Ontario’s soaring poverty gap ‘starkest’ for single adults as welfare rates stagnate

Posted on May 10, 2016 in Social Security Delivery System

TheStar.com – News/GTA – Ontario’s poverty gap for single adults on welfare has skyrocketed by 200 per cent over past 20 years, according to analysis by Canadian Centre for Policy Alternatives.
May 9, 2016.   By LAURIE MONSEBRAATEN, Social justice reporter

After five years on welfare, Pauline Bryant figures she was probably over-qualified to help others “get by on next to nothing” as a part-time community engagement worker last year.

Although the job gave Bryant an extra $600 a month, it didn’t provide medical benefits or enough money to escape welfare. But it eased her sense of isolation.

“What I liked best about working with others on low income was the message: ‘You are not alone,’ ” says Bryant, 53. “That’s what I held onto. I realized it’s not just me.”

Her friend Tracy Mead, 50, has also worked on contracts for community agencies but never earned enough to survive without welfare, either.

“I’m just weary of it all,” the Toronto woman says. “I’m tired of walking to food banks because I can’t afford transit and I’m tired of being on the verge of homelessness because I can’t afford rent.”

Despite the province’s 2008 poverty reduction plan, the women’s plight and that of almost 158,000 other single adults on welfare or Ontario Works is getting worse, according to a new report on social assistance being released Monday.

For this group, the poverty gap has jumped by almost 200 per cent since 1993, says the analysis by the Canadian Centre for Policy Alternatives.

It means people like Bryant and Mead are living on incomes 60 per cent below the poverty line, the report says.

“Whether you are single, a single parent, or a family with children, if you qualify for social assistance in Ontario, you fall below the poverty line,” says economist Kaylie Tiessen. “The gap is starkest for singles on Ontario Works and is dramatically worse than 20 years ago.”

If the province is serious about fighting poverty, it should raise welfare rates as well as tax credits such as the Trillium Benefit, a monthly payment to all low-income people that provides relief for sales tax, property tax and energy costs, she says.

“Both are necessary,” she says. “One would be investing to ensure that people are receiving enough money to get by regardless of their employment status. And another would be to improve the social assistance rate structure.”

Tiessen compares welfare incomes and their relation to the poverty line since 1993, the year social assistance rates hit a high water mark in Ontario.

That year, welfare incomes for single parents, families and the disabled were slightly above the Low Income Measure (LIM), after taxes, the province’s official poverty line. (The LIM is an income 50 per cent below the median income.)

Welfare incomes for singles were still about 20 per cent below the LIM in 1993. At that time, a single person on social assistance received $663 a month, the equivalent of about $995 in today’s dollars.

Two decades later, in 2014, after severe welfare cuts by the former Mike Harris government and despite modest improvements to rates and other supports by the Liberals, single people on welfare received $656 in monthly Ontario Works payments and about $75 a month in Trillium benefits and federal GST credits.

Today, the maximum Ontario Works rate is $681 a month.

By the numbers:

$20,811 – Low Income Measure, after taxes, for a single person
59% – Poverty gap for a single person receiving Ontario Works
$12,301 – Value of poverty gap for a single person on Ontario Works
158,000 – Number of single adults receiving Ontario Works in February
Source: Canadian Centre for Policy Alternatives

In April, NDP MPP Paul Miller (Hamilton East – Stoney Creek) introduced a private member’s bill to establish an independent panel to advise the government on social assistance rates.

The proposed Social Assistance Research Commission, which would include people with experience living in poverty, would report annually on recommended Ontario Works and Ontario Disability Support Program rates. The recommendations would be based on an analysis of the cost of food, housing and other necessities in various regions of the province.

“This would take the politics out of setting rates and provide an independent, evidence-based approach that looks at how the costs of things differ across the province,” Miller said in an interview.

The bill received unanimous support by MPPs, including Premier Kathleen Wynne, during second reading. But unless the government holds committee hearings and sends the bill back to the legislature for third reading and royal assent, there will be no change, Miller added.

“I think we can do a lot better job of helping people in need,” Miller said. “We’ll see if the government is serious about doing something about poverty in our province.”

Social policy expert John Stapleton says it doesn’t make sense to make large increases to welfare rates without fixing the system’s hundreds of complicated rules that work to trap recipients in poverty.

“It could work,” he said. “As long as it isn’t restricted to social assistance and can look at the interaction with social housing, the minimum wage and other supports low-income people rely on.”

Also in the mix are provincial plans, announced in the spring budget, to pilot a Basic Income, a form of guaranteed annual income, and a housing benefit outside social assistance that promise to offer opportunities to help all low-income people, including those on welfare.

But Bryant and Mead are skeptical.

Both women fell onto welfare after they lost well-paying, full-time jobs with benefits after the 2008 economic downturn. Now they pay more than half of their income on rent, rely on food banks to eat and have lost teeth because they can’t afford regular dental care.

For the past five years they have been urging the provincial Liberals to raise rates through a group called Put Food in The Budget, which will be debating the basic income idea at its annual meeting on Thursday.

“We can’t wait another 10 years for pilot projects,” Bryant says. “I think this is just diverting people’s attention from the real problem: the severe poverty of people on social assistance and the need to raise rates now.”

“If they are really serious about a basic income, they have to increase welfare rates first,” adds Mead. “You have to have a reasonable floor to build on.”

The worst thing about welfare:

– Tracy Mead, who has been living on social assistance since 2008 when ill health forced her to quit a full-time job.
“The worst thing about being on Ontario Works is being on Ontario Works. Someone else decides when and if I eat. I live in poverty with the constant hyper-vigilance of not knowing if there will be food or shelter month to month — with no end in sight when it doesn’t have to be this way.

– Pauline Bryant, has been living on social assistance for about five years after losing a well-paying full-time job with benefits at the deli counter of a now-defunct grocery store chain.
“The worst thing is not knowing if my cheque will be released on time and the fact that it is already spent once the rent is paid, leaving next to nothing for everything else. Also not knowing when and if anything is ever going to change.”

– John Stapleton, a former policy analyst with the provincial social services ministry, now working as a consultant.
“All the things ordinary Canadians believe one should do to move off of social assistance and out of poverty are largely against https://www.thestar.com/news/gta/2007/12/06/the_treadmill_of_poverty.htmlthe rules of social assistanceEND: savings, earnings, training and education, saving on accommodation, getting meaningful help from family and others.”

– Kaylie Tiessen, an economist and research associate with the Canadian Centre for Policy Alternatives.
“We have developed a cumbersome and complicated system that is not achieving its objectives, humiliates people and treats recipients with indignity.”

Possible solutions:

– Incomes for single adults on social assistance fall more than 50 per cent below the earnings of a minimum-wage worker employed full-time. Therefore, a modest increase to social assistance would not interfere with the incentive to work, says the Canadian Centre for Policy Alternatives.
– Increasing tax refundable credits, such as the Ontario Trillium Benefit, which includes sales tax, property tax and energy benefits for low-income residents, would boost incomes for people on social assistance and continue to help them if they are able to get a job.
– Ontario’s plan to pilot a basic income as an alternative to welfare would be a way to provide an income floor for all Ontarians. It could end the bureaucratic maze of rules people on social assistance endure and help fill income gaps for those working part time, on contract or in other precarious employment situations.
– A portable housing subsidy to help make rents more affordable for low-income Ontarians is another measure highlighted in the 2016 provincial budget that could help people on social assistance. A $2.4 million provincial pilot of a portable housing benefit for those fleeing domestic violence would help about 500 households in 2016-17. If successful, it could be expanded to help all low-income Ontarians.

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