This section outlines how jurisdictions determine if an individual or family is eligible for social assistance. Households that receive social assistance are also eligible for other payments (e.g., tax credits and child benefits); together, these components form a household’s total welfare income.
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 benefits or other types of assistance. However, as social assistance is a “last resort” income support, the basic structure of programs across the country is much the same, even though the specifics vary.
In every jurisdiction, eligibility for social assistance is determined based on a needs test that considers a household’s financial assets as well as their income, both aspects of which are discussed below. Although these are not the only determinants of eligibility, they form the most important basis for both initial and ongoing eligibility.
Asset limits
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.
Appendix 1 shows the liquid asset exemption levels in effect as of January 2022 and details the changes that occurred during the year.
Income limits
Once a household has met the asset test requirements, they must complete an income test to determine whether they are eligible for social assistance. Certain aspects of a household’s income are not taken into account when determining eligibility. For example, while the Canada Child Benefit, child welfare payments, and federal and provincial/territorial tax credits are all considered exempt income, Employment Insurance benefits and Workers’ Compensation payments are typically not. For every dollar of non-exempt income a household has, their social assistance payment is reduced by a dollar unless otherwise specified.
Some earnings from employment are also exempt from the income test, which 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 a flat-rate amount and a percentage means that once the flat-rate is exceeded, benefits are reduced by a percentage amount.
Appendix 2 shows the earnings exemption approaches in effect in each jurisdiction as of January 2022, and details of the changes that occurred during the year.
Indexation of benefits
Individuals and families who receive basic social assistance benefits are also 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 because it protects the value of benefits and credits from being eroded by higher costs of living.
Appendix 3 shows which of the provincial or territorial benefits or tax credits that the example households in this report received are indexed to inflation and which are not, as of January 2022, as well as any additional details as appropriate.
Note that two of the three federal government 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 (CAI), 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 (e.g., food and clothing) and shelter and shelter-related costs (e.g., 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, one combined benefit, or, in some instances depending on the benefit program, both, as of January 2022. Specifics are included in the notes.
The structure of basic benefits provides important context for understanding their adequacy, given that comparisons can be made between those benefits and the costs of living, such as food and shelter.