Yes, it’s true! The BC government has actually done something positive for a change.
At present, adults who are receiving the Persons with Disability (PWD) pension, are faced with the burden of asset limits. You may remember from previous posts that the government would claw back PWD payments until a person’s total assets fell below $5,000 (with some exclusions).
The net result of PWD claw backs meant that any gifts or inheritances to the disabled individual could result in a net zero financial gain. How frustrating it must have been to gift money to a disabled person only to have the government take back that gift for their own purposes.
Some families were able to dodge the issue by setting up trusts for their children. The downside to trusts is that they can be difficult to set up and administer, putting them out of reach for the average family.
The BC government has now increased the asset limitation to $100,000 ($200,000 for a couple). This means you can gift money to a disabled adult or have them inherit money without the threat of a PWD claw back.
The new asset limit combined with a Registered Disposability Saving Plan (RDSP) which is exempt from the $100,000 limit, means that the vast majority of families will no longer need to worry about setting up a trust.
My hat is off to the BC government for doing the right thing. Now if they could just work on raising the PWD payments from the level that is well below the poverty line…….