Ontario Works Act Regulations

 The Community and Neighbourhood Services Committee recommends the adoption of the report dated April 21, 1998, from the Commissioner of Community and Neighbourhood Services.

 The Community and Neighbourhood Services Committee reports, for the information of Council, having requested:

 (a)the Chair of the Community and Neighbourhood Services Committee to report to the May 21, 1998, meeting of the Committee on the outcome of his meeting with the Minister of Community and Social Services; and

 (b)the Commissioner of Community and Neighbourhood Services to:

 (i)report to the May 21, 1998, meeting of the Committee providing a more detailed analysis of the impacts of the Ontario Works Act regulations, in order that strategies can be developed to respond to such regulations; and

 (ii)invite interested parties to submit their comments on the regulations.

 The Community and Neighbourhood Services Committee submits the following report (April 21, 1998) from the Commissioner of Community and Neighbourhood Services:

 Purpose:

 The purpose of this report is to provide an overview of the new Ontario Works Act regulations, which have recently been released by the Province. Due to the limited time available to examine the regulations, this report highlights the key changes contained in the new regulations, and provides an initial overview and impression of the cumulative impacts for Toronto.

 Financial Implications:

 The net financial impact of the new regulations will require substantial analysis and is therefore not known at this time.

 Recommendations:

 It is recommended that:

 (1)the Chair of the Community and Neighbourhood Services Committee arrange a meeting with the Minister of Community and Social Services to discuss the implications of the new regulations for the City of Toronto;

 (2)the Province be urged to reconsider those regulatory changes that undermine and contradict the employment goals central to the Ontario Works program, and that constrains the Municipality=s capacity to effectively and efficiently manage the delivery system such that it is both fiscally responsible, and sufficiently flexible to meet the needs of Toronto residents;

 (3)this report be forwarded to the Minister of Community and Social Services; and

 (4)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

 Background:

 By the late 1980s, it was widely acknowledged that the social assistance system was in need of significant reform. Based on legislation which had been passed in the late 1950s, the system could no longer adapt to rapidly occurring changes in the social and economic environment. Ongoing reductions in other programs, like Employment Insurance (E.I.), and difficult labor market conditions, placed increasing pressure on social assistance, to the point where it is now the principal labour market adjustment program in Toronto, and an ever more critical support for people who lose jobs, or who are seeking assistance to re-enter the labour market. As one example of the changes occurring, it is worth noting that fewer than 40 percent of the unemployed people in the Greater Toronto Area (G.T.A.) are now in receipt of E.I. versus more than 70 percent a decade ago.

 The current government initially outlined its commitment to reform the social assistance system in AThe Common Sense Revolution@ document. Beginning in 1995, a number of significant changes were made to the social assistance system, including:

 (a)reductions in social assistance rates;

 (b)introduction of more restrictive policies governing eligibility;

 (c)in October 1996, the introduction of the Ontario Works program;

 (d)tabling of new social assistance legislation, the Social Assistance Reform Act (S.A.R.A.), in June 1997;

 (e)announcement of significant new municipal responsibilities for cost-sharing and delivering social assistance as part of the Province=s AWho Does What@ process;

 (f)introduction of a series of important regulation changes affecting benefit levels and eligibility for implementation on April 1, 1998; and

 (g)most recently, release of the new regulations for the Ontario Works program effective May 1, 1998.

A critical component of the Province=s reform is the creation of a new legislative framework for social assistance. Passed in November 1997, the new S.A.R.A. does two things:

 (a)it gives effect to the new municipal social assistance funding and program delivery responsibilities recommended by the Provincial Who Does What panel; and

 (b)it creates a wholly new social assistance delivery system through two new pieces of program legislation: the Ontario Works Act (O.W.A.) and the Ontario Disability Support Program Act (O.D.S.P.A.). These statues replace three existing Acts: General Welfare Assistance (G.W.A.), Family Benefit Assistance (F.B.A.), and the Vocational Rehabilitation Services (V.R.S.) Act.

 In July 1997, the Department reported to Metropolitan Council on the details of the new legislation (Clause No. 2 of Report No. 10 of the Human Services Committee), and assessed impacts of the new legislative framework introduced by the Province.

 The Social Services Division has had the regulations for less than a week. Due to the limited time available to examine the regulations, this report highlights the key changes, and provides an initial overview and impression of the cumulative impacts for Toronto. The changes are listed in Appendix I. The Department will continue to analyze the impacts in greater detail and report back to Committee over the next several months.

 The Province has indicated that provision is being made for a transition period, extending to the end of 1998, to enable delivery agents to fully implement the new regulations.

 Discussion:

 (I)Toronto=s Social Services Delivery System:

 The Department has recognized for some time that social assistance should be an employment focused program which enables staff to actively help people become independent by obtaining jobs. Its own efforts to reform the social assistance delivery system have been predicated on two basic principles:

 (a)people on assistance want to work; and

 (b)the social services delivery system must balance the need to ensure financial integrity with the need to provide service supports which effectively meet the needs of Toronto residents.

 Overall, Toronto has demonstrated that a social services delivery system can be compassionate, while at the same time, efficient, effective and fiscally responsible.

 Toronto Social Services has a track record of responding to residents= service needs and to initiating new and effective strategies for improving program management and reducing program delivery costs.

 Since the early 1980s, Toronto has provided a range of employment programs and supports to clients. By working with an array of community organizations and other levels of government, it developed a basic employment services infrastructure. This provided the foundation for the implementation of the Province=s Ontario Works program, and enabled the municipality to introduce Ontario Works in a way which best meets local needs and respects community values.

 Through a fundamental redesign of the delivery system, begun in the late 1980s, the Social Services Division has dramatically streamlined administrative processes, introduced program efficiencies, increased cost-effectiveness, and reduced the time spent by staff on non-value added activities. The result is evident in cost of administration comparisons with the other delivery agents around Toronto, which demonstrate that the City is just as cost-effective as these jurisdictions, although it faces issues unique to large urban centres, and delivers services to 90 percent of all social assistance clients in the G.T.A.

 Steps to increase financial integrity have been central to the Division=s efforts to improve the delivery system. Through a range of initiatives, with technology as a central focus, most recently the Client Identification and Benefits Systems, the Division has continued to strengthen program integrity.

 In the end, however, the hallmark of an effective social services delivery system for any community is its capacity to positively respond to local needs within the prevailing legislative and regulatory framework. Toronto has consistently advocated for the changes to social assistance which ensure that the program:

 (a)treats people fairly and equitably;

 (b)provides adequate financial and employment supports in relation to the costs of living in the local community; and

 (c)makes sufficient discretion available to municipalities to respond flexibly to needs in different communities.

 As indicated in its July 1997 report, the Department is supportive of certain core elements of the Province=s approach to legislative reform. The Department has long supported the creation of a single tier social assistance system, and the development of a separate program for people with disabilities. Similarly, the Department strongly agrees with the dual priority the new legislation establishes for the social assistance system: to promote independence through employment, and to provide financial assistance.

 At the same time, there are key features of the legislation, and more specifically, the new O.W.A. regulations, which are regressive and which are counterproductive to achieving the Province=s own stated purpose of creating an employment focused program which has, as its priority, the goal of moving people into jobs. Appendix IV states the Province=s specific purpose for the Ontario Works Act.

 Of particular concern is the introduction of law enforcement powers in the social assistance system. These powers appropriately belong to law enforcement agencies, and directly contradict the support role that must be central to an employment focused social assistance program. This concern will be elaborated later in the report.

 (II) New Regulations: Overview:

 The O.W.A. regulations provide the detailed and technical basis for specifying the application of the provisions contained in the new statutes. In effect, regulations provide the rules for delivering social assistance on a day to day basis. The new regulations published by the Province set out the following: basic definitions under the O.W.A.; who is eligible for assistance; how applications will be taken; obligations to seek employment and to participate in employment assistance activities; issues related to non-compliance; and the processes for calculating benefit entitlement. Appendix I lists the contents of the new regulatory package.

 Overall, the Department is concerned that the social assistance system which will emerge under the new regulations will be administratively cumbersome, unnecessarily restrictive, and will undo the positive efforts this municipality has made to redirect staff time and resources from administering financial eligibility to supporting clients= efforts to re-enter the labour market.

 (III)Key Issues:

 This section will examine specific changes to eligibility, benefits and program delivery. Potential impacts will be assessed using key examples.

 (A)Changes to Eligibility:

 There are a number of changes which affect who is eligible for financial assistance. Overall, the regulations adopt a more restrictive approach to program eligibility. The key ones are as follows.

 Treatment of Assets: Value of Automobiles:

 Under the new regulations, automobiles worth more than $5,000.00 are considered an available asset. Applicants and recipients who own such a vehicle will not be eligible for assistance unless they dispose of the asset.

 Given that more than one third of Toronto=s clients receive assistance for less than four months, this is a unduly restrictive change which will cause many clients to lose their primary source of transportation, and one of the most important tools they have to regain employment. The effect may well be to reduce people=s ability to look for work, and rapidly move off assistance.

 Conversely, someone may be in need, and meet all other eligibility criteria, but be denied financial assistance solely on the basis of the value of their vehicle. In such cases, the applicant person may have no recourse but to sell their automobile even though they may need benefits for only a short time.

 Earnings Exemptions:

 The new regulations reduce the amount of employment income that people with earnings can retain as the length of time on assistance increases (see Appendix I for details). Currently, there are over 14,000 people with earnings in receipt of assistance who may be affected by this change.

 This change will undermine the Support to Employment Program (S.T.E.P.), introduced over 10 years ago. The program ensures that people with earnings are always better off working than they would be on social assistance alone. The program also serves as a transitional support to clients with low incomes who are seeking to become completely independent of social assistance.

 The most substantial impact will be felt by larger families who have earnings, but who, because of their budgetary needs, remain eligible for social assistance. In these cases, the new exemptions will simply reduce the overall income available (see Appendix II for several case examples), and serve as a disincentive to maintaining part-time employment.

 Persons 60-64 Years Old:

 As the Department noted in its July 1997 report, under S.A.R.A., 60 to 64-year old persons applying for social assistance after January 1, 1998, will only be eligible for financial assistance under O.W.A. They also will be required, as a mandatory condition of eligibility, to participate in all approved employment activities, including Community Participation. There is a monthly average of over 500 people in this age group in receipt of O.W.

 The Department=s position remains that the inclusion of this group in O.W. is not consistent with the purpose of the Act, which is intended to assist employable individuals find the Ashortest route to a job.@ If citizens nearing retirement must apply for financial assistance through O.W., at minimum, they should be exempted through regulation from mandatory O.W. activities, such as Community Participation.

 Sole Support Parents:

 As of May 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. Single parents with school-aged children will have mandatory participation requirements. All regulations that have traditionally applied exclusively to employable cases, will now also apply to this group. For example, single parents who quit or are fired from their jobs may not be eligible for assistance for a three or six-month period. As has been reported previously, this represents a fundamental change for the social service system.

 (B)Changes to Benefits:

 The new regulations do not alter the maximum benefit levels provided under basic assistance or shelter allowances. However, there are a number of changes which, taken collectively, will negatively impact many clients, either by reducing the funds they will receive as a result of the way benefits will be calculated, by reducing the funds available in certain situations, or by restricting eligibility for specific benefits. The following summarizes the key changes.

 Pregnancy Allowances:

 The most obvious change to benefits is the elimination of the pregnancy allowance, which provided $37.00 per month for up to six months to pregnant clients. In 1997, this allowance was provided to approximately 6,500 women. To date, in 1998, nearly 2,900 women have received the allowance. The Provincial position is that the funds may be provided through other means, but only where proof of need is demonstrated and it can be assured that the funds are appropriately used.

 In consultation with Toronto Public Health, the Social Services Division will investigate options to replace the pregnancy allowance (e.g., by using the Special Diet allowance), and examine approaches to delivering the benefit which will meet the nutritional needs of pregnant women.

 Back to School and Winter Clothing Allowance:

 In both cases, these allowances, which are provided to families once a year, will now be available only to children living at home who are under 18 years of age. Previously, all dependents up to the age of 21 were eligible to receive both allowances.

 Restricted Eligibility for Discretionary Benefits:

 Under G.W.A. regulations, a person or family with a low income, on the basis of a needs test, could obtain a drug card under G.W.A. which provided 100 percent coverage for the cost of approved 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.

 These clients will no longer be eligible for a drug card. As noted in the Department=s February report, entitled AGeneral Welfare Assistance Regulation Changes,@ this change will create very real hardships for certain low income and working poor households, especially where individuals or families urgently require drugs to maintain their health. In certain cases, individuals or families with high drug costs may be compelled to leave their jobs and apply for social assistance to ensure their medical needs can be met.

 The new O.W.A. regulations introduce a mandatory program providing vision and basic dental care for children in receipt of benefits under O.W. and O.D.S.P., and for disabled adults in receipt of O.D.S.P. Programs serving adults in receipt of O.W. will only be provided on a discretionary basis by municipalities. The potential is that a two tier system will emerge, with adults on O.W. receiving no dental or vision care benefits, or lower quality benefits. Currently, low income people and recipients of other government programs (C.P.P., O.A.S./G.I.S.) can receive certain vision care and dental benefits under G.W.A.

 Dependent Adults:

 The regulations introduce a new definition of dependent adult, which will affect both eligibility and benefit levels for specific clients. Currently, any adult over the age of 21 is eligible for social assistance if they demonstrate financial need. However, under the new regulations, any adult who does not meet the new test for financial independence is considered a dependent adult, regardless of age, and is not eligible for social assistance in their own right.

 As a result, dependent adults, whether they are 20 or 45 years of age, who live with their parents are not eligible for social assistance if their parents are not in receipt of O.W.A. or O.D.S.P. If the parents are in receipt of social assistance, the dependent adult is simply added to the family=s benefit unit, resulting in a substantially reduced allowance which is paid directly to the parent.

 For adults in this situation, the immediate effect of this change will be either ineligibility or a substantial reduction in benefits, ranging up to 80 per cent. of current entitlements. Appendix II provides specific examples of the way benefit levels will be altered. Along with reductions in benefits, there will also be a corresponding loss of independence for those affected.

 As of April 1, 1998, the maximum entitlement for boarders living at home was also reduced. Currently, boarders who live with their parents, and all 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. A number of other reductions in benefits related to shelter costs were described in the Division=s February 4, 1998, report discussing changes to regulations effective April 1, 1998.

 There is a larger issue related to benefit reductions that should be noted here. 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 that they will lose their housing, or make it that much more difficult for them to secure stable housing. Such consequences often ultimately result in the need for more costly interventions.

 Funerals:

 Currently, the municipality, under the Anatomy Act, is responsible for burial costs of the indigent poor. The Province has traditionally cost-shared these expenses on a 80/20 basis under Special Assistance. Under the new regulations, the Province will no longer cost-share burials for non-social assistance recipients. In 1997, gross divisional expenditures for funerals was approximately $2.7 million. Appendix III provides information about the 1997 and 1998 funeral expenditures.

 (C)Changes Affecting Program Delivery:

Eligibility Review Officers: Law Enforcement Powers:

 Currently, the Division has a well established and effective process in place for protecting the integrity of the social assistance program. The Division has developed a close working relationship with the Toronto Police Service, and is convinced, based on experience, that the delineation of powers and responsibilities between police staff and social service workers is appropriate and productive in addressing any program abuse.

 The new legislation expands the ability of delivery agents to establish fraud control measures, and permits the creation of specific units and positions, such as a fraud control unit and eligibility review officer with police-type powers, including search warrants. While the Department supports placing new authorities in the Act that will enable it to better protect program integrity, it is very concerned about the emphasis on an onerous client policing function for the social assistance system, and for staff.

 The Department believes, as a principle, there is a fundamental contradiction between policing and client support functions. APolicing@ functions should not be incorporated within the social assistance system. This is particularly the case when the current verification and monitoring activities are to be expanded so significantly.

 Verification and Documentation Requirements:

 The new regulations will substantially increase the need to document and verify information related to the determination of eligibility and entitlement. A number of regulatory changes announced by the Province in February this year are indicative of the thrust of the new O.W.A. regulations. For example, the fixed shelter amount for homeless individuals was eliminated, and replaced by repayment of actual shelter costs, where proof is provided.

 In addition, only actual utility costs are now being paid. Previously, below a minimum dollar amount, a set allowance was paid for utilities, based on family size. Currently, about 10 percent of the caseload is reimbursed for actual utility costs. About one-third receives the set allowance.

 The Department=s analysis of these minor changes indicates that the caseload changes will add to the already extensive amounts of documentation front-line workers currently review, thereby lengthening the eligibility determination process and increasing staff workload. Direct financial savings from the proposed changes will be modest, at best, as the Provincial government has acknowledged.

 These consequences will be magnified many fold with the introduction of the O.W.A. regulations. Several examples are cited below:

 (a)determination of whether an adult is financially independent or dependent (more information is provided in the section below related to this issue);

 (b)establishing and monitoring trusteeships for youth under 18;

(c)establishing liens against property as required by the new regulations; and

 (d)the extensive workload associated with implementing new fraud control measures.

 Increased administrative workload required to deliver income supports will make it more difficult for the Division to pursue increased efficiencies by streamlining and automating procedures, which has allowed it to redirect staff time to assisting people to obtain work. In fact, these initiatives are critical to the success of Ontario Works, which requires front-line staff to work intensively with clients to pursue employment activities.

 Program Prescriptiveness:

 The new regulations are indicative of the prescriptive approach being taken by the Province to the management of the social assistance delivery system. Potentially, the discretion available to local service managers in a number of human service areas to shape their delivery systems to respond to local community needs will be impacted.

 The potential under the new regulations is that the Province will increasingly micro-manage the delivery system. Over time, the City has been able to fashion positive and appropriate responses to the needs of Toronto=s residents using the discretion and flexibility available to it under the G.W.A. Act.

 At a more basic level, reflecting the core values which have been expressed by communities in Toronto, the municipality has used its discretion and has consistently pursued the creation of a delivery system which balances effective program management and competent and cost-effective program delivery with a responsive and compassionate approach to providing income supports to eligible people in need. Maintaining this balance has been critical through the last recession, a period in which social assistance became the program of last resort to a much larger group of people who had no other means to subsist, as well as the primary employment support program for unemployed people in Toronto.

 Conclusion:

 This report provides a broad overview of the major changes to the social assistance system that will flow from the new O.W.A. regulations. While a detailed examination of impacts has not been possible, given the recent release of the regulations, the issues identified reflect the direction and tone of the Provincial changes.

 The Department has a number of critical concerns about the cumulative impacts of the regulations on the social assistance delivery system:

(a)Changes made to the way eligibility is determined and benefits are calculated will, in many cases, negatively impact clients already in very vulnerable situations. Reductions to social assistance benefits may also place more people in unstable or risky situations, particularly in Toronto given the high cost of shelter. The Department is concerned that the energies of an ever larger group of clients will be directed to trying to maintain housing and meet basic needs, diminishing their capacity to actively seek work.

 (b)Excessively restrictive eligibility criteria which deny benefits to people in need will increase pressures on true emergency services, such as hostels and other community-based services supported by the Municipality and local funders.

 (c)The new regulations are highly prescriptive and centralize control of very detailed program decisions with the Province. There will be much less discretion and flexibility available to delivery agents at the very time that municipalities are required to contribute to a larger part of the costs of social assistance.

 (d)As noted, new policing powers are included which are inherently incompatible with the employment support role central to Ontario Works, and which should therefore not be part of the social assistance program.

 (e)The regulations will have substantial program management implications, and will significantly increase the staff time and resources required to deliver the O.W. program.

 Underpinning these changes is the presumption that clients do not use benefits for the reasons they are provided, and cannot be trusted to decide how their needs can best be met. This seems paradoxical given one of the tenets of the Provincial reform is to support people becoming self reliant. The outcome of the approach taken in the regulations will be a delivery system which is much less capable of responding to client need, and which requires great efforts to document and verify large amounts of information, with corresponding increases in the time staff spend administering financial assistance, and a reduction in the time available to actively assist clients to become independent.

 In view of the above, it is recommended that the Province be urged to reconsider those regulatory changes that undermine and contradict the employment goals central to the Ontario Works program, and that constrain the municipality=s capacity to effectively and efficiently manage the delivery system such that it is both fiscally responsible and sufficiently flexible to meet the needs of Toronto residents.

 Contact Name:

 Heather MacVicar:

Tel: 392-8952

Appendix IV

 Legislative Authority

The Ontario Works Act provides a legislative framework for the vision of social assistance in Ontario. This vision is one that respects people=s dignity, enhances their self-esteem, and fosters independence, self-reliance, community contribution and participation. Ontario Works provides employment assistance and temporary financial support for people who are in financial need.

 The legislation states the purpose of the Ontario Works Act is to:

 -recognize individual responsibility and promote self-reliance through employment;

 -provide temporary financial assistance to those most in need while they satisfy obligations to become and stay employed;

 -effectively serve people needing assistance; and

 -be accountable to the taxpayers of Ontario.

 Excerpt from Draft Provincial Ontario Works Policy Directives: Directive #1 Overview of Policy Directives

 The Community and Neighbourhood Services Committee reports, for the information of Council, also having had before it a communication (undated) from Mr. Peter Clutterbuck, Co-Executive Director, Community Social Planning Council of Toronto, outlining their concerns with the changes made to social assistance laws with the release of the regulations implementing aspects of the Ontario Works Act; and attaching a copy of a newsletter from the Ontario Social Safety Network in regard thereto; and requesting that the Committee reserve space on its May agenda for deputations from members of the community on these issues and concerns.

 Councillor Jack Layton, Don River, appeared before the Community and Neighbourhood Services Committee in connection with the foregoing matter.

 (A copy of Appendices I, II and III are on file in the office of the City Clerk.)