The Alliance Against Poverty is a grassroots group based in Kitchener-Waterloo. We are dedicated to the eradication of poverty through non-violent political action and direct advocacy for persons. We do not seek or accept government funding.
In examining the social assistance system in Ontario, we are chiefly concerned that recipients of both Ontario Works (OW) and Ontario Disability Support Program (ODSP) benefits at present do not receive anywhere near enough income to be raised above abject poverty. If we could change only one thing, it would be to index both the OW and ODSP rates to inflation, starting from June 1995 (before the Harris cuts).
We recognize as well that a host of detailed rules need to be changed: rules which unfairly restrict eligibility, rules which penalize those who try to work, rules which strain family life, and rules which make it difficult to enter into training and education. We see these rules as counterproductive, even according to the Government of Ontario's own stated goals of promoting labour force participation, family life, and education.
We have therefore compiled 36 Recommendations for change to the social assistance system, based on the experience of people we know personally, as well as people who spoke to the social audit carried out by the Interfaith Social Assistance Reform Coalition (ISARC) in 2010. In the case studies we have cited, the names followed by asterisks are those taken from the ISARC audit, and the rest are our personal contacts.
The five questions posed in the framework for this Social Assistance Review make clear that the Government places a high priority on getting recipients into employment and off social assistance, and keeping the cost of social assistance down. We believe that these stated priorities are the wrong place to start.
It is not “realistic” to expect persons lacking all economic resources to be instant candidates for the labour market. When people are in a state of loss and desperation, they first need adequate housing, food, and access to communication and transportation. Without such a platform for daily life, the chances of finding and keeping employment are greatly diminished.
It is also not realistic to send disadvantaged individuals out into a labour market that more and more resembles the “Wild West”. Precarious jobs with no benefits, unpredictable hours, and in some cases no certainty of getting paid, do not provide a viable alternative to social assistance, even for a recipient who is employment-ready. If there is an expectation that “Ontario Works” recipients will move on to employment, there must be a concomitant expectation upon the Province to oversee labour standards and promote the creation of secure jobs.
The social assistance system is being squeezed between a fiscal climate of austerity on one hand and a malfunctioning labour market on the other.
Without enough real jobs, more people are in need of assistance. Without enough public revenue, there isn't money to take care of them. Proactive government policy is needed to repair both of these sides: to restore adequate public revenue and a fair and vibrant labour market. Only then will a humane and sustainable social assistance system take its rightful place between them. This is our vision – elaborated in the Conclusion: “Moving Toward Universality”.
We will now set out our Recommendations on the five questions - discussed in this order:
2 – “appropriate benefit structure”,
3 – “income and asset rules”,
1 – “realistic expectations” regarding transition to employment, and
4 – “long-term viability” of the social assistance system in Ontario.
(We did not have significant comments to make on 5 - the relationship between the provincial and other levels of government.)
Benefit Rates (“2. Appropriate Benefit Structure”):
Housing must come first. All recipients of OW and ODSP (except for those fortunate enough to get into subsidized housing) are struggling to find any place where they can afford to live. For example, our friends Scott and Calvin had decent rooms for a while, but the market rent was above the OW Shelter Allowance, so they never had enough food and were always under stress. Many others, such as Rolf and Andrew, both on ODSP, have had to take rooms in unsafe houses, with drug dealers in the halls and vermin in the kitchen. This does not support recovery and employability.
- Recommendation 1: The Shelter Allowance portion of the OW or ODSP cheque should reflect the cost of appropriate housing in the recipient’s region. The Shelter Allowance should be adjusted yearly, using up-to-date figures on these costs provided by the Canada Mortgage and Housing Corporation.
Our friend Chris, also on ODSP, would like to move to Toronto, where there would be more opportunities, but the Shelter Allowance on ODSP is not sufficient to pay Toronto’s higher rents. Chris feels that life is at a dead end.
- Recommendation 2: The Shelter Allowance should vary across Ontario, according to housing costs in each locality, as the CMHC calculates. (Note that in remote areas, shelter may cost less but a transportation allowance might be necessary.)
Jim, in his 50s, has been on ODSP for many years and has no hope of ever going back to the work force. He doesn’t want to spend the rest of his life in a rooming house. He feels, and we agree, that people with disabilities should be able to afford a one-bedroom apartment.
- Recommendation 3: The Shelter Allowance for an individual on ODSP should be sufficient for an average one-bedroom apartment in their region. Note that some ODSP recipients will also require an apartment with special amenities such as a wheelchair-accessible shower.
Our friend Elaine, who receives OW, is a frugal woman. She decided to save money by sharing a small basement apartment with another person, so that her share of the rent would be only $340 per month. OW then reduced her cheque, since $340 is below the Shelter Allowance of $368 for a single person.
Conversely, Andrew was paying $450 for a substandard room, simply because the landlord charges the equivalent of the ODSP Shelter Allowance for all his rooms. Since the tenant is not allowed to economize by finding a place for less than the Shelter Allowance, this kind of unfair pricing and disregard for housing standards by unscrupulous landlords, is fostered by the ODSP system.
- Recommendation 4: If someone on either OW or ODSP economizes by finding a cheaper place, or sharing space to save money, they should still receive the full Shelter Allowance. (This would also stop landlords from simply raising rents up to the Shelter Allowance regardless of the quality of the accommodation.)
Jane* has a son who lives with his father. There is no money in the OW cheque to provide for her son when she has access to him. What happens if she wants to have her son for the night? Family and Child Services will require that she have a specific standard of housing in order to receive approval for the overnight visit, but her budget will not pay for this type of housing. The result is she has less access to her son and her family suffers.
Bill* is also a non-custodial parent, therefore does not receive any income support for a dependant child. But Family and Child Services, requires that he have a larger place for when his daughter stays with him.
- Recommendation 5: The Shelter Allowance for non-custodial parents must take into account that they need a bedroom for when their child visits, or they may lose access to their child.
Rolf is finding it more and more difficult to buy adequate food. Although he has subsidized housing, the Basic Needs portion of his ODSP cheque has not kept pace with the rising cost of food and bus fare, especially the last few years. The quality of groceries he can buy is rapidly diminishing. How much longer can this go on?
- Recommendation 6: The Basic Needs portion of both the OW and ODSP cheque should be indexed to the true inflation rate (inclusive of food and energy prices).
The demand for food banks and soup kitchens and other emergency hampers is continually increasing. People are living on less money now than they had in 1995. Volunteers are tired of being expected to provide basics that should be included in the social assistance cheque. It has gone on far too long.
- Recommendation 7: The indexing of the Basic Needs portion of the cheque to inflation should be immediately back-dated to June 1995 (before the Harris cuts) - because there were no increases for 11 years after that, and the loss has never been recovered.
Despite Ontario’s introduction of the Child Benefit, many families on assistance are worse off, or little better off – because they have had the Winter Clothing and School Supplies allowances clawed back. Many people have also lost the Special Diet Allowance they used to rely on to buy a little more food.
- Recommendation 8: Immediately restore the full Child Benefit, and Winter Clothing and School Supplies allowances, with no clawbacks whatsoever. Restore the Special Diet Allowance to all who were eligible for it before March 2010.
Many people who come to OW have past debts and other past issues which make it difficult for them to open a bank account. Walter is afraid to open a bank account because of his creditors. Tom has difficulty getting ID because of past incarceration, so he does not have a bank account. He had his wallet stolen while visiting unsavoury past friends, and lost almost an entire month’s ODSP benefit in cash. Calvin also lost his rent money on the street because he encountered someone to whom he had a past drug debt.
- Recommendation 9: Develop a form of secure direct-deposit and chequing privileges for recipients.
Many recipients do not file income tax returns, because of complicated past finances or in some cases, lack of knowledge. Therefore they do not receive the HST credits or any other benefit paid in the form of a tax credit.
- Recommendation 10: Do not use the tax system to assess or deliver social service entitlements.
Eligibility (“3. Simplifying income and asset rules”):
Asset-stripping robs the recipient of the stability needed to support employment.
- Recommendation 11: A person should not be forced to liquidate their savings, a reasonable car, home, or RRSPs in order to first become eligible for either OW or ODSP. Assets could be re-examined if a person is still on OW after a year.
Elaine used up her EI benefits, only to discover that her former job was never coming back. She applied for OW, was approved, and received a cheque at the end of the month. But by then she had missed the current month’s rent, and she has no way of ever making that up.
- Recommendation 12: In the first month for which a recipient is deemed eligible for OW, they should have their benefits backdated to the beginning of the month, so they can pay their rent and not risk losing their housing before benefits even start. After that, regular payments should start at the end of that same month, for the following month’s expenses.
Kurt had a long-term mental disability. He entered into a common-law relationship with a woman, and the two of them lived in constant fear of Kurt losing his ODSP benefits if the relationship were discovered. His partner was afraid to answer the phone in the daytime. She didn’t have enough money to support Kurt if he lost his income, and besides this would have been humiliating for him. The stress made Kurt’s mental illness worse, and he broke off the relationship, causing trauma for them both.
Helena* suffered neurological damage from two serious car accidents. She used to receive help from the Ontario Disability Support Program because her chronic pain was preventing her from working. After her husband Ken found full-time work, Helena learned that she was no longer qualified for ODSP. Ken was only employed seasonally. “I wish I could have kept my ODSP, so that when my husband isn’t working I could help out financially,” Helena said. “We’ve had huge fights over money. So bad that someone called the police and I had to go stay with my daughter.”
- Recommendation 14: The income of the spouse of an ODSP recipient should not be considered part of the recipient’s income. A person with a disability should be allowed to take the ODSP benefit into the marriage, to retain his or her autonomy in the relationship and contribute to the financial stability of the household.
Sophie* collects ODSP benefits and has teenaged children. After her daughter graduated from high school, she took a job and started to earn money. The government saw this as family income and clawed it back from the family social assistance cheque. And so, in order to join the workforce and find her way to a self-sustaining life, her daughter had to move out and support herself at the age of 18 or risk having to support her entire family.
- Recommendation 15: The income of a child of a person on either OW or ODSP should not be counted as income for the recipient.
Dale*, who was on ODSP because of an injury, was supportive of the idea of his wife Felicia going back to university. They filled out reams of forms to qualify for a loan from Ontario Student Assistance Program. Felicia was finally ready to begin her studies. But the couple was shocked to discover that OSAP loans are deducted from ODSP cheques. Dale sought an appeal but was denied three times. They were forced to reject the OSAP loan, and Felicia dropped her plans for university.
- Recommendation 16: Do not treat loans as income. This includes student loans.
Pam* and her ex-husband own a house together – a house that she cannot live in because her ex-husband and his girlfriend occupy the home. She has applied for Ontario Works (OW) but is not eligible because she owns a house (that she cannot live in). “OW saw the house as an asset, but doesn’t look at the complexity of the situation,” she said. “Why doesn’t someone from the system sit down and listen to the situations of the people?
- Recommendation 17: Allow for situations that “fall through the cracks” – for example a divorcing couple where one spouse still “owns” part of the matrimonial home but cannot live there. Recognize that time is needed to work out legal problems but the person needs income support in the meantime.
If a person with a disability is able to generate some income by renting out rooms in a house, this income is now assessed at 60% by ODSP, regardless of what the costs against it are. Our friend Dorothy was left with nothing to live on, because all she could raise in rents went to the mortgage, utilities, and taxes. She was determined not to sell her equity in the house, which was an inheritance and provision for old age, so she lost her nominal ODSP benefits and drug and dental coverage.
- Recommendation 18: Do not treat rental income as income, until all costs against it are deducted (as it appears on the income tax return).
- Recommendation 19: Persons with disabilities who try to be entrepreneurial but still need income support, should be encouraged in these pursuits, and their income fairly assessed. Nothing should be clawed back if their actual income including ODSP is still below the Low Income Measure.
Walter had to stop working in his late 50s because of back pain. He used up his savings, then applied for OW. Taking CPP early, at age 60, he still fell below the monthly income for a single person on OW, so the system topped him up and gave him drug and dental coverage. He applied for ODSP, but his doctor wrote on the application that he was able to do “light duty”. As a result, he was not only denied ODSP but was also cut off OW, because he’s suddenly supposed to be looking for work. He now must live on nothing but his meagre CPP cheque, below the income of a person on OW. It means living in a basement room, which makes his aches and pains worse.
- Recommendation 20: Persons over 60 who are having trouble getting back in to the work force should be automatically put on ODSP until age 65, with no medical test. Employment seeking should not be expected of them.
- Recommendation 21: A more comprehensive and standardized form of medical assessment for ODSP is needed. For example, a person may be able to perform a certain motion, but that doesn’t mean that they can perform it consistently hour after hour day after day. Also, mental health should always be investigated. The individual’s family doctor may not be aware of all that is required for a thorough employment-readiness exam.
- Recommendation 22: No one should be denied OW because they’ve failed to find work within some specified period of time.
Transition to Employment (“1. Realistic Expectations and Supports”):
Not every OW recipient is ready to work. Some may never be.
- Recommendation 23: Hire more case workers and mandate them to consider people’s unique situations. Recognize that not all OW clients will be accepted as employable by employers, and they may fail many times when trying to enter the work force. Recognize as well, that clients may be going through a life crisis, such as family breakdown or other family emergency (such as a child in trouble), or uncertain health, or foreclosure of their home, and they may need time to stabilize before being employment-ready. Don’t push them into employment instantly.
- Recommendation 24: Recognize that some recipients may need training in literacy or ESL or basic life skills, and make this available.
- Recommendation 25: For recipients with little or no work history, consider easing them into the work force through a few hours a week of community service (paid at the minimum wage), to help determine their employment-readiness and to let them start learning work habits in a safe setting.
Do not penalize people when they try to work.
- Recommendation 26: Recognize that there are costs involved in working or looking for work – such as telephone and/or internet, child care, clothing, and transportation (this would include car insurance, for recipients living in remote areas). The Basic Needs portion of the cheque must be sufficient to cover all the costs for the person to attend job interviews, resume workshops, training, etc.
Scott was trying to get back to work after years of struggle with addictions. He briefly took on two part-time jobs, but soon discovered he couldn’t handle it. By the end of six weeks he had lost both jobs. But then his next OW cheque was reduced because of his earnings the previous month. Now he had a smaller cheque and no job, so he couldn’t pay his rent. His brief attempt to work only led to a cascading series of disasters.
- Recommendation 27: Recognize that if the recipient’s earnings are variable and not stable, the present system of delayed claw-back may lead to the person losing their housing. To prevent this problem, nothing earned should be clawed back, for as long as the recipient’s total income is below the Low Income Measure.
David was told he had to be seeking work, so he accepted an assignment from a temp agency. Within a few hours he discovered that he couldn’t do this type of work at all. But if you quit or are fired, you lose your OW benefits! This makes OW recipients “sitting ducks” for exploitation and unacceptable working conditions. David quit, lost his meagre benefits, and became homeless, living on the street for several years. All because he tried to comply with the requirement to work.
- Recommendation 28: Get rid of the rule that OW recipients lose their benefits if they quit or are fired. Not every job is going to be a fit. If they fail repeatedly, reassess their employment readiness. Recognize that a small percentage of OW recipients will never be able to adapt to the workplace, even if they don’t technically qualify for ODSP. These persons are still deserving of basic income support, and should not be thrown on the street.
- Recommendation 29: If a case worker observes that the recipient is being improperly treated by an employer (such as being denied minimum wage and CPP and EI deductions because they are classified as a “contractor”) or by a temp agency, or by any employer who fails to pay them for hours worked – the case worker should notify the Ministry of Labour and call for an inspection and enforcement of the Employment Standards Act.
Julie* lives in rent-geared-to-income housing. She has 2 children under 5 years old and is trying to get into the work force. When you are in rent-geared-to-income housing the rent is constantly being adjusted according to what you earn so that you can never get ahead. Going to work means increased expenses including child care and transportation. The housing managers are not able to take this into account when setting the rent for the month, so participants in the program end up with less money than they had before going to work. Julie had to reduce her hours of work because she wasn’t allowed to keep enough of her earnings to pay her child care bill.
- Recommendation 30: When calculating the income of tenants in rent-geared-to-income housing, an employment expense deduction should be applied, based on the person’s actual costs of working.
Another disincentive for OW recipients to go to work, is that they will no longer have drug and dental coverage, in most cases. It is good that OW allows extended drug and dental for a period of time after the person transitions to employment – but this only delays the loss the person will face. If there is a sizable need for medication or dental work in the recipient’s family, they may be worse off in a job without benefits than they are on OW.
- Recommendation 31: Given that fewer jobs today are secure and with benefits, Ontario should set up a drug and dental plan for all Ontarians who do not have coverage through their employers. A substantial portion of it could be funded by small employers (freeing them from the burden of administering separate plans). This plan should be completely separate from OW and ODSP (just as OHIP is).
- Recommendation 32: Dentures, glasses (lenses and frames), diabetic testing supplies, and smoking cessation aids should be covered, by the present plans for OW and ODSP, and by any future plan. More medications should be covered.
4. Long-term Viability of the Social Assistance System:
The labour market is changing, and this will mean more people on social assistance, as an ongoing reality.
Today, one in three jobs in Ontario is temporary, contract, part time or self employed. (This according to the Workers’ Action Centre.) People with little training and no solid work experience are the most likely to be forced to accept these poor quality jobs. Secure jobs which would get a person off OW are becoming the exception today.
- Recommendation 33. Recognize that many “jobs” that recipients may get will not be stable and long-term, but non-standard jobs with unpredictable hours and no benefits. Recognize that therefore many people will still require income support for some time, as they are in and out of temporary and part-time jobs.
Temp agencies are springing up in disadvantaged areas of cities. They provide just-in-time employees, but no security or hope for the worker. Some employers now use a revolving-door supply of temps in order to avoid the payroll costs of hiring people permanently. The temp worker only gets a portion of what the position pays.
- Recommendation 34: Ontario’s 2009 improvements to the Employment Standards Act relating to temp agencies are welcome, but more is needed. Revolving-door arrangements between employers and temp agencies, which deny secure jobs to workers, should be legislated against. An employer should not be allowed to routinely hire new temps for the same jobs from which they dismissed other temps yesterday. They should not be allowed to recruit through temp agencies except for positions that actually are temporary (such as Christmas rush, maternity leave, etc.). Legislation must be introduced to protect workers
Precarious work also has a harmful effect on health, and therefore future employability – and also on family life, including the mental health of the children growing up with these insecure and anxious parents. We can only expect that all of this will lead to more young people in need of social assistance in the future.
(Please see the Access Alliance’s paper Working Rough, Living Poor: http://accessalliance.ca/sites/accessalliance/files/documents/Access%20Alliance_Working%20Rough%20Living%20Poor%20Final%20Report%20June%202011.pdf.)
- Recommendation 35: If Ontario truly wants to reduce the number of people on social assistance, it will have to seriously address all of these labour market issues, beginning with a thorough study and resulting in quality legislation to bring about more secure jobs.
- Recommendation 36: Starting now, Ontario should hire more inspectors and pro-actively enforce the Employment Standards Act. This would help thousands of OW recipients to transition to more secure and lasting employment.
Conclusion - Moving Toward Universality
Some implications of all of the above recommendations are that:
- Persons on OW and ODSP would have their standard of living raised to a humane level and be better able to seek employment.
- Homelessness would be reduced, and the market would be encouraged to build more bachelor and one-bedroom apartments, of which there is now a dire shortage.
- Nutrition and health outcomes would improve, and street drugs and gangs would hold less appeal.
- Retailers would notice an increase in sales.
All of these might be expected to save the public money and generate more tax revenue.
But there are some additional implications that should be noted:
- Many who are now “working poor” would become eligible for some income support from OW – for their wages would not be clawed back as long as their total income is below the Low Income Measure. This would uplift a whole class of Ontarians who have been too long neglected. It would also encourage the government to raise the minimum wage and legislate for more secure jobs, so that less public assistance for these workers would be required.
- All of the working poor, as well as self-employed persons, would become eligible for drug and dental coverage. There are now thousands of working adults who haven’t been to a dentist in years, and if their doctor hands them a prescription they hand it right back to him saying, “I can’t afford to fill it”. They are surely entitled to as much coverage as a person on OW receives.
- Many families in which one spouse is fully supporting a spouse with a disability would become eligible for help from ODSP. This is long overdue.
Can Ontario afford these improvements?
As mentioned above, putting a secure floor under our society (in a way that might in time evolve into a Guaranteed Annual Income) can be expected to reduce costs for health care and criminal justice, while expanding the tax base somewhat.
Moreover, in these times of preoccupation with deficits, there is beginning to be a recognition among public policy thinkers that it’s time to revamp the tax system to raise more revenue from those who can afford to pay. A consensus is emerging, that starving the public sector has gone too far (as can be seen from Washington to Athens to Dublin).
When it comes to revamping Ontario’s tax system, it would obviously be preferable if the initiative came from the federal level, to:
- Raise the personal exemption to the Low Income Measure,
- Restore the 15 graduated tax brackets that Canada had until the 1980s,
- Add more brackets at the high-income end, and
- Close loopholes.
Simply by fixing the lop-sidedness of the present income tax system, more revenue would be raised with almost no effect on most families.
And this is to say nothing about corporate tax cuts, which have long since gone past the level at which they had any positive effect on job creation. In the next fiscal cycle, these cuts should start to be reversed.
Ontario must do what it can to implement such tax reforms, while continuing to call on the federal government to play a leading role.
We aren’t calling for drastic change. Ontario still has the fundamentals of a sound public sector, but serious tweaking is needed to keep it from falling into disrepair. The disrepair is beginning – as the stories told in this report illustrate.
We must start the repair now, if we wish to have a viable public sector, a viable labour market, and a viable social assistance system – a viable society – for future generations.
Submitted by the Alliance Against Poverty ……………………………………
Oscar Cole-Arnal ………………………………………………………
Eleanor Grant ………..…………………………………………………