Welfare in Canada

Newfoundland and Labrador

Last updated: December 2021

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:

  • Recurring additional social assistance payments from the province;
  • Federal and provincial child benefits (for households with children); and
  • Federal and provincial tax credits or benefits.

Together, these combine 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. In 2020, these households were also eligible for benefits introduced in response to the COVID-19 pandemic.

The table below shows the value of the welfare income components of the four example household types in Newfoundland and Labrador in 2020. All four households are assumed to be living in St. John’s. The child in the single parent family is two years old and the children in the couple household are ten and 15. COVID-19 pandemic-related payments are included in the basic social assistance, child benefit, and tax credit/benefits amounts, where applicable.

Components of welfare incomes, 2020

Note: Totals may not add up due to rounding.

Total annual welfare incomes in 2020 ranged from $11,678 for the unattached single considered employable to $31,276 for the couple with two children. The income of the unattached single with a disability was $18,226, and that of the single parent with one child was $24,766.

Basic social assistance: Monthly basic social assistance benefit amounts remained unchanged in 2020.

Additional social assistance: All four households received additional benefits.

The unattached single considered employable, the single parent with one child, and the couple with two children received $1,800 ($150 per month) through the Supplemental Shelter Benefit.

The unattached single with a disability received $1,800 ($150 per month) through the Personal Care Allowance, paid by the Department of Health and Community Services (HCS) to social assistance clients receiving supportive services. In addition, the unattached single with a disability received rent and utilities top-ups of $6,000 and $1,200 respectively from HCS, which are rounded averages provided by HCS.

Note

These amounts are not new, but they have been provided for inclusion in the Welfare in Canada report for the first time this year.

These amounts replace the Fuel Supplement included in previous years’ reports. While persons with disabilities are ineligible for the Fuel Supplement, that benefit was included in previous years’ report calculations as a proxy for fuel costs and utilities top-up amounts.

Federal child benefits: Both households with children received the Canada Child Benefit (CCB), which increased with inflation in July 2020 from $553.25 to $563.75 per month for a child under six years of age and from $466.83 to $475.67 per month for a child aged six to 17. In addition, they received a one-time COVID-19 pandemic-related CCB top-up payment of $300 per child in May.

Provincial child benefits: Both households with children received the Newfoundland and Labrador Child Benefit. In July 2020, this monthly payment increased from $33.75 to $34.08 for the first child, and from $35.83 to $36.16 for the second child.

Federal tax credits / benefits: All four households received the GST/HST credit, which increased in July 2020 with inflation. The unattached single considered employable and the unattached single with a disability both received $293, while the single parent with one child received $586 and the couple with two children received $894. The unattached single considered employable and the unattached single with a disability both received $26.94 from the GST/HST credit supplement, while the single parent with one child received the full $154 amount.

A one-time COVID-19 pandemic-related GST/HST credit top-up payment, delivered in April 2020, provided the basic amount of $290 to both the unattached single considered employable and the unattached single with a disability. The single parent with one child received $733 and the couple with two children received $886.

Provincial tax credits / benefits: All four households also received the Newfoundland and Labrador Income Supplement. The unattached single considered employable received $220, the unattached single with a disability received $420, the single parent with one child received $440, and the couple with two children received $727.

COVID-19 pandemic-related payments

All pandemic-related payments available to the example households in Newfoundland and Labrador came from federal programs (i.e., the GST/HST credit and Canada Child Benefit). In total, the unattached single considered employable and the unattached single with a disability received $290 related to the pandemic, the single parent with one child received $1,033, and the couple with two children received $1,486. These amounts are included in, and are not in addition to, the benefits described in the Components section above.

COVID-19 pandemic-related payments, 2020

Changes to welfare incomes

The graphs below show how the total welfare incomes for each of the four example household types in Newfoundland and Labrador have changed over time. Note that the values are in 2020 constant dollars, and not in nominal dollars. This takes into account the effect of inflation as measured by the national consumer price index, given that inflation reduces real dollar values over time.

The welfare income of the unattached single considered employable was historically much lower than that of the unattached single with a disability until 2012, when their values converged. The welfare income of the unattached single with a disability, however, declined gradually over time until the convergence point.

The massive decline between 1995 and 1997 in the total welfare income for the unattached single considered employable was the result of a policy change that gave recipients very low room and board allowances instead of market rent shelter benefits.

The 2012 convergence resulted from the elimination of supplemental shelter benefits in the income calculations for the unattached single with a disability. Between that point and 2019, the Fuel Supplement was included in the calculations of the income of the unattached single with a disability as a proxy for shelter and utilities top-ups provided by the Department of Health and Community Services (HCS), values which were not available until 2020.

The large increase in the 2020 income of the unattached single with a disability resulted from the inclusion of rounded average amounts for the shelter and utilities top-ups provided by HCS. The inclusion of these amounts better reflects the actual policy regime in Newfoundland and Labrador.

In 2020, the total welfare income of the unattached single considered employable was $11,678, while that of the unattached single with a disability was $18,226.

Welfare incomes for households with children have gradually increased over time, with larger increases in 2006 and again between 2015 and 2017. A decline between 2017 and 2019 was followed by an increase in 2020 to the highest levels seen across the time series.

The 2006 increases 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. The increases in 2020 were due to federal COVID-19 pandemic-related payments.

In 2020, the welfare income of the single parent with one child was $24,766,  while that of the couple with two children was $31,276.

Adequacy of welfare incomes

The adequacy of a household’s total welfare income can be assessed by comparing it to a set threshold of poverty and/or low income.

In Canada, there are two commonly used measures of poverty:

  • Canada’s Official Poverty Line, 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.
  • Deep Income Poverty (MBM-DIP) identifies households whose disposable income is less than 75 per cent of the MBM.

There are also two commonly used measures of low income:

  • 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.

Note that MBM thresholds vary by province and community size, and LICO thresholds vary by community size, and so those for St. John’s are used in the analysis below. As well, both the MBM and LIM thresholds are estimates based on increasing the 2019 thresholds to account for inflation.

Note also that none of the poverty or low-income measures currently in use in Canada account for the higher cost of living faced by persons with disabilities and thus these additional costs are not reflected in our analysis.

More information about the thresholds is available in the methodology section.

A table containing comparisons of the welfare incomes of the four example household types in Newfoundland and Labrador with all four poverty / low-income thresholds is available for download.

Poverty threshold comparisons

The figures below compare welfare incomes for the four example household types to the MBM and MBM-DIP thresholds for St. John’s.

The welfare incomes of all four example household types in Newfoundland and Labrador were below, and in some cases far below, Canada’s Official Poverty Line in 2020, which means that all four households were living in poverty. Two of the four households were also living in deep poverty in 2020, as defined by the MBM-DIP.

The unattached single considered employable had the lowest income relative to the poverty thresholds. Their income was $5,433 below the deep income poverty threshold and $11,137 below the poverty line. In other words, their income was only 68 per cent of the MBM-DIP and only 51 per cent of the MBM.

The unattached single with a disability fared best of all four example households relative to the poverty thresholds. Their income was $1,115 above the deep income poverty threshold, but it remained below the poverty line by $4,589. This means their income was 107 per cent of the MBM-DIP but 80 per cent of the MBM.

Note that the poverty experienced by persons with disabilities is under-represented, given that neither the MBM nor the MBM-DIP account for the additional costs of disability.

The single parent with one child had a welfare income that was $567 above the deep income poverty threshold, but below the poverty line by $7,500. In other words, their income was 102 per cent of the MBM-DIP but 77 per cent of MBM.

The welfare income of the couple with two children was $2,947 below the deep income poverty threshold and $14,355 below the poverty line. This means their income was 91 per cent of the MBM-DIP and 69 per cent of the MBM.

Low-income threshold comparisons

The welfare incomes of these households were also below, and in some instances far below, the low-income thresholds, as shown in the table linked above.

The lowest income relative to these thresholds was that of the unattached single considered employable, whose total welfare income was 46 per cent of the LIM and 63 per cent of the LICO thresholds. The highest income relative to the LIM was that of the unattached single with a disability, at 72 per cent, while their income relative to the LICO was 98 per cent. The highest income relative to the LICO was that of the single parent with one child, at 109 per cent, while their income relative to the LIM was 69 per cent. The income of the couple with two children was 62 per cent of the LIM and 89 per cent of the LICO.

Changes to adequacy of welfare incomes

The graph below shows the total welfare incomes of each of the four example household types in Newfoundland and Labrador since 2002 as a percentage of the MBM, which indicates changes in their level of poverty over time. A rise in the trendline indicates an improvement in their level of poverty, while a decline indicates a worsening of their poverty.

Note that the MBM thresholds reflect the base in use in each year in question (i.e., the 2000, 2008, and 2018 bases; the latter two are indicated with vertical lines in each graph). Rebasing creates a sufficiently higher threshold than that using a previous base, which typically results in a worsening of poverty in the year in which the new base is used. As noted above, MBM thresholds vary by province and community size, and so St. John’s is used. Also note that the 2020 MBM thresholds are estimates. More information is in the methodology section.

The welfare income of the unattached single considered employable generally declined in value relative to the poverty line over the time series, from 62 per cent of the MBM in 2002 to 51 per cent in 2020. The 2008 and 2018 MBM rebasings worsened their level of poverty and erased the improvements of 2007 and 2012. The low point was 50 per cent of the poverty line in 2019, increasing to 51 per cent in 2020.  

The welfare income of the unattached single with a disability also declined in value relative to the MBM from 2002 to 2019, with a large improvement in 2020 that was due to a change in reporting of the components of welfare incomes as noted above. In 2020 their income stood at 80 per cent of the poverty line.

The welfare income of the single parent with one child fared best relative to the poverty line among all four households, although their poverty worsened across the time series. Progress in 2007 resulted in a high of 91 per cent of the poverty line. A similar improvement between 2014 and 2017, when their welfare income reached 86 per cent, was followed by a worsening of their poverty due to the 2008 and 2018 MBM rebasings. In 2020, their income stood at 77 per cent of the poverty line.

The welfare income of the couple with two children followed a very similar trendline to that of the single parent with one child. Highs of 74 and 76 per cent of the poverty line were reached in 2007 and 2017 respectively. However, rebasing in 2008 and 2018 resulted in sharp drops. They started the time series in 2002 with an income that was 71 per cent of their poverty line and ended with an income that was 69 per cent of the poverty line in 2020.