Welfare in Canada
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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 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).
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 concerning 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.
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, they vary 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 reason) from the asset test.
Appendix 1 shows the liquid asset exemption levels in effect as of January 2018 and details of the changes that occurred during the year.
Once a household has met the asset test, it has to complete an income test to determine if it is eligible 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 recipient to earn a certain amount after which welfare benefits are reduced dollar for dollar.
- A percentage of earnings approach means that welfare benefits are reduced by a certain percentage. For example, a 25 per cent exemption rate means that welfare benefits are reduced by 75 cents for every dollar earned.
- A combination of flat-rate and a percentage means that once the flat rate is exceeded, benefits are reduced by a percentage amount.
Appendix 2 shows the earnings exemption approach in effect as of January 2018, and details of the changes that occurred.