On June 11, 2018, the Alberta government passed new legislation to allow for trusts to be set up to provide for individuals with disabilities without negatively affecting their eligibility for the Assured Income for the Severely Handicapped (AISH) program. This newly-passed legislation, An Act to Strengthen Financial Security for Persons with Disabilities (SA 2018, c 12), amends the AISH legislation and is a significant development in planning for the future of loved ones with disabilities.

To determine whether an individual is eligible for the AISH program, the applicant's assets are first assessed. Prior to this new legislation, a trust could be included in the calculation of his or her assets. This frequently resulted in applicants who were beneficiaries of a trust, including a trust used to manage an inheritance for the applicant, being ineligible for the AISH program. A person's interest in a trust is now explicitly excluded from the calculation of a person's assets. The provision in the regulations that permitted a trust to be deemed an asset of the person has been repealed. The new legislation also includes a one-year period within which assets that have otherwise been received, such as by a gift or outright inheritance, can be invested into a trust or other exempt asset, such as an RDSP.

For people with disabilities, and the loved ones who wish to plan for their futures, this is a significant development. It will allow parents to leave assets to their disabled child in a discretionary trust set up by their wills, without jeopardizing their child's ability to access AISH programs. In addition, individuals who were found to be ineligible for AISH benefits because they were a beneficiary in a trust may now be able to re-apply for AISH benefits.

If you would like more information on how this new legislation impacts planning for loved ones with a disability, a member of our Trusts, Estates and Wealth Preservation group in Alberta would be pleased to discuss it with you further.

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