Law Times

LAW TIMES COVERING ONTARIO'S LEGAL SCENE | APRIL 1, 2019 25 www.lawtimesnews.com BY JULIUS MELNITZER For Law Times T he intersection of govern- ment benefits and structured settlements could prove to be an area that presents chal- lenges for personal injury lawyers — even as issues relating to these benefits have made structures more attractive for clients. By way of example, the On- tario Disability Support Pro- gram, the HST credit and the Ontario government's hydro re- bate are all tied to income. The corker, however, is that while the Canada Revenue Agency does not treat structure payments as income, provincial authorities are all over the map in their treatment of structures for the purpose of calculating in- come eligibility for their various benefit and support programs. Alberta, for example, which has the country's richest disabil- ity benefits, is no longer taking structure income into account when assessing eligibility for As- sured Income for the Severely Handicapped Act. The situation in Ontario, however, is more complex. Un- til fairly recently, the province treated monies received from structures as income that was included in the calculation of its means test for ODSP eligibility. "The government looked at ODSP as a last resort, and they don't want anyone to be on the program if they can get money elsewhere," says Rita Levato, a lawyer and principal at McKellar. Troy Lehman, a partner at Barrie, Ont.-based personal in- jury boutique Oatley Vigmond LLP, explains that his firm rep- resents many clients who rely on ODSP. "[I]f their lawyers are not care- ful, they're always running the risk that the clients will become ineligible for the program when they receive their settlement," he says. "So, it's important for law- yers to do what they can to pre- serve their entitlement." Fortunately, Lehman says, structured settlements are "re- ally attractive" to judges. "That's because they know that if certain individuals, like people who are 20 [years old] and may have issues with im- pulse buying, don't use struc- tures, their dad will be calling me in five years because the money will be gone," he says. It was only in August 2017 that pressure and lobbying from dis- ability advocate the Ontario Brain Injury Association convinced the former Liberal government to re- consider — at least in part. Kyla Baxter, president of Bax- ter Structures in Toronto, says the changes to the ODSP regime are "extremely significant" in that injured parties will no lon- ger have to choose between pur- suing legal recourse and receiv- ing compensation awards and applying for disability support payments. "The changes were initiated originally on behalf of sexual assault victims. Following these changes, survivors (victims) can take full advantage of all a struc- ture can offer, with far greater f lexibility in the design of each plan," said Baxter in an emailed statement. "This can make all the difference in a sexual assault victim's life." "We tried to get the minister of community and social services to treat structures in the ODSP con- text in the same way as the feds treat structures for tax purposes," says Nathan Kikkert, an associ- ate at McKellar. But the Liberals weren't prepared to go as far as Alberta had gone. While the Liberals agreed that structures would not be treated as assets, they stipulated that the in- come derived from the structures was exempt only up to the exempt amount of the capital (the amount for pain and suffering and future care). The upshot is that struc- tures are now unique in their ability to preserve ODSP ben- efits. But it takes a fair amount of work on the lawyer's part. "You have to carefully consider the amounts allocated to eco- nomic loss and whether it applies to past or future earnings as well as making sure you understand the exempt categories under ODSP," says Mary-Anne Strong, a partner at Beckett Personal Injury Lawyers in London, Ont. "And you have to lay it out to ODSP in a very clear, fair and honest way." It's also important to be straight up with ODSP about fees, especially contingency fees, which can significantly reduce the client's take. "If you do that, you'll find that ODSP will deal with you reason- ably and will even consider al- lowing the fees to come entirely from the non-exempt categories, so that there is more left in the exempt categories," Strong says. As it turns out, even inter vi- vos, discretionary, non-vesting trusts — sometimes called Hen- son trusts — set up with a claim- ant's settlement monies will not work to preserve a claimant's ODSP benefits. The difference is that a plaintiff who creates a Hen- son trust is voluntarily putting the settlement monies out of reach. From the profession's per- spective, many lawyers are un- aware of the effect personal in- jury settlements could have on ODSP and other benefits. And that's a problem because lawyers who don't make the im- pact of settlement on government benefits clear to their clients could well be negligent. Indeed, struc- tured settlement specialists say it's really not very different from ignoring tax gross-up issues. "Most of our clients who are on or applying for ODSP need ODSP. They also need the safety and security of a structured set- tlement," says Baxter. LT — with files from Anita Balakrishnan Troy Lehman says structured settlements are 'really attractive' to judges. STRUCTURED SETTLEMENTS Your injured client needs more than a settlement. STRUCTURE IT EVERY TIME. 1.800.265.8381| www.mckellar.com Stand for the best guaranteed return for your client. Untitled-5 1 2019-03-27 11:16 AM Structures now unique in ability to preserve ODSP benefits

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