Social Policy in Ontario

Ontario set to replace welfare cheques with debit cards

Posted on March 19, 2015 in Social Security Delivery System

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TheStar.com – News/Queen’s Park – The province is introducing a new Ontario-wide debit card system for social assistance recipients to remove the stigma of a “welfare cheque.”
Mar 19 2015.   By: Richard J. Brennan, Provincial Politics

The Ontario government is set to introduce a new province-wide, social assistance debit card to remove the “stigma” of the welfare cheque, the Star has learned.

Since the province is responsible for administering the Ontario Disability Support Program, the reloadable cards will be issued to those recipients first and then offered to municipalities, which run the Ontario Works welfare program.

The new card system will be similar to one already in use by the city of Toronto.

Queen’s Park is refusing to say how much the changes are going to cost or when they will be implemented.

“While still in development, our plan is to introduce a single reloadable payment card program for ODSP and Ontario Works recipients who do not receive their social assistance payments through direct bank deposit to increase customer convenience for social assistance clients,” said Amber Anderson, Community and Social Services Minister Helena Jaczek’s press secretary.

The ministry says about 82 per cent of those receiving Ontario Works and 85 per cent on ODSP get their social assistance payments through direct deposit.

Anderson noted Tuesday there will be no restrictions — as is the case in some U.S. states — on what the cards can be used to buy.

“Payment cards would allow clients to access their social assistance funds through ATMs, in-branch, make point-of-sale purchases and bill payments,” she said.

Payments “for eligible clients would be loaded electronically on their cards without having to visit a local office,” said Anderson, adding those in isolated communities will still receive cheques.

In Ontario, a single person on welfare receives $656 monthly; a single person with one child, $941; and a couple with two children, $1,173. A single person on ODSP receives $1,098 monthly; a single person with one child, $1,515; and a couple with two children, $1,791.

The total tab for assistance is more than $7 billion a year.

Three years ago Toronto became the first Canadian city to replace its welfare cheques with reloadable debit cards, allowing users to avoid cheque-cashing fees and according to a city staff report, saving the city as much as $2.5 million a year.

Anderson said reloadable cards are expected to reduce the reliance on expensive cheque-cashing services, remove the “stigma” of the welfare cheque and reduce the need to replace lost, stolen or damaged cheques.

City of Toronto staff estimated in 2013 a single client receiving $599 a month could save at least $250 a year by eliminating cheque-cashing fees at payday loan shops.

Anderson explained the card would be refilled by the province once a month.

“It is primarily for folks who don’t have access to a bank account and don’t have direct deposit. It will be kind of like the reloadable Visa cards. We would have the number on our end and we can reload when it is time for the monthly cheque,” she said.

Critics are suspicious the cards are simply a stopgap to make up for problems with the Social Assistance Management System (SAMS), which is still going through teething pains after it was launched in November.
“Introducing a new payment scheme for social assistance at this time raises red flags,” NDP critic MPP Cindy Forster (Welland) said.

“The Liberals’ incompetent rollout of SAMS provides us with zero confidence in the government’s ability to get this right without putting social assistance recipients at risk once again.”

Technical problems with the new $240-million computer system caused havoc late last year when numerous welfare recipients received no money or as little as $5, while another 17,000 individuals and families were initially assigned $20 million in overpayments.

“Frontline staff and families who depend on OW and ODSP are still struggling with the chaos created by SAMS and the Liberals’ arrogant decision to implement flawed software. The last thing they need is another headache to worry about,” said Forster.

Meanwhile, some U.S. states have introduced laws prohibiting people from using their welfare debit cards to buy items like cigarettes, guns or for gambling. There will be no such restriction on cards issued in Ontario.
A Toronto official said the debit card program has been successful, noting the program currently provides safe and reliable service to about 8,500 cardholders each month.

“It has proven to be a very convenient and secure payment method for Ontario Works recipients that cannot use or open a bank account,” said Darrin Vermeersch, director of Toronto’s employment and social services department.

< http://www.thestar.com/news/queenspark/2015/03/19/ontario-set-to-replace-welfare-cheques-with-debit-cards.html >

Tags: poverty, standard of living

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