The following report comes from the Income Security Advocacy Centre (ISAC).
Ontario’s Basic Income Pilot Project: What will it mean for people on social assistance?
On Monday, April 24, the Ontario government announced its Basic Income Pilot Project.
Many questions about how the pilot project will work haven’t been answered yet. We expect more details in the coming weeks. Here is information that we have right now about what the pilot project could mean for people who are on social assistance and get their incomes from Ontario Works or the Ontario Disability Support Program. We will provide more information as we get more details.
Read the government’s announcement here: https://news.ontario.ca/opo/en/2017/04/giving-more-people-an-opportunity-to-get-ahead-and-stay-ahead.html.
Read the government’s backgrounder here: https://news.ontario.ca/mcss/en/2017/04/ontarios-basic-income-pilot.html.
- What is a “pilot project”?
A pilot project is a small test of a program to see how it works. In this case, the government is testing giving a “basic income” to a small number of low income people who qualify. Not everyone in Ontario who has a low income will be part of the pilot project.
The point of the government’s Basic Income Pilot Project is to research what happens to people who get the basic income over time and to build evidence for whether or not it will achieve the program’s goals. The government has said that the pilot project will “study whether a basic income can better support vulnerable workers and give people the security and opportunity they need to achieve their potential” and “whether giving people a basic income can be a simpler and more economically effective way to provide income security support to people living on low incomes”.
The results of the pilot project could give the government information about whether or not to implement a bigger basic income program in the future. It could also influence the government’s thinking about future reforms to social assistance.
- Who can be part of the Basic Income Pilot Project?
Only people who live in these three parts of Ontario will be eligible to participate:
- Hamilton, Brantford and Brant County
- Thunder Bay and the surrounding area
4000 people in total will be part of the pilot project, so only a very small number of people who live in these areas will be able to participate. People who live outside of these areas will not be part of the test.
People on social assistance or others on low income who live in different parts of the province will not be eligible to participate. Also, not everyone on social assistance who lives in the test areas will be selected.
People who are selected for the pilot project will also have to be:
- Between 18 and 64 years old
- Living in one of the pilot areas for at least 12 months
- Living on a low income.
People have to have a low income to participate in the pilot project, but how low has not yet been exactly defined. Generally, people will be eligible if they have incomes lower than about double the basic income amount. This means that people will only be able to participate in the pilot project if they have annual incomes lower than approximately:
- $34,000 for a single person
- $46,000 for a single person with a disability
- $48,000 for a couple
- $60,000 for a couple where one person has a disability.
- How do people participate in the pilot project? Can I sign up?
People cannot sign up for the Basic Income Pilot Project unless they get a letter inviting them to apply. People who live in the test areas will be selected at random. They will get a letter telling them that they have been selected to participate and inviting them to apply. Those people will then be able to decide whether or not they want to apply.
People in Hamilton, Brantford and Brant County area and Thunder Bay and the surrounding area will start getting these letters in late spring 2017. People in Lindsay will start receiving letters in fall 2017.
Participating in the Basic Income Pilot Project will be completely voluntary. No one will be forced to participate. Anyone who decides to participate will have the right to change their minds later and stop being part of the project at any time.
- What about Indigenous peoples?
The government has said that they are setting up a separate Basic Income Pilot Project with First Nations partners. That work has just started recently. Indigenous people who live in the pilot project areas can participate, like anyone else, if they meet the eligibility requirements and get a letter inviting them to apply.
- How much money will people get?
The amount of money people will get from the Basic Income Pilot Project will depend on how much money they get from work or from federal benefit programs (CPP or EI).
The government has set the following maximum basic income amounts:
- Up to $16,989 per year ($1,415.75 per month) for a single person
- Up to $24,027 per year ($2,002.25 per month) for a couple
- Up to an extra $6,000 per year ($500 per month) for a person with a disability.
People with no other income will receive the maximum amounts. People who have income from work or from federal benefit programs will get a lower amount:
- People who work will get a basic income amount that is reduced by half of their net earned income
- People on CPP or EI will get a basic income amount that is reduced by the entire amount of their benefits.
Earned Income Examples:
- A single person on the basic income pilot has a job.
- Their net earnings, or take-home pay after taxes and deductions, are $200 a month.
- The basic income amount they would receive would be the maximum basic income amount less half of their net income – $1,415.75 – $100 = $1,315.75.
- Their total income for that month would be the basic income amount plus their earnings – $1,315.75 + $200 = $1,515.75.
- The example above and other examples are in this table:
|Maximum monthly basic income amount||Net monthly earnings
(after taxes and deductions)
|Monthly basic income||Total monthly income|
|Single person with a disability||$1,915.75||$200||$1,815.75||$2,015.75|
|Couple where one person has a disability||$2,502.25||$2,000||$1,502.25||$2,502.25|
People with children will still get the Canada Child Benefit and the Ontario Child Benefit if they are eligible. The CCB or OCB amount they get may change depending on their level of income.
- What will people in the pilot project have to do for the research?
The 4000 people who get the basic income amount will be asked to participate in research by doing things like filling out questionnaires and having information gathered about them through other research methods. The government has not yet given all the details about how the research will be done.
There will also be a “control group” in the pilot project in addition to the 4000 people who get the basic income amount. The people in the control group will also be low income people from the test areas. They will not get the basic income amount but will be asked to participate in the research to compare what happens to them and what happens to the people who get the basic income amount. The government has not yet said whether the people in the control group will be compensated in some way for participating in the research.
Whether they get the basic income amount or are in the control group, the government will have to give people complete information about what they will be asked to do, how information will be gathered, and how the research will be done before they agree to participate in the pilot project.
- How does the basic income pilot amount compare with social assistance rates?
The monthly basic income amounts are a lot more than people get from basic OW or ODSP benefits. People who get basic needs and shelter from OW or ODSP, not counting other benefits like Special Diet or income from other sources like from a job, will get a lot more money from the basic income pilot.
However, people on OW or ODSP are also eligible for other benefits and services, most of which will not be available to them if they participate in the basic income pilot. Information about which benefits people will keep and what they could lose is below.
|Comparison with current OW basic needs and shelter amounts (and no other OW benefits, and no income from other sources)|
|Annual Maximum Basic Income||Monthly Maximum Basic Income||Current OW Basic Needs and Maximum Shelter||Monthly Difference|
|Single||Up to $16,989||$1,415.75||$706||+ $709.75|
|Couple||Up to $24,027||$2,002.25||$1,095||+ $907.25|
People with a disability will get up to an extra $6,000 more each year, or $500 per month.
|Comparison with current ODSP basic needs and shelter amounts (and no other ODSP benefits, and no income from other sources)|
|Annual Maximum Basic Income||Amount plus extra $6,000 for people with disabilities||Monthly Maximum Basic Income||Current ODSP Basic Needs and Maximum Shelter||Monthly Difference|
|Single||Up to $16,989||$22,989||$1,915.75||$1,128||+ $787.75|
|Couple||Up to $24,027||$30,027||$2,502.25||$1,688||+ $814.25|
- Which OW or ODSP benefits can I keep if I participate in the basic income pilot, and which will I lose?
The government has said that people who decide to leave OW or ODSP and be part of the Basic Income Pilot Project will be able to keep their drug benefits, and people on ODSP will be able to keep their dental benefits. This is good news, because a lot of people on social assistance rely on these important benefits.
All other benefits available through OW or ODSP will not be kept, including:
- Special Diet Allowance
- Remote communities allowance
- Mandatory Special Necessities (MSN) – including diabetic supplies, medical and surgical supplies, including incontinence supplies, and medical travel
- Vision benefits (i.e., glasses, repairs, exams)
- Hearing aids and other supports, like visual alerting systems
- Service dog benefit
- Assistive devices co-payment coverage
- Employment supports, including the Work-Related Benefit and other benefits
- Up-front child care costs.
Anyone on OW or ODSP who gets a letter inviting them to apply to participate in the Basic Income Pilot Project will have to decide whether or not it makes sense to do so. It will be important for them to compare the amount of money they could get from the pilot project with the total amount of benefits they get from OW or ODSP. Even if the amount of money they would get from the pilot project is higher, they should consider whether or not it’s easy for them to buy the supplies or services they need that they would get from social assistance.
- How do the basic income amounts compare with the poverty line?
The maximum basic income amounts for singles and couples without a disability are set at 75% of the Low Income Measure, or LIM. The government says it chose 75% of LIM based on a recommendation that it received from its special advisor, Hugh Segal.
There is no official poverty line in Ontario or in Canada, but governments use the LIM as one way to measure how much income people have compared to other people. LIM is often used as a substitute for the poverty line in Canada, but because poverty is defined in different ways it’s not exactly the same. Other measures of poverty in Canada are the Low-Income Cut Off (LICO) and the Market Basket Measure (MBM).
The basic income pilot will give people a lot more money than is currently available through base benefits of Ontario Works and the Ontario Disability Support Program. But it’s not clear whether people who are on the basic income but do not work for pay (which includes some people with disabilities and others who are excluded from or have limited access to the labour market) will get enough money from the basic income amount to meet their needs.
The government says that the basic income amount plus tax credits and benefits (like the G/HST rebate, the Ontario Trillium Benefit, and child benefits) will give people an income “that will meet household costs and average health-related spending”. But the government has not defined what that means.
The additional $6,000 per year for people with disabilities was also recommended by Mr. Segal. It recognizes that people with disabilities have additional costs related to their disability. He also said that the government should review that amount as part of the basic income test to see if it is enough to meet the needs of people with disabilities. We agree.
- How will people with disabilities qualify for the additional $6,000?
We have recommended to the government that they use the same definition of disability that
is currently used in ODSP. Using a stricter definition would exclude many people with disabilities. The government has not yet confirmed that they will do this. We also don’t know yet who will be responsible for deciding if a person with a disability meets the ODSP test, and how people will appeal decisions about eligibility. We will share this information once we get it from the government.
- Can I get both social assistance and the basic income?
No. People who are selected to apply for the Basic Income Pilot Project will have to decide whether or not to stay on social assistance or go on basic income. If a person decides to go on basic income, they will have to withdraw from social assistance.
- What happens if someone loses their job halfway through the year while they’re on the basic income pilot? Can they get more money?
People who are on the basic income pilot will run into circumstances where things in their lives will change – they might lose their job, they might get married, etc. These kinds of changes may mean that they need more money from the pilot project.
The government has said that the pilot project is being designed so that people will be able to report a significant change in their circumstances or their income to make adjustments in their basic income amount. They have not yet defined what a “significant change” means.
- What’s the difference between basic income and social assistance?
There are a lot of differences. Besides the different amounts of money and the different benefits that we discussed above, there are a lot fewer rules in the basic income pilot.
For example, people who get the basic income will only have to report their income annually instead of monthly, as people on social assistance currently do. The amount of assets they have (money in the bank, retirement savings, etc.) will not count when the government decides if they are eligible. The vast majority of the 800 OW and ODSP rules do not apply to basic income. And people in the Basic Income Pilot Project will not have a caseworker.
Because there are a lot fewer rules, basic income is much less intrusive and punitive than social assistance. However, without a caseworker to provide supports and referrals and without access to other benefits listed above, some people may find being on a basic income has its own challenges.
- How long will the pilot project run? What will happen to people after it ends?
The Basic Income pilot project will run for three years. We don’t yet know what will happen to people who participate after the pilot project ends. If they do not get money from other sources and have to go back on social assistance, they might have a drastic decrease in their income. The government will have to tell people who are deciding whether or not to participate what will happen, before they make their choice.
We hope that this initial information is helpful to understanding how the government’s Basic Income Pilot Project will work. We will share more information as it becomes available.