When Ontario’s long-promised review of welfare begins this spring, the provincial government faces a stark choice.
Does it spend years trying to unravel a set of 800 social assistance rules that make up the current outdated system?
Or will this government take the bolder road and build an entirely new and improved income security system?
Unravelling the rules is a long and involved process. Each time a rule is changed, another set of rules would emerge. It would require the dedication of an unprecedented level of expert resources and large amounts of time from decision makers.
Imagining and building the architecture for a new income security system would be far less complicated. The goal would be to replace the outmoded social assistance system with a simplified income support program for low-income working age adults.
Here is the case for a brand new architecture:
The social assistance system in Ontario was rebuilt during the 1990s with the introduction of the Ontario Works Act and the Ontario Disability Support Program Act.
The purpose was to provide a basic welfare program in Ontario Works whose success was predicated on the principle that only the neediest of the needy would receive assistance. Success was defined in terms of leaving the program. Reliance on the program was considered dependency.
That system does not work. It needs replacing.
The Ontario Disability Support Program was separate from Ontario Works. It drew a distinction between more deserving people whose need for support was based on their disability. Reliance on the program is considered to be largely a matter of entitlement and people receiving benefits are not considered to be in a state of dependency.
The new architecture should continue to make the important distinction between people with disabilities and those without disabilities in recognition of the higher costs related to being disabled.
Children should be supported through the child benefit system, including Ontario’s growing Ontario Child Benefit.
Remaining social assistance benefits should serve adults only through four special purpose benefit programs designed to replace welfare: a housing benefit, a basic income, a Working Income Tax Benefit and an emergency system.
Low-income adults would receive a new housing benefit to meet their housing needs and they would receive a basic income through refundable tax credits.
There would be no asset test and no needs test. Like the Canada Child Tax Benefit or the Ontario Child Benefit, a person’s income can be tested using tax definitions.
Those who earn some income should be supplemented through the Working Income Tax Benefit program. Opportunity planners should administer employment supports. In short, the only welfare program that would be left would be an emergency system.
Combined, these new programs would provide about $10,000 a year for single persons, which is about $3,000 more than they get now but short of what full-time minimum wages would provide.
This would not be a guaranteed annual income because some income would be based on participation in employment programs and work incentives.
For persons with disabilities, the ultimate goal would be to provide a disability benefit that resembles Old Age Security and the Guaranteed Income Supplement at the same rate as OAS/GIS. It would be fully integrated with federal CPP disability payments, the Workplace Safety and Insurance Board and other disability income programs.
To ease the way to a new income system for low-income working age adults, the government should:
- Raise the current liquid asset limitation rules to exempt registered savings instruments like tax-free savings accounts and RRSPs to at least $5,000 to enable recipients to bridge the transition from assistance to employment.
- Introduce a new housing benefit to replace the shelter component of social assistance.
- Increase the child benefit system in Ontario so that the four federal-provincial income assistance programs (the Child Tax Benefit, the National Child Benefit Supplement, the Universal Child Care Benefit and the Ontario Child Benefit) completely remove all children from the social assistance benefit structure.
- Change rules that currently prevent transition to self-reliance.
Without having to wait, these interim measures would move the current system toward a new program that would act as a bridge to a better life for low-income adults. We cannot start the replacement process soon enough.