Welfare Rate Increase

Feb 20, 2007 There may be some confusion on the details of the welfare rate increase. Finance Minister Carole Taylor was interviewed live in front of the legislature by Bill Good on CTV. Good said: "Shelter rates going from $325 to $375, I'm hard pressed to know where someone can find a place to live for $375 a month.

Taylor responded: "Of course the shelter part is only a portion of the assistance they receive … on top of that we've increased the support payment for those who are single employables by $50, and the third thing we've done for income assistance is to harmonize the rates for children."

A new rate table is available on the Ministry's website which confirms that the rate for single clients who are expected to work is increasing by $100 per month, but the rate for couples is increasing by only $50 per month. Rate increases vary from a high of 20.1% to a low of 4.3%.

The overall budget for the Ministry of Employment and Income Assistance will increase from an estimated $1.387 billion in 2006-07 to $1.480 billion in 2007-08, an overall increase of almost $100 million. The Ministry's Service Plan shows the following:
Core Business Area

2006-07 restated estimates
2007-08 estimates
2008-09 plan
2009-10 plan

Operating Expenses ($000)

Employment Programs
95,689
97,867
99,025
99,987

Temporary Assistance
365,387
358,180
349,501
346,890

Disability Assistance
663,735
732,884
761,217
793,206

Supplementary Assistance
235,624
263,809
271,855
283,230

Employment and Assistance Appeal Tribunal
2,019
2,070
2,070
2,070

Executive and Support Services
24,139
24,718
25,187
25,472

Total
1,386,5933
1,479,528
1,508,855
1,550,855

It appears to be in need of revision since it shows a cut in temporary assistance of $7 million, yet the rate increases will require $22.2 million more per year just for single employables. The budget for disability benefits is shown increasing by $69.1 million, and the budget for supplementary assistance benefits is shown increasing by $28.2 million. Supplementary assistance consists of crisis supplements for emergency needs, medical supplies and equipment, dental and optical services, medical transportation, subsidized bus passes, alcohol and drug treatment programs, and employment related expenses. The combined shelter and support increases are not part of the supplementary assistance budget.

Using data on the number of income assistance cases by type of case as of December 2006, and multiplying by the corresponding rate increases, gives an estimate of the annual cost of the rate increase as $80.2 million or $18 million more than the amount allocated in the service plan for changes in the budgets for temporary and disability benefits. This estimate shows an average annual increase of $821 per case which is higher than the figure derived using data from the Ministry's fact sheet which said that the "full cost of all rate increases will be $58.1 million in 2007/08" for 135,000 individuals.

The welfare rate increase is long overdue, and many would argue the rates should be increased further. Let us hope that the Campbell government isn't counting on paying for them by further reducing the number of people on assistance before they are truly capable of being self-supporting.

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David Schreck, StrategicThoughts.com