Welfare in Canada
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Last updated: November 2020
This resource is not intended to help individuals identify what government transfers they could be entitled to. Individuals living in Newfoundland and Labrador seeking financial assistance should visit this page.
Components of welfare incomes
In Newfoundland and Labrador, households that qualify for basic social assistance payments also qualify for other financial support, including:
- Recurring additional social assistance payments (for example, an annual back-to-school allowance);
- Federal and provincial child benefits (for households with children);
- The GST/HST credit and credit supplements; and
- Provincial tax credits or benefits.
Together, these combine with basic social assistance payments to form a household’s total welfare income. Households may receive less if they have income from other sources, or more if they have special health- or disability-related needs.
The table below shows the value and components of welfare incomes for four example household types in 2019. All four households are assumed to be living in St. John’s. The child in the single parent family is aged two, and the children in the couple household are aged 10 and 15.
|Single person considered employable||Single person with a disability*||Single parent, one child||Couple, two children|
|Basic social assistance||$9,048||$9,048||$13,644||$14,220|
|Additional SA benefits||$1,800||$1,800||$1,800||$1,800|
|Federal child benefits||$6,568||$11,083|
|Provincial child benefits||$402||$827|
|Provincial tax credits/benefits||$220||$420||$440||$727|
|Total 2019 income||$11,386||$11,586||$23,578||$29,533|
Note: Totals may not add up due to rounding.
Total annual welfare incomes in 2019 ranged from $11,386 for a single person considered employable to $29,533 for a couple with two children.
Basic social assistance benefit amounts were unchanged from 2018.
All four households received additional social assistance benefits. The single person with a disability received $1,800 ($150 per month) through the Personal Care Allowance paid by the Department of Health and Community Services to social assistance clients receiving supportive services. The other household types received $1,800 ($150 per month) through the Supplemental Shelter Benefit. As the vast majority of social assistance recipients living in St. John’s had rental costs that exceeded the basic benefit, it was assumed they automatically received the shelter supplement.
Persons with disabilities on assistance were ineligible for both the fuel supplement and supplemental shelter benefits and instead received actual fuel costs and rent top-ups from the Department of Health and Community Services. Average values of these payments were not readily available and so could not be included in total welfare income calculations; while persons with disabilities are ineligible for the Fuel Supplement through Income Support, that benefit is included in basic assistance calculations as a proxy. We hope to be able to obtain average fuel and rental top-up amounts in future years.
Both households with children received the Canada Child Benefit, which increased with inflation in July 2019 from $541 to $553.25 per month for a child under 6 years of age, and from $457 to $466.83 per month for a child aged 6 to 17. They also received the Newfoundland and Labrador Child Benefit. This monthly payment increased in July 2019 from $33.17 to $33.75 for the first child, and from $35.16 to $35.83 for the second child.
All four households received the GST/HST credit, which increased in July 2019 with inflation. The single person considered employable and the single person with a disability both received $287, while the single parent with one child received $574 and the couple with two children received $876. Both single adult households received $30.75 through the GST/HST credit supplement, while the single parent received the full amount of $151.
All four households also received the Newfoundland and Labrador Income Supplement, which includes an additional disability amount for the single person with a disability.
Changes to welfare incomes
The graphs below show how the total welfare incomes for each of the four example household types have changed over time. The values are in constant 2019 dollars, taking into account the effect of inflation as measured by the national consumer price index.
Historically, the trends in welfare income of a single person considered employable and a single person with a disability were very different. The income of a single person considered employable was much lower and had more fluctuations compared to the general reduction over time that characterized the welfare income of a single person with a disability. Starting in 2012, however, the value of total welfare incomes for these two households converged and have since remained nearly identical.
The massive decline between 1995 and 1997 in the total welfare income for a single person considered employable was the result of a policy change that gave recipients very low room and board allowances instead of market rent shelter benefits.
Starting in 2011, calculations of welfare incomes for a single person with a disability for the purposes of this report no longer include supplemental shelter benefits. Persons with disabilities on assistance receive shelter benefit top-ups from the Department of Health and Community Services. The average values of this support are not readily available and therefore are not included in these calculations.
- In 2019, the total welfare income of a single person considered employable was $11,386, while that of a single person with a disability was $11,586.
Welfare incomes for households with children have gradually increased over time, with increases in 2006 and again from 2015 to 2017, although values have decreased since then. The 2006 rise resulted from an increase to the Family Benefit rate. The rise in 2015 to 2017 was largely the result of changes to federal child benefits.
In 2019, the welfare income of a single parent with one child was $23,578, and that of a couple with two children was $29,533, both of which were slightly below the high point reached in 2017.
Adequacy of welfare incomes
The adequacy of a household’s total welfare income can be assessed by comparing it to a set threshold of low income. In Canada, there are three commonly used measures:
- The official poverty measure, the Market Basket Measure (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 (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 (LICO) identifies households that are likely to spend a disproportionately large share of their income on the necessities of food, clothing, and shelter.
The table below shows how welfare incomes for the four example household types compared to the three low-income thresholds (after tax). Because LICO and MBM thresholds vary by community size, the threshold used for each is for St. John’s.
|Single person considered employable||Single person with a disability||Single parent, one child||Couple, two children|
|Total welfare income||$11,386||$11,586||$23,578||$29,533|
|MBM threshold (St. John’s)||$22,600||$22,600||$31,961||$45,199|
|Welfare income minus MBM threshold||-$11,214||-$11,014||-$8,383||-$15,666|
|Welfare income as % of MBM||50%||51%||74%||65%|
|LIM threshold (Canada-wide)||$24,642||$24,642||$34,850||$49,285|
|Welfare income minus LIM threshold||-$13,257||-$13,057||-$11,271||-$19,752|
|Welfare income as % of LIM||46%||47%||68%||60%|
|LICO threshold (St. John’s)||$18,520||$18,520||$22,540||$35,017|
|Welfare income minus LICO threshold||-$7,134||-$6,934||$1,038||-$5,484|
|Welfare income as % of LICO||62%||63%||105%||84%|
The maximum 2019 welfare incomes of all four households were below the thresholds of nearly every low-income measure. One household exceeded the income threshold of one low-income measure (the welfare income of a single parent with one child in 2019 was 105% of the LICO threshold). Households with children had incomes closer to the thresholds than single persons.
The lowest income relative to the thresholds was that of a single person considered employable at between 46 and 62 per cent of the thresholds, although the income of a single person with a disability was comparable at between 47 and 53 per cent of the thresholds. Single parents with one child had the highest incomes relative to the thresholds – 68 per cent of the LIM, 74 per cent of the MBM, and 105 per cent of the LICO. Couple households with two children had an income of between 60 and 84 per cent of the thresholds.
Given that the MBM is Canada’s official poverty measure, and that having an income less than 75 per cent of the MBM is classified as “deep poverty,” all four of the example households would have been living in deep poverty in 2019.