In every jurisdiction, eligibility for social assistance is primarily based on a “needs test” that considers a household’s income and financial assets. Although these are not the only determinants of eligibility, they form the primary basis for both initial and ongoing eligibility.
How do asset and income tests work?
To qualify for social assistance, a household’s assets and income must fall below certain limits set by each province or territory. These limits can vary by household size and composition. The needs test applies at the time of application, when eligibility is initially determined, as well as continuously, since households must declare any new assets or income while receiving benefits. This declaration, and the calculation for eligibility, is typically done monthly. Some jurisdictions set different limits for those applying for social assistance compared to those already receiving it.
Given that social assistance is considered a “last resort” income support program, all amounts of assets and all amounts of income, from any source, are counted against a household’s benefit eligibility, unless the source is specifically “exempt” from the test’s calculations. The underlying assumption is that households will use these assets or income to support themselves, reducing the need for social assistance benefits.
The asset test
To be considered for social assistance, a household typically cannot have assets in amounts higher than the program’s allowed maximum. The asset test usually only considers a household’s “liquid” assets, which are those that can be readily converted to cash. This includes cash on hand and in a bank account, as well as certain types of stocks, bonds, and securities. Some amount of these assets is exempt in every province and territory.
“Fixed” assets — such as a primary residence, primary vehicle, personal effects, and items needed for employment — are typically exempt (within certain guidelines) from the asset test. All jurisdictions also exempt the value of Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans (RDSPs). Several have some exemptions for Registered Retirement Savings Plans (RRSPs) as well as other asset sources.
Table A1 shows liquid asset limits in effect in all provinces and territories as of January 2023, with any changes that occurred during the year noted in the table. Asset limits apply to both households that are applying for social assistance and households that are already receiving social assistance, unless otherwise stated.
In 2023, three jurisdictions increased asset limits. Alberta’s limits, which are based on a multiplier of basic benefit amounts, increased as of January 1 along with the increase in basic benefits; the amounts in the table reflect this increase. In Newfoundland and Labrador, asset limits doubled as of July 1. In Quebec, amounts for dependent children of recipients are indexed annually, effective January 1 each year; the amounts in the table reflect this indexation increase.
Note that Manitoba introduced the new Manitoba Supports for Persons with Disabilities (MSPD) program in 2023; asset limits for the unattached single with a disability receiving benefits from that program are included in the table below.
Table A1: Liquid asset limits for Welfare in Canada households, 2023
1. Asset limits refer to those in the “Expected to Work” (ETW) and “Barriers to Full Employment” (BFE) categories of Alberta’s Income Support program, wherein liquid asset limits are equivalent to three months of Core Benefits (plus an amount of the Federal Child Benefit) based on household composition, except for the second unattached single with a disability, for whom the asset limits refer to those in the Assured Income for the Severely Handicapped (AISH) program.
2. Asset limits refer to those in British Columbia’s Income Assistance program except in the case of the unattached single with a disability; in that case, they refer to those in the Disability Assistance program.
3. The MBFE household is an unattached single with a disability receiving Medical Barriers to Full Employment benefits, while the MSPD household is an unattached single with a disability receiving benefits from the new Manitoba Supports for People with Disabilities program.
4. Asset limits refer to those in New Brunswick’s Transitional Assistance program (TAP) except in the case of the unattached single with a disability; in that case, they refer to those in the “Blind, Deaf or Disabled persons” category in the Extended Benefits (EB) program.
5. Asset limits in the Income and Employment Support program were increased from $3,000 for a household of one person and $5,500 for a household of two or more people, to $6,000 for one person and $11,000 for two or more people as of July 1, 2023.
6. Asset limits refer to those in the Ontario Works (OW) program except in the case of the unattached single with a disability; in that case, they refer to those in the Ontario Disability Support Program (ODSP).
7. Asset limits refer to those in Prince Edward Island’s Social Assistance program except in the case of the unattached single with a disability; in that case, they refer to those in the Assured Income component of the AccessAbility Supports program.
8. Asset limits for applicants and recipients refer to those in the Social Assistance program; the higher amounts apply after the first month. Asset limits for the unattached single with a disability refer to those in the Social Solidarity program. Income received during the month of application for rent, heating, and public utility costs are not considered household assets. Note that asset limits are higher for some returning applicants to Social Assistance, including participants in the Aim for Employment program who have completed the mandatory 12 months of participation and who apply to return in the month immediately following that participation. In these cases, asset limits in 2023 were $2,500 for an unattached single, $5,517 for a single parent with one child, and $5,656 for a couple with two children.
9. Asset limits refer to those in the Saskatchewan Income Support (SIS) program except in the case of the unattached single with a disability; in that case, they refer to those in the Saskatchewan Assured Income for Disability (SAID) Program.
10. This amount represents $500 in cash plus $1,500 in a form other than cash.
The income test
To be considered eligible, a household’s total income after exemptions typically must be less than the maximum amount of benefits that they would receive from the program. The benefit amount is calculated as the difference between the maximum benefit the household would be eligible for and their income after exemptions. Thus, a household with zero income after exemptions will receive the maximum benefit. A household where income after exemptions is equal to or greater than the maximum benefit will not qualify for assistance.
Given that the income test is typically calculated monthly, households who qualify for assistance can become ineligible if their income after exemptions exceeds the maximum benefit in any given month. Income from a previous month is normally calculated against benefit eligibility in the following month.
This ongoing, monthly test of eligibility is important not only for access to regular monthly financial support but also for access to in-kind benefits, such as health benefits, because access may depend on the household continuing to be eligible for at least some financial assistance. A difference of a few dollars in income can cause a household to lose this access.
Income exemptions are typically different for “earned” and “unearned” income. Earned income is the amount of money that a household gets from employment or self-employment, while unearned income is the amount the household receives from other sources, including pensions, gifts, settlements, and other income support programs.
Earned Income
In all 13 provinces and territories, some amount of earned income is exempt from the needs test. These exemptions allow households who are either applying for or receiving social assistance to earn a certain amount of money from employment without their eligibility for or the amount of their benefits being impacted.
Each social assistance program has its own way of calculating earned income exemptions, but there are generally three approaches:
- A flat-rate amount permits a household to earn a certain amount each month, after which social assistance benefits are reduced dollar for dollar,
- A percentage of earnings approach means that benefits are reduced by a certain percentage of the amount of money earned. For example, a 25 per cent exemption means that benefits are reduced by 75 cents for every dollar earned, and
- A combination of a flat-rate amount and a percentage means that once the flat-rate amount is exceeded, benefits are reduced by a percentage amount.
In some jurisdictions, households that are applying for assistance are not allowed any exemptions for earned income. In these cases, their benefits are reduced dollar for dollar.
In most cases, earned income exemptions are based on monthly earnings (e.g., a household could earn $200 each month before their benefits are reduced). A small number of social assistance programs calculate exemptions based on annual earnings; programs for people with severe disabilities are more likely to have an annual earnings exemption than programs for people who are considered employable.
Typically, net income is counted as opposed to gross income, and both employment and self-employment income are treated the same. In jurisdictions that have more than one social assistance program (e.g., one program for people who are deemed employable and another for people with severe disabilities), earned income exemption levels can differ between programs.
Table A2 shows earned income exemption amounts in effect in all provinces and territories as of January 2023; any changes that occurred during the year are noted. Amounts are monthly unless otherwise specified and apply to both households that are applying for social assistance and households that are already receiving social assistance, unless otherwise stated.
One jurisdiction increased earned income exemptions in 2023: Newfoundland and Labrador increased exemptions in December as noted in the table.
Note that Manitoba introduced the Manitoba Supports for Persons with Disabilities (MSPD) program in 2023; earned income exemptions for the unattached single with a disability receiving benefits from that program are included in the table below.
Table A2: Earned income exemptions for adults in Welfare in Canada households, 2023
11. ETW/BFE refers to the “Expected to Work/Barriers to Full Employment” category of social assistance in Alberta. Under the ETW/BFE categories, if a dependant is attending school, their income is fully exempt. If a dependant is not in school, the first $350 of net earnings is exempt and a 25% exemption applies thereafter. AISH refers to Alberta’s Assured Income for the Severely Handicapped program.
12. In British Columbia, Income and Disability Assistance recipients must be in receipt of assistance for at least one month before the earned income exemption amount applies. However, no wait period applies for people who have previously received Disability Assistance (i.e., returning PWDs) or for people who have received Income Assistance in at least one of the previous six calendar months (i.e., recent Income Assistance recipients who return to assistance, and people who transfer from Income Assistance to Disability Assistance).
13. EIA refers to Manitoba’s Employment and Income Assistance program and MSPD refers to the Manitoba Supports for Persons with Disabilities program.
14. In Manitoba, recipients of EIA must be in receipt of assistance for at least one month before the earned income exemption amount applies. MSPD applicants are eligible for their full base exemption after their categorical eligibility is established (prorated for the calendar year). Note that Manitoba also provides the Rewarding Work Allowance (RWA) to all employed adults without disabilities receiving EIA benefits, which is a payment of $100 for people working more than 80 hours or ten days in a month, or $50 for those working less. Employed people receiving EIA under Medical Barriers to Full-Employment (MBFE), as well as MSPD, receive similar benefits in the form of employment transportation and employment clothing benefits.
15. Note that those applying for MSPD who are not members of a prescribed class (see below) must first meet the financial eligibility requirements of EIA. Once their categorical eligibility is established, the full base exemption applies, as noted above, to the date that the Disability Impact Assessment form was received.
16. Members of the prescribed class for MSPD are those who have been receiving services from Manitoba’s Community Living disABILITY Services, were living in personal care homes, or were receiving CPP-D at the time of application.
17. Note that amounts are prorated based on the date of eligibility.
18. Exemption amounts are for New Brunswick’s Transitional Assistance and Extended Benefits programs.
19. This refers to an unattached single with a disability requiring supportive services.
20. In Nova Scotia, families already in receipt of assistance may also earn up to $3,000 per fiscal year through the Harvest Connection program without affecting their basic Income Assistance payment.
21. The $350 exemption would apply to people with disabilities if they participate in supported employment.
22. These exemption amounts apply to recipients in both the Ontario Works (OW) program and the Ontario Disability Support Program (ODSP) as of January 1, 2023. In Ontario, recipients of OW must be continuously in receipt of assistance for at least three months before the earned income exemption amount applies. As well, the earnings of, and amounts paid under a training program to, people attending full-time post-secondary school are exempt as income and assets.
23. Starting in February 2023, the earnings exemption amount for ODSP recipients was increased to $1,000 in net monthly earnings for each adult earner with a disability, with a 25% exemption on additional amounts (i.e., for each additional dollar earned, support is reduced by 75 cents). In addition to earnings exemptions, ODSP provides a $100 Work-Related Benefit to each eligible adult family member in any month they receive earnings.
24. These exemption amounts apply to people with no limited capacity for employment or temporary limitations to employment in the Social Assistance program and to participants in the Aim for Employment Program, as well as people with severely limited capacity for employment in the Social Solidarity program. Aim for Employment Program participants may also receive a supplement of 20% of any portion of their work income in excess of the applicable exemption amount.
25. SIS refers to the Saskatchewan Income Support program. SAID refers to the Saskatchewan Assured Income for Disability program.
26. In the Yukon, recipients must be in receipt of assistance for at least one month before the earned income exemption amount applies. Note that people who qualify for the Yukon Supplementary Allowance (payable to people with disabilities and people aged 65+) are eligible for an additional annual earned income exemption of up to $3,900.
27. Note that the basic deduction of $100 for a single-person household and $150 for households with two or more people is applied to total income from both earned and unearned income.
Unearned Income
“Unearned income” includes sources of income that do not come from employment. Many sources of unearned income are specifically exempt from the needs test in many jurisdictions, while others result in a reduction in benefits.
Unearned income from some income support programs, such as the Canada Child Benefit and the GST/HST credit, is typically exempt from the needs test. As well, exemptions are often made for income from sources such as payments from certain programs for people with disabilities or for foster children, payments from reparations programs, pain and suffering awards resulting from certain court cases or government settlements, or income from money that is borrowed or comes from grants.
Conversely, income from Employment Insurance (EI), the Canada Pension Plan (CPP) and Canada Pension Plan-Disability (CPP-D), or provincial and territorial workers’ compensation programs is typically not exempt. Although payments from these types of social insurance programs are important sources of income that households receiving social assistance may have paid into, they are typically unable to claim them without their social assistance eligibility or benefit levels being impacted. As well, in most jurisdictions, households applying for or receiving social assistance are required to “pursue” or “access” these benefits, if they are eligible, only to have their social assistance benefits reduced dollar for dollar.
Table A3 below shows unearned income exemptions in effect in all provinces and territories in 2023 for payments from Employment Insurance, the Canada Pension Plan (CPP) and Canada Pension Plan-Disability (CPP-D), QPP/QPP-D in Quebec, or provincial and territorial workers’ compensation programs. Exemptions are for both applicants and recipients unless otherwise noted.
As of 2023, two jurisdictions provided some level of exemption for payments from these programs: New Brunswick (for recipients only) and the Northwest Territories. One other jurisdiction, British Columbia, partly exempts some income from some forms of workers’ compensation payments.
Table A3: Exemptions for EI/CPP/CPP-D/workers’ compensation (as “unearned income”) for Welfare in Canada households, 2023
28. ETW/BFE refers to the “Expected to Work/Barriers to Full Employment” category of social assistance. AISH refers to Alberta’s Assured Income for the Severely Handicapped program.
29. In British Columbia, Disability Assistance recipients must be in receipt of assistance for at least one month before the earned income exemption amount applies. However, no wait period applies for people who have previously received Disability Assistance (i.e., returning PWDs) or for people who have received Income Assistance in at least one of the previous six calendar months (i.e., people who transfer from Income Assistance to Disability Assistance).
30. Note that in Ontario, CPP death benefit, orphan’s benefit, and disabled contributor’s child benefit payments are fully exempt.