Analysis of Impacts of Ontario Works Regulations

 The Community and Neighbourhood Services Committee recommends:

(1)the adoption of the report dated (May 11, 1998) from the Commissioner of Community and Neighbourhood Services;

(2)that staff not implement any of the regulations which force family members apart until the Chair of the Community and Neighbourhood Services Committee has reported on the outcome of his meetings with the Minister of Community and Social Services; and

(3)that a copy of the report of the Commissioner of Community and Neighbourhood Services be forwarded to the Association of Municipalities of Ontario with a request that the AMO Board of Directors develop a strong municipal position for submission to, and the support of, the Association at its Annual General Meeting in August 1998.

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

(i)established a sub-committee, comprised of Councillors Chow and Korwin-Kuczynski, to review the Ontario Works Program Regulations; and

(ii)requested the Commissioner of Community and Neighbourhood Services to report directly to Council for its meeting on June 3, 1998, on how the City would be able to:

(a)continue the drug deductible for working parents;

(b)continue to transfer the National Child Tax Benefit to low-income parents;

(c)continue to cover the 25 percent or the extra cost for items that are applicable under Special Assistance and Supplementary Aid; and

(d)continue to cover the Back to School and Winter Clothing Allowance for Youth.

The Community and Neighbourhood Services Committee submits the following report (May 11, 1998) from the Commissioner of Community and Neighbourhood Services:

Purpose:

This report examines the most immediate impacts related to the introduction of the new Ontario Works Act regulations, and recommends strategies for addressing these impacts. The report then briefly describes the Federal National Child Benefit Supplement, which will be introduced in July 1998, and discusses the implications for social assistance clients.

Financial Implications:

The full financial impact of the new regulations will require substantive analysis and, at this stage, only preliminary analysis has been completed.

Recommendations:

It is recommended that:

(1)Council express its concerns to the Minister of Community and Social Services as they pertain to the negative impact of the regulations of Ontario Works on youth, dependent families, low income families, and individuals with special needs, as described in this report;

(2)the Chair of the Community and Neighbourhood Services Committee seek a meeting with the Minister to discuss these concerns and seek the Minister=s response to the recommendations contained in this report to remedy the problems;

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

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

Background:

In mid-April, the Province released the new regulations that accompany the Ontario Works Act (O.W.A.), which took effect May 1, 1998. In the report to the April 21, 1998, meeting of the Community and Neighbourhood Services Committee, the Department highlighted the key changes contained in the regulations, and provided an initial overview of the cumulative impacts for Toronto. At that time, the Committee requested that the Commissioner provide Aa more detailed analysis of the impacts of the Ontario Works regulations, in order that strategies can be developed to respond to such regulations@.

The Department=s April 21, 1998, report assessed the new O.W.A. regulations against two criteria:

(a)the principles underlying the Social Services Division=s efforts to reform the social services delivery system, namely that people on assistance want to work and that the delivery system must balance the need to ensure financial integrity and efficiency with the need to provide service supports which effectively meet the needs of Toronto residents; and

(b)the degree to which the key features of the new legislation and regulations support the Province=s own stated purpose of creating an employment focused program which has, as its priority, the goal of moving people into jobs.

In its previous report, the Department urged the Province to reconsider those regulatory changes that contradict the employment goals central to the Ontario Works program, and that constrain the municipality=s capacity to manage the delivery system such that it is both fiscally responsible, and sufficiently flexible to meet the needs of Toronto residents.

While most of the regulations impact on all individuals applying for social assistance, there are particular negative impacts on four client groups: youth, dependent adults, low-income families and individuals with special needs. This report will focus on analysis of the impact of the regulations on these client groups.

A further significant change in policy that will impact the social assistance system is the recently announced Federal National Child Benefit Supplement, which will be introduced in July 1998. The new Benefit is briefly described, and the implications for social assistance clients discussed.

Discussion:

(I)Impacts of Ontario Works Regulations on Client Groups:

This section examines the negative impact of the new O.W. regulations on specific client groups in terms of either benefits and/or eligibility issues, as appropriate.

(A)Youth:

(1)Benefit Issues:

Back to School and Winter Clothing Allowance:

The Back to School Allowance provides $128.00 once a year in August for each dependent child up to 21 years of age who is in school to meet costs associated with returning to school. To be eligible a dependent must be in school and in receipt of social assistance. A Winter Clothing Allowance of $105.00 per dependent is provided in November each year to all dependents under 21 years of age.

These mandatory allowances will be restricted to children living at home who are under 18 years of age. As a result, approximately 3,100 youth will no longer be eligible for the Back to School Allowance. Over 3,500 youth will no longer be eligible for the Winter Clothing Allowance.

The above changes are in addition to the 22 percent reductions in social assistance allowances that were enacted in October 1995 (see Appendix 1). They will further reduce the resources available to families with limited incomes to meet their children=s specific needs.

(2)Eligibility Issues:

16-17 Year Olds:

Under the new legislation, financial assistance will not be paid directly to young people under age 18. Only under exceptional circumstances, and if the young person is in school or an approved learning program, will assistance be paid, and then only to an adult trustee appointed by the delivery agent. The Department has previously expressed that the appointment of a trustee, without any consent from the youth, may inadvertently place a young person at further risk. Specifically, as a result of this change, young people may face a greater risk of being exploited by individual trustees.

The Division=s approach will be to establish trusteeship arrangements through approved community agencies, such as those that provide services to families and youth. Only where this is not possible, or there are other extraordinary circumstances, will trusteeship be arranged with an individual adult.

(B)Dependent Adults:

As discussed in the April 21, 1998, report, the O.W.A. regulations introduce a new definition of dependent adult. Currently, any adult over the age of 21 is eligible for social assistance if they demonstrate financial need. Under the new regulations, any adult who does not meet the new test for financial independence is considered a dependent adult, and is not eligible for social assistance in their own right. Consequently, dependent adults, whatever their age, who live with their parents, are not eligible for social assistance if their parents are not in receipt of O.W.A. or the new Ontario Disability Support Program (O.D.S.P.).

(1)Benefits Issues:

Under the definition of dependent adult, if parents are in receipt of social assistance, a dependent adult is simply added to the family=s benefit unit, resulting in a substantially reduced allowance which is paid directly to the parent. As the Department indicated in its previous report, those affected will be either ineligible or will face a substantial reduction in benefits, ranging up to 80 percent of current entitlements. (See Appendix 2 for detailed examples.)

Impacts on Single Parents and Youth:

A single parent in need who is considered a dependent, and who is living with his/her parents will no longer receive any benefits in his or her name. If his/her parents are not on assistance, only the child of the single parent will receive an allowance. If the parents are in receipt of social assistance, the single parent will simply be added to the parents entitlement, and the child also receive an allowance. In both cases, the single parent only receives the entitlement for his or her child.

As indicated in the April 21, 1998, report, there will be a significant reduction in the allowance provided to the single parent. These reductions will obviously place much greater pressures on parents, especially those with low incomes, who may be trying to assist their adult children, who themselves have children. The change would seem to penalize single parents who seek their families= help.

Further, although single parents are responsible for caring for their children, they are not themselves recognized as independent adults.

The Department is also particularly concerned about the impact on young adults. The intention of the new dependent adult policy appears to be to ensure families assume responsibility for adult children who live with them. This may be reasonable in higher income households. However, this assumption is questionable among working poor families, or families in receipt of social assistance. In such cases, a young adult who can significantly benefit from the emotional support and parental guidance provided by their family, may be pressured to move out of the family home because of the additional financial stresses caused by the reduction in benefits for the adult child.

As well, under the current G.W.A. benefit structure, there is an economic benefit for the entire family to remain intact. Given the high costs of shelter in Toronto, the ultimate effect may be to place a greater number of young people at risk unnecessarily.

This change comes on top of a number of changes to regulations, which took effect April 1, 1998, that penalize people who move in with, or remain with, their parents to reduce their costs. These changes were discussed in the Department=s February 4, 1998, report to Committee, entitled AGeneral Welfare Assistance Regulation Changes.@

These changes are particularly problematic in Toronto, given the high cost of housing, and the fact that benefit levels, including shelter allowances, were reduced by 22 percent in 1995. Currently, more than two-thirds of all individuals and families on assistance pay more than their maximum shelter allowance for accommodation. In this context, the proposed regulatory changes will have two adverse effects:

(a)potentially, there will be an increase in the number of people who live on their own, rather than with their families, and will likely place more people, especially youth, in situations where they are at greater risk. This is especially true for younger people, and for single parents and their children; and

(b)the overall funds available to cover shelter costs will be significantly reduced in families in which an adult child remains in the parent=s home, potentially jeopardizing current housing arrangements, especially among families with low incomes.

Exemptions Under the Dependent Adult Policy:

Social Services recognizes the importance of the family, and that the family must, first and foremost, be responsible for the well being of youth. However, where this is not possible, the social assistance system must provide the appropriate support. The Department is concerned that certain of the recent regulations will have the effect of driving youth out of their family environment rather than encouraging them to maximize support from their families.

For these reasons, the Department recommends that low-income families with youth living at home be exempted from the new regulation, whether they are working poor, on fixed incomes or in receipt of social assistance.

Determination of when the exemption applies should be made based on an agreed upon income threshold for the household. Below this threshold, young adults living with their families will continue to be eligible for benefits in their own name, as is currently the case. The income test employed by the Children=s Services Division to assess eligibility for a child care subsidy should be explored as a model for establishing appropriate income thresholds, which take into account family size.

(2)Eligibility Issues:

Human Rights and Charter Concerns:

The Department has requested that Toronto Legal undertake a review of the new regulations to determine whether the provisions relating to dependent adults violate the Ontario Human Rights Code (the "Code") or the Canadian Charter of Rights and Freedoms (the "Charter"). This section identifies the key issues of concern to the Department.

Human Rights Code:

Under Section 1 of the The Ontario Human Rights Code, AEvery person has a right to equal treatment with respect to services, goods and facilities, without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, family status or handicap.@

A key question is whether the definition of dependent adult may be considered to violate the Code on the basis of family status because it treats persons who live with their parents in a less favourable manner than persons who live with persons who are not their parents.

Under the new definition of "financially independent", a person is considered financially independent if the person resides with his or her spouse or has resided at any time in the past with a spouse. Again, an important issue is whether this clause may be considered to violate the Code on the basis of marital status as it gives less favourable treatment to persons who have never had a spouse. It also needs to be determined whether this clause, by using the term "spouse" as defined in the regulation, violates the Code on the basis of sexual orientation as same sex partners cannot be considered spouses for the purpose of receiving social assistance.

Given these issues, the Department anticipates that the definition of dependent adult may be challenged by clients under the provisions of the Human Rights Code.

Charter of Rights and Freedoms:

Section 15(1) of the Charter provides that every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, nation or ethnic origin, colour, religion, sex, age, or mental or physical disability. Unlike the Code, the Charter does not specifically prohibit discrimination based on marital status, family status or sexual orientation.

Generally, the issues surrounding the application of the Charter are complex. Further review will be required to assess whether there is any legal basis for clients to challenge the new definition of dependent adult under the Charter.

(C)Low-Income Families:

(1)Eligibility Issues:

Extended Health Benefits:

Under G.W.A., a person or family with a low income (e.g., the working poor and people on fixed government incomes), on the basis of a needs test, could obtain a drug card which provided 100 percent coverage for the cost of approved prescription drugs and drug products. These clients also have access to other Special Needs items such as prescription glasses and emergency dental treatment. As of April 1, 1998, these clients were no longer eligible for the above benefits.

In 1997, approximately 300 people per month received drug cards to cover the cost of prescription drugs. Now, if they need assistance with drug costs, they must 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 has an annual deductible. For example, a single person with an annual income of less than $6,500.00 ($541.00 per month) must cover the first $350.00 in drug costs. There is also a $2.00 co-payment for every prescription. Appendix 3 lists the deductibles for different family sizes and income ranges.

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. 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.

People with low incomes who need certain drugs to live may face severe financial stress. As a result, individuals and families may be forced to make extremely difficult choices between meeting other basic needs and purchasing prescriptions. In certain cases, people with high drug costs may be compelled to leave their jobs and apply for social assistance to ensure their medical needs can be met.

To address these concerns, and ensure vulnerable people are not worse off than before the April 1 changes, the Division=s position is that the Trillium Drug Plan deductible should be waived for those with high drugs costs who would have been eligible for the extended health benefit. The Department recommends that Council advocate to the Province that this change be effected as soon as possible.

The Department also recommends that, until such time as this change is made, the implementation of this regulation change be stayed.

Related Eligibility Changes:

Elimination of extended health benefits is only one of several changes that will negatively impact low-income individuals and families. The other changes include: deletion of Special Assistance and Supplementary Aid (discussed below); the introduction of the National Child Benefit Supplement (discussed in Section B); and the changes to the earned income exemptions discussed in the Department=s April 21, 1998, report on the new regulations. As a result of each of these changes, low-income families will not be eligible for social assistance and accompanying benefits.

Given these changes, families with extensive special needs may be forced to leave their jobs to qualify for social assistance so that they can access necessary health items and services. In the longer term, this is neither cost-effective, nor is it consistent with the overall aim of the O.W. program, which is to actively support clients to become independent through securing and maintaining employment. People on fixed income may also face increased hardship if they are not able to afford their medical needs, and subsequently experience a declining quality of life.

(D)Individuals With Special Needs:

(1)Eligibility Issues:

Under G.W.A., municipalities could deliver, on a discretionary basis, specific benefits to low income people through Special Assistance, and to recipients of other government programs (Canada Pension Plan, Old Age Security/Guaranteed Income Supplement) through Supplementary Aid. In both cases, eligibility was determined through a budget test. Both programs were cost-shared by the Province and municipalities at the following ratios: Special Assistance 50/50 and Supplementary Aid 80/20. (Appendix 4 lists the medical benefits currently available.)

Under the new O.W.A. regulations, Special Assistance and Supplementary Aid are no longer available. The impacts for clients are potentially severe. In many cases, clients require these items, or supplies, to meet urgent health needs, and to maintain an acceptable quality of life.

Benefits provided under Special Assistance and Supplementary Aid included a range of health care items such as hearing aids, prosthetics, wheelchairs and repairs, respiratory equipment and ambulatory aids. The bulk of funding for these items is covered under the Ministry of Health=s Assistive Devices Program (A.D.P.). Under this program, eligible individuals can be reimbursed for 75 percent of the costs of specific items, above $100.00 per item per month. Through Special Assistance and Supplementary Aid, Social Services subsidized the remaining 25 percent, and covered items under $100.00, for eligible cases.

There are also medical items not covered by A.D.P., but provided for under Special Assistance and Supplementary Aid. These include surgical supplies, bath aids, and walkers, the costs of which were covered, up to prescribed limits, based on a client=s medical condition. People can receive benefits on a one-time basis, such as surgical supplies, or obtain on-going assistance for specific medical items. Benefits range from $50.00 per month for surgical dressings to one-time costs of $2,000.00 for a wheelchair. In 1997, benefits were provided to over 150 individuals and families per month.

For instance, a senior citizen who has been recently released from hospital, and returns home, is supported by Homecare. This program, delivered by the Ministry of Health, assists hospitalized individuals, who require medically related equipment on an ongoing basis, to relocate in the community. However, assistance through Homecare is only provided in the short term.

In such cases, a bundle of medical related items may be required (e.g., hospital bed, commode, bath bench and grab bars for the bath tub) for the person to live independently in their own home on an ongoing basis. These items, which can cost up to $1,500.00, are now provided to eligible low-income seniors through Supplementary Aid or Special Assistance. This will no longer be the case under the new regulations. It is the Division=s understanding that there is no other government funding available.

People previously eligible for these benefits under G.W.A. have little or no ability to cover these costs themselves. Increasingly, there are also few alternative sources of assistance. In fact, over the past decade, agencies such as the March of Dimes and the Multiple Sclerosis Society have increasingly relied on Social Services to cover the cost of medical items for low-income people. The changes proposed under the new regulations will now require people to seek help from these agencies, which themselves have faced funding reductions, and may be ill equipped to meet these new demands. Beyond agencies serving particular communities, people will need to seek help for critical medical items from families, from charities in the community, or from vendors through negotiated prices and payment processes.

Given these issues, the Department recommends that the Ministry of Health should, through the Assistive Devices Program:

(a)cover the full cost of medical items currently provided through Special Assistance and Supplementary Aid to low-income people; and

(b)reinstate items delisted under the Assistive Devices Program over the past several years to ensure low-income people are provided with all medical supplies and aids currently available through Special Assistance and Supplementary Aid.

The Department recommends that, until such time as this change is effected, the implementation of changes to Special Assistance and Supplementary Aid be stayed.

(II) National Child Benefit:

In 1987, the Federal Government originally introduced the Child Tax Benefit with the aim of providing a more targeted approach to supporting low-income families with children. In 1996, as a result of ongoing Federal-Provincial negotiations, a new expanded program, renamed the National Child Benefit, was announced. In the 1998 budget, the Federal Government announced it would provide additional support to low-income families through the new National Child Benefit Supplement (N.C.B.S.), which will be introduced in July of this year.

This program=s overall objectives are to:

(a)help prevent and reduce child poverty; and

(b)promote attachment to the workforce resulting in fewer families having to rely on social assistance and ensuring families will always be better off as a result of working.

Eligibility for the National Child Benefit Supplement is based on income declared in the previous tax year, and the number of children in a family. The maximum allowance under this program is $605.00 per child per year. It is clear that the intent of the program is to support the incomes of the working poor. Families on social assistance will not receive an overall increase in their entitlement. The new program=s design requires benefit dollars to be deducted dollar for dollar from the family=s social assistance entitlement. Provisions have been made in the O.W.A to consider the N.C.B.S. as 100 percent chargeable income.

This program is in addition to the existing Child Tax Benefit which is also designed to assist low-income families but is exempt as income for determining a family=s social assistance entitlement.

One critical effect of the treatment of income under the new Supplement is that families on social assistance with net entitlement less than or equal to the N.C.B.S. may no longer be eligible for social assistance (see Appendix 4). The result, combined with other changes in the O.W.A., will mean that families will not be eligible for program benefits such as a drug card, other discretionary benefits, or participation in O.W. activities. Based on the current caseload, it is anticipated that approximately 460 cases could be affected.

The intention in designing the N.C.B.S was not to make families worse off. This will be the case if the above families are no longer eligible for social assistance because they are in receipt of the new Supplement. The Provincial Government should ensure that provisions are made to ensure that no families currently on social assistance will become ineligible as a result of the introduction of the N.C.B.S.

(III)Transition to the New Regulations:

Given the breadth and magnitude of issues resulting from the O.W.A regulation changes, a transition period is required for implementation. Certain changes will require action because of the effective date, and can be more readily effected. For example, the elimination of the pregnancy allowance, has already been communicated to staff. In conjunction with Toronto Public Health, the Division has made provision for pregnant women=s needs through the formulation of a new Special Diet allowance.

Other regulatory changes will require substantive planning, training and communication with clients and with the community; for example, employment provisions with respect to child care need to be carefully considered. Through the O.W. Transition Directives, the Province has made provision for the changes affecting the current caseload to be completed by the end of 1998. Therefore, the Division will phase in these regulations according to a detailed implementation plan to ensure that the new regulations are introduced with minimum disruption to service delivery.

Conclusion:

This report discusses the aspects of the new regulations which are of most immediate concern to the Department. It is evident that certain changes will have consequences which may not be supportive of the overall goals of the Ontario Works program. The changes will also potentially disadvantage very vulnerable clients who have limited means of replacing benefits or services lost as a result of the regulatory changes. In response to these changes, the Department has recommended that the Province take specific actions to address situations where there will be adverse impacts.

The Social Services Division will continue to assess the impacts of the new regulations and further Provincial directions, and report back to Council as appropriate.

Contact Name:

Heather MacVicar

General Manager

Tel: 392-8952

Appendix 1

Social Assistance Benefits Before and After October 1995

Single Youth

Pre October 1, 1995 Post October 1, 1995

$ $

Basic Allowance 249.00 195.00

Maximum Basic Shelter 414.00 325.00

Total Maximum Benefit 663.00 520.00

  Appendix 2

Case Examples

 (I)Changes to Definition of Dependent Adult:

 (1)Sole support parent, age 24 with 1 child (financially independent) living at home with parents who are not on social assistance.

Rent $600

 (3)Sole support parent aged 24 with 1 child (not financially independent) living with parents who are in receipt of assistance.

Total rent $1,500: Sole Support Parent pays $600, Parents pay $900

  Appendix 3

 Medically Based Items Currently Provided Under Special Assistance

and Supplementary Aid

 Emergency Dental Prosthesis

Dentures Other

Eyeglasses Surgical Supplies

Funerals Ostomy Supplies

Respiratory Supplies Hearing Aids

Beds - Manual Beds - Electric

Bath Aids Wheelchairs - Electric

Toilet Aids Surgical Diabetic

Cushions Lifts

Bars, Railings Orthotics

Wheelchairs - Manual Footwear

Walking Cribs Wheelchair Repairs

Custom Seating Wheelchair Rentals

Repairs Therapeutic Assessment

Appendix 4

 National Child Benefit Supplement

 Case Example:

July, 1998 August, 1998

Sole support parent with one child,with earnings Sole support parent with one child, with earnings

Gross social assistance $957 Gross social assistance $957

Deductible earnings $920 Deductible earnings $920

N.C.B.S. chargeable income $ 50

Net assistance $ 37 Net assistance $ 23

Family remains eligible for social assistance Family is no longer eligible for assistance because with the N.C.B.S. chargeable income the net assistance is a negative amount. 

The Community and Neighbourhood Services Committee reports, for the information of Council, also having had before it communications from the following:

-(May 20, 1998) from Mr. Denis Casey, Acting President, Canadian Union of Public Employees, Local 79, in support of the recommendations embodied in the foregoing report of the Commissioner of Community and Neighbourhood Services;

 -(May 20, 1998) from Ms. Jill Barber, Referral Coordinator, Metro Toronto Movement for Literacy, outlining concerns with respect to the Ontario Works Regulations; and

-(May 21, 1998) from Mr. Farid Chaharlangi, Community Development Worker, Jane/Finch Community and Family Centre, outlining concerns with respect to the Ontario Works Regulations.

The following persons appeared before the Community and Neighbourhood Services Committee in connection with the foregoing matter:

-Ms. Liz Klassen, on behalf of Toronto Legal Clinic;

-Mr. Keith Hambly, Fred Victor Centre;

-Ms. Catherine Hill, tenant of Fred Victor Centre;

-Ms. Karen Wirsig, Metro Network for Social Justice, and submitted a brief in regard thereto;

-Mr. George Panagapka, Mental Health and Addictions Action Coalition, and submitted a brief in regard thereto;

-Mr. Tim Rourke, and submitted a brief in regard thereto;

-Ms. Angela Robertson, Community Social Planning Council of Toronto, and submitted a brief in regard thereto;

-Mr. Andrew Mitchell, Workfare Watch Project, and submitted a brief in regard thereto;

-Mr. Denis Casey, Acting President, and Mr. Tim Maguire, Metro Unit Officer, Canadian Union of Public Employees, Local 79;

-Ms. Magaly San Martin and Ms. Mary Gellatly, Parkdale Community Legal Services; and

-Ms. Josephine Grey, Executive Director, Low Income Families Together.