Premier Ford is once again attacking working families and their children. Parents who work and receive income assistance in Ontario, may also receive a supplemental benefit known as the Transition Child Benefit as part of their monthly entitlement. These parents might have received a letter in the mail recently regarding the cut of this benefit, effective November 1, 2019. This benefit is meant to offset claw-backs from the federal Child Benefit (also known as ‘baby bonus’) that result when a parent earns money and no longer receives the full amount of the Child Benefit.
What are the impacts of cutting this benefit? The (hopefully) unintended effect of this cut may be that parents need to stop working, just to be able to pay rent. Yes, you read that last sentence right!
Every hour that you work and get paid, will result in a reduction in your Child Benefit amount. These claw-backs happen yearly, with the new tax-year beginning in July. If you worked more in the previous year, as is common for someone with a disability who can sometimes work more, your Child Benefit amount will be less. If you aren’t working as much the following year, you would still get the reduced amount until the new tax year kicked in. This can result in hundreds of dollars in lost income every month. The Transition Child Benefit helped families supplement this every month and was based on the amount of Child Benefit received, which is based on income and number of children under 18.
If a parent worked full-time all year, they would lose a significant portion of the Child Benefit every month. It could be hundreds of dollars or more, depending on how many children the parent had. Now parents on social assistance will not be able to recoup that lost income through the Transition Child Benefit. This could mean that parents are no longer "breaking even" when they work. In fact, working may significantly reduce their monthly income, leaving some unable to pay rent. If a parent is worse off financially for working, I can see many deciding not to anymore.
This isn’t even the worst of the cuts coming for those who work while on assistance. A change in earning claw-backs from 50% to 75% announced earlier last year will further exasperate this problem and continue to punish those who work. Less people working while on social assistance means less deducted from monthly entitlements and a greater cost to the Province. It may also mean fewer people exiting which will result in greater caseloads, requiring more workers to be hired.
I fail to see how disincentivizing working while on social assistance will save the Province any money. In fact, I believe it will cost taxpayers significantly more money both immediately and in the long-term.
Kelley Denham
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