Basic income put to the test
Margie Goold, who suffers debilitating arthritis, bought a new walker.
Lance Dingman, who lost his right leg to a chronic bone disease, is no longer running out of groceries by the middle of the month.
Wendy Moore, who has been homeless for almost two years, is looking for an apartment.
The three Hamilton residents are part of the first wave of participants in Ontario’s experiment with basic income, a monthly, nostrings-attached payment of up to $1,400 for people living in poverty. Those with disabilities receive an additional $500 a month.
The three-year pilot project, which began in the Hamilton and Thunder Bay areas last summer and in Lindsay last fall, is testing whether unconditional cash support can boost health, education and housing for people on social assistance or earning low wages.
Information gleaned from the three test sites will guide future provincial policy on how to better support all Ontarians living in poverty.
The province is among several areas in the world experimenting with the idea of a basic income, including Finland, which began a two-year pilot last January.
Lindsay resident Kathy Mahood, 53, who joined the pilot project in October, says she has already seen a difference in the community of about 22,000 near Peterborough.
“People are relieved and happy for the extra help,” she said. “I really notice it when the cheques start coming out at the end of the month. The stores are much busier. The town is busy, busy. A lot busier than it was before. There are lineups at the grocery store. It’s definitely injecting more money into the community.”
Mahood fell into deep poverty after a work-related back injury and the death of her husband two years ago.
When she joined the pilot project in October, she was living on about $735 a month in federal Canada Pension Plan disability benefits and proceeds from the sale of her house.
“I figured I had a year and a half left before I would lose my apartment and have to rent a room. It was pretty frightening,” she said.
But with $1,200 in basic income every month on top of her disability benefits, Mahood has money for rent and healthy food — and has begun making regular payments to clear her credit card debt.
“If I am careful, I should be debtfree when the program ends in three years,” she said.
Mahood was able to buy modest Christmas gifts for her four grandchildren in December. She could afford to buy ingredients for Christmas baking. She can put gas in her car and has money for repairs.
“I feel healthier and I am not stressed all the time about money,” she said.
After couch-surfing for almost two years, Moore, 60, is using her basic income payment to look for stable housing.
“My biggest focus is getting my own place and giving poor John his apartment back,” said Moore, who has been sleeping on her friend’s living room sofa for about a year.
Before joining the program in October, the single mother of six and grandmother of 12 was “barely surviving ” on $330 a month in basic needs allowance from Ontario Works, the province’s welfare program for people without disabilities.
Her total income for 2016 was $4,247.
Because Moore was homeless, she was not eligible for a shelter allowance that would have brought her monthly Ontario Works payment to just over $700.
But under the basic income experiment, Moore receives $1,416 a month, an amount that remains constant no matter where she lives.
“It is giving me back my independence,” she said. “I don’t feel so backed into a corner. If I want to eat, I can afford to buy something instead of going to a food bank or a soup kitchen.”
Moore and the others are among almost 3,000 people enrolled so far in the test sites. The province hopes to recruit 6,000 participants, including 4,000 who will receive a basic income, fill out surveys and participate in focus groups as part of the study.
A further 2,000 won’t get the monthly payments but will be paid to complete surveys and tracked as a control group.
Thunder Bay heating and fireplace installer Taras Harapyuk, who hasn’t worked since 2015 when he fell lifting a ladder out of his truck, signed up for the pilot project last September. He learned last week that his application was randomly selected as part of the control group.
“I was very disappointed to hear I wasn’t chosen to get the extra money,” Harapyuk said. “But I will fill out the surveys. I am happy to help.”
Adults in the three test sites age 18 to 64 with after-tax incomes under $34,000, or couples with incomes under $48,000, are eligible. The income cut-off for individuals with disabilities is $46,000.
If participants find employment or get a better job, their basic income payments are reduced by 50 cents for every dollar earned until they are no longer financially eligible. But unlike social assistance, which is adjusted monthly, basic income payments are calculated once a year, based on the participant’s previous year’s income tax return.
Project administrators can make mid-year adjustments if participants lose a job or go back to school, change a living arrangement or become disabled.
After a slow start last summer, enrolment topped 2,544 at the end of January and the project is on track to be fully enrolled by the summer, the government says.
“We are on well on our way to reaching full enrolment of participants into the pilot and have the measures in place to ensure this study is conducted with the utmost integrity, rigour and ethical standards,” said Social Services Minister Helena Jaczek and Housing Minister Peter Milczyn, the government’s cochairs for the pilot project.
“What we learn from this pilot will help inform our longer-term plans to better support people living on low incomes.
Goold, 60, who has a developmental disability and suffers from severe arthritis, was getting about $1,400 a month from the Ontario Disability Support Program before her first basic income payment.
Laurie Monsebraaten can be reached at lmonsebraaten@thestar.ca.