If you are receiving Ontario Disability Support Program (ODSP) Income Support, you need to tell your caseworker about money you and your family receive, including money earned from running a business (self-employment).

When you earn money from running your own business, you can claim some of the business expenses. Under the Ontario Disability Support Program, your profit is the money you earn from your business minus approved business expenses.

The profits you and your family earn are considered income and may reduce your Income Support. As of September 1, 2013, you or any member of your family can earn up to $200 a month without having your income support reduced. If you have earnings, you will see this change in your October 2013 payment. Half of your net profits above $200 are exempt — this means half of your profits above $200 do not affect your eligibility or the amount of money you get for Income Support.

You can also claim some of your child care and disability-related work costs as deductions from your profits before they reduce your Income Support.

There are exceptions

We do not consider the profits of dependants under 18 years of age. Their profits are completely exempt. You do not need to tell your caseworker about their profits from running a business.

If you or members of your family are enrolled full time in high school or an approved post-secondary institution, the post-secondary education earnings exemption may apply to you. If you qualify, your profits are completely exempt, but you still need to tell us about your earnings each month.


Claiming business expenses

You have to claim at least $100 per month in business expenses. This is called the Standard Expense Deduction. You don't have to provide proof of your business expenses for this deduction.

If your actual business expenses are more, you can claim the full amount of your expenses. You may be asked to provide proof of your business expenses, such as receipts or invoices.

Here are some examples of business expenses that you can claim for deduction:

  • supplies
  • tools and equipment
  • bookkeeping and legal fees
  • advertising and business cards
  • rent for your place of business (does not include rent for your home).

You cannot claim all of the business expenses that may be allowed under the federal and provincial Income Tax laws. Here are some examples of expenses you cannot claim under the Ontario Disability Support Program:

  • wages for employees
  • gifts and entertainment
  • business losses
  • depreciation on business assets
  • conferences.

Your caseworker can help you figure out which business expenses ODSP allows.

It is important to remember that ODSP helps you become more financially independent. It's not meant to support and grow your business.

How profits from running a business affect your ODSP Income Support

  1. We look at your revenue (or gross income). This is the money you earn from running a business.
  2. We average this amount out over the year. For seasonal businesses, we average the amounts over the number of months the business is running.
  3. We deduct the Standard Expense Deduction of $100 per month for miscellaneous business expenses, such as office supplies, raw materials or tools. If your actual “allowable” expenses are higher, you’ll need to show your caseworker receipts, and the actual amount can be deducted.
  4. You can make up to $200 profit per month without a reduction to your income support. We apply this $200 earnings exemption to your monthly net profit.
  5. We calculate half your monthly profits above $200 (the other half is exempt).
  6. If you have child care expenses or disability-related work expenses, these are deducted from this amount.
  7. We subtract this final amount from your monthly income support.
  8. Then we give you the $100 per month Work Related Benefit each month you have a profit.

Example

Nancy runs her own business all year round. She has a total of $9,600 in business income/revenue this year. She had $100 in business expenses each month. She had no childcare or disability-related work expenses. Before starting her business, she received $1,053 a month in income support.

Step 1

Average Nancy’s business income/revenue over the year
$9,600 / 12 = $800 per month

Step 2

Deduct business expenses (- $100) to calculate net profits
$800 - $100 = $700

Step 3

Apply $200 earnings exemption to monthly net profit
$700 - $200 = $500

Step 4

Calculate half her monthly net profits above $200 (50%)
$500 x 50% = $250

Step 5

Subtract this amount from income support
$1,053 - $250 = $803

Step 6

Add Work Related Benefit (+ $100)
$803 + $100 = $903

Nancy will receive $903 from ODSP income support per month. Add this to her average net profits of $700 per month and she will have $1,603 each month.

What you need to report to your caseworker

You and your adult family members need to report:

  • the money you earn from running a business
  • your business expenses, and
  • your child care and disability-related work costs.

Your caseworker can tell you how to report this information.

We will use this information to calculate your ODSP Income Support. Your caseworker can help you figure out how your profits affect your ODSP Income Support.

Learn more