Welfare in Canada
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Last updated: November 2019
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
Households that qualify for basic social assistance payments also qualify for other financial support including:
- GST/HST credit
- Provincial/territorial tax credits or benefits
- Federal and provincial/territorial child benefits (for households with children)
- Recurring additional social assistance payments (for example, an annual back-to-school allowance)
Together, these combine with basic social assistance payments to form the total welfare income of a household. Households may receive less if they have income from other sources, while some households may receive more if they have special health- or disability-related needs.
The table below shows the value and components of welfare incomes for four household types living in St. John’s in 2018.
|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||$6,448||$10,881|
|Provincial child benefits||$392||$808|
|Provincial tax credits/benefits||$220||$420||$440||$727|
|Total 2018 income||$11,383||$11,583||$23,436||$29,296|
Total welfare incomes in Newfoundland and Labrador ranged from $11,383 for the single person considered employable to $29,296 for the couple with two children.
On top of basic social assistance, households received additional social assistance benefits, as shown in the table. 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 over 90 per cent of social assistance households 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 the supplemental shelter benefits because they often received additional financial benefits towards the actual cost of shelter and utilities from the Department of Health and Community Services. The value of this additional assistance was not readily available and so could not be included in the total welfare income calculations.
Both households with children received the Newfoundland and Labrador Child Benefit. This monthly payment increased in July 2018 from $32.16 to $33.17 for the first child and from $34.16 to $35.16 for the second child. They also received the Canada Child Benefit which increased in July 2018 from $533 to $541 per month for a child under the age of six and from $450 to $457 per month for a child aged between six and 17.
All households received the GST credit, which increased in July 2018 in line with inflation. In terms of provincial tax credits, social assistance households qualified for the Newfoundland and Labrador Income Supplement. The amount was higher for those who were also eligible for the federal Disability Tax Credit.
Changes to welfare incomes
The graphs below show how the total welfare incomes for each of the four illustrative household types have changed over time. The values are in constant 2018 dollars, taking into account the effect of inflation as measured by the national consumer price index.
In the early 1990s, a single person with a disability had a welfare income nearly double that of a single person considered employable. But the welfare incomes of these two household types have converged. In 2018, a single person with a disability had a total welfare income of $11,583, compared to $11,383 for a single person considered employable.
Between 1995 and 1996, the welfare income of a single person considered employable dropped from nearly $6,900 to under $2,000. This was the result of a policy change where recipients no longer received shelter benefits for market rent and instead received significantly lower room and board allowances. Between 2000 and 2002, the total amount more than recovered to the previous level, and continued to increase gradually until 2012.
Between 1997 and 2005, the welfare income of a single person with a disability consistently declined. It fell again in 2011, but this was due to the shelter supplement no longer being included in the welfare income calculations. This in turn was because persons with disabilities on assistance often received additional financial support towards the cost of shelter and utilities from the Department of Health and Community Services and were therefore ineligible for the shelter supplement. Since the amount of this additional assistance was not readily available, it could not be included in the welfare income calculations.
Over the long term, welfare incomes for both household types with children have gradually increased, with marked rises in 2006 and in the period from 2015 to 2017. The rise in 2006 was the result of a five per cent increase to the Family Benefit rate, while the rise from 2015 to 2017 was largely the result of changes to federal child benefits.
In 2018, the welfare incomes of the single parent with one child and the couple with two children dropped slightly, and stood at $23,436 and $29,296, respectively.
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 (also known as the Market Basket Measure or 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 of poverty (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 measure (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 in Newfoundland and Labrador for the four household types compared to three low income thresholds (after tax). Because LICO and MBM thresholds vary by community size, the threshold used is for St. John’s.
|Single person considered employable||Single person with a disability||Single parent, one child||Couple, two children|
|Total welfare income||$11,383||$11,583||$23,436||$29,296|
|MBM threshold (St. John’s)||$19,502||$19,502||$27,579||$39,003|
|Welfare income minus MBM threshold||-$8,119||-$7,919||-$4,143||-$9,707|
|Welfare income as % of MBM||58%||59%||85%||75%|
|LIM threshold (Canada-wide)||$24,054||$24,054||$34,017||$48,108|
|Welfare income minus LIM threshold||-$12,671||-$12,471||-$10,580||-$18,812|
|Welfare income as % of LIM||47%||48%||69%||61%|
|LICO threshold (St. John’s)||$18,166||$18,166||$22,109||$34,347|
|Welfare income minus LICO threshold||-$6,783||-$6,583||$1,327||-$5,051|
|Welfare income as % of LICO||63%||64%||106%||85%|
For each household type, the maximum welfare income fell well below all of the low income measures with one notable exception: the single parent with one child, whose welfare income exceeded the after-tax LICO by six per cent (but was significantly below the MBM and LIM thresholds). As a proportion, the biggest gap was for single adults considered employable — their welfare income was between 47 per cent and 63 per cent of the low income thresholds.