Raising Social Assistance Rates

I just read an interesting policy paper from Open Policy Ontario.

Authored by John Stapleton and Yvonne Yuan the paper looks at the question of whether  higher social assistance rates lead to higher caseloads during recessions.

Well, they don’t.  

The authors conclude that when you take a look at unemployment data and minimum wage levels over time you’ll see that that higher social assistance benefit levels will not result in more people on social assistance. 

Stapleton and Yuan recommend immediate implementation of either: 

1. Raising the single Ontario Works assistance rate by 14.3% to $838 per month to equal 40% of full-time minimum wages along with parallel increases for other family sizes or 

2. Raising Ontario refundable tax credits by $1,365 per year so that all low-income single people can benefit from an increase in income. 

They also recommend that minimum wages be immediately increased to $15.00 per hour.

Read the report at https://openpolicyontario.s3.amazonaws.com/uploads/2021/03/culprits-20210219r-sacs.pdf

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Fast Facts

• There has been no increase in rates since 2018 a continuation of a gradual downward slide in the value of social assistance that began with a drastic cut in 1995.  
• According to the Ontario government, evidence shows that racially diverse, newcomer and low-income communities have been impacted more significantly by COVID-19 than others.
• The federal government’s response to the pandemic has identified $2,000 per month as a “basic income” for people who have lost their jobs. The current rates for single individuals on Ontario Works (OW) is $733 and for Ontario Disability Support program (ODSP) is $1,169.00 fall far below this “basic income.”. 
• The annual cost of poverty in Ontario is between $27.1 and $33 billion taking into account loss of tax revenue and increased expenses in the health and justice systems (Feed Ontario. The Cost of Poverty in Ontario 2019, p.4).  

Here is a link to a chart that illustrates how the buying power of social assistance rates has continued to sink over the years, because of minimal or no annual increases to match inflation. 

https://1drv.ms/w/s!AvRzOEPfSVfDvQTzDtVAYONTQ22W?e=LJGTc5