This article does not provide legal, or any professional advice. It is meant to provide information.
The Ontario Disability Support Program (ODSP) provides financial assistance for individuals with disabilities, including support for living expenses, health benefits, and employment. If you're receiving ODSP and want to work or start a business, you may be wondering how it affects your benefits. This guide explains how ODSP calculates earnings from employment and self-employment, what deductions are allowed, and how to report your income accurately.
I wanted to mention that all the information in this article is based on information from the Government of Ontario’s website in February 2025.
Disclaimer: This blog post is for informational purposes only and is not intended as legal or financial advice. Please consult with a qualified professional for personalized guidance regarding your specific situation.
ODSP and Employment
As of July 1, 2024, ODSP rates increased by 4.5%, bringing the maximum payment for a single person to $1,368 per month. While this is a step forward, the increase does not fully match Ontario's cost of living. However, ODSP allows recipients to earn income through employment or self-employment while maintaining some benefits.
If you are not attending high school or postsecondary school full-time, ODSP considers your net earnings (after deductions like income tax, Canada Pension Plan, and Employment Insurance). You can earn up to $1,000 per month without affecting your income support. For earnings above this threshold, only 75% is counted when calculating your new ODSP amount. 25% above the $1,000 limit is also fully exempt.
Non-disabled spouses and children over 18 who are not in school full-time can earn up to $200 per month before their income affects ODSP benefits. Anything above this amount is reduced by 50%.
Earnings must be reported monthly through MyBenefits, the Interactive Voice Response (IVR) system, or the Employment/Training Income Report form. ODSP will adjust your income support the following month based on the net earnings you reported.
Reporting Employment Income
When reporting income from a job, ODSP requires both gross pay (before deductions) and net pay (after deductions). This includes wages, tips, and any deductions like child or spousal support.
ODSP allows work-related deductions, which can lower the amount counted against your support payments. These include:
- Child care expenses (licensed care covered fully, unlicensed care covered up to $600 per child)
- Disability-related work expenses (specialized transportation, assistive technology, or services up to $1,000 per month)
For example, if you earn $2,200 per month in net pay but spend $150 on specialized transit (disability related expense), ODSP subtracts this amount from your reported earnings before applying deductions.
Self-Employment and ODSP
If you own a business, ODSP calculates your income differently. Rather than reporting income monthly, ODSP averages business earnings over the year and adjusts your ODSP support annually. Your net profit (income minus business expenses) is considered income.
ODSP allows self-employed individuals to claim business-related expenses, including:
- Supplies and tools
- Bookkeeping and accounting fees
- Marketing and advertising costs
Expenses such as employee wages and business losses cannot be deducted from ODSP calculations. If you have at least $100 in business expenses per month, you can claim a $100 Standard Expense Deduction without needing receipts, or you can submit detailed records for additional deductions.
Work-Related Benefits for ODSP Recipients
ODSP offers several benefits to help recipients transition into employment or self-employment:
- Work-Related Benefit: Provides $100 per month for each employed adult in the benefit unit. This is added automatically when employment is reported.
- Employment and Training Start-Up Benefit: Offers up to $500 every 12 months to cover work-related expenses, such as clothing, transportation, and tools.
- Employment Transition Benefit: Provides a one-time $500 payment when transitioning from ODSP to paid work.
These benefits help ease the cost of starting a job, making it easier to maintain employment while on ODSP.
Example: ODSP Income Calculation for Employment
Let’s say you are receiving the maximum ODSP support of $1,368 per month and begin working as a social worker, earning $3,000 in gross pay and $2,200 in net pay per month. You also need a $150 paratransit bus pass for work.
Here’s how ODSP would calculate your income:
1. Subtract exemptions:
$2,200 (net pay) - $150 (disability-related work expense) = $2,050
2. Apply ODSP exemptions:
First $1,000 is exempt → $2,050 - $1,000 = $1,050
25% is also exempt → $1,050 × 0.25 = $262.50
3. Apply ODSP deductions:
75% above the $1,000 that is not exempt → $1,050 - $262.50 = $787.50 (75% that is not exempt)
4. Adjust ODSP support:
$1,368 (original ODSP payment) - $787.50 = $580.50
5. Add work related benefit
Add $100 to your total → $580.50 + $100 = $680.50
In this case, you would still receive $680.50 in ODSP support while earning $2,200 in employment income, giving you a total monthly income of $2,880.50.
Example: ODSP Income Calculation for Self-Employment
Now, let’s say you run your own social work practice and make $24,000 in revenue per year. After deducting $250 per month in bookkeeping and advertising fees, your monthly business profit is $1,750. You also need a $150 bus pass.
1. Subtract business and work-related expenses:
$2,000 (average monthly revenue) - $250 (business expenses) = $1,750
$1,750 - $150 (disability-related work expense) = $1,600
2. Apply ODSP deductions:
First $1,000 is exempt → $1,600 - $1,000 = $600
25% is fully exempt → $600 × 0.25 = $150
3. Apply ODSP deductions:
75% above the $1,000 that is not exempt → $600 - $150 = $450 (75% that is not exempt)
4. Adjust ODSP support:
$1,368 (original ODSP payment) - $450 = $918
5. Apply the Work-Related Benefit:
Add $100 to your total → $918 + $100 = $ 1,018
In this case, you would still receive $1,018 in ODSP support while earning $1,600 in self-employment income minus your expenses, for a total monthly income of $2,618.
Reporting Your Income
ODSP requires all income to be reported monthly, even if it is exempt. If you have a regular job, report your net pay and deductions each month, and ODSP will adjust your payment accordingly.
For self-employment, report your gross and net business income monthly, but your ODSP payment will be adjusted once a year based on your annual income.
Why Understanding ODSP and Employment Rules Matters
Knowing how ODSP calculates income can help you maximize your earnings while keeping essential benefits. Whether you're starting a job or launching a business, understanding exemptions, deductions, and reporting requirements ensures you receive the correct ODSP support.
If you have questions about how your income affects your ODSP benefits, contact your caseworker or visit the official government website for more information.
If you would like more financial resources, you can check out my Ebooks on programs both on the provincial and federal level on Ontario Without Barriers.