Tweddle, A. Ken Battle, K. and Sherri Torjman, S. (2014). Caledon Institute. Retrieved from: http://www.caledoninst.org/Publications/Detail/?ID=1057
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
In Saskatchewan
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
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.
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