Welfare in Canada

About social assistance

This section outlines how jurisdictions determine if an individual or family is eligible for social assistance. Households in receipt of social assistance are also eligible for other payments (such as tax credits and child benefits) which together form the household’s total welfare income.

Last updated: November 2022

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).

What is social assistance?

Social assistance is the income program of last resort. It is intended for those who have exhausted all other means of financial support.

Who is eligible for social assistance?

Each province and territory has its own social assistance program(s), so no two are the same. Each program has different administrative rules, eligibility criteria, benefit levels, and provisions for special types of assistance. However, the basic structure of social assistance is much the same across the country, even though the specifics vary.

In every jurisdiction, eligibility for social assistance is determined on the basis of a needs test which takes into account a household’s financial assets and income. These tests are discussed below. While these are not the only determinants of eligibility, they form the most important basis for both initial and ongoing eligibility.

Asset test

In order to qualify for social assistance, a household’s assets must fall below certain limits set by each province and territory. These limits can vary by household size and, in some jurisdictions, there are different limits for those applying for welfare compared to those already receiving it.

Asset tests tend to only consider a household’s liquid assets such as cash on hand and in a bank account as well as stocks, bonds, and securities that can be readily converted to cash. Fixed assets such as primary residence, primary vehicle, personal effects, and items needed for employment are exempt (within certain guidelines) from the asset test.

The table in Appendix 1 shows the liquid asset exemption levels in effect as of January 2021 and details of the changes that occurred during the year.

Income limits

Once a household has met the asset test, it must complete an income test to determine eligibility for social assistance. Certain aspects of a household’s income are not taken into account when determining the amount of social assistance. For example, the Canada Child Benefit, child welfare payments, and federal and provincial/territorial tax credits are all considered exempt income, but Employment Insurance benefits and Workers’ Compensation payments are not. For every dollar of non-exempt income a household has, its social assistance payment is reduced by a dollar.

Some earnings from employment are also exempt from the income test. This allows recipients to earn a certain amount of money without affecting their social assistance payments, creating a modest work incentive. Each social assistance program has its own way of calculating earnings exemptions, but there are generally three approaches:

  • A flat-rate amount permits a client to earn a certain amount after which social assistance benefits are reduced dollar for dollar;
  • A percentage of earnings approach means that benefits are reduced by a certain percentage. For example, a 25 per cent exemption means that benefits are reduced by 75 cents for every dollar earned;
  • A combination of flat-rate and a percentage means that once the flat rate amount is exceeded, benefits are reduced by a percentage amount.

The table in Appendix 2 shows the earnings exemption levels in effect as of January 1, 2020 and details of the changes that occurred during the year.

Indexation of benefits

Individuals and families who receive basic social assistance benefits will also be eligible for financial support through refundable tax credits, child benefits for households with children, and, where applicable, additional social assistance payments. Some of these benefits and credits are indexed to inflation while others are not.

Inflation indexing is important as it protects the value of benefits and credits from being eroded by higher costs of living.

Appendix 3 shows which provincial or territorial benefits or tax credits that the example households are eligible for are indexed to inflation as of 2021 and which are not, as well as any additional details as appropriate.

This appendix is new for 2021 and will be updated each year.

As of 2021, three jurisdictions index basic social assistance benefits: New Brunswick, Quebec, and Yukon. One other indexes shelter payments that are available separate from their social assistance program: Manitoba. Three jurisdictions index their provincial or territorial child benefit: Newfoundland and Labrador, Ontario, and Quebec. Three jurisdictions index other provincial or territorial tax credits or benefits: Ontario, Quebec, and Saskatchewan.

Note that two of the three federal benefits that households are eligible for — the Canada Child Benefit and the GST/HST credit — are indexed to inflation, and the federal climate action incentive, which is available to households in Alberta, Manitoba, Ontario, and Saskatchewan, is adjusted based on changes to the federal carbon tax. These federal benefits are not included in the table in Appendix 3.

Breakdown of basic social assistance benefits

Recipients of provincial and territorial social assistance programs receive benefits for cost-of-living expenses, such as food and clothing, and for shelter and shelter-related costs, such as heating costs or home insurance. These amounts may be calculated separately or combined into a flat rate amount. Some are also provided through separate programs administered outside of social assistance.

Appendix 4 shows which jurisdictions provide cost-of-living and shelter components as separate allowances and which provide them as one combined benefit or, in some instances, as both depending on the benefit program. Specifics are included in the notes.

Understanding the structure of basic benefits provides another way to understand the adequacy of basic benefits given that comparisons can be made between those benefits and the costs of living, such as food and shelter.

This appendix is new for 2021 and will be updated each year.