The Community and Neighbourhood Services Committee reports, for the information of Council, having requested the Commissioner of Community and Neighbourhood Services to provide a further report to the Committee with respect to the impacts on:

Purpose:

The purpose of this report is to describe the provincial changes to regulations announced on February 2, 1998, and to review the impacts on clients and on the Social Services Division.

Funding Sources, Financial Implications and Impact Statement:

There are no immediate direct financial implications.

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background/History:

On February 2, 1998, the Minister of Community and Social Services announced a number of changes to the social assistance system as part of the introduction of new regulations under Ontario Works. The changes, to be implemented April 1, 1998, primarily involve benefit levels and deductions. Also included are policies to ensure prisoners do not receive social assistance, and changes to eligibility for health benefits.

As part of the implementation of the new Social Assistance Reform Act (S.A.R.A), the Ontario Works legislation and regulations are also tentatively scheduled to take effect April 1, 1998. Details are not yet known. If the Province=s timetable is met, a report will be forwarded to Council in April discussing the overall changes and assessing the implications for Toronto.

The Minister=s statement also referred to previously announced changes that will affect single parents. Single parent cases are currently managed by the Province. However, as of April 1, 1998, in conjunction with the implementation of the new Ontario Works legislation, all single parents will be required to enroll in the Ontario Works program as part of the overall changes in the delivery system. To facilitate this transition, responsibility for managing single parent clients (and foster children) will be devolved to municipalities. It is anticipated that a report to Council will be tabled in March which discusses the plan and process for transferring single led cases to the municipality.

This report discusses the impacts of the changes announced to date on clients, in the context of the circumstances faced by social assistance recipients in Toronto. The report also identifies a number of key concerns related to the implications these changes will have for the management and delivery of Ontario Works in Toronto.

Comments and/or Discussion and/or Justification:

As noted above, most of the changes relate to benefit levels and income deductions, and will reduce the actual benefits that clients receive. The specific details regarding the new regulations are contained in the Minister=s announcement, which is appended (Appendix A).

Client impacts must be assessed in the context of the circumstances facing those who will be affected by the changes. In Toronto, homelessness and housing affordability are key concerns. A number of the changes proposed will reduce benefit levels for people who are already homeless, or who maybe coping with circumstances which are not highly stable, such as those who are living in rooming houses.

Another important issue involves the provision of drug cards to individuals or families who have high drug costs, or who require prescription drugs on a frequent basis. Certain clients will no longer be eligible for drug cards through social assistance. The potential implications are significant for those affected.

Homelessness and housing affordability are key issues facing Toronto, and particularly facing low income residents. The City, through the establishment of the Homelessness Action Task Force, has made a commitment to address these problems. Recently, the Province launched its own task force to investigate homelessness across Ontario.

Through the 1990s, the number of homeless people has grown steadily. Hostels usage has more than doubled over the past four years, and there has been a steady increase in the number of individuals using drop-ins and the Out of the Cold program. Seven to eight hundred people per month who receive General Welfare Assistance cheques do not have a fixed address; a significant proportion of these people may be at risk of being homeless at any given time. At the same time, very low vacancy rates, a lack of affordable shelter and minimal construction of new low cost-housing stock make it difficult for many low income people to find housing.

Substantial evidence also exists that increasing numbers of people are at risk of losing their housing. As a result of the October 1995 social assistance rate cuts, a majority of the Division=s clients have shelter costs in excess of their shelter allowance. Often, clients have only a few dollars a day left for meeting other basic needs after covering their housing costs. The recent Background Paper for the Homelessness Action Task Force provides a comprehensive overview of the housing issues facing low income people in Toronto.

Overall, the regulatory changes proposed will result in the majority of clients affected having their entitlements reduced, modestly in many cases. As well, those who are impacted are those who may face the greatest risk of being or becoming homeless.

Under the new regulations:

The maximum entitlement for boarders living at home is also being reduced. Currently, boarders who live with their parents and other boarders receive the same allowances. As a result of this change, people who move in with, or remain with, their parents to reduce their costs, will be penalized. In addition, clients who receive income from boarders will have a greater proportion of this income deducted.

In many ways, these changes appear straightforward. Although they do not affect large numbers of clients, of paramount concern is how the impacts will be distributed. The changes will potentially reduce benefits for homeless people, people living in rooming houses, those with low utility payments, people living at home and those taking in boarders. Given the cuts in social assistance rates that were made in 1995, and the ongoing problems with housing affordability in Toronto, for many people even moderate reductions in benefits may increase the risk they will lose their housing, or make it that much more difficult for them to secure stable housing. Such outcomes often ultimately result in the need for more costly interventions.

Currently, a person or family with a low income, on the basis of a needs test, can obtain a drug card under G.W.A. For example, a low income family with very high drug costs may be in a position to have these costs covered. The drug card is issued through the Ontario Drug Benefit Program, administered by the Ministry of Health, and provides 100 percent coverage for the cost of prescription drugs and drug products. In 1997, approximately 300 people per month received drug cards who were in this situation, including people on fixed incomes who are in receipt of Old Age Security or Canada Pension Plan benefits.

Starting April 1, 1998, these clients will no longer be eligible for a drug card through G.W.A. Instead, they will be required to apply to the Provincial Trillium Drug Program (T.D.P.) which reimburses low income earners who qualify on the basis of a financial means test. However, the Trillium plan also has an annual deductible. For example, a single person with an income of less than $6,500.00 must cover the first $350.00 in drug costs. There is also a $2.00 co-payment for every prescription. Appendix B lists the deductibles for different family sizes and income ranges.

This change will create very real hardships for certain low income people, especially where individuals or families urgently require drugs to maintain their health. One obvious example is a diabetic who must take insulin every day. Under the Trillium Program, a person will have to cover the deductible ($350.00) before any subsidy is available. For people with low incomes who need certain drugs to live the financial stress could be severe. People may be forced to make extremely difficult choices between meeting other basic needs and purchasing prescriptions. Also, people in this situation might have to leave their jobs to retain access to necessary medicines.

The new regulations will have impacts from a program management perspective, out of proportion to the apparent simplicity of the actual changes. Many of the changes, especially those which involve verification of actual client expenses, will add to the already extensive amounts of documentation front-line workers review. Such changes will inevitably lengthen the eligibility determination process. They will also make it more difficult for the Division to pursue increased efficiencies by streamlining, and, wherever possible, automating procedures, which has been a central goal of its efforts to radically improve the administration and delivery of social assistance benefits to clients.

This last issue is critical from another standpoint. The Division=s automation and restructuring initiatives have been key to redesigning the social assistance system to deliver the Ontario Works program, which the Province has clearly indicated is intended to focus on moving people back into the labour market. Under Ontario Works, front-line staff must be able to work more intensively with clients to assist them to return to work. Increased administration of income supports is counterproductive in an employment focused program.

Direct financial savings from the proposed changes will be modest, at best, as the Provincial Government has acknowledged. As indicated above, any savings will be more than offset by the upward pressures on administration costs.

Given that the new Ontario Works legislation will impact the delivery of Hostels and Children=s Services in the future, as well as Social Services, each service area may face more prescriptive program management and service delivery conditions as a result of the changes being made by the Province. Obviously, the discretion local service managers have to shape their delivery systems to meet local community needs may be adversely impacted.

Conclusions:

This report details the changes in regulations proposed by the Province, and discusses key impacts on clients and on the management and delivery of social assistance.

Although the announced regulation changes will not affect large numbers of clients, the impacts may be felt most acutely by those who are already in very vulnerable positions regarding housing or health benefits. In Toronto, it is clear that an increasingly restrictive social assistance system will place greater pressures on other social and emergency services, notably hostels, at a time when these services are already under stress.

The new provincial regulations will have substantial program management implications, increasing the workload involved in administering eligibility determination and entitlement. The Social Services Division is concerned that the introduction of such changes will negatively affect staff=s ability to undertake value added activities: namely helping clients find jobs.

Perhaps most importantly, it is likely that the changes announced to date are indicative of the prescriptive approach being taken by the Province regarding the establishment of new regulations governing eligibility and benefit determination under the Ontario Works Act. Potentially, the discretion available to local service managers to shape their delivery systems to respond to local community needs will be limited.

Upon the release of the new Ontario Works regulations, the Social Services Division will provide Council with an assessment of the impacts on clients, and on program management and service delivery in the affected service areas.

Contact Name:

Heather MacVicar: 392-8952

The Community and Neighbourhood Services Committee reports, for the information of Council, also having had before it during consideration of the foregoing matter a communication (February 2, 1998) from The Honourable Janet Ecker, Minister of Community and Social Services, respecting the Ontario Works Act to be proclaimed in April 1998.

(A copy of each of the Appendices referred to in the foregoing report was forwarded to all Members of Council with the agenda of the Community and Neighbourhood Services Committee for its meeting on February 12, 1998, and a copy thereof is on file in the office of the City Clerk.)