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Assets and Exemptions


Policy

Eligibility: May 1, 2005

Definition of Assets

Exemptions: September 30, 2014

Asset Limits for Persons Applying for PWD Designation: July 20, 2011

Asset-Related Sanctions: May 1, 2005

Types of Assets: January 30, 2013

Tax Refund: October 1, 2012

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Eligibility: May 1, 2005
May 1, 2005

Assets do not affect eligibility for income assistance or disability assistance when the value of the assets is within the exemption levels in Rate Table: Assets. [see Rate Tables] Where the value of assets exceeds the exemption levels, applicants and recipients are not eligible for income assistance or disability assistance, as they are required to use their assets for personal independence.

Assets are only assets if they can be converted to cash. All assets have an intrinsic monetary value; therefore, the term convert refers to the "ability" to sell the asset. The decision as to whether the asset is convertible is the responsibility of ministry staff to make based on information provided by the applicant or recipient.

In all circumstances, the onus rests with the applicant or recipient to provide reasonable documented evidence that the asset could not be sold.

Applicants and recipients are required to reasonably determine the value of assets and provide verification of value on request. If they do not provide verification, they may be determined ineligible for assistance.

Lump sum payments received under the Canada Pension Plan (CPP) Class Action Settlement Agreement as approved by the Supreme Court, Kelowna Registry in Action No. S50808, are treated as "other financial awards" and are exempt from unearned income up to the allowable asset level for the family unit.  Eligible exempt assets may be purchased and recipients will not be deemed to have inappropriately disposed of property or assets.

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Definition of Assets
December 1, 2003

Assets include any of the following:

  • cash (see cash assets)
  • equity in property
  • equity in investments or other financial instruments
  • equity in trust where the applicant or recipient has control over disbursements

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Exemptions: September 30, 2014
September 30, 2014

The following assets are exempt for the purposes of determining the assets of an applicant or recipient, for income assistance or disability assistance [see Hardship – Eligibility for Hardship Assistance for recipients of hardship assistance]:

  • clothing and necessary household equipment
  • one motor vehicle where the equity does not exceed $10,000 and the vehicle is generally used for day-to-day transportation needs

    Note: There is no limit on the value of a vehicle owned by recipients with the Persons with Disabilities designation.

    [see Policy – Types of Assets – Vehicles]
  • a family unit’s place of residence
  • money received or to be received from a mortgage on, or an agreement for sale of, the family unit’s previous place of residence if the money is either:

    • applied to the amount owing on the family unit’s current place of residence
    • used to pay rent for the family unit’s current place of residence
  • business tools
  • seed required by a farmer for the next crop year
  • basic breeding stock held by a farmer at the date of application for income assistance, and female stock held for stock replacement
  • essential equipment and supplies for farming and commercial fishing
  • fishing craft and fishing gear owned and used by a commercial fisher
  • an uncashed life insurance policy with a cash surrender value of the amount shown in Rate Table: Assets [see Rate Tables] or less
  • prepaid funeral costs
  • a tax refund under the Income Tax Act (Canada)
  • a child tax credit under the Income Tax Act (Canada)
  • a child tax benefit under the Income Tax Act (Canada)
  • a Universal Child Care Benefit under the Universal Child Care Benefit Act (Canada)
  • a goods and services tax credit under the Income Tax Act (Canada)
  • a harmonized sales tax credit under the Income Tax Act (BC)
  • a sales tax credit under the Income Tax Act (BC)
  • a refundable medical expense supplement [see Related Links – Income and Exemptions – Policy – Income Tax Refund]
  • individual redress payments granted by the government of Canada to a person of Japanese ancestry
  • individual payments granted by the government of Canada under the Extraordinary Assistance Plan to a person infected by the human immunodeficiency virus
  • individual payments granted by the government of BC to a person infected by the human immunodeficiency virus
  • individual payments granted by the government of Canada under the Extraordinary Assistance Plan to thalidomide victims
  • money from a lump-sum settlement paid by the government of BC to persons awarded compensation by an adjudicative panel in respect of claims of abuse at Jericho Hill School for the Deaf
  • money paid under the 1986–1990 Hepatitis C Settlement Agreement made June 15, 1999, except money paid under section 4.02 or 6.01 of Schedule A or of Schedule B of that agreement
  • money paid by the Government of Canada under a settlement agreement, to persons who contracted Hepatitis C by receiving blood or blood products in Canada prior to 1986 or after July 1, 1990, except money paid under that agreement as income replacement
  • an income tax refund, or part of an income tax refund, that arises by reason of a payment made by the government of BC to the government of Canada on behalf of a person who incurred a tax liability due to income received under the Forest Worker Transition Program
  • money received from the Common Experience Payment or through the Independent Assessment Process under the Indian Residential Schools Settlement Agreement
  • money paid to a person in settlement of a claim of abuse at an Indian residential school, except money paid as income replacement in the settlement
  • lump sum payments made to clients as members of the Canada Pension Plan (CPP) Class Action Settlement are exempt from unearned income up to the allowable asset level for the family unit
  • post-adoption assistance payments provided under the Adoption Regulation (BC)
  • assets exempt under the Self-Employment Program [see Related Links – Self-Employment Program]
  • assets held in asset development accounts [see Policy – Types of Assets – Asset Development Accounts]
  • assets held in trust for persons in special care facility or for persons with the PWD designation [see Related Links – Trusts]
  • payments granted by the government of BC as Interim Early Intensive Intervention Funding (renamed Autism Funding:  Under age 6 Program, effective February 1, 2005)
  • payments granted by the government of BC under section 8 of the Child, Family and Community Services Act, Agreement with child’s kin and others
  • payments granted by the government of BC under the Ministry of Children and Family Development’s At Home Program
  • payments granted by the Government of BC under the Ministry of Children and Family Development’s Extended Autism Intervention Program (renamed Autism Funding:  Age 6 – 18 Program, effective February 1, 2005)
  • payments granted by the Government of BC under an agreement for contributions to the support of a child to a person other than a parent of that child
  • funds held in a registered education savings plan (RESP) for which a recipient or a dependent child in a family unit is either a named beneficiary of the RESP, the subscriber to the RESP or both
  • a travel supplement provided under the authority of Community Living British Columbia (CLBC)
  • individual payments dispersed from the BC Institutional Legacy Trust Fund
  • a working income tax benefit, including a disability supplement under the Income Tax Act (Canada)

    Note: the working income tax benefit and disability supplement can be received either quarterly or annually and is exempt regardless of the frequency of payment
  • a quarterly Climate Action Tax Credit and the one-time Climate Action Dividend under the Income Tax Act (BC)
  • a retroactive compensation awards under, including interest for pain and suffering, made under the Criminal Injury Compensation Act, for claimants who were minor victims of assault and who registered their claim from 1980 to 1992 in which these compensation decisions were deferred.
  • eviction compensation payments are considered exempt up to the asset level of the family unit [see Related Links – Income and Exemptions – Policy –Eviction Compensation]
  • funds held in, or money withdrawn from, a Registered Disability Savings Plan (RDSP)
  • money from a lump-sum settlement paid by the Government of BC to persons awarded compensation in respect of claims of abuse at Woodlands School
  • money paid or payable from a fund established by the government of British Columbia, the government of Canada and the City of Vancouver in relation to a recommendation in the final report of the Missing Women Commission of Inquiry
  • payments granted by the government of BC under the Temporary Education Support for Parents program

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Asset Limits for Persons Applying for PWD Designation: July 20, 2011
July 20, 2011

Persons who intend to apply for the Persons with Disabilities (PWD) designation and who are in need of financial support may receive income assistance and retain their assets at the higher limits limits (including assets over the PWD level in the process of being transferred into a trust or RDSP) applicable to recipients of disability assistance, until their PWD designation is determined.

To qualify for income assistance, these applicants are required to meet all eligibility criteria under the Employment and Assistance (EA) Regulation, with the exception that their assets are to be tested at the higher limits allowed to recipients of disability assistance as noted above. [see Rate Table – Assets]. While waiting for the determination of their PWD designation, they are entitled to retain assets over the income assistance limits, but not exceeding the asset limits applicable to recipients of disability assistance except as noted above.

[see Related Link – PWD Designation – Designation Application.]

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Asset-Related Sanctions: May 1, 2005
May 1, 2005

Disposing of Property or Assets for Inadequate Consideration

Applicants and recipients may not sell an asset for an amount that is less than its intrinsic value. Doing so may result in a period of ineligibility or rate reduction.

This rule applies to disposal of assets within two years prior to application or while the recipient is in receipt of assistance.

[For information on the period of ineligibility or rate reduction, see Related Links – Sanctions.]

Recipients who receive a CPP Class Action Settlement lump sum payment and purchase eligible exempt assets will not be deemed to have inappropriately disposed of property or assets.

Disposal of Property to Reduce Assets

Applicants and recipients who decrease the value of their assets by giving them to family or others with the intent of reducing their assets to make themselves eligible for assistance may have sanctions applied to their family unit’s assistance.

This rule applies to disposal of assets within two years prior to application or while the recipient is in receipt of assistance.

Recipients who receive a CPP Class Action Settlement lump sum payment and purchase eligible exempt assets will not be deemed to have inappropriately disposed of property or assets.

[For information on the period of ineligibility or rate reduction, see Related Links – Sanctions.]

Failing to Accept or Pursue Assets

Applicants and recipients who fail to accept or pursue assets may be ineligible for assistance or may have a rate reduction applied to the family unit's assistance.

This rule applies to the failure to pursue or accept assets within two years prior to application for assistance or while the recipient is in receipt of assistance.

[For information on the period of ineligibility or rate reduction, see Related Links – Sanctions.]

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Types of Assets: January 30, 2013
January 30, 2013

Cash Assets

Cash assets are defined in regulation as money on hand, money in bank accounts, money orders, or cheques that can be immediately cashed.

Note: Asset limits as set out in Rate Table: Assets [see Rate Tables] include cash assets.

Lump sum payments received under the Canada Pension Plan (CPP) Class Action Settlement Agreement as approved by the Supreme Court, Kelowna Registry in Action No. S50808, are treated as “other financial awards” and are exempt from unearned income up to the allowable asset level for the family unit. Eligible exempt assets may be purchased and recipients will not be deemed to have inappropriately disposed of property or assets.

Vehicles

When determining eligibility for income assistance, a motor vehicle is exempt for the purposes of determining an applicant’s or recipient’s assets if it is generally used for day-to-day transportation needs and the equity in the motor vehicle does not exceed the amount shown in Rate Table: Assets. [see Rate Tables]

If the equity in the first vehicle is above the amount shown, the applicant or recipient is deemed to be ineligible due to assets in excess of the prescribed limit. Equity over the prescribed limit may not be added to the total family asset calculation.

The onus rests with applicants or recipients to provide documentation on the equity in their vehicle. The VMR (Vehicle Market Research) Canada Site may be used to verify a vehicle’s wholesale value and NADA (National Automobile Dealers Association) Guides to value other types of vehicles (e.g., motorcycles) [see Resources for Staff].

When determining the wholesale value of a vehicle, only the year, make, model, and mileage of the vehicle will be considered. Additions such as “upgrades” will not be considered. Example: 2004 Ford Focus 4 door station wagon (120,000 KM) with power locks and air conditioning would be treated as standard. Additions such as the air conditioning and power locks would not be considered when determining the wholesale value.

If the vehicle is older than the most current VMR Canada or NADA Guides listings and the value of a listed vehicle of similar make is less than the amount shown in Rate Table: Assets [see Rate Tables], the vehicle is not considered an asset. Once the wholesale value is determined, money owed on the vehicle must be deducted from the value to determine the equity.

A leased vehicle is not considered an asset.

Vehicle equity limits do not apply to any of the following:

  • persons with the Persons with Disabilities designation or their dependants
  • persons awaiting adjudication of a PWD application
  • parents of disabled dependent children
  • relative care providers of disabled children in the Child in Home of Relative Program or foster parents of disabled foster children in the Ministry of Children and Family Development’s foster care program

For care providers of disabled children, the Employment and Assistance Worker (EAW) must be satisfied that the dependent child has a disability and a need for transportation that only the applicant or recipient can provide and for which there are no reasonable alternatives. The EAW may request written or verbal confirmation from a health care worker confirming that these conditions exist. Either of the following is also acceptable as proof of a disability:

  • proof of the child’s enrolment in the At Home Program
  • the existence of a special needs case for the child on the system

A vehicle that has been modified for an adult or child with a disability is not considered an asset if all of the following apply:

  • a member of the family unit has a disability, and the vehicle modifications are necessitated by the disability
  • a member of the family unit is unable to use the vehicle without the modification
  • the modifications cannot reasonably be transferred to another vehicle

Jointly Owned Assets

When it is determined that an asset that is jointly owned cannot be disposed of because the other owner will not co-operate, the Supervisor may deem the asset not available. This decision is valid for a six-month period and may be extended for a maximum of two years.

Sale of Personal Property

Money received from the sale of personal property is considered to be an asset.

All or part of the money received from the sale of a home may be exempted as a personal asset for a limited time (ordinarily three months) in the following situations:

  • the client intends to invest the equity in the purchase of a primary residence
  • money is being used for rent or mortgage payments for the family unit’s current place of residence

Compensation Payments

A compensation payment considered exempt under Section 11 (1) ss. (o) – (v) and (ii) of the EA Regulation and Section 10 (1) ss. (o) – (v) and (ii) of the EAPWD Regulations may continue to be exempt if it is converted to a non-exempt asset. It is, however, the responsibility of the client to clearly document that the funds used to purchase this non-exempt asset originated directly from the compensation payment.

For example, if a client received a Hepatitis C settlement and invested those funds in a RRSP, the funds could still be considered a Hepatitis C settlement provided the client could clearly document their origin.

Business Assets

For participants in the ministry’s Self-Employment Program (SEP), the following assets are exempt when approved in the business plan:

  • any assets of the business, including business tools and equipment, that enhance the long-term viability or functionality of the small business
  • a reserve account of up to the amount shown in Rate Table: Assets [see Rate Tables] established to meet anticipated future business expenses
  • business loans used for permitted operating expenses or approved renovations, or deposited in the cash asset development account

Business assets (including cash asset accounts) are no longer exempt once participation in the self-employment program ends. [For more information, see Related Links – Self-Employment Program]

Asset Development Account Programs and Asset Development Accounts

An asset development account (ADA) Program is a savings program established and operated by an external agency, and is designed to encourage individuals with low incomes to save money for undertakings that will lead to, or enhance, self-sufficiency. For the period that an applicant or recipient is participating in an ADA Program, the funds in their asset development account are exempt as an asset.

An ADA Program must be approved by the ministry for the purposes set out in BCEA regulations in order for the savings and contributions in a client’s asset development account to be exempt as assets. Funds saved may only be used for the purposes of enhancing self-sufficiency. Examples of accepted purposes include:

  1. education leading to self-sufficiency
  2. skills training leading to self-sufficiency
  3. starting a self-employment enterprise leading directly to self-sufficiency, or for PWD and PPMB clients, to increased self-reliance and independence.

If an applicant or recipient does not use all or part of the money contributed to an asset development account for the purposes specified under the program, the asset exemption ceases to apply to that portion of the money not used for these purposes.

Ministry Approval of an ADA Program

Approval of an ADA Program for the purposes set out in BCEA Regulations may be granted by the Executive Director of the region on behalf of the Minister. In order for the ministry to assess whether an ADA Program meets the purposes set out in BCEA Regulations, ADA Program Operators must provide a description of the ADA Program including the following information:

  • how individual client asset development accounts will be managed
  • contribution amounts or matching ratios
  • duration of client participation
  • purpose(s) of accounts
  • how clients may withdraw funds from their ADA

Letter of Understanding

Once an ADA Program has been determined to be acceptable to the ministry, a Regional Executive Director may conditionally approve an ADA Program subject to signing a joint Letter of Understanding with the ADA Program Operator. A template for a letter of conditional approval, available from the regional Community Relations and Service Quality Manager (CRSQ), may be used by the regions for this purpose.

  • The Letter of Understanding will outline the commitment of the ADA Program Operator as outlined in the program information. A template for the Letter of Understanding is available from the regional CRSQ.
  • The Letter of Understanding must indicate that the ADA Program Operator recognizes any clients participating in an ADA Program approved by the ministry are subject to BCEA legislation and regulations.
  • The signed Letter of Understanding shall be kept on file in the region, and the Regional Executive Directors shall ensure that regional staff are advised of all ministry-approved ADA Programs operating in their areas.

Farm Assets

When farmland, excluding a house, is rented before being sold, any revenue obtained by an applicant or recipient is considered unearned income. When a farm is sold, the equity after the sale is considered an asset.

Registered Disability Savings Plans (RDSP)

The ministry’s Registered Disability Savings Plan (RDSP) policy allows eligible clients to hold funds in an RDSP as an exempt asset and receive disbursements from an RDSP as exempt income. RDSP disbursements can be used for any purpose and do not impact eligibility for hardship assistance, income assistance or disability assistance.

RDSP disbursements are exempt as an asset. A disbursement from an RDSP remains exempt even if it is converted to a non-exempt asset. It is, however, the responsibility of the client to clearly document that the funds originated directly from an RDSP.

For example, a client withdraws money from an RDSP and keeps the funds as cash while the client shops for a non-exempt vehicle. Both the cash and the non-exempt vehicle could still be considered exempt provided the client clearly documents the origin of the funds used to make the purchase.

Any ministry client can set up an RDSP if they meet the federal government’s criteria. To meet the federal government’s criteria, clients must be under 60 years of age and must apply and be found eligible for the Disability Tax Credit. Not all PWD clients will qualify for the Disability Tax Credit as provincial and federal disability criteria differ.

Up to $200,000 can be contributed to an RDSP. The federal government provides bonds and matching grants for contributions to RDSPs. Clients may also be eligible for a $150 gift to their RDSP from the Vancouver Foundation’s Endowment 150 program.

Two types of disbursements are permitted from RDSPs: Lifetime Disability Assistance Payments and Disability Assistance Payments. Lifetime Disability Assistance Payments are annual lifetime payments and Disability Assistance Payments are lump-sum payments. The type of payments and the payment amounts depend on how much was contributed to an RDSP and when.

Eligible clients may choose to transfer newly received assets into an RDSP (or trust), to avoid being over the asset limit in subsequent months [see Procedures].

Reporting Contributions
Clients do not need to report RDSP balances or contributions from outside their family unit, but are required to report personal contributions, contributions from their family unit, and disbursements. [see Procedures]

[For more information on RDSPs and Endowment 150, see Resources for Clients.]

Registered Retirement Savings Plans

Money held in Registered Retirement Savings Plans (RRSPs) is considered an asset for the purpose of determining eligibility for assistance. RRSPs may include any of the following:

  • guaranteed income certificates (GICs)
  • stocks
  • bonds
  • treasury bills
  • mutual funds

Redeemable RRSPs – RRSPs are often referred to as “locked in” or “non-redeemable”. Financial institutions use these terms loosely to mean that the money is invested for a term or time period and generally not intended to be cashed in or redeemed in that period of time. Financial institutions will, however, allow RRSPs to be redeemed with a financial penalty.

Non-Redeemable RRSPs (Locked-in RRSPs) – The Pension Benefits Standards Act (PBSA) provides regulatory authority for locked-in pensions. Regardless of how an RRSP is described by a financial institution or an applicant, only those that are locked in pursuant to the PBSA are unavailable for the purposes of income and assets eligibility criteria.

Locked-in pensions include employer-sponsored RSPs and RRSPs. By agreement between the employer and the bargaining unit, the locked-in pension funds may only be transferred into other locked-in RSPs or RRSPs as described in the PBSA. When employment ceases, the locked-in funds may not be paid out as a cash lump sum, but must be used to provide a retirement income, starting no earlier than age 55. These RRSPs are not considered assets for eligibility purposes.

Loans Credit and Gifts

Loans – If an applicant or recipient chooses to negotiate a cash loan, the loan amount is not included in the calculation of entitlement, as it is not defined as “earned” or “unearned” income. The amount, when received, is an “asset” in the form of cash and the recipient becomes ineligible if the asset exceeds the asset level for the family. This also applies to funds accessed from a line of credit, credit card or a reverse mortgage. However, to be considered a loan, repayment terms must exist prior to acceptance. If there are no repayment terms, the item may be considered a gift.

Gifts – The receipt of a gift is not included in the calculation of entitlement, as it is not defined as either “earned” or “unearned” income. A gift is considered an asset as stated in the definition of asset in the regulation. The receipt of an asset in the form of a gift will make the recipient ineligible for assistance if the value of the asset, including the gift, exceeds the asset exemption level for the family.

A gift may only be provided on a one-time basis. Gifts may not be periodic or ongoing. Periodic or ongoing payments fall within the definition of unearned income. [see Related Links – Income and Exemptions]

Trusts

The following client types may transfer assets into a discretionary trust or a non-discretionary trust, under certain conditions, without affecting eligibility for assistance:

  • Clients who have the PWD designation.
  • A client who resides in a private hospital or a special care facility (other than a drug or alcohol treatment centre)
  • Clients or applicants awaiting a PWD adjudication decision or completing a PWD Application form [for more information, see Persons with Disabilities Designation – Designation Application]

[For information on policy regarding trusts, see Related Links – Trusts]

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Tax Refund: October 1, 2012
October 1, 2012

Tax refunds are exempt as assets for the purposes of determining the assets of an applicant or recipient of income assistance or disability assistance. For example, if an applicant has $3,000 in a bank account from an income tax refund, it would be considered exempt.

Tax refunds are fully exempt regardless of how many years of tax refunds are received.

It is the responsibility of the client to clearly document that the funds originated directly from a tax refund.

Clients can use tax refunds to purchase other exempt assets and they will not be deemed to have inappropriately disposed of property or assets. If a client purchases a non-exempt asset, it would be considered as part of their general asset limit.

Hardship cases are not eligible for income tax refund exemptions.

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