Time to raise welfare rates: Debunking the BC government’s sorry excuses for inaction

April 1^st marks the 10^th anniversary since basic welfare benefit rates (also known as social assistance rates) were last increased in British Columbia. For a single person on basic assistance the benefit rate remains $610 per month, and for a single parent with one child it is $946 a month.

That means for 10 years running, annual inflation has eroded the real value of a welfare cheque. While politicians see their paycheques increase annually (often well beyond the rate of inflation), welfare benefits have been frozen at rates that were utterly insufficient to meet basic needs to begin with.

Many were rightly surprised that the 2017 BC Budget offered no increases to basic welfare. After all, was the surplus not supposed to offer some relief after years of belt-tightening? Why are the poorest among us to be left out of the government’s “rewards”?

When pressed on these points, the government has offered a number of sorry excuses:

1. In February, Deputy Premier Rich Coleman made the gob-smacking statement in the legislature that, “We have to remember that a person on social assistance—a single person on social assistance in British Columbia—gets double the annual income of a person in the Third World.”
2. Social Development Minister Michelle Stilwell has acknowledged that living on a welfare income is hard, but argued that people on basic assistance are only there temporarily.
3. The government has said it is focused instead on those on disability assistance, for whom they have offered benefit increases in both 2016 and 2017.
4. The government says it has expanded other forms of support for those on welfare such as employment supports for single parents and increasing earnings exemptions for those on assistance (allowing those on welfare to earn and keep some money, thereby supplementing their welfare incomes).

It’s probably not worth dignifying Coleman’s statement with a rebuttal. Suffice to let it stand as indicative of the views held by some in government: a callousness that helps explain why we’ve seen rates frozen for so long. Are Third World incomes now the standard by which we compare the adequacy of our social safety net?

In what follows we offer responses to the other points.

Reality-check on “temporary” basic assistance 

First, a few basics about how welfare operates in BC. At any given time, about 4% of British Columbians rely on social assistance. Social assistance is broadly divided between those deemed “employable” and are thus placed in the “temporary” category (about 37% of welfare recipients), and those with a recognized disability who are granted Person With Disabilities (PWD) designation (about 63% of welfare recipients).

In turn, those in the “temporary” category are separated into four subcategories:

• those who are “Expected to Work” (about 25% of those on assistance, currently about 47,000 people).
• those who are “Temporarily Excused” from work, mainly because they have young children to care for (8% of those on assistance, about 16,000 people).
• those categorized as People with Persistent Multiple Barriers to employment, PPMB, mainly because of addiction or other health issues (about 4% of those on assistance, about 5,000 people).
• those who are “Expected to Work-Medical Condition,” mainly because their health issues are perceived as temporary barriers to employment (under 1% of those on assistance, just over 1,800 people).

To be clear, it’s not just singles in the “Expected to Work” category who have seen their rates frozen for 10 years – it’s all those outside the PWD category, many of whom have children or barriers to employment. The Ministry considers all those listed above as “temporarily” on assistance and thus undeserving of a rate increase.

Notably, a substantial number of people who are categorized as “temporary” recipients actually do have a disability; they are merely living in purgatory awaiting formal PWD designation. That’s because the way welfare operates in BC, people cannot directly apply for disability assistance. First a person needs to get on basic assistance, and only then can one apply for PWD – a highly onerous and frustrating process that minimally takes months, and often years. (Check out this video for a compelling short story about the process.)

Minister Stilwell is correct that some of those outside the PWD category are only there for a short time. Indeed, that has always been true. There is always a fair amount of “churn” in the system, with people coming onto assistance and others leaving. And because it is so bloody hard to live on welfare, if people are at all able, they get off assistance as soon as they can – nothing new there.

But it is worth stating, even though it shouldn’t be necessary: just because someone is only on assistance for a few months, that is no reason they should be forced to live in misery and to forfeit their dignity.

Paradoxically, because welfare incomes are so low (and people are made to virtually exhaust their savings before they qualify for assistance), the system actually makes it harder to transition to work, the very thing the government insists is its priority. Inadequate rates mean people are sometimes forced out of their housing (unable to pay their rent), and must spend much of their time looking after basic needs (lining up for free food, etc.). Lacking access to transit, a phone number, email/internet, or work clothes, connecting with potential employers is additionally challenging. Simply put, when the system grants you only $375/month for shelter and $235/month (about $7.80/day) for everything else, much of day-to-day life becomes focused on survival, greatly hampering efforts to find employment. This reality is highlighted in the CCPA report Living on Welfare in BC.

Data about how long people stay on assistance is not easily available (it’s not readily published by the Ministry). It can be dug up, however. Last fall we made special data requests to the Ministry and found that the facts dispute the Minister’s claim that those on basic assistance are only there “temporarily”:

• The Ministry reports that of all those in the “temporary” category, over 27,000 people were on assistance for more than one year, and almost 19,000 people were on assistance for more than two years. That’s a lot of people getting the same rates that existed 10 years ago.
• According to the Ministry’s latest annual report, people in the “Expected to Work” (ETW) category remain on assistance for a median of 7.5 months. That’s a long time to live on a basic welfare income. And remember, that’s the median, so while many people are there for only a few months, many others receive basic assistance for much longer.

  Of all those in the “temporary” category, over 27,000 people were on assistance for more than one year and almost 19,000 were on assistance for more than two years.

• The median length of stay on social assistance has been increasing in recent years. Back in 2011/12, according to earlier Ministry annual reports, the median length of time spent on assistance in the ETW category was 5.8 months.

A false premise seems to underlie the government’s inaction: were the government to increase basic assistance, welfare may become too “attractive” and thereby encourage people to stay on assistance longer.

This notion is simply not supported by the evidence. The last time there was a notable increase in basic welfare benefits was 2007 when the rate for a single person went from $510 to $610 per month. But the “Expected to Work” caseloads did not increase then or the year after. The caseloads only went up modestly in the wake of the recession in 2009 (as is expected), and then came back down. The overall caseload rate has been relatively stable at about 4% for many years.

Disability assistance welfare rates increased in 2016 and 2017 

This is true. After having rates frozen for eight years between 2008 and 2015 (during which time the real value of a disability welfare income fell by $1,218 a year), those on PWD assistance saw paltry increases of between $25-$77 a month in 2016 (or between $300 to $924 a year, depending what transit support is claimed), and $50/month ($600 a year) in 2017. In total, the annual welfare income for those on disability will rise from $11,416 two years ago to $12,940 in 2017 (reaching about 65% of the poverty line using the Market Basket Measure).

But the new PWD welfare income in real dollars remains well below where it was in the mid 1990s – it was equivalent to over $14,000 in 1994 in today’s dollars. And even with the latest increases, BC’s PWD benefit rates remain lower than those in Ontario, Saskatchewan and Alberta, and completely inadequate to meet core needs.

The government is right about one thing: in virtually all cases, those on PWD assistance—about 120,000 British Columbians – our family members, friends and neighbours—are not there temporarily.

Rather, once you’ve gone through the onerous and extended process of gaining PWD status, this is your life – for many years to come. The total annual income of $12,940 is a disgrace. Yet it represents the income our government, acting on our collective behalf, deems acceptable for people to live on for a very long time. We are failing the most vulnerable among us with a disability benefit so low that, in all likelihood, recipients rely on food banks and other charities to make ends meet. 

Earnings exemptions can boost incomes, and single parents can access additional employment supports 

That’s true. Actually, the government eliminated earnings exemptions in 2002 (the rule allowing people on assistance to earn and keep some money as a supplement to their welfare income). Then, to its credit, in more recent years, it not only restored earnings exemptions but enhanced them.

But here’s the rub: most people on welfare don’t use them.

As previously noted, we put a data request into the Ministry in the fall and learned that among “Expected to Work” clients, the take-up rate for earnings exemptions was only 10.6% in 2015. For those with PWD designation, the take-up rate was somewhat higher, 21% in 2015.

The low usage of earnings exemptions speaks to the fact that most people on social assistance either aren’t in a position to gain paid employment or available employment opportunities and supports fail to accommodate their needs. Practically speaking, this policy does not represent an actual income supplement for most people on social assistance.

The government has been keen to highlight this new initiative, however, as of March 2017, only 4,500 people have accessed the program, and the Ministry notes that only 883 single parents have actually found employment via the program since it started in September 2015.

These policy changes for single parents are welcome. Overall, however, the government’s move on this front proves the point that the welfare system’s rules and rates don’t facilitate the path to employment the government claims. If these programs for single parents are worthwhile, why not extend them to all welfare recipients?

Conclusion: No more excuses not to raise the rates

The government’s stubborn resistance to raising welfare rates is an affront to human dignity, and it needs to end.

That we have a welfare system that is structurally dependent on food banks and other charities for people to meet their basic needs impugns us all. We are failing to meet a moral obligation to one another.

That we have rates so inadequate that many women feel compelled to remain in or return to abusive relationships is a condemnation of us all.

The government’s inaction is simply unconscionable. In a society as wealthy as ours, there is no excuse not to raise rates.

The government has room in its budget to act now. It could immediately raise rates by $200-400 a month (depending on family size), and the total cost of about $400 million could be covered by the current surplus. Then going forward we should establish an independent commission to determine what rates should be and move quickly to enact these recommendations.

Quick facts about welfare rates in BC

• Measured in constant dollars, BC social assistance benefit rates peaked in 1994. Strikingly, today, total annual welfare incomes in BC are between $1,000 and $4,000 lower than they were in the mid-1990s, after adjusting for inflation (depending on family size). This is despite BC’s economy growing by more than 70% (in real terms) since 1994.
• Indeed, comparing welfare rates to the general inflation rate (Statistics Canada’s Consumer Price Index, CPI) masks a more troubling reality. The CPI is held down by falling prices for some non-essentials (such as electronics). However, in a recent CCPA study of poverty in BC, we found that the costs of core essentials that families cannot avoid – rent, electricity and food – have been increasing since the mid 2000s by three-to-four times the rate of inflation. Given this, it’s not hard to see why frozen welfare rates are leaving many BC families with heightened financial stress and unable to make ends meet.
• Despite BC having the highest cost of living among Canadian provinces, basic social assistance rates for a single person ($610/month) and for a single parent with one child ($946/month) rank sixth lowest in Canada. For a couple with two children, total annual welfare income in BC is the 9th lowest in Canada.
• People on social assistance in BC aren’t living just below the poverty line. Rather, they are living thousands of dollars below it. For a single person on basic assistance, even when their welfare income is combined with federal and provincial benefits like the GST credit, their total annual income only reaches 39% of the poverty line (using the Market Basket Measure). For a single parent with one child, it reaches about 65% of the poverty line, and for a couple with two kids, approximately 59% of the poverty line.

For more on poverty and welfare in BC, read our report Long Overdue: Why BC Needs a Poverty Reduction Plan released in January.

Topics: Economy, Poverty, inequality & welfare, Provincial budget & finance