ODSP and OW Overpayments

My friend told me that she has been assessed with an overpayment from the Ontario Works office. What is this and how can I avoid it?

If you receive social assistance, an overpayment occurs when you receive money from the Ontario Works (OW) office or the Ontario Disability (ODSP) office that you are not entitled to and you are expected to pay it back. Normally you would have to pay it back through reductions in future payments while you are on social assistance (often 5% or 10% of your monthly entitlement until reimbursement is complete) or, if you are off social assistance, you would normally enter into a repayment plan.

If you are assessed with an overpayment by the OW or ODSP office, you are permitted to dispute it through the internal review process and, if not resolved, through the Social Benefits Tribunal appeal process.

There are numerous situations in which you could end up with an overpayment, however, in our experience, there are three common situations.

First, when you turn age 65, you are expected to apply for Old Age Security (OAS) and any other pensions you might be entitled to. It is not uncommon for people to start receiving their pension(s) and not inform the OW or ODSP office. When the pension income is not reported, it does not get deducted from the monthly payment as it should be. This means you are paid OW or ODSP money when you shouldn’t have been. This could apply to many other sources of income you may forget to report and could lead to a significant amount of overpayment.

Second, in families which are on OW or ODSP for a long time, the OW or ODSP recipient may not realize that they have to keep the OW or ODSP office apprised of any changes in all members of the benefit unit, including children. It is not uncommon for children to grow up, graduate from high school or post-secondary education, and go on to work while the OW or ODSP office is not aware of the changes. Employment income from children (in certain situations), as well other payments such as OSAP, impact the amount of OW or ODSP entitlement. If proper deductions are not made, then you are overpaid.

Third, in situations where one or more members of the benefit unit has employment earnings, if the earnings are not declared to the OW or ODSP office in a timely manner, an overpayment can arise. There is a cutoff time for reporting of income so that deductions are accurately reflected on the next monthly payment. If you miss this cutoff period and the deduction is not made, you are subject to an overpayment.

The best way to avoid an overpayment is to familiarize yourself with your obligations while on social assistance, the main one being reporting to the OW or ODSP any significant changes in any of the members of the benefit unit immediately, as well as any income received. Not all income is deductible but this will be assessed by the OW or ODSP office (you can also get legal advice on this).

This is legal information and not legal advice. If you need further information or need legal advice, please call our Intake Line at 416-441-1764 ext. 1 or complete our online Intake Form.