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Welfare Incomes: Key Patterns and Trends

Welfare Incomes 2009 estimates total welfare incomes (social assistance plus child benefits and tax credits) for 4 family/household types in each of the 13 provinces and territories for a total of 52 cases*.

The four family types are:

  • A single person considered employable;
  • A single person with a disability;
  • A lone parent with a 2-year-old child;
  • A couple with two children aged 10 and 15.

The NCW has published similar estimates since 1986.

*Some information on Alberta’s separate program for people with severe disabilities is also provided.1

2009

All welfare incomes increased in 2009 compared to 2008.2

  • When adjusted for inflation, a few of our 52 cases showed a decrease, but most increased well above the 0.3% rate of inflation and in 15 cases, the increases were more than 5%.

Yet most welfare incomes remained inadequate.

  • For the single person, the range was from a low of $3,773 to a maximum of only $9,593. For the person with a disability, it ranged from $8,665 to $12,9053; for the lone parent, from $14,829 to $19,297; and the couple with children from $19,775 to $24,045.
  • Regardless of the measure used, welfare incomes were consistently far below most socially accepted measures of adequacy.
  • Only lone parents in Quebec, Newfoundland and Labrador, and Saskatchewan have “cracked” or come close to poverty lines.
  • The worst-off have always been single people considered employable and the situation did not change in 2009. The welfare income of a single person was at best only 62% of the poverty line, using the Low-income cut-offs (LICOs) as the measure, and at worst was a mere 24%. The Market Basket Measure (MBM) of poverty showed similar results at 64% and 26%.
  • The single person’s welfare income only reached 15 to 38% of the average after-tax income for Canadian singles overall, making it apparent just how excluded some social assistance recipients are from mainstream Canadian life.

WELFARE INCOMES OVER TIME

  • Between 1990 and 2009, inflation increased by 45.9% and most welfare incomes did not keep up. As a result, many people on welfare now are worse off than recipients in earlier decades. In several cases, welfare incomes decreased by 20% or more.
  • Single persons saw an increase in only 3 jurisdictions; lone parents in 6 jurisdictions and the couple with children in 4 jurisdictions.
  • The current decade produced a peak year for welfare incomes for a single person considered employable in only 5 cases. For the person with a disability, peaks were in only 3 cases. For the lone parent and the couple with children peaks were in just 6 cases for each family type.
  • In contrast, 9 provinces and 1 territory had their lowest years for single people considered employable in the current decade.

ASSETS

There was wide variation in the level of liquid assets, such as money in a bank account or retirement savings, that were exempt in calculating eligibility for welfare.

  • Assets exemption levels were generally very low, although somewhat less so for people with a disability. The lowest levels range from $0 to $50, $150 or $200 for a single person. New Brunswick, Quebec and Saskatchewan were in a significantly higher range.
  • Manitoba is a striking contrast to all, allowing $4,000 per person for all our family types, thus reaching $16,000 for the couple with two children.
  • Over time, many asset exemption levels have eroded. When indexed to inflation, 1989 amounts were often higher than the 2009 amounts.

EARNINGS AND THE WORKING INCOME TAX BENEFIT

There was also wide variation across the country in the treatment of income from other sources when calculating a household’s welfare benefit.

  • Some earnings were fully exempt and welfare was not reduced. Other earnings were partially exempt or not exempt at all. With $250 of earnings a month, a lone mother in 6 jurisdictions benefited by $200 or more as did her single neighbour, while in other cases they kept the value of only half or less of their earnings. In 2 provinces, neither saw any financial gain from their employment.

The impact of the federal Working Income Tax Benefit (WITB) on social assistance recipients remains unclear. The structure of each jurisdiction’s welfare program – both its rates and earnings exemption policies – determines the amount of WITB paid.

  • In almost all cases, with between $462.50 and $600 of earnings per month, a single welfare recipient gained financially, usually by the $42.50 maximum. With increasing earnings, people can become ineligible for welfare before they reach the maximum WITB. Not enough information is available to tell whether the WITB can live up to its goal of helping people avoid, escape and stay off welfare.

1 Information on Alberta’s Assured Income for the Severely Handicapped (AISH) program is included for some comparative purposes but because it differs from other social assistance programs in significant ways it is not included in our regular social assistance scenarios. All other programs in this report are needs tested – including Alberta’s Income Support Program – with benefits based on family size and other factors. For more details, see Chapter 3 and Chapter 6.

2 Note that welfare incomes are generally higher in the territories for all family types, due to the higher cost of living in the north. As well, some information is not available for the Territories. It is difficult to compare or rank provincial and territorial incomes in the same way.

3 Under AISH, the total income was $14,297.

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Date Modified:
2012-09-27