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 Prince Edward Island 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 Charlottetown in 2018.
|Single person considered employable||Single person with a disability*||Single parent, one child||Couple, two children|
|Basic social assistance||$10,053||$10,053||$13,652||$20,501|
|Additional SA benefits||$750||$350|
|Federal child benefits||$6,448||$10,881|
|Provincial child benefits|
|Provincial tax credits/benefits||$110||$110||$165||$165|
|Total 2018 income||$10,445||$11,208||$20,977||$32,757|
Total welfare incomes in Prince Edward Island ranged from $10,445 for the single person considered employable to $32,757 for the couple with two children.
There were a number of changes affecting welfare incomes in PEI in 2018. PEI had two shelter allowance rates for single adults considered employable: a standard rate of $346 per month and a higher rate for persons with special accommodation needs of $539 per month. Beginning in 2016, in recognition of the changing rental market, PEI gradually shifted its policy so that single adults considered employable could receive the higher of the two possible shelter allowances. By the start of 2018 most single employable adults on social assistance were receiving the higher shelter allowance rate. This shift is reflected in the table above.
Over the course of 2018, social assistance shelter rates increased by three per cent in June and by six per cent in December. In November 2018, the Food Allowance increased by ten per cent.
There was also a restructure of benefits affecting the single person with a disability. In July 2018, the former Disability Support Program was enhanced and renamed AccessAbility Supports. As a result the single person with a disability was eligible to receive $150 per month through the Community Living Expense as part of the Assured Income component of AccessAbility Supports. On top of basic assistance, the couple with children received an additional $350 through the School Allowance ($75 for the 10-year-old and $100 for the 15-year-old issued in August and December).
Both households with children 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, and the PEI Sales 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.
Both single persons considered employable and single persons with a disability saw their welfare incomes drop significantly starting in 1994. For single persons considered employable, the drop was much sharper and occurred over three years. For single persons with a disability, welfare incomes fell more gradually until 2003. Following that, these welfare incomes remained fairly constant until 2018, when both increased sharply.
The 2018 increase for the single person considered employable was mostly due to a gradual shift in policy – in recognition of the changing rental market in PEI, single employable recipients could receive the higher shelter allowance rate of $539 per month instead of the lower rate of $346 per. The increase for the person with a disability was due to the introduction of a $150 per month Community Living Allowance in July 2018.
In 2018, the welfare income of the single person considered employable and the person with a disability stood at $10,445 and $11,208 respectively.
- Unlike single adult households in PEI, households with children have seen a steady increase in their welfare incomes since the mid-1990s, with a more notable increase from 2015 as federal child benefits changed.
- In 2017, the maximum welfare income of a single parent with one child and a couple with two children stood at $20,619 and $32,135, respectively, the highest levels over the entire time period.
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 Prince Edward Island 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 Charlottetown.
|Single person considered employable||Single person with a disability||Single parent, one child||Couple, two children|
|Total welfare income||$10,445||$11,208||$20,977||$32,757|
|MBM threshold (Charlottetown)||$19,257||$19,257||$27,234||$38,514|
|Welfare income minus MBM threshold||-$8,812||-$8,049||-$6,257||-$5,757|
|Welfare income as % of MBM||54%||58%||77%||85%|
|LIM threshold (Canada-wide)||$24,054||$24,054||$34,017||$48,108|
|Welfare income minus LIM threshold||-$13,609||-$12,846||-$13,040||-$15,351|
|Welfare income as % of LIM||43%||47%||62%||68%|
|LICO threshold (Charlottetown)||$17,939||$17,939||$21,835||$33,920|
|Welfare income minus LICO threshold||-$7,494||-$6,731||-$858||-$1,163|
|Welfare income as % of LICO||58%||62%||96%||97%|
For each household type, the maximum welfare income fell well below all of the low income measures with two exceptions: the welfare income of single parents with one child and couples with two children stood at 96 per cent and 97 per cent of the LICO, respectively. As a proportion, the biggest gap was for single adults considered employable — their welfare income was between 43 per cent and 58 per cent of the low income thresholds.