Can a housing provider require disclosure of Henson trusts when considering rental assistance?

December 1st, 2017 by elliot-fonarev

The Court of Appeal for British Columbia has just released a decision about asset verification for rental subsidy applicants who are beneficiaries of trusts. Though this decision is not binding in Ontario, it will be of interest to affordable housing providers here, as some of the same principles may apply.

The decision in S.A. v Metro Vancouver Housing Corporation (MVHC), helps shed light on the circumstances in which BC housing providers are allowed to request information about the contents or value of discretionary trusts (often called Henson trusts) when determining whether to grant or continue rental assistance. Henson trusts benefit disabled persons without affecting their ability to receive government benefits. Though the B.C. government does not consider Henson trusts as assets for the purpose of eligibility for disability assistance, the court said that MVHC was entitled to require the applicant provide information regarding a Henson trust when determining eligibility for a rental subsidy. In Ontario, Henson trusts are also not considered assets for determining eligibility for disability assistance under the Ontario Disability Support Program (ODSP) Act, 1997. But if the Ontario courts are swayed by this case, housing providers could seek information about Henson trusts for their internal discretionary rental assistance programs. This could be an important source of data for housing providers to help make decisions about how to allocate discretionary funds and determine eligibility for internal and external rental assistance or Rent Geared to Income (RGI) programs.

The applicant, S.A., is a person with disabilities who receives income from B.C.’s version of ODSP (the Employment and Assistance for Persons with Disabilities Act, SBC 2002) and has lived in the complex since 1992. The housing complex is governed by an operating agreement between MVHC and BC Housing, which requires tenants to meet specific criteria to be eligible for MVHC housing. The operating agreement requires MVHC to get ongoing proof of eligibility for each tenant receiving RGI. MVHC also has an internal discretionary subsidy for tenants most in need. S.A. received the internal discretionary subsidy.

In 2010, the applicant’s father died. Like many parents of children with disabilities, S.A.’s father put her inheritance into a Henson trust. MVHC learned of the trust, and told her that they could not complete her annual income review without details of the balance of and disbursements made from the trust since it was established. S.A.’s position was that the trust was not an asset that could affect her eligibility for a housing subsidy and that MVHC was not entitled to know its balance. She also said that she had not received any money from the trust. MVHC’s position was that the trust was an asset and denied her application for the additional rental assistance. MVHC removed her rental subsidy. The dispute went to court. S.A. wanted a declaration that the trust did not count toward her assets and a refund of the difference between the market rent and the subsidized rent in the months that she paid market rent. MVHC wanted disclosure of the value of the trust if S.A. wanted to be considered for rental assistance and a declaration that the rental assistance program and MVHC’s contractual obligations require such disclosure.

The B.C. Court of Appeal conducted an interesting review of the nature of Henson trusts. Though the B.C. government does not consider Henson trusts as assets for some purposes, the court said that MVHC was entitled to require S.A. to provide information regarding the trust if she wishes to seek the internal discretionary rental subsidy. In this situation, the court said that the Henson trust was an asset that MVHC could request further details about to decide whether to give S.A. assistance over other eligible applicants.

The court noted that MVHC ran two programs and the decision related only to its internal discretionary rental assistance program. The court said that for the purposes of this program, MVHC was entitled to consider the trust when determining both whether S.A. was eligible for the assistance, and, if found eligible, when exercising its discretion to grant the additional subsidy. The court also emphasized that this finding did not affect the way that other social assistance programs considered Henson trusts – each social assistance program has its own individual eligibility criteria and whether benefits from a Henson trust must be taken into account will vary from program to program and depend on the rules and regulations that govern eligibility that particular program. In other words, Henson trusts could be relevant to asset verification in some contexts, while prohibited from the calculation in the context of determining eligibility for disability assistance.

This case is useful for Ontario housing providers as a reminder to ensure that you are following the specific regime and criteria for rental assistance that are applicable to you. Depending on the type of program and the source of assistance, some housing providers may be prevented from asking for information relating to Henson trusts, while others may be allowed to seek such information. In the event of a dispute about what can and cannot be counted towards assets, we would be pleased to weigh in.

Filed in: Housing

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