Tear­ing down the ‘wel­fare wall’

We should dis­man­tle wel­fare; re­place it with more ad­e­quate, dig­ni­fied in­come sup­ports

The Guardian (Charlottetown) - - OPIN­ION - BY SHERRI TOR­J­MAN Sherri Tor­j­man is vice-pres­i­dent of the Cale­don In­sti­tute of So­cial Pol­icy and an ex­pert ad­viser with Ev­i­denceNet­work.ca.

The talk of walls between na­tions gar­ners sig­nif­i­cant at­ten­tion. There’s vir­tu­ally no dis­cus­sion, by con­trast, of the walls within na­tions. In Canada, a par­tic­u­larly high ‘wel­fare wall’ keeps peo­ple out of main­stream of so­ci­ety.

A re­cent study for the Cen­tre for Re­search on Work Dis­abil­ity Pol­icy shows how this wel­fare wall traps hun­dreds of thou­sands of Canadians with dis­abil­i­ties.

In­di­vid­u­als with dis­abil­i­ties face se­ri­ous em­ploy­ment chal­lenges due to lack of sup­ports, ac­ces­si­ble trans­porta­tion and un­der­stand­ing of their ca­pa­bil­i­ties. The un­em­ploy­ment rate of this group is dou­ble the na­tional av­er­age.

But per­sons with dis­abil­i­ties also face bar­ri­ers from an in­come se­cu­rity sys­tem that, iron­i­cally, was in­tended to pro­vide as­sis­tance.

Many can­not qual­ify for pub­lic or pri­vate in­surance be­cause the el­i­gi­bil­ity cri­te­ria re­quire em­ploy­ment or the pro­grams are de­liv­ered as work­place ben­e­fits. So far too many in­di­vid­u­als with dis­abil­i­ties end up on wel­fare — the lean­est and most ar­chaic of Canada’s so­cial pro­grams.

De­spite wide dif­fer­ences in wel­fare pro­grams through­out the coun­try, they all pro­vide ba­sic as­sis­tance and dis­cre­tionary spe­cial as­sis­tance.

Ba­sic as­sis­tance cov­ers core liv­ing costs, such as food, cloth­ing and shel­ter.

But the amount barely cov­ers th­ese es­sen­tials and isn’t in­dexed to in­fla­tion.

Spe­cial as­sis­tance is in­tended for ad­di­tional ex­penses, such as den­tal care, pre­scrip­tion med­i­ca­tions and dis­abil­ity equip­ment.

Spe­cial as­sis­tance is a pos­i­tive fea­ture of wel­fare since it pro­vides fund­ing for ad­di­tional needs. But many re­cip­i­ents with dis­abil­i­ties in­ad­ver­tently be­come trapped be­hind the wel­fare wall be­cause wel­fare is the only route to re­ceive essen­tial sup­ports.

Re­cip­i­ents with dis­abil­i­ties can find them­selves worse off fi­nan­cially if they have some earn­ings from paid em­ploy­ment than if they just stayed on wel­fare.

Wel­fare re­cip­i­ents must pay back to gov­ern­ment most of their em­ploy­ment earn­ings through a mech­a­nism known as the wel­fare tax-back. While the rules vary by ju­ris­dic­tion, re­cip­i­ents ef­fec­tively pay back to gov­ern­ment most of their earn­ings.

In­come taxes and pay­roll taxes, no­tably em­ploy­ment in­surance pre­mi­ums and Canada Pen­sion Plan (CPP) con­tri­bu­tions, can fur­ther re­duce over­all in­come. Higher earn­ings also mean lower tax cred­its, such as the GST credit.

Then there’s the loss of in­come-in-kind, like sup­ple­men­tary health and den­tal ben­e­fits.

For most wel­fare re­cip­i­ents, th­ese mul­ti­ple fac­tors mean that the cost of em­ploy­ment is very high.

The good news is that plenty can be done by the fed­eral and provin­cial/ter­ri­to­rial gov­ern­ments to tear down the wel­fare wall.

Ot­tawa could beef up the Work­ing In­come Tax Ben­e­fit (WITB), which sup­ple­ments low earn­ings to en­sure that paid work is a more at­trac­tive op­tion than wel­fare. It also helps wel­fare re­cip­i­ents make the tough tran­si­tion to work by top­ping up their typ­i­cally low wages.

Provin­cial and ter­ri­to­rial gov­ern­ments could ex­tend healt­hand dis­abil­ity-re­lated sup­ports to work­ing poor house­holds, as well as to those on wel­fare. Wel­fare would no longer be the only route to re­ceive tech­ni­cal aids and equip­ment, pre­scrip­tion drugs and den­tal care.

While th­ese changes are wel­come, they would still leave in place a se­ri­ously flawed pro­gram. A more ro­bust re­form would be to dis­man­tle wel­fare and re­place it with a more ad­e­quate and dig­ni­fied form of in­come sup­port. Canada al­ready has a suc­cess­ful prece­dent: the Na­tional Child Ben­e­fit re­placed wel­fare ben­e­fits paid in re­spect of chil­dren with a more gen­er­ous fed­eral ben­e­fit.

Sim­i­larly, Ot­tawa could as­sume re­spon­si­bil­ity for in­come se­cu­rity for per­sons with dis­abil­i­ties, whether they’re work­ing or not.

A new dis­abil­ity in­come ben­e­fit could be mod­elled on the Guar­an­teed In­come Sup­ple­ment, which could help dra­mat­i­cally re­duce the poverty rate for per­sons with dis­abil­i­ties as it did for se­niors.

The shift to fed­eral au­thor­ity would re­sult in a wind­fall sav­ings to prov­inces and ter­ri­to­ries. This cash could be in­vested in a co­her­ent sys­tem of dis­abil­ity sup­ports for all per­sons with dis­abil­i­ties — work­ing or not.

A fed­er­ally de­liv­ered ben­e­fit would help Ot­tawa achieve its twin goals of poverty re­duc­tion and in­clu­sive growth.

Shoring up the in­come se­cu­rity sys­tem is an essen­tial step in break­ing down the wel­fare wall for per­sons with dis­abil­i­ties. Equally vi­tal are mea­sures that en­able ac­cess to wide-rang­ing dis­abil­ity sup­ports out­side of wel­fare.

Dis­abil­ity should not mean a life of poverty.

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