Welfare in Canada

About Welfare in Canada

Welfare in Canada is a series that presents the welfare incomes of four example households living on social assistance in a given year.

Last updated: November 2019

This resource is not intended to help individuals identify what government transfers they could receive. Individuals seeking advice on their eligibility for welfare or financial assistance should contact their local social assistance provider (their province, territory or municipality).

Welfare incomes refers to a household’s total income from government transfers and not just social assistance payments. Individuals and families who are in receipt of basic rates of social assistance will also be eligible for financial support through tax credits, child benefits for households with children, and, where applicable, additional social assistance payments that are automatic and recurring (for example, an annual back-to-school allowance). Together these form the total welfare income of a household. The value varies in every province and territory because each jurisdiction has distinct social assistance programs.

Welfare in Canada, 2018 looks at the maximum total amount that a household (an individual or family) would have received over the course of the 2018 calendar year, assuming they had no other source of income and no assets. Some households may have received less if they had income from other sources, while some households may have received more if they had special health- or disability-related needs.

The report looks at:

  • Eligibility criteria for social assistance
  • Components of a household’s total welfare income
  • Variations in welfare incomes by province/territory
  • Changes in welfare incomes over time
  • Adequacy of welfare incomes compared to poverty thresholds

In each jurisdiction, the total welfare income for which a household is eligible depends on its specific composition. For illustrative purposes this resource focuses on the welfare incomes of four household types:

  1. Single person considered employable
  2. Single person with a disability
  3. Single parent with one child age 2
  4. Couple with two children ages 10 and 15

Welfare in Canada was established by the Caledon Institute of Social Policy to maintain data previously published by the National Council of Welfare. In 2018, Maytree assumed responsibility for updating the series.

Methodology

The methodology replicates the approach used by the National Council of Welfare. To calculate the welfare income for each household type, we made the following assumptions:

  • The households started to receive assistance on January 1 and remained on assistance for the entire year.
  • The households had no earnings so were eligible to receive the maximum rate of assistance.
  • The heads of all households were deemed fully employable, with the exception of the single person with a disability.
  • The households lived in the largest city in their province or territory.
  • The households lived in private market housing and utility costs were included in the rent.
  • The households filed an income tax return at the end of the previous tax year.
  • Changes to welfare rates or other program rates over the course of the year were accounted for.
  • Basic rates and additional items (for example, a Christmas allowance or a back-to-school allowance) were included where applicable. Special needs amounts were not included.

To compare how total welfare incomes have changed over time within each jurisdiction, we convert the total welfare incomes from earlier years into 2018 prices using the consumer price index. The only exception is in the Changes to welfare incomes between 2017 and 2018 section where welfare incomes have not been adjusted for inflation. As prices increase, the same amount of money is able to buy less. Adjusting for inflation means that the trends over time in this report represent how the value of welfare incomes has increased after accounting for changes to the costs of living.

To demonstrate the adequacy of welfare incomes, we compare total welfare incomes in 2018 to the three measures of low income commonly used in Canada. These are:

  • The official poverty measure (also known as the Market Basket Measure or MBM) identifies households whose disposable income is less than the cost of a basket of goods and services that represent a basic standard of living.
  • The Low Income Measure of poverty (LIM) identifies households whose income is substantially below what is typical in society (less than half of the median income).
  • The Low Income Cut-Off measure (LICO) identifies households that are likely to spend a disproportionately large share of their income on the necessities of food, clothing, and shelter.

The exact levels of the low income thresholds change every year (in response to changes in costs, in the case of MBM and LICO, and in response to changing average income in the case of LIM) and are produced by Statistics Canada. At the time of publication, the MBM and LIM levels for 2018 were not available. As a result, we have estimated the LIM and MBM thresholds for 2018. To estimate the MBM threshold, which varies by community, we increased the 2017 levels in line with the consumer price index for the applicable city. To estimate the LIM threshold, which is the same across the provinces, we increased the 2017 levels in line with the national consumer price index.

All the low income thresholds used are for after-tax income because welfare incomes are not subject to income taxation.

The territories are not included in this part of the analysis because Statistics Canada does not produce poverty thresholds for the territories.

Maytree thanks all jurisdictions for their cooperation in the production of the welfare incomes data presented in this report.