Saturday, March 24, 2007

Spring, Annual Budgets and False Hope for the Poor

At this time of the year, both the federal and provincial governments hand down their budgets. This year in particular, both of these budgets were politically motivated and designed to fool the casual observer that the poor and socially disadvantaged are being cared for. With most of you aware, we all know the general population has somewhat increased its concern for the needy among us. We read upon the New Year that the growing gap between the very wealthy among us and those barely getting by has grown exponentially, despite reported economic growth in this country.

Imagine yourself as somebody who is not benefiting from all of this hoopla around growing prosperity and economic growth. Imagine that you are too ill to work and being one of the growing unfortunate numbers who do not have a private disability plan to look after you, or you have been forced to retire early due to circumstances of your plant closure and your age is a major strike against you getting new employment. Imagine that you are a single parent, through divorce or death of a spouse, that you find yourself thrown into the unbound world of economic competition and cannot obtain affordable childcare in order for you to go back to work or to upgrade your skills. You and a growing number of people are now turning to the government's minimalist plan of support and learning now that all of these years you enjoyed substantial tax cuts are now coming back to bite you. We no longer have the social safety net many anticipated at one time would be there. We no longer have job security that at one time lasted from the time you left school until the day you collected your gold watch and a retirement pension. Employers reject the older, long-term unemployed, injured or disabled worker, in favour of younger people they can pay less and expect more from.

When this happens to you, where do you go? Some people are lucky enough to have a skill to sell or family members to fall back on to assist them in times of need. However, many people find self-employment and entrepreneurship not suited to their lifestyle, needs and budget, nor do they have family members that can or will help. You end up with what the government has left: a tattered social safety net, designed less to serve you than to serve a growing number of low-wage, rule-breaking employers that will use and abuse whatever powers they may have. As a person with a disability, it is no longer viable to remain on benefits, as the value of your benefits have eroded to such a point that it is impossible to survive on so little. Injured workers are more likely to find themselves in trouble with the new Workplace Safety and Insurance Board, which all but guarantees adequate compensation for injured workers and wherever possible, attempts to force you back to work before you are ready. Ontario Works ... I need not say much more about that. After the major cut of Ontario Works Benefits in 1995, many families forced to resort to this benefit of "last resort" have also lost their homes, their marriages and many have been pushed out into the street or working in low-wage, precarious labour, only to be laid off to return to Ontario Works time after time.

It is the Spring of 2007, which is usually supposed to represent hope for hundreds of thousands of Ontario families. The federal government, in hopes of getting re-elected, presented a budget that on its surface appears to be something for everyone, including the working poor. The provincial Liberals released their own budget a few short days later, attempting to outdo the Conservatives' attempt at becoming Liberals, by trying to make themselves appear to be New Democrats. However, all of this is flash in the pan upon further inspection.

The vast majority of the federal government's budget is geared towards increased transfer payments to the provinces, as well as additional tax cuts that benefit particular sectors of the middle class. For those who work, but do not earn enough to pay income taxes, these tax cuts are of no use to you. For those of you unfortunate enough to rely on assistance, they are even of less use to you. If you are a person with a disability, the only mention in the federal budget is a Registered Disability Savings Plan; that is, a financial instrument that is designed similarly to the Registered Education Savings Plan, but is set up for persons with disabilities, friends and relatives to deposit money into it up to a total amount of $200,000 per person. This RDSP, as they call it, again depends on having the kinds of friends and relatives that have the financial means and willingness to contribute to such an instrument on behalf of a person with a disability, which is usually somebody who is younger and anticipates a number of future financial needs with respect to his or her disability. People who are older, living on ODSP and lack such family support will not benefit from such an instrument.

If you are a member of the "working poor"; that is, if you are a single person and earning more than about $4,500 per year, but less than $12,899 per year, you will be entitled to the new Working Income Tax Benefit (WITB). At $4,500, the benefit is at its highest peak of $500, and as your income moves towards $12,899, it decreases substantially until it hits zero. For families, the figures are about $8,500, at its peak and ending at zero at approximately $21,000 per year.
In the Toronto Star, Thomas Walkom in his wisdom advised this benefit made good press, but will not help the majority of the working poor, as most year-round minimum wage earners earn more than $12,899, and an estimated 89% of such earners are part of families, where it is likely there is another earner or other sources of income. With regards to families, if both partners earned a minimum wage year round salary, they'd still earn more than the requisite $21,000 per year. To say that this benefit will lift hundreds of thousands of families out of poverty is a lie. It is a way to impress the public that "something is being done" without having to do anything at all, while at the same time, saving $1 billion of this initiative that is obviously not going to be used to be spent on something else. However, the Conservatives did not promise an anti-poverty budget, so they can be forgiven for being a tad slovenly in that direction.

Provincially, the picture is much more cynical, especially given their pre-budget hype about this budget was about it being an "anti-poverty" budget. When you promise so much, but not deliver, this makes the picture much more cynical and brazen to many voters. Their major anti-poverty initiative is a $2.1 billion investment over a five-year period on a new Ontario Child Benefit. They also promised a $392 million dollar investment in affordable housing, as well as $51 million more for Legal Aid Ontario and $8 million over three years for a Legal Support Centre for the Liberal's revamped mess they made of the Ontario Human Rights Commission. Throwing big numbers at some voters may "wow" some, but upon closer examination, one finds that these numbers do not add up at all. Furthermore, with regards to the Ontario Child Benefit, the major initiative that Premier Dalton McGuinty and Finance Minister Gregory Sorbara, stated not only prior to the budget, but continues to cite today, is "an end to the clawback of the National Child Benefit Supplement".

A little background here. In 1998, the federal government designed the National Child benefit Supplement as a means to reduce child poverty in the provinces, but leaving the provinces with the right to clawback 100% of the dollars from this Benefit from families who were in receipt of any kind of welfare or disability benefits. Some provinces, including Ontario, chose this direction, though not all provinces did. Over time, a movement gained some momentum when it was learned that the poorest of the poor will not benefit from this federal initiative and these same people would only get this money "back" if they took on a low-waged job and left the benefit rolls. It did not matter that many of the parents in this picture were persons with disabilities, who had substantial barriers to employment, or parents who had no access to subsidized or low-cost childcare. They were to receive this benefit on one hand, and have the provincial government claw it back from the other.

Anyways, years of campaigning by anti-poverty groups, such as the Hands Off! Campaign and Pay the Rent and Feed the Kids, in addition to a lawsuit filed through the Income Security Advocacy Clinic in Toronto, the Liberals made a promise before they were elected in 2003 that they would END the clawback. Now, almost four years later, Premier Dalton McGuinty and Finance Minister Gregory Sorbara are saying they are finally doing this with the introduction of the new Ontario Child Benefit. The question is: Is this for real? Is the clawback ending? Of course not!

The Ontario Child Benefit has a multi-year period of implementation, with a "down payment" given to eligible parents of up to $250 per child in July 2007. This date is no accident, as you are aware, the provincial government intends to go to the polls on October 10, 2007. They want to make it look like they were able to keep at least one promise; henceforth, the message is that if we vote these clowns back in again, they will continue the implementation of this Benefit. Again, big numbers speak big visions for some voters. The threat is, of course, if we vote for somebody else to take the reigns of Ontario, this Benefit may never be fully implemented. But, is this Benefit what the provincial Liberals say it is?

After July 2007, nobody will hear neither hide nor hair about this Benefit again until July 2008, when full implementation of this Benefit will begin. The Budget was unclear as to how it will be implemented, but suggested there will be some "restructuring" of social assistance and disability benefits for parents. This "restructuring" involves reducing (yes, that is correct!) social assistance and disability benefits with respect to a portion of the "basic needs" part of their allotments for children, and simply moving this reduction over to help pay for the Ontario Child Benefit. The Budget Papers, as I read them, implied this "reduction" will not affect current shelter allotments for families or health benefits, such as drug and dental coverage. After this "reduction" in children's benefit allotments from the monthly cheques is moved over to the Ontario Child Benefit program, each family will receive equal benefits according to their incomes regardless of whether their income comes from social assistance benefits or from low-paid work.

After this mathematical shell game is completed, how much money does this mean for families on Ontario Works and Ontario Disability Support Program benefits? I have been promised by various authorities I spoke to that the net result will be positive for all families, but it appears to me that OW and ODSP families will be getting substantially less benefit from this prorgram than would families that receive all of their income from wages would. For example, at its interim implementation period starting in July 2008, when the Ontario Child Benefit begins, each qualifying family will begin to receive monthly cheques that will be sent at the same time as the National Child Benefit Supplement and Child Tax Credit cheques. The OCB will be an "add on" to these pre-existing benefits. In 2008, it is estimated that families in receipt of OW and ODSP will have a net gain of up to approximately $31 per child, and upon its full implementation in 2011, such families will have a net gain of up to $50 per child. I italicized the term "up to" for a reason, because OCB will be clawed back at a rate of approximately 8 cents on the dollars for every dollar received by families that is over and above $20,000 per annum.

This set-up will particularly be hard on ODSP families, for example, that have more than three children, have additional benefits on their cheques intended to support family members with special medical or disability-related needs. For example, ODSP families that also receive Assistance for Children with Severe Disabilities, Special Diet Allowances, Medical Transportation Allowances, or additional monies for other medical conditions, such as diabetes, ostomies or surgical supplies, will easily have a family "budget" that far exceed the $20,000 arbitrarily alloted as the peak point. These families will be punished because they have special needs, something that makes me wonder about possible Charter challenges, Human Rights Code Complaints and so forth. When this issue was raised with a couple of my experts, including Sarah Blackstock, Policy Analyst at Income Security Advocacy Clinic, and another friend of mine locally that litigates anti-poverty issues, I was told my assumptions were correct. However, both advised me that there are many questions that remain unanswered about this Benefit and they will be seeking these answers and report back. Maybe the government hasn't thought about the point I made above, or has other plans on how to define "income" for this purpose. Let us hope so, or my computer will be on the ready for the drafting of new Complaints.

So, the big question here is ... does this new Ontario Child Benefit end the NCBS clawback? No, it doesn't. If the clawback were to be ended by this Benefit, recipients would see up to $122 per month extra for each child without any cuts to their basic need budgets. This program, even at its maximum stated implementation, will net the poorest of these families only an additional $50 per child, a full $72 short of what they would be getting if the clawback were truly ended.

What about other anti-poverty initiatives in this Budget? There was an announcement about $392 million alloted for affordable housing. For those of you who are aware, this is not new money ... but money that was set aside under a prior agreement with the federal government before the federal government decided to renege on their end of the deal. This money was just not spent and its interest collected, etc. since is likely to be spent elsewhere. Most of this money is allocated to deliver an additional $100 per month per working poor family earning $20,000 a year or under. Nobody on OW or ODSP will see this money. The government expects 27,000 families across Ontario will benefit. Another part will be for new housing - I may be wrong, but I think they are talking about another 4,500 units of affordable housing, which doesn't even put a dent in the number of families on the waiting lists, which at last call was about 122,000 families ... let alone all families in core need (e.g. those spending more than 30% of their income on housing related costs), which is estimated to be at about 600,000. There are also other programs and initiatives under this $392 million announcement, such as for the repair and maintenance of ageing housing stock as well as $150 subsidies towards home energy audits for low income families.

There was also a general across the board increase of 2% for all persons on Ontario Welfare and Ontario Disability Support Program, expected to kick on on November 30, 2007 - expected, of course, AFTER the next election. This 2% increase amounts to approximately $20 per individual and $35 -$40 per family. This is really just a drop in the bucket, considering that prior to McGuinty coming into power - the rates have been frozen for approximately 10 years and have lost at least 18% of its purchasing power. After McGuinty came in, while his government did issue two raises, 3% and 2% respectively, they hardly made up for additional inflationary erosion since his government took office, nor did it make up at all for what folks have lost in the preceding ten years prior to getting into office. The additional 2% is better than nothing, I suppose, but by the time it kicks in, it has already long been spent ... on rent increases of 2.6% permissible this year, electricity price hikes, gas price hikes, transit fare hikes, grocery price hikes, etc. almost to the point that people on assistance are once again going to be losing money, not gaining it, like this government has promised.

With respect to this budget, those who are working at low-wage jobs are rewarded. While I have no difficulty with helping the working poor, I have difficulty with the philosophical direction and implications of this government and what is implied in this Budget. Many people on ODSP cannot work, or cannot find a suitable position that would both accommodate their disabilities and utilize the person's actual skills and abilities. Neither of these two classes of people are supported under this budget. As a ground floor practitioner, I see many of these same people feeling forced to go out to find part-time jobs ANYWHERE ... just so they can both pay the rent and put food on their tables. Unfortunately, this push does not often have good results with people with disabilities. Taking "any" job is not bound to be successful with this group, nor is it helpful to an employer who risks re-injury of an employee who is returning to work because they have to, not because they can.

Cases in point:
  1. One man, 46, who has suffered extensive brain injuries in a fall years ago, has been deemed unable to work. However, seeing the substantial erosion in his purchasing power of his ODSP benefits, he went for and accepted a job at a local call centre. While he did well in his training period, he was fired from his job three days after he began due to his inability to multi-task on the call centre's equipment while speaking with customers;
  2. One woman on ODSP, 48, suffers from fibromyalgia and other disabilities. She does not have many skills, but wants to work. She found a part-time cleaning job, cleaning various offices in the community. While she didn't have trouble with the hours, she became injured on the job three weeks after she began her new placement. She ended up in hospital in severe pain, put on medications and was told not to return to this job.
  3. On man, 50, is living on ODSP. He was very depressed when he realized that he would never be able to afford to live in his own apartment and must settle for a room instead. He joined a training program in customer service and accepted a job at a call centre. One week later, he became very stressed and was forced to quit his job because he was unable to handle it. He is still feeling financially pinched and worries about his future.
  4. One man, 31, has a severe learning disability and emotional problems is on ODSP. Prior to this time, his family was able to assist him by providing him with additional funds to maintain a clean one-bedroom apartment. Recently, his family lost their ability to do this due to illnesses of their own, leaving him with insufficient funds to maintain his apartment. He was forced to move from this apartment to a smaller one that had substantial maintenance concerns, as well as a problem with cockroaches. He desperately wanted to move out of this apartment into a better one, so he tried and found a job. Because of this man's disability, he was not able to get along well with other coworkers and his boss and began to feel like people were "picking on him" and as each day went by, his depression and anxiety worsened to a point that it affected his work performance and was fired. He is still trying to find work, but his social worker at the hospital doesn't believe he can work ... but he can't afford not to work either.
  5. A man, 48, has been having trouble with his claim for the Workplace Safety and Insurance Board. For awhile, he received appropriate benefits and workplace training, but for some reason, became reinjured and unable to complete his retraining ... he was cut off. Almost immediately, his wife left him and he could no longer keep his apartment. He ended up in a room, where he eventually was able to get on to ODSP. The landlord for the rooming house that he is in has applied for and successfully obtained a conversion to a duplex and he was asked to move. He does not have sufficient funds from ODSP to get a one-bedroom apartment in the area, nor does he want to move to another room ... he hears about all the different rooms available and he does not want to live under those conditions. He has applied for and accepted a job as a gas station attendant, where he immediately began to become ill, and his injuries became worse. He had to quit. He is currently living in a bedsitting room in a "welfare motel".

These are just examples of how people on ODSP are faring with a diminishing income and poor, unstable job prospects in the community. ODSP used to have a very strong Employment Supports Program, but due to increased demand and an unwillingness on the part of government to make new investments in this Program, the quality of service and wait times under this initiative has deteriorated. It is not unknown for some people in some regions to wait more than a year for service. Further, because the new model now rewards success - service providers that deliver this Program are tempted to find the fastest job they can find for somebody, not necessarily the most appropriate job. There are no longer any funded training opportunities, so if an ODSP recipient needs to upgrade their skills before they can obtain a suitable job, the Employment Supports Program will no longer be of service to them.

With the general direction and philosophy of this government's budget, I am becoming increasingly concerned that while this government may not REQUIRE people with disabilities to find work in exchange for continued eligibility for benefits, as with the case of Ontario Works, this is being done by stealth. That means that when somebody is finding they can no longer afford to pay for the basics of their survival, they may find themselves forced to take any job -- often at their own detriment and at really no help to their prospective employer. Does the government really want to do this to its vulnerable citizens? I think as a general public, we need to ask these questions and try to find out why this is happening. Because less and less jobs offer pensions and disability plans of their own, anybody ... and I mean anybody ... can be just one paycheque away from this kind of tragedy. By then, it will only be too late when you discover that in exchange for all the tax cuts you received while working, you gave up most of your rights to social protection in the event of job loss, disability, ill health, divorce, etc. It is about time that we STAND UP and do something about this before more people get hurt.

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