Friday, November 23, 2018

Changes to Welfare and ODSP in Ontario

To start, I'd like to note I've done some math on a reddit; you can see the post here. The post details ODSP changes, and if you scroll down one post, you see the changes to Ontario Works.

For those who don't know, Ontario Work is "Welfare" for Ontario. If you have no job, you can apply for Ontario Works, or OW. It will give a single person $733 a month, split between Rent and Needs. This $733 is an 'estimate' as if you somehow find a place to rent that's cheaper than $390 a month (nearly impossible in Ontario; but not totally impossible, especially in the right city and right circumstances) then you only get support up to your actual rent. The remaining $343 is for all your other basic needs. The rates are uniform across Ontario (for now, bill 60 may change that) and the Toronto rates can be seen here.

ODSP rates are a bit harder to find but are mentioned on pages like this. The basic maximum rate is $1,169 a month; $672 for basic needs and $497 for rent. Again, if your rent is below that, you get the lesser amount. ODSP is the Ontario Disability Support Program. When originally implemented by the Mike Harris government, it was designed to support the so-called 'deserving poor' which is a term used to criticize the system; but using more modern and intentional phrasing, ODSP is supposed to be for those who "can't work", with the implication being those on OW can, but choose not to.

As most of you know, I am on ODSP. These changes will impact me. How exactly is a devil in the details.

The old system saw a $200 exemption a month in income, plus a 50% clawback beyond that. $200 a month works out to $2400 a year. The new system will allow $6000 a year, plus a 75% clawback. $6000 a year works out to $500 a month.

For Ontario Works, they are changing from a $200 exemption and 50% clawback, to a $300 exemption and 75% clawback.

For ODSP the pivot point is roughly $21,800 a year, or, $1,816 a month. For OW the pivot is at $13,000 or $1,083 a month. If you make more than that, you will now have less money under the new system; but if you make less than that, you'll have more under the new system. Note these are combined OW/ODSP+Job figures. They work out to 20 hours of work a week at minimum wage for ODSP, and 7 for OW. As such if you are on welfare and work 12 hours a week, you will have less money after these changes than you do now.

This math has some caveats. I did not, for example, include the $100 a month that ODSP will basically give you for having a job to support additional costs related to employment such as transportation to and from a job. OW's system is different, but under the right circumstances, you could claim up to $250 a month for such costs; though my understanding is very few qualify for that maximum. This means that you can make more money than outlined in my math before the clawbacks hit.

To clarify a few misconceptions that many people have online.

1 - People on ODSP do "pay taxes". Someone on ODSP gets $14,028 a year, and that requires you to pay $333 in federal taxes and $186 in provincial taxes. In reality, this never applies as people on ODSP almost always either rent, or, get less money due to not renting. Renting grants you a tax exemption up to a certain amount, and will always zero out the tax bill for people on ODSP. This credit, for example, is worth $418 to me. Beyond there there are credits for sales taxes. There are, however, always edge cases where you would not qualify for various credits. In the end, because of the various credits however, most people on ODSP without a job pay $0 in income taxes.

2 - Most people on ODSP are honest. The system puts up roadblocks. For example when I reported the $4 I get as income from Patreon to ODSP they outright sounded irritated at me that I'd report so little. They literally told me not to report amounts so low. They also didn't have an answer for *when* I should report such income; when Patreon charges them, when it goes into my account at Patreon, when I transfer it out of my Patreon, when the transfer gets into my Paypal, when I transfer it out of my Paypal, when it gets into my Bank account, when I withdraw it as cash? They had no clue.

3 - It is possible to live on $14K a year. It's just not very fun. At one time I had a full time job where I made $24K a year, and I was always running short on money. That was a decade ago. The Autism gives me ADHD symptoms to the point I take Ritalin daily. The ADHD can make it very difficult to budget due to impulse purchases. The Autism can make it difficult to learn certain "life lessons" that come naturally to others. My brain simply does not work the same way yours does; its broken. It has been a long, hard, grind to get to the point that I can regularly live within my means on ODSP without outside help; but it can be done.


I want to outline what I would do.

I'd do a number of reforms to the system.

First and foremost is near-literally taking people by the hand and leading them to jobs that they can do. "they can do" being key. Not everyone is suited for factory work, or to be a barista at starbucks. When a job is found that can be done, the recipient must be - for lack of a better term - babied into it. small steps. perhaps literally driving them to the interview, making sure they look nice, and so forth. A lot of people on the system have been without work for years and have simply and literally forgotten workplace culture. Ease people back into that.

A huge help towards this would be grants for employers who hire people on social assistance. It would mean there is less of a financial risk in training and hiring someone who is on welfare.

I would also increase the rates. OW would go up to $977 a month, a 33% increase. Both the basic needs and rent portions would increase be 33%, bringing expected rents up to a far more realistic level. ODSP would go up to $1,559, also a 33% increase. Again, the increase would apply both to rent and basic needs; which ironically puts my own ODSP under the maximum as I only pay $535 for rent.

Clawbacks would be 0% for the first $560 a month, 25% for the next $560, 50% for the next $560, and 75% beyond this. This would mean a full time minimum wage job sees you off the system.

I like the idea that those working full time at minimum wage should not get welfare.

Those on ODSP, however, would be able to work full time, 40 hours a week, at a job that pays $18.50 an hour, prior to the clawback zeroing out your ODSP. ODSP would also not stop fully if you reach that limit; instead your drug benefits would be calculated separately and would have a higher income level at which they stop.

Lastly, but perhaps most importantly, is that all these clawbacks would be applied in total only last. This means if someone else in some other program also has some sort of income clawback, that this is taken into account when calculating your clawback for OW and ODSP.

In structure, this is similar to the system the tories just brought in. Harsher at the higher end but nicer at the lower end. The key difference is that the rates are actually high enough to survive on.

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