In May 2025, Ontario did something rare and sensible. It announced that the new Canada Disability Benefit (CDB) would not be clawed back from Ontario Disability Support Program (ODSP) payments. Most provinces followed suit. Only Alberta did not.
For once, new money really is new money. People on ODSP who qualify for the CDB actually keep both.
This is especially welcome for people with disabilities who keep working or volunteering despite health challenges. For once, their modest wages aren’t punished. Imagine: getting paid a little and actually keeping it.
But here’s the problem: all this progress retires at 65 — whether someone retires or not.
When people with disabilities become seniors, they cease to be eligible for ODSP and the CDB. They move onto Old Age Security (OAS), the Guaranteed Income Supplement (GIS) and Canadian Pension Plan (CPP) retirement income.
On paper, this looks tidy: one set of programs ends, another begins. But GIS has one of the harshest earnings tests in the country. Only the first $5,000 of wages are exempt. That threshold hasn’t budged since 2020, isn’t indexed to inflation, and is now the lowest among eight major income programs, including ODSP, the Canada Workers Benefit and the Canada Child Benefit.
The result: people are penalized simply for working a few hours or even volunteering.
Consider Tim, a hypothetical 64-year-old in Toronto living with a disability.
Tim receives $1,408 a month from ODSP plus $120 for a special diet. He qualifies for the new CDB. Despite his health challenges, he works 12 hours a week at $20 an hour, earning $12,000 a year. Thanks to ODSP’s $1,000 monthly earnings exemption, he keeps it all.
Tim also volunteers weekly at a soup kitchen, earning a monthly $50 honorarium plus a meal. ODSP rules let him keep every cent. His $600 in annual volunteer income barely makes a ripple.
But the day he turns 65, his income drops by $1,517 a year. Why? Because GIS claws back part-time wages and even volunteer honorariums. Tim loses money because he works and volunteers.
Some workers with disabilities may end up with a higher income because CPP is clawed back in its entirety by social assistance, but at a lower rate under GIS. But that’s not the point.
This isn’t just Tim’s story. It’s a national design flaw. Before 65, disability programs encourage work. Ontario quintupled its exemption to $12,000 a year for non-seniors. B.C. raised theirs to $15,000. The new CDB exempts ODSP entirely and allows another $10,000 in earnings.
After 65, seniors’ programs punish work. GIS claws back wages and honorariums, even if the honorarium only covers the bus fare to a volunteer shift.
It’s as if Canada tells people with disabilities: “Stay active, we support you!” — until their 65th birthday, when the message flips to: “Sit down and stop trying.”
Losing $1,500 a year can mean skipped groceries, unpaid bills or dropping out of community life. For a volunteer, a $600 honorarium can trigger a $300 clawback. That’s a fine for helping your neighbours.
Meanwhile, Canada faces an aging population and a shortage of volunteers and caregivers. Why would we make it harder for older adults to pitch in?
The fix is not complicated. Good policy for people with disabilities should not “retire” at 65.
The National Institute on Ageing has already called for doubling the GIS earnings exemption from $5,000 to $10,000 and indexing it to inflation. That would bring seniors’ programs closer to modern disability policy and reflect today’s costs of living.
Canada also needs to harmonize rules across federal and provincial programs so that modest earnings and honorariums are treated the same. Income security programs should work together, not at cross-purposes.
We’ve taken a step forward by shielding the CDB from clawbacks. Now we need to make sure those protections don’t vanish at 65.
Good policy shouldn’t retire. Neither should the people it’s supposed to help.
