CITY WIDE IMPLICATIONS CITY OF HAMILTON Public Health and Community Services Employment and Income Support Branch Report to: Mayor and Members Committee of the Whole Date: August 21, 2003 Submitted by: Joe-Anne Priel, General Manager Prepared by: Gillian Berney Director, Employment and Income Support Branch 905-546-2424 E.4818 SUBJECT: Proposal for Reform of the Social Assistance System in Ontario (HCS03035) (City Wide) RECOMMENDATION: (a) That Council endorse in principle the proposal for reform of the social assistance system in Ontario, as recommended by the Board of the Directors of the Association of Municipalities of Ontario (AMO). (b) That the department further review the program and financial implications of the proposal from a local perspective. (c) That the department work in partnership with the Association of Municipalities of Ontario (AMO), the Ontario Municipal Social Services Association (OMSSA) and other municipalities to influence effective development and implementation of the proposal. (d) That Council correspond with the Minister of Community, Family and Children’s Services indicating their support for further development of the proposal. (e) That a copy of this report be distributed to the Association of Municipalities of Ontario (AMO) and the Ontario Municipal Social Services Association (OMSSA) for distribution to other Municipalities. Joe-Anne Priel, General Manager SUBJECT: Report Proposal for Reform of the Social Assistance System in Ontario (HCS03035) (City Wide) - Page 2 of 5 EXECUTIVE SUMMARY: This report has been prepared to advise Council of a proposal for reform of the current Social Assistance Program that was endorsed by the Association of Municipalities of Ontario (AMO) Board on February 28, 2003. The AMO Community and Social Services Task Force have proposed a reform to the current social assistance system that would benefit children and families and also increase attachment to the workforce for adults in receipt of income supports. The Ontario Municipal Social Services Association (OMSSA) Board has decided to send a general letter of support for the proposal with reference for the need for OMSSA to have input on the development of further details of the policy. The Throne Speech of April 30, 2003 also makes reference to reform of the social assistance system. It states that “Because no child should live in poverty or depend on welfare, your government will provide a special benefit to meet the unique needs of children who require a helping hand. In the coming weeks, your government will unveil further details of this enriched and compassionate benefit.” The proposal is to remove children from the social assistance program by instituting a new benefit for children whose families receive social assistance, comprised of provincial and federal funding (National Child Benefit Supplement). In addition, the Ontario Works Program would be re-focused to become a labour market attachment program for adults. The proposal is to have two phases of implementation: Phase l for the creation of the Child Supplement and Phase ll for refocusing of the Ontario Works Program. Phase l: Child Supplement • • The Ontario Child Supplement would replace the child portion of the Ontario Works and Ontario Disability Support Program budgets The Child Supplement would be Provincially funded, thereby removing the current municipal contribution (Note: As federal funding of the National Child Benefit Supplement increases, the provincial funding of the Child Supplement could be reduced) Families would also receive the National Child Benefit Supplement (thereby altering the current approach of reinvestment of these funds) The remaining Ontario Works program would continue to be delivered by municipalities and would be focused on adults and attachment to the workforce. • • SUBJECT: Report Proposal for Reform of the Social Assistance System in Ontario (HCS03035) (City Wide) - Page 3 of 5 Phase ll: A Renewed Ontario Works Program • • • • The revised Ontario Works Program would be focused on supporting adults to find and sustain employment. Adult benefits would be 100% funded by the Province and tied to minimum wage rates. There would be no municipal contribution to adult benefits. There would be an expectation of reinvestment of provincial savings (as the NCBS rates increase, the provincial contribution would decrease) into support programs for low-income families. Administrative costs would continue to be cost-shared 50/50 between the Province and the municipalities. Attached in Appendix A is a graphic representation of the proposed changes. Benefits of the Proposed Reforms • • • • • • Families would see an increase in income of 10-15% (Ontario Child Supplement and National Child Benefit Supplement) as the NCB rates continue to increase Reduction in poverty Streamline existing delivery systems Cost-sharing for child benefits would be removed from the Municipal tax base during the first phase Cost -sharing for adult benefits would be removed from the Municipal tax base during the second phase Creates a more responsive labour market adjustment program for adults The proposal involves significant changes to the existing social assistance system in Ontario for the benefit of families and children. Through implementation of these reforms children and families would experience an improved quality of life and the broader community would benefit from a reduction in the level of poverty and the related social and health impacts. BACKGROUND: • • The proposal is made under the assumption that the Federal government will continue to increase National Child Benefit Supplement payments and it will continue to be administered through the income tax system. There would be an increase in provincial costs as the amount paid to children through National Child Benefit Supplement payments would not be clawed back from social assistance payments and the municipality would no longer cost-share 20% of children’s social assistance benefits. It is also assumed there would be no decrease in Ontario Works adult benefits and the Community Reinvestment Fund transfers would not be reduced as a result of the municipal savings. Further long term changes may include: • • SUBJECT: • • • • Report Proposal for Reform of the Social Assistance System in Ontario (HCS03035) (City Wide) - Page 4 of 5 Phasing out of the provincially funded Ontario Child Supplement as NCBS continues to increase. Reinvestment of municipal savings due to the removal of children from the Ontario Works benefits to programs for low income families; Evolve the Ontario Works program into a true labour market adjustment program Remove municipal cost sharing for labour market programs in the second phase when adults are 100% funded by the province ANALYSIS OF ALTERNATIVES: • • Municipalities have been expressing concern regarding the social and health impacts of low social assistance rates for children and families. The Ontario Government’s approach to the National Child Benefit supplement in which funds are treated as income and deducted from social assistance allowances has been questioned due to the detrimental impact on the income levels of families who receive social assistance. The City of Hamilton is mandated by the Province of Ontario to deliver and share the costs of the Ontario Works program in accordance with the Ontario Works legislation. Furthermore, the City of Hamilton is mandated by the Province of Ontario to share the costs of the Ontario Disability Support Program. The National Child Benefit is administered in accordance with a federal and provincial agreement. • • FINANCIAL/STAFFING/LEGAL IMPLICATIONS: • • • • If the proposal is implemented, provincial expenditures are projected to increase by approximately $290.0 million per year. Municipal costs province-wide are projected to decrease by approximately $90 million in the first phase when children are removed from Ontario Works assistance. In the City of Hamilton, cost savings equate to about $5.4 million (at about 6% of the provincial caseload) It should be noted however that if the proposal is implemented the municipal portion of the NCB claw-back would no longer be available to re-invest as has been the case since the NCB was introduced in 1998. The City of Hamilton currently re-invests approximately $2.6 Million annually in both internal and community based programs in accordance with Federal and Provincial guidelines (City of Hamilton National Child Benefit Reinvestment Strategy). Loss of the re-investment funding would result in either loss of a significant number of both mandatory and discretionary programs and services, or determination of alternate funding sources including the net levy in order to assure continuation of the programs. Two mandatory programs, Learning, Earning and Parenting and child care subsidy are currently supplemented by funds from the NCB program. SUBJECT: Report Proposal for Reform of the Social Assistance System in Ontario (HCS03035) (City Wide) - Page 5 of 5 POLICIES AFFECTING PROPOSAL: • • Ontario Works Policies National Child Benefit Reinvestment Strategy CONSULTATION WITH RELEVANT DEPARTMENTS/AGENCIES: The following City departments were consulted: Program Policy and Planning Division, Parent and Child, Community Programs, Employment and Income Support and Benefit Eligibility Branches of PHCS. The Association of Municipalities of Ontario (AMO) Board sponsored the development of the proposal. Other municipalities throughout the province have endorsed the policy. CITY STRATEGIC COMMITMENT: The proposal for reform of the social assistance system in Ontario supports the City’s Vision of itself as a safe, healthy, sustainable community and a great place in which to work, live and play, that offers residents and businesses growth and opportunity. It aligns with the City’s Mission to turn this Vision into a reality. Furthermore, it promotes the values of fiscal accountability, leadership, innovation and respect. It also extends the values inherent in Vision 2020 as well as the Social Development Strategy, particularly the proposed children and families and skills development flagships.
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