Archived - Clawbacks Keep Families on Welfare in Deep Poverty

Release of Welfare Incomes 2002

Welfare incomes across Canada in 2002 were only a fraction of average incomes and the poverty line, said the National Council of Welfare in a report released today.

 Welfare incomes for single people were worth as little as 15 percent of the average income and only 20 percent of the poverty line.

"It is almost unfathomable that a person can be expected to live on as little as $3,298 a year in St. John's, or even $6,461 a year in Vancouver," said John Murphy of Canning, Nova Scotia, the chair of the Council.

Families on welfare fared only slightly better. In Alberta, the income of a single parent was worth only 27 percent of the average income and just 48 percent of the poverty line. The income of a two-parent family in Ontario was worth just 20 percent of the average income of families the same size. In Quebec, the welfare income of a couple with two children reached only 49 percent of the poverty line.

"This is a disappointing situation, particularly more than four years after the federal government made a massive infusion of cash to low-income families through the National Child Benefit. The Council was particularly disappointed to note that this occurred as overwhelming evidence emerged that underlined the importance of early child development."

The Council's new report notes that families on welfare now receive a larger share of their income from the federal government - but less from their provincial and territorial governments. Since the National Child Benefit began in 1998, all provinces and territories reduced their payments to families on welfare either by clawing back part of the National Child Benefit, or by allowing inflation to erode their share. The federal government, on the other hand, made larger and larger payments to low-income families with children. The recent federal budget committed even more increases to the program.

When Ottawa, the provinces and territories negotiated the National Child Benefit, the federal government allowed provincial and territorial governments to claw back part of the money that goes to families that rely on welfare. Only Newfoundland and New Brunswick resisted the temptation to take the money from those children who were unlucky enough to have parents whose incomes came from welfare, not from jobs. Nova Scotia, Quebec and Manitoba have since reduced the amounts they claw back. The National Council of Welfare has been a vocal opponent of this practice.

"Circumstances would be a lot less difficult for families if governments stopped clawing back the federal child benefit," said Mr. Murphy. "The Council believes that welfare programs should provide good incentives to work, but it makes no sense to take money from the poorest of the poor. There is simply no fat to cut in the budgets of people who are forced to rely on welfare."

"The Council believes that a far more constructive approach to getting people off welfare would be to provide real incentives to work. The most obvious incentive for parents on welfare is the provision of high-quality affordable child care. It is overwhelmingly clear to the Council that the provision of child care is the very first step in making it possible for a parent on welfare to complete an education or training program, and then find and keep a job."

"The federal government's new child care program is exactly the kind of incentive the Council believes we should provide," said Mr. Murphy. "I was very pleased to see the program in the recent federal budget, and to learn of the agreement Minister Stewart recently concluded with the provinces and territories. We need a national system of child care with high standards, and that is what we are now putting in place."

The report also noted that the welfare incomes of people with disabilities are in a slow decline. While people with disabilities were spared the direct cuts many provinces imposed in the last decade, their incomes have not kept pace with inflation.

Welfare Incomes is a regular publication that tracks the annual welfare incomes of four typical households in each province and territory: a single employable person, a single person with a disability, a single parent with one child aged two, and a couple with two children aged 10 and 15.

The National Council of Welfare has published similar estimates since 1986.The National Council of Welfare is a citizens' advisory group to the Minister of Human Resources Development.

Released Date 2003-04-10

Related Materials

• Welfare Incomes 2002