– Massive Cuts to Legal Aid Funding Also Announced –
The 2019/2020 Ontario Budget was announced today, and creates even more uncertainty for people who receive benefits from the Ontario Works (OW) and Ontario Disability Support Program (ODSP) system.
While the Budget is short on details about changes to social assistance, it confirms many of the reforms that government has already announced. What is new is the government’s forecast of $1 billion in savings from these reforms:
“Reforming the social assistance system by simplifying the rate structure, reducing administration, cutting unnecessary rules, and providing greater opportunities to achieve better employment outcomes for social assistance recipients, resulting in estimated annual savings of over $1 billion at maturity” (p.9).
Given that social assistance spending on benefits, employment services, and drug benefits totaled about $9.2 billion in 2017-2018, this represents a shockingly high 11% reduction in spending on benefits and services to some of the most vulnerable low-income Ontarians. The impact on people on OW and ODSP could be devastating.
The Budget does not mention specific cuts to social assistance rates. While rate increases have been announced in annual provincial budgets for the last fifteen years, changes to rates don’t have to be included in Budget announcements and could be announced in the coming weeks.
The Budget also announces that changes will be coming to Temporary Care Assistance and the Transition Child Benefit (TCB), to “streamline the system and improve equity between those who receive social assistance and other families with children” (p.194). This ominous statement may signal a risk to the future of these benefits or, in the case of the TCB, a restriction on eligibility for people with precarious immigration status.
In addition, the Budget announces a 30% cut to funding for legal aid services. Given that Legal Aid Ontario funds individual and systemic advocacy services for low-income people in Ontario, this cut will severely limit the ability of low-income Ontarians to defend their rights and receive justice.
The Budget confirms the following proposed changes to social assistance:
- Simplifying the social assistance rate structure;
- Reducing administration;
- Cutting unnecessary rules;
- Redesigning ODSP to “consolidate complex supplements and benefits into simplified financial support for people with severe disabilities”;
- Moving OW and ODSP employment supports into Employment Ontario;
- More options for social assistance recipients to access and provide information using technology;
- Changing rules for how much money people can keep when they work, from the first $200 earned in a month with a 50% clawback on additional earnings, to $300 per month for OW and $6,000 per year for ODSP – with a 75% clawback on additional earnings. While the increase in the earnings amount will be helpful, the 75% clawback will not “encourage recipients to increase their labour force participation and achieve greater financial independence” but will have exactly the opposite impact.
- Analysis of some of these proposed changes is available here: http://incomesecurity.org/policy-advocacy/changes-ontario-is-proposing-to-ow-and-odsp/.
Other aspects of the Budget not related to social assistance are an increase to the Ontario Child Benefit with the cost of living in July, as implemented by the previous government, and a new low-income dental program for seniors that builds on previous work to increase availability of public dental services through public health units, community health centres, and Aboriginal Health Access Centres.
As well, the Budget reiterates the government’s commitment to provide a tax credit to low-income Ontarians (the new Low-income Individuals and Families Tax Credit or LIFT). The Financial Accountability Officer recently produced a report that demonstrates that LIFT will provide fewer benefits to Ontarians than the scheduled $15 minimum wage increase that government recently cancelled (more information is here: https://www.fao-on.org/en/Blog/media/MR-LIFT-2019).
The 2018/2019 Budget is available online here: http://budget.ontario.ca/2019/contents.html.
ISAC will provide more analysis of the implications of Budget 2019/20 as more information becomes available.