Welfare in Canada

Last updated: November 2020

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

In Prince Edward Island, 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 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 Charlottetown. 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 employableSingle person with a disabilitySingle parent, one childCouple, two children
Basic social assistance$10,848$12,648$14,700$22,464
Additional SA benefits   $350
Federal child benefits  $6,568$11,083
Provincial child benefits    
GST/HST credit$287$300$725$876
Provincial tax credits/benefits$110$110$165$165
Total 2019 income$11,245$13,058$22,158$34,938

Download the data in a table

Total annual welfare incomes in 2019 ranged from $11,245 for the single person considered employable to $34,938 for the couple with two children.

Three of the example households received benefits through the Social Assistance program; the single person with a disability received benefits through AccessAbility Supports which replaced the Disability Supports Program in 2018.

Social assistance benefits increased considerably during 2018 making 2019 the first full year of the new higher payments (the Basic Food Allowance increased by 10 per cent in January 2019, and the Shelter Benefit increased by 6 per cent in December 2018). Households also received a Local Transportation allowance of $25 per month as part of their basic social assistance benefits.

Through AccessAbility Supports, persons with a disability were provided with an assured income benefit made up of allowances for food, essentials, and community living, as well as a shelter benefit. AccessAbility Supports recipients could also access other income supports depending on their particular circumstances.

On top of basic social assistance benefits, the couple with two children received an additional $350 through the School Allowance ($75 for the 10-year-old, and $100 for the 15-year-old, issued in both August and December).

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. Unlike many provinces, Prince Edward Island does not have its own child benefit program.

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. The single person with a disability also received $12.60 through the GST/HST credit supplement while the single parent received the full amount of $151.

All four households also received the PEI Sales Tax Credit of $110 per year for an individual plus $55 for a spouse, common-law partner, or eligible dependant.

 

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.

Download the data in a table

  • Both single persons considered employable and single persons with a disability saw their welfare incomes drop significantly starting in 1994. For a single person considered employable, the drop was much sharper and occurred over three years. For a single person with a disability, welfare incomes fell more gradually until 2003. Following that, these welfare incomes remained fairly constant until 2017, when both increased sharply.

  • Between 2017 and 2019 the welfare income of a single person considered employable increased by $3,005 per year while the welfare income of a single person with a disability increased by $2,389. The increase for single persons considered employable in 2018 was due to a change in the shelter allowance policy in recognition of PEIs changing rental market. The 2018 increase for single persons with a disability was due to the introduction of an Assured Income through AccessAbility Supports. Incomes rose further for both household types in 2019 as a result of increases to basic social assistance benefits.

  • In 2019, the welfare income of a single person considered employable was $11,245, and that of a person with a disability was $13,058.

Download the data in a table

  • After a period of decline in the 1990s and stagnation thereafter, welfare incomes for households with children began to rise in 2005. Changes to federal child benefits between 2015 and 2017 resulted in further increases to the welfare incomes of households with children.
  • In 2019, the welfare income of a single parent with one child was $22,158, and that of a couple with two children was $34,938. These are the highest amounts over the time series.
 

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:

  1. 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.
  2. The Low Income Measure (LIM) identifies households whose income is substantially below what is typical in society (less than half of the median income).
  3. 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 Charlottetown.

 Single person considered employableSingle person with a disabilitySingle parent, one childCouple, two children
Total welfare income$11,245$13,058$22,158$34,938
MBM    
MBM threshold (Charlottetown)$21,841$21,841$30,888$43,683
Welfare income minus MBM threshold-$10,596-$8,783-$8,731-$8,745
Welfare income as % of MBM51%60%72%80%
LIM    
LIM threshold (Canada-wide)$24,642$24,642$34,850$49,285
Welfare income minus LIM threshold-$13,397-$11,585-$12,692-$14,347
Welfare income as % of LIM46%53%64%71%
LICO    
LICO threshold (Charlottetown)$18,289$18,289$22,260$34,581
Welfare income minus LICO threshold-$7,044-$5,231-$103$357
Welfare income as % of LICO62%71%100%101%

Download the data in a table

The maximum 2019 welfare incomes of all four example household types were below the thresholds of almost every low-income measure. The two households with children had incomes closer to the thresholds than those of single persons and met or exceeded the income threshold of one low-income measure.

The lowest income relative to the thresholds was that of a single person considered employable, with a total income of between 46 and 62 per cent of the thresholds. The single person with a disability fared somewhat better, with a total income of between 53 and 71 per cent of the thresholds. The couple with two children household had the highest income relative to the thresholds – total income was 71 per cent of the LIM and 80 per cent of the MBM, and 101 per cent of the LICO. The single parent with one child had an income that was 64 per cent of LIM and 72 per cent of the MBM, and 100 per cent of the LICO.

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,” three of the example households would have been living in deep poverty in 2019. Only the couple with two children had an income above the deep poverty threshold, but remained below the poverty threshold.

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