- “The welfare incomes in this report represent the total amount that four typical family types would receive over the course of a year.
- The households are: a single person considered employable, a single person with a disability, a single parent with one child age 2 and a couple with two children ages 10 and 15.
- Total welfare income consists of the following components:
•provincial/territorial and federal child benefits
•provincial/territorial and federal tax credits.”
“It is important to note that the amounts shown for welfare represent the maximum paid for basic needs.
- Households may receive less if they receive income from other sources.
- Some households may receive more than the amounts identified here if they have special health- or disability-related needs.”
Caledon Institute of Social Policy
November 03, 2014
Anne Tweddle, Ken Battle and Sherri Torjman
This report focuses on the incomes of four different households living on social assistance, commonly known as “welfare.” It is a continuation of the welfare incomes series published regularly by the former National Council of Welfare.
Total welfare incomes consist of the sum of two main components:
- social assistance
- provincial/territorial and federal child benefits as well as relevant
provincial/territorial and federal tax credits.
Social assistance is the program of last resort. It is intended for persons who have exhausted all other means of financial support. Every province and territory has its own social assistance program, so no two are exactly the same.
Each program has different administrative rules, eligibility criteria, benefit levels and provisions regarding special assistance. However, the basic structure of social assistance is much the same across the country, even though the specifics may vary.
The most common way of assessing the adequacy of any income program is to compare it to a recognized standard and then determine how far it diverts from that indicator. There is no single or commonly accepted baseline, but rather several measures that typically are used for comparative purposes. They fall into one of two groups: poverty measures and income measures.
Poverty measures are considered to be the baseline level below which households are deemed to live in poverty. Two poverty measures are employed in this report: low income cut-offs (LICOs) and the Market Basket Measure (MBM).
In 2013, welfare incomes for single employable households ranged from 36.1 percent of the after-tax poverty line in Manitoba to a ‘high’ of 65.0 percent in Newfoundland and Labrador . Most of the other jurisdictions cluster around the lower rate.
Welfare incomes for single persons with disabilities, while low, were slightly higher, ranging from 49.3 percent of the poverty line in Manitoba to 70.5 percent in Ontario . Alberta provides a separate program (AISH, or Assured Income for the Severely Handicapped) for persons with disabilities, which pays higher rates than the standard welfare program. In 2013, incomes of single persons on AISH came to 98.3 percent of the after-tax LICO, far higher than the 50.5 percent for persons with disabilities on standard welfare.
In Saskatchewan , we include for the first time incomes of persons with disabilities on the Saskatchewan Assured Income for Disability (SAID) program. This program also pays higher rates than standard welfare. For 2013, the income of single persons on SAID was 83.6 percent of the after-tax LICO, compared to 68 percent for those receiving Saskatchewan Assistance Plan benefits.
For single-parent households with one child age 2, welfare incomes represented 62.8 percent of the poverty line in Manitoba and a surprising 103.1 percent of the after-tax LICO in Newfoundland and Labrador . For two-parent families with two children, welfare incomes as a percentage of the poverty line ranged from 58.8 percent in Manitoba and 59.0 percent in BC to 85.5 percent in Prince Edward Island .
The report also compares total welfare incomes in 2013 with the Market Basket Measure. As in the case of after-tax poverty lines, welfare incomes fall well below the designated baseline for all household types and in all jurisdictions, with the exception of persons on Alberta ’s AISH program and the Saskatchewan ’s SAID program.
Income measures comprise the second group of comparators. This set of measures assesses the adequacy of welfare relative to the level of income of other households in the population. There are several different indicators that can be used for comparative purposes. Two have been selected for this analysis: after-tax average incomes and median incomes.
After-tax average incomes represent the amounts that households actually can use in their daily lives – their so-called ‘disposable income’ after they have paid federal and provincial/territorial income taxes. After-tax amounts represent a good basis for comparison to welfare, which is not subject to income taxation and is therefore effectively a de facto disposable income.
Welfare incomes for the four illustrative households typically ranged between 20 and 40 percent of after-tax average incomes. Only in one case do they exceed 50 percent of average incomes (55.4 percent for single parents in Newfoundland and Labrador ). The figures tell a powerful story about the adequacy of welfare incomes relative to the after-tax average incomes of Canadians.
While the conclusions are basically the same when the former are compared to after-tax median incomes – differences are typically only a few percentage points – the adequacy picture comes out only slightly better because of the different comparator base.
ISBN – 1-55382-630-2
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