gifts will be fully exempt as income or assets:
- Gifts that will be applied to the purchase of a principal residence or an exempt vehicle; and
- Gifts that will be applied to the first and last month’s rent necessary to secure accommodation.
To allow sufficient time to use these funds, an asset exemption will be provided for a 12-month period for a principal residence and 6 months for an exempt vehicle or first and last month’s rent.
Example of Non-Chargeable Gift
A client receives a onetime payment of $450 to assist with their shelter costs. As this money was a gift used to meet a specific need of the client, it is treated as non-chargeable income and will not affect the client’s OW entitlement.
There are two types of loans that a client may receive – formal or informal.
Formal loans are loans from a recognized lending institution with a signed agreement and an established repayment schedule.
Informal loans are loans from sources such as family or friends.
A portion of, or the full amount of the loan is considered non-chargeable income in the following situations:
The total amount of loan must be reinvested for the development and maintenance of the business. Any portion that is used for other purposes is chargeable income.
Medically Necessary Health-Related Expenses
Loans received for medically necessary health related items are exempt where no other government provision is available to provide for the cost. This can include orthodontic care or necessary prescription medication not covered under Ontario Drug Benefit (ODB). This may be a one-time casual payment towards the cost of the required item. In other instances, the loan may be provided on an ongoing basis to offset the cost of the item pending receipt of assistance from the Trillium Drug Plan (TDP) or the Ministry of Health and Long Term Care’s Special Drugs Program.
Direct Post-Secondary Education Costs
Loans from family or friends may be exempted as chargeable income or assets where they are provided for direct school related costs such as tuition, books and compulsory fees where there is no government assistance available. In addition, the caseworker must review the individual’s participation requirements to assess if the education and training is part of their approved service plan.
Purchase of a Motor Vehicle
Purchasing a vehicle required to actively participate in an approved OW activity or to maintain employment.
Payment of First and Last Month’s Rent
Funds required for first and last month’s rent or utility deposits.
Purchase of Necessary Items
Loans used for the purchase of household items necessary for the well-being of one or more members of the benefit unit. Household items necessary for the well-being of the benefit unit are such items as groceries, clothing, furniture and appliances.
This project is one component of an overall city eviction prevention strategy. Funding has been provided to community agencies to assist with direct intervention to prevent eviction.
OW clients may have access to the Housing Stabilization Fund. However, if they do receive assistance from the Rent Bank, this assistance is non-chargeable.
Credit Card Advances
Advances from credit cards will be considered a formal loan and not considered as chargeable income, provided they are used to assist the client in meeting his or her basic needs such as purchasing food and paying shelter costs.
Advances used by the client for items other than basic needs will be considered chargeable income.
A donation, regardless of its value or frequency, received from a registered religious, charitable or benevolent organization is non-chargeable income.
Inheritances and windfalls of $10,000 or less can be considered a gift or voluntary payment. Gifts and voluntary payments up to a maximum of $10,000 over a 12 month period are exempt as income.