Social Assistance Rate Restructuring and the Ontario Child Benefit - PowerPoint PPT Presentation

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Social Assistance Rate Restructuring and the Ontario Child Benefit

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no change for singles/couples without children, children over 18. Basic Needs only ... Some OW/ODSP offices are providing training to local agencies ... – PowerPoint PPT presentation

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Title: Social Assistance Rate Restructuring and the Ontario Child Benefit


1
Social Assistance Rate Restructuring and the
Ontario Child Benefit
  • Prepared by Cindy Wilkey, JoAnne Frenschkowski,
  • Jennefer Laidley (May 2008)
  • Income Security Advocacy Centre
  • www.incomesecurity.org

2
Workshop Overview
  • Structural change overview
  • How the Ontario Child Benefit works
  • How social assistance rates will be affected by
    the Ontario Child Benefit
  • A new benefit Transition Child Benefit
  • Some family income examples

3
Structural Change History
  • 1988 Transitions report
  • 1997 - Federal / provincial / territorial
    agreement on NCB and NCBS
  • Ontario Child Benefit (OCB) recommended in many
    social assistance redesign initiatives
  • Ontario Municipal Social Services Association
  • Caledon Institute / John Stapleton
  • Transitions Revisited
  • Toronto Daily Bread Food Bank
  • Toronto Social Services Action Plan
  • MISWAA (Modernizing Income Security for
    Working-Age Adults)

4
Structural Change Theory
  • Social assistance can be a barrier to economic
    independence
  • Social assistance is stigmatizing - Tax delivered
    benefits move income supports beyond stigma
    think of Old Age Security
  • Same approach should be used for child benefits
  • Income tax delivered, based on family income
  • Portable available regardless of source of
    income
  • Non-stigmatizing
  • Reliable not affected by parental eligibility
    for social assistance
  • BUT less responsive to changes than social
    assistance

5
Structural Change Results
  • Means a gradual move of benefits for children out
    of social assistance and into Ontario Child
    Benefit
  • From social assistance ? tax-delivered,
    income-based benefit
  • Requires SA rate restructuring integration
  • Other forces at play
  • Move to simplify SA rules
  • Matthews Report / OMSSA
  • Move to look more comprehensively at poverty
  • MISWAA/Ontario Poverty Reduction Strategy

6
The Ontario Child Benefit What is it and who
will benefit?
  • Announced in the 2007 provincial budget
  • Directed at low-income families with children
    under age 18
  • One-time down payment on the OCB made in July
    2007
  • Monthly OCB payments will start as of July 2008
  • OCB eligibility piggy-backs on NCBS eligibility
  • Like the CCTB and NCBS, the OCB amount will be
    based on the previous years income
  • OCB payment will come as part of the CCTB/NCBS
    cheque paid on the 20th of the month

7
Maximum OCB amounts July 2008-July 2011
By July 2011, families on social assistance
should see a net benefit of at least 50 per
child per month as a result of the OCB.
8
The Ontario Child Benefit Eligibility Criteria
  • In order to be eligible for the OCB
  • Must be the primary caregiver (single parent,
    spouse, common-law partner) of one or more
    children under age 18, in a low-income family
    and,
  • Must file a tax return and,
  • Must be eligible and register for the Canada
    Child Tax Benefit and,
  • Must be a resident of Ontario and
  • Must have status in Canada.

9
The Ontario Child Benefit Who gets the Maximum?
  • OCB benefits ? as net family income ?
  • In July 2008, eligible families will receive the
    maximum OCB if their net family income 20,000.
  • The OCB will be reduced by 8 for every dollar of
    net family income over 20,000.
  • The Ontario Ministry of Finance on-line
    calculator can help you estimate your benefit
  • http//www.fin.gov.on.ca/english/budget/ontariobu
    dgets/2007/ocb/calc.html

10
OCB and net family income
11
OCB BenefitsCalculating Net Family Income
  • Families determine their net family income by
    calculating their total income, which includes
  • Social assistance income (reported in T5 form)
  • Earnings from employment
  • Other income (CPP, EI, WBC, UCCB benefits)
  • Then, they make any deductions to obtain net
    income.
  • Spouses must add their respective net incomes to
    obtain net family income.

12
OCB Income Eligibility Reportable Social
Assistance Income
  • Income included in OW/ODSP T5 includes
  • Basic Needs Shelter allowances
  • Fuel
  • Back-to-School Winter Clothing allowances
  • Special Diet allowance
  • Northern allowance
  • ODSP work-related benefits
  • Personal Needs allowance (OW)
  • Transition Child Benefit (new OW/ODSP benefit)
  • But does not include
  • Assistance for Children with Severe Disabilities
    (ACSD)
  • Temporary care allowance
  • ODB, dental or vision care benefits, hearing
    aids, wheelchairs repairs, ADP approved items
  • Excess repayments/reimbursements

13
Joint Custody and the OCB
  • Eligibility for the OCB is tied to the CCTB/NCBS
    rules
  • Parents with joint custody get the CCTB/NCBS in
    alternating 6 month periods, if the Canada
    Revenue Agency is aware of the joint custody
    arrangement.
  • OCB payments are expected to follow the same
    payment schedule

14
Rate Restructuring
  • When? July/August 2008
  • What?
  • Only rates for families with dependent children
    under 18
  • no change for singles/couples without children,
    children over 18
  • Basic Needs only
  • Shelter allowance unchanged
  • Back-to-School and Winter Clothing Allowances
    discontinued as a lump sum
  • delivered monthly as part of the OCB.

15
Rate Restructuring
  • Three moves
  • Rates integrated with NCBS and OCB
  • Rates also rationalized
  • Increase internal consistency
  • Reduction and eventual elimination of older
    child differential

16
Rate Integration with OCB / NCBS
17
Rate Rationalization /Reduction of Older Child
Differential
  • Rate Rationalization
  • Consistent formula for Basic Needs
  • Reduction of Older Child differential

18
Rate Integration with the NCBS/OCB What is the
effect on Family Income?
  • Government committed that
  • Rate restructuring will not leave any family on
    OW or ODSP worse off than they were before,
    taking into account the 2007 OCB down payment.
  • Do the new rates meet this commitment?
  • For most families, yes.
  • But after restructuring some families fall short
  • In 2008/9, single parents on OW with older
    children will end up behind the 21 benchmark
    increase set by the 2007 down payment.
  • But, by 2011, they should reach the same 50 net
    new income target as other families.

19
(No Transcript)
20
Income Trends for Families on Social Assistance
1989-2007Adapted from National Council of
Welfare, Welfare Incomes 2005
21
Transition Child Benefit
  • New Benefit for both OW and ODSP
  • s.58.3 OW Reg 134/98 s.45.3 ODSP Reg 222/98
  • Necessary complement to rate restructuring
  • Basic Needs reduction is based on receipt of
    maximum NCBS and maximum OCB
  • For a variety of reasons, there are many families
    who do not receive the maximum NCBS/OCB they
    would be worse off after restructuring without
    TCB.

22
Transition Child Benefit
  • Maximum amount of TCB
  • OW 172
  • ODSP 148
  • The formula for calculating actual benefit is in
    the regulations.
  • Intended to cover the difference between the
    existing SA rate structure and the restructured
    rates.

23
Transition Child Benefit
  • Who can expect to be eligible
  • Recipient (or spouse) who is not getting any OCB
    or NCBS where s/he
  • Did not file an income tax return for the
    previous taxation year
  • Is a newcomer to Canada (i.e. refugee claimant)
  • Has recently moved to Ontario
  • Has a newborn child
  • Experienced a catastrophic income change
  • Is facing administrative delays.
  • Recipient/spouse who gets less than the maximum
    amount of the OCB for at least one dependent
    child.
  • Usually because income is above the cutoff

24
Transition Child Benefit
  • Those not eligible
  • A child receiving Temporary Care Assistance under
    Ontario Works
  • A dependent of a dependent under Ontario Works
  • Persons not on social assistance in their own
    right and getting only ACSD on behalf of a child
  • Residents of interval and transition homes, once
    they are no longer eligible for the equivalent to
    basic needs and shelter and
  • Residents of emergency hostels.

25
Transition Child Benefit
  • Additional Eligibility requirements
  • Parents potentially eligible for NCBS/OCB must
    make reasonable efforts to access the benefit -
  • will be given up to 4 months to establish
    eligibility for NCBS/OCB
  • Discretion to extend beyond 4 months, if
    continuing to make reasonable efforts
  • TCB will have to be repaid, if retroactive
    NCBS/OCB benefits received.
  • Recent regulation ensures that retro payment
    cannot reduce income below 2.50

26
Transition Child Benefit Joint Custody
  • Recent Case Oliveira v. Ontario, 2008 ONCA 123
  • In a joint custody situation, parent entitled to
  • 100 shelter allowance for children each month,
  • may be entitled to full drug and dental each
    month,
  • only entitled to 50 basic needs for the children
  • Where parent is only getting CCTB/NCBS/OCB for 6
    months of the year
  • Will the parent be entitled to the Transition
    Child Benefit for the other 6 months?
  • How will that eligibility be determined? Data
    sharing with CRA? Recipient reporting?
  • There are many answers we dont have yet.
    Detailed Policy Directives will be issued by OW
    and ODSP this spring.

27
Rate restructuring Easy and Difficult Case
Examples
  • The following examples explore how the benefits
    we have been discussing interact in different
    family income scenarios.
  • Please note that the actual figures used are
    estimates for discussion purposes only. For
    example,
  • Very simplified OW/ODSP incomes have been used
    for ease of comparison.
  • To illustrate the net income effect due to the
    OCB and rate restructuring, we have held the
    CCTB/NCBS payments at 2007/8 levels in both the
    before and after restructuring examples.

28
Family 1 OW single parent
  • Single mother with 2 children over 13
  • OW only no outside income
  • 2007 net family income 12,840
  • (from line 236 on her Income Tax Return this
    is not total income, it is the income figure that
    is used to calculate the amount of the NCBS and
    the OCB)
  • NCBS for July 2008 312
  • OCB for July 2008 100
  • TCB for August 2008 0
  • (Ineligible because receiving max NCBS and OCB)

29
Family 1 OW single parent
30
Family 2 OW refugee claimant
  • Single mother with 2 children, refugee claimant,
    not landed
  • OW only no outside income
  • 2007 net family income 14,562
  • NCBS in July 2008 0 (not eligible)
  • OCB in July 0 (not eligible)
  • TCB in August 2008 344

31
Family 2 OW refugee claimant
  • Transition Child Benefit calculation
  • 172 X of children 344
  • less OCB - 0
  • less NCBS-43.76-41.99 - 0
  • Monthly TCB benefit 344

32
Family 2 OW refugee claimant
33
Family 3 ODSP no outside income
  • Couple with 2 children
  • ODSP only - no outside income
  • 2007 net family income 23,590
  • NCBS for June 2008 260 (out of 312)
  • OCB for June 2008 76 (out of 100)
  • TCB in August 2008 46

34
Family 3 ODSP no outside income
  • Transition Child Benefit calculation
  • 148 X of children 296
  • less OCB - 76
  • less NCBS-43.76-41.99 - 174
  • Monthly TCB benefit 46

35
Family 3 ODSP no outside income
36
Family 4 ODSP max special diet
  • Couple with 2 children
  • ODSP 250 special diet for each parent
  • Net family income 29,590
  • NCBS for July 2008 145
  • OCB for July 2008 36
  • TCB for Aug 2008 201

37
Family 4 ODSP max special diet
  • Transition Child Benefit calculation
  • 148 X of children 296
  • less OCB - 36
  • less NCBS-43.76-41.99 - 59
  • Monthly TCB benefit 201

38
Family 4 ODSP max special diet
39
Discussion of other examples
  • We are looking for scenarios where the
    effectiveness of the Transition Child Benefit can
    be tested.
  • Can you think of others?

40
What Next
  • Information and advocacy in the short run
  • Political pressure building to restore the
    Back-to-School and Winter Clothing Allowances.
  • Municipal and School Board are passing
    resolutions
  • Some Municipalities are considering a special
    benefit to be paid this year to ease the
    transition in the first year.
  • ISAC will continue to work with the various
    Ministries and the Premiers office around
    identified problems
  • MCSS Communication Strategy
  • ODSP and OW staff have received training
  • Cheque inserts have gone out to ODSP and OW
    recipients
  • Some OW/ODSP offices are providing training to
    local agencies
  • Some OW/ODSP offices have started meeting with
    clients to explain the transition. There may
    also be public information sessions in some
    municipalities.
  • In the longer term, advocacy groups are looking
    for
  • faster implementation of the OCB,
  • increases to the OCB maximum and
  • a larger net OCB for families on social assistance
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