• Components of welfare incomes
• Changes to welfare incomes
• Adequacy of welfare incomes
• Changes to adequacy of welfare incomes

Last updated: November 2022

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:

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

Together, these components 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 2021, one example household — the single parent with one child — was also eligible for payments related to the continuing COVID-19 pandemic.

The table below shows the value of the welfare income components of the four example household types in Prince Edward Island in 2021. All four households are assumed to be living in Charlottetown. The child in the single parent household is two years old and the children in the couple household are ten and 15. COVID-19 pandemic-related payments are included where applicable in the table below.​

Components of welfare incomes, 2021

Note: Totals may not add up due to rounding.

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

Total annual welfare incomes in 2021 ranged from $13,838 for the unattached single considered employable to $39,686 for the couple with two children. The income of the unattached single with a disability was $15,674 and that of the single parent with one child was $26,639.

Basic social assistance: Three of the example households received benefits through the Social Assistance program. The unattached single with a disability received benefits through AccessAbility Supports. Monthly basic allowance amounts did not increase in 2021; however, shelter benefit amounts increased effective July 2021 by approximately 35 per cent for the unattached single households (from $588 to $794), approximately 29 per cent for the single parent with one child (from $743 to $961), and approximately 20 per cent for the couple with two children (from $933 to $1,118).

Additional social assistance: On top of basic benefits, the couple with two children received an additional $450 through the School Allowance ($100 for the ten-year-old and $125 for the 15-year-old, issued in both August and December, which was an increase over 2020’s amounts). In addition, the December School Allowance was doubled as a cost-of-living top-up in recognition of rising costs due to inflation, providing an additional $225 to the couple with two children household.

Federal child benefits: Both households with children received the Canada Child Benefit (CCB), which increased with inflation in July 2021 from $563.75 to $569.42 per month for a child under six years of age and from $475.66 to $480.41 per month for a child aged six to 17. In addition, the single parent of one child aged two received the COVID-19 pandemic-related CCB Young Child Supplement, given to CCB-eligible families with children under the age of six, of $300 per child in January, April, July, and October.

Provincial child benefits: Prince Edward Island does not currently have a child benefit program.

Federal tax credits / benefits: All four households received the GST/HST credit, which increased in July 2021 with inflation. The unattached single considered employable and the unattached single with a disability received $297.50 in basic GST/HST credit, while the single parent with one child received $595 and the couple with two children received $907. Three households also received the GST/HST credit supplement. The unattached single considered employable received $38.28, the unattached single with a disability received $74.28, and the single parent with one child received the maximum amount of $156.

Provincial tax credits / benefits: 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. These amounts remained unchanged in 2021.

COVID-19 pandemic-related payments

The only pandemic-related payment available to the example Prince Edward Island households in 2021 was received by the single parent of one child aged two, which came from the federal Canada Child Benefit Young Child Supplement of $300 per child, paid in January, April, July, and October. This amount is included in, and is not in addition to, the benefits described in the Components section above.

COVID-19 pandemic-related payments, 2021

The graphs below show how the total welfare incomes for each of the four example household types in Prince Edward Island have changed over time. Note that the values are in 2021 constant dollars, not in nominal dollars. Using constant dollars takes into account the effect of inflation, as measured by the national Consumer Price Index, given that inflation reduces real dollar values over time.

Note that both the nominal and constant values of the welfare income of the unattached single considered employable, the unattached single with a disability, and the single parent with one child was higher in 2021 than in 2020.

After a period of relative stability through the early 1990s, the total welfare income of the unattached single considered employable declined significantly between 1994 and 1996, followed by a long period of relative stasis that lasted until 2017. Increases from 2018 through 2021 culminated in a total welfare income of $13,838 in 2021, which is an increase of 61 per cent over 2017 and the highest value across the time series.

The total welfare income of the unattached single with a disability saw a similar trend through the mid-1990s, with a less severe decline in the late 1990s and a period of relative stability from 1999 through 2002. Another decline followed in 2003, with another period of relative stability through to 2017. Increases from 2018 through 2021 resulted in a total welfare income for this household of $15,674 in 2021. This is the highest value across the time series and an increase of 41 per cent over 2017.

Increases in 2018 were due to a change in shelter allowance policy for the unattached single considered employable, in recognition of PEI’s changing rental market, and the introduction of an Assured Income through AccessAbility Supports for the unattached single with a disability. Increases in 2019 resulted from increases to basic social assistance benefits. Those in 2020 resulted from both basic benefit increases and the addition of provincial and federal COVID-19 pandemic-related payments.

The 2021 increases resulted from increases to shelter benefit rates and occurred despite the loss of pandemic-related payments.

After declines in the mid-1990s and relative stagnation between 1996 and 2005, total welfare incomes for households with children began to gradually rise. Changes to federal child benefits between 2015 and 2017 resulted in further increases. Higher basic social assistance benefits since 2017 and the addition of provincial and federal COVID-19 pandemic-related payments saw welfare incomes reach their highest levels in 2020.

In 2021, the total welfare income of the single parent with one child increased to $26,639, despite the loss of the majority of pandemic-related payments and largely because of the increase to shelter benefit amounts. The total welfare income of the couple with two children in 2021 declined to $39,686, largely due to the loss of pandemic-related payments and despite the shelter benefit amount increases. Note that the total welfare income of the couple with two children in 2021 was the only one of the four households to experience a nominal decline in their welfare income between 2020 and 2021.

Adequacy of welfare incomes

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

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

• The Market Basket Measure (MBM), Canada’s Official Poverty Line, 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 Charlottetown are used in the analysis below. As well, both the MBM and LIM thresholds for 2021 are estimates based on increasing the 2020 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 Prince Edward Island 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 Charlottetown.

The welfare incomes of all four example household types in Prince Edward Island were below Canada’s Official Poverty Line in 2021, meaning all these households were living in poverty. Two of the four households were also living in deep poverty in 2021, as defined by the MBM-DIP.​

The unattached single considered employable had the lowest income relative to the poverty thresholds. Their income was $3,690 below the deep income poverty threshold and $9,532 below the poverty line. This means their income was 79 per cent of the MBM-DIP and 59 per cent of the MBM.

The unattached single with a disability fared better, with a welfare income that was $1,854 below the deep income poverty threshold and $7,696 below the poverty line. In other words, their income was 89 per cent of the MBM-DIP and 67 per cent of the MBM.

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

The single parent with one child had a welfare income that was above deep income poverty but below the poverty line. Their income was $1,851 above the deep income poverty threshold but $6,411 below the poverty line. This means their income was 107 per cent of the MBM-DIP but 81 per cent of the MBM.

The welfare income of the couple with two children was the highest relative to the poverty thresholds. Their income was $4,631 above the deep income poverty threshold but it remained below the poverty line by $7,054. In other words, their income was 113 per cent of the MBM-DIP and 85 per cent of the MBM.

Low-income threshold comparisons

The welfare incomes of all four households were below the LIM threshold, and those of two households were below the LICO threshold, as shown in the table linked above.

The lowest income relative to these two low-income thresholds was that of the unattached single considered employable, whose total welfare income was 50 per cent of the LIM and 73 per cent of the LICO. The highest income relative to the LIM was that of the couple with two children, at 72 per cent; their income relative to the LICO was 110 per cent. The highest income relative to the LICO was that of the single parent with one child, at 115 per cent; their income relative to the LIM was 69 per cent. The unattached single with a disability had an income that was 57 per cent of the LIM and 82 per cent of the LICO.

Changes to adequacy of welfare incomes

The graphs below show the total welfare incomes of each of the four example household types in Prince Edward Island as a percentage of the Market Basket Measure (MBM), starting in 2002.

The MBM has been updated twice since its creation in 2000, first in 2008 and again in 2018. This “rebasing” updates the measure, including the items and costs included in the basket, to better reflect contemporary circumstances.

Three trendlines for each household are shown, which correspond to the relationship between welfare incomes and the original and rebased MBMs. Rebasing typically creates a higher poverty threshold than that of a previous base.

The 100 per cent threshold at the top of the vertical axis represents Canada’s Official Poverty Line. As such, the graphs essentially show how far below the poverty line the households have been in terms of their total welfare income over the past 20 years. The trendlines indicate changes in the level of poverty of the households within the years in which the bases are applied. A rise in the trendline within those periods indicates an improvement in their level of poverty while a decline indicates a worsening of the depth of their poverty.

A grey line has also been included that indicates the deep income poverty threshold, which is 75 per cent of the MBM. As such, the graphs also show the relationship between total welfare incomes over time and deep poverty.

Note that MBM thresholds vary by province and community size, and so Charlottetown is used. Also note that the 2021 MBM thresholds are estimates based on increasing the 2020 thresholds to account for inflation. More information is in the methodology section.

The welfare income of the unattached single considered employable started the time series in 2002 at only 43 per cent of the poverty line and, with slight fluctuations, remained at that level in 2008. After rebasing, their income was even lower, at 38 per cent of the poverty line. Thereafter, their income stayed steady relative to the poverty line, with some slight fluctuations, until 2017 where it was 42 per cent of the poverty line, increasing to 56 per cent in 2018. With the 2018 rebasing, their income was 48 per cent of the poverty line, increasing to 59 per cent in 2021.

Overall, the welfare income of the unattached single considered employable was 16 percentage points higher relative to the poverty line in 2021 than at the start of the time series in 2002. This represents a significant lessening of their poverty, although their income remains over 40 per cent below the poverty line in 2021. It is also important to note that their income was below the deep income poverty threshold across the entire time series, meaning they would have been living in deep poverty over the last 20 years.

The welfare income of the unattached single with a disability started the time series in 2002 at 64 per cent of the poverty line, declining through 2006 to 54 per cent, then increasing to 56 per cent in 2008. After rebasing, their income was only 50 per cent of the poverty line, increasing to 55 per cent in 2010, then falling and remaining stable through 2016 and increasing again to 60 per cent in 2018. After rebasing, their income was 52 per cent of the poverty line, increasing to 67 per cent in 2021.

Overall, the welfare income of the unattached single with a disability was only slightly higher, relative to the poverty line, in 2021 at 67 per cent than in 2002 at 64 per cent. Not much improvement in the depth of their poverty was made across the time series. As well, given that their income was below the deep income poverty threshold across the entire time series, they would have been living in deep poverty over the last 20 years.

The welfare income of the single parent with one child started the time series at 66 per cent of the poverty line, increasing to 73 per cent in 2008. After rebasing, their income was only 65 per cent of the poverty line, increasing in 2009 to 69 per cent. Through 2014, their income fluctuated but generally remained stable, after which it rose steadily relative to the poverty line, to 79 per cent in 2018. With 2018’s rebasing their income was 69 per cent of the poverty line, increasing to 81 per cent in 2021.

Overall, the welfare income of the single parent with one child ended the time series in 2021 at 81 per cent of the poverty line, much higher than it started in 2002 at 66 per cent. This 15 percentage point change indicates a fairly significant reduction in the depth of their poverty across the entire time series. While their income has risen above the deep income poverty threshold in recent years, it was below or at the threshold for 17 of the last 20 years, meaning they would have lived in deep poverty for the vast majority of the time period.

The welfare income of the couple with two children fared best relative to the poverty line among all four households and followed a similar trendline to that of the single parent with one child. Their income started the time series at 72 per cent of the poverty line, increasing slightly to 75 per cent in 2008. After rebasing, their income was at 67 per cent of the poverty line, then generally increased, with some fluctuations, and reaching 87 per cent in 2018. After 2018’s rebasing their income was 76 per cent of the poverty line, increasing to a high of 91 per cent in 2020, then falling to 85 per cent in 2021.

Overall, the welfare income, relative to the poverty line, of the couple with two children ended the time series in 2021 at 85 per cent, 13 percentage points higher than it was in 2002, at 72 per cent. This indicates a fairly significant reduction in the depth of their poverty across the time series. Their income was, however, below or at the deep income poverty threshold for 14 of the last 20 years, meaning they would have lived in deep poverty for most of the time period, but emerged out of deep poverty in the last six years.