Transcript Slide 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
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
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)
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
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, incomebased 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
The Ontario Child Benefit: What is it
and who will benefit?
o
Announced in the 2007 provincial budget
o
Directed at low-income families with
children under age 18
o
One-time “down payment” on the OCB
made in July 2007
o
Monthly OCB payments will start as of July
2008
o
OCB eligibility piggy-backs on NCBS eligibility
o
Like the CCTB and NCBS, the OCB amount will be
based on the previous year’s income
o
OCB payment will come as part of the
CCTB/NCBS cheque paid on the 20th of the month
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.
The Ontario Child Benefit:
Eligibility Criteria
In order to be eligible for the OCB:
o
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,
o
Must file a tax return; and,
o
Must be eligible and register for the
Canada Child Tax Benefit; and,
o
Must be a resident of Ontario; and
o
Must have status in Canada.
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/ontariobudgets/2007/oc
b/calc.html
OCB and net family income
2008 OCB Amounts (based on net family income and # of children)
$2,000
$1,800
Amount of OCB
$1,600
OCB for family w/
1 child
$1,400
$1,200
OCB for family w/
2 children
$1,000
$800
OCB for family w/
3 children
$600
$400
$200
$0
under
$20,000
$22,500
$25,000
$27,500
$30,000
$32,500
$35,000
2007 Net Family Income
$37,500
$40,000
$42,500
OCB Benefits:
Calculating “Net Family Income”
Families determine their net family income by
calculating their total income, which includes:
Social assistance income (reported in T5 form)
o Earnings from employment
o Other income (CPP, EI, WBC, UCCB benefits)
o
Then, they make any deductions to obtain net
income.
Spouses must add their respective net incomes
to obtain net family income.
OCB Income Eligibility:
Reportable Social Assistance Income
Income included in OW/ODSP T5 includes:
o
o
o
o
o
o
o
o
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:
o
o
o
o
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
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
Rate Restructuring

When? July/August 2008

What?

Only rates for families with dependent
children under 18


Basic Needs only


no change for singles/couples without
children, children over 18
Shelter allowance unchanged
Back-to-School and Winter Clothing
Allowances discontinued as a lump sum:

delivered monthly as part of the OCB.
Rate Restructuring
Three moves:


Rates “integrated” with NCBS and
OCB
Rates also “rationalized”


Increase “internal consistency”
Reduction and eventual elimination
of “older child differential”
Rate Integration with OCB / NCBS
Rate Rationalization /
Reduction of Older Child Differential

Rate Rationalization:

Consistent formula for Basic Needs:
Single
Adult Rate
+ “Single
Parent
Supplement”
+ “Older Child
Supplement”
= Total
OW
$211
$144
$17
$372
ODSP
$554
$143
$59
$756
+ “Older Child
Supplement”
= Total
Single
Parents
Couples

Couples
Rate
OW
$420
-
$17
$437
ODSP
$821
-
$59
$880
Reduction of Older Child differential
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.
Maximum Monthly Rates In June 2008, with annualized allowances and existing NCBS deduction
Ontario Works Cheque
Case Type
Basic
Needs
+ Max
Shelter
less
NCBS
$480
$549
$122
$615
$595
$512
$595
Single Parent
+ 1 Child *
Single Parent
+ 2 Children**
Couple
+ 1 Child*
Child Benefit Cheque
= Total
Case Type
Single Parent
+ 1 Child*
Single Parent
+ 2 Children**
Couple
+ 1 Child *
+ Yearly
Benefits
B2S/WC
Allowance
Adjusted
Income*
Nov 2007
CCTB
+NCBS
$907
$107
$166
$273
$1,180
$15
$1,195
$226
$984
$214
$312
$526
$1,510
$34
$1,544
$122
$985
$107
$166
$273
$1,258
$15
$1,273
MONTHLY
CHEQUE
TOTAL
+ Annualized
Benefits
B2S/WC
Allowance
TOTAL
ODSP Cheque
Basic
Needs
+ Max
Shelter
less
NCBS
$829
$700
$122
$1,001
$759
$940
$759
= Total
MONTHLY
CHEQUE
TOTAL
Child Benefit Cheque
= Total
CCTB
+NCBS
+ Total
$1,407
$107
$166
$273
$1,681
$15
$1,695
$226
$1,534
$214
$312
$526
$2,060
$34
$2,094
$122
$1,577
$107
$166
$273
$1,850
$15
$1,865
Maximum Monthly Rates as of July/August 2008, with Ontario Child Benefit
Ontario Works Cheque
Case Type
Child Benefit Cheque
Net change in
monthly
income after
Restructuring*
Basic
Needs
+ Max
Shelter
= Total
CCTB
+ NCBS
+OCB
=Total
$355
$549
$904
$107
$166
$50
$323
$1,227
+ $47
+ $32
$372
$595
$967
$214
$312
$100
$626
$1,593
+ $83
+ $49
$420
$595
$1,015
$107
$166
$50
$323
$1,338
+ $80
+ $65
ODSP Cheque
Case Type
*Net
Change in
monthly
cheques
MONTHLY
CHEQUE
TOTAL
Single Parent
+ 1 Child*
Single Parent
+ 2 Children**
Couple
+ 1 Child *
Child Benefit Cheque
Change in
monthly
cheques
Net change in
monthly
income after
Restructuring*
Basic
Needs
+ Max
Shelter
= Total
CCTB
+ NCBS
+OCB
=Total
MONTHLY
CHEQUE
TOTAL
$697
$700
$1,397
$107
$166
$50
$323
$1,720
+ $39
+ $25
$756
$759
$1,515
$214
$312
$100
$626
$2,141
+ $81
+ $47
$821
$759
$1,580
$107
$166
$50
$323
$1,903
+ $53
+ $38
Single Parent
+ 1 Child*
Single Parent
+ 2 Children**
Couple
+ 1 Child *
* 1 child under 13,
*Adjusted
to include
the value of
the Back to
School
Allowance
& the
Winter
Clothing
Allowance
calculated
on a
monthly
basis
change
takes into
account
the loss of
the Back to
School and
Winter
Clothing
Allowances
The OCB
downpayment of
$250 in
July 2007
delivered
the
equivalent
of $21 of
this net
increase
Income Trends for Families on Social
Assistance – 1989-2007
Adapted from National Council of Welfare, Welfare Incomes 2005
Total Maximum Family Income on Social Assistance
(Ontario Works), 1989 to 2007, Lone Parent, One Child
under 6, (2007 dollars) and After-Tax Low Income Cut-Off
$24,000
$2,908
$3,111
$3,377
$3,522
$3,586
$3,687
$3,795
$13,515
$12,950
$12,365
$11,923
$11,492
$11,469
$11,247
$5,036
$2,485
$14,224
$12,000
$4,519
$2,136
$14,731
$2,256
$19,614
$2,172
$2,249
$19,604
$14,940
$2,266
$19,633
$2,207
$2,374
$19,281
$1,775
$16,000
$11,458
$11,235
$18,193
$4,000
$18,822
$8,000
$16,796
Total Annual Income
$20,000
$2,050
LICO 2007, $21,851
$0
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
Year
Federal Child Benefits and GST Credit (UCCB begins July 2006)
Provincial Social Assistance and Tax Credits (Ontario Child Benefit begins July 2007)
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.
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.
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
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.
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
Transition Child Benefit: Joint Custody

Recent Case: Oliveira v. Ontario, 2008 ONCA 123
 In a joint custody situation, parent entitled to:




Where parent is only getting CCTB/NCBS/OCB for 6
months of the year:



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
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 don’t have yet. Detailed
Policy Directives will be issued by OW and ODSP this
spring.
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.
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)
Family #1 OW single parent
June 08
OW
August 08
1,022
984
38
0
0
100
CCTBBB*
214
214
NCBS*
312
312
0
0
1,586
1,610
Basic needs + shelter
BTS/WC
OCB
TCB
Total income
Change +/*approximation for comparison
purposes
+ $24
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
Family #2 OW – refugee claimant
Transition Child Benefit calculation:
$172 X # of children
less: OCB
less: NCBS-$43.76-$41.99
Monthly TCB benefit
=
$344
- $ 0
- $ 0
$344
Family #2: OW – refugee claimant
June 08
OW
August 08
1,248
984
38
0
OCB
0
0
CCTBBB
0
0
NCBS
0
0
TCB
0
344
1,286
1,328
Basic needs + shelter
BTS/WC
Total income
Change +/-
+ $42
Family #3 ODSP – no outside income
Couple with 2 children
o
ODSP only - no outside income
o
o
o
o
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
Family #3 ODSP – no outside income
Transition Child Benefit calculation:
$148 X # of children
less: OCB
less: NCBS-$43.76-$41.99
Monthly TCB benefit
=
$296
- $ 76
- $174
$ 46
Family #3 ODSP – no outside income
June 08
ODSP Basic needs + shelter
BTS/WC
OCB
CCTBBB
NCBS
TCB
Total income
Change
August 08
1,826
38
0
214
1,764
0
76
214
260
260
0
46
2,338
2,360
+ $22
Family #4 ODSP + max special diet
Couple with 2 children
o
ODSP + $250 special diet for each
parent
o
o
o
o
Net family income = $29,590
NCBS for July 2008
OCB for July 2008
TCB for Aug 2008
= $145
= $ 36
= $201
Family #4 ODSP + max special diet
Transition Child Benefit calculation:
$148 X # of children
less: OCB
less: NCBS-$43.76-$41.99
Monthly TCB benefit
=
$ 296
- $ 36
- $ 59
$201
Family #4 ODSP + max special diet
June 08
ODSP
August 08
1,940
1,764
38
0
0
36
CCTBBB
214
214
NCBS
145
145
Basic needs + shelter
BTS/WC
OCB
TCB
201
Total Income
Change +/-
2,337
2,360
+ $23
Discussion of other examples
o
We are looking for scenarios where
the effectiveness of the Transition
Child Benefit can be tested.
o
Can you think of others?
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
Premier’s 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