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Household size

Annual Basic Income

Benefit Amount (at

75% LIM, 2016e)

Annual Ontario Works

Basic Needs + Max

Shelter

Household size

Annual Basic Income

Benefit Amount (at

75% LIM, 2016e)

Annual ODSP Basic

Needs + Max Shelter

Single adult $16,989 $8,472 Single adult $22,989 $13,536

Single with one

child $24,027 $11,592

Single with one

child $30,027 $18,540

Single with two

children $29,427 $12,228

Single with two

children $35,427 $19,296

Couple $24,027 $13,140 Couple $30,027 $20,256

Couple with one

child $29,427 $13,776

Couple with one

child $35,427 $21,012

Couple with two

children $33,979 $14,460

Couple with two

children $39,979 $21,852

*ODSP, acronym for Ontario Disability Support Program

Household size

Average Monthly

Basic Income Benefit

Amount (at 75% LIM,

2016e)

Average Monthly

Ontario Works Basic

Needs + Max Shelter

Household size

Average Monthly

Basic Income Benefit

Amount

Average Monthly

ODSP Basic Needs +

Max Shelter

Single adult $1,416 $706 Single adult $1,916 $1,128

Single with one

child $2,002 $966

Single with one

child $2,502 $1,545

Single with two

children $2,452 $1,019

Single with two

children $2,952 $1,608

Couple $2,002 $1,095 Couple $2,502 $1,688

Couple with one

child $2,452 $1,148

Couple with one

child $2,952 $1,751

Couple with two

children $2,832 $1,205

Couple with two

children $3,332 $1,821

Comparison of Pilot Basic Income model (at 75% LIM) and

Ontario Works

Comparison of Pilot Basic Income model (at 75% LIM) and

ODSP (assume 1 disabled adult family member)

Comparison of Pilot Basic Income model (at 75% LIM) and Comparison of Pilot Basic Income model (at 75% LIM) and

BASIC INCOME - RATES COMPARISON TABLES

Basic Income and First Nations

A Discussion Paper

November 29, 2016

Basic Income Discussion Paper

contents

Contents Background ............................................................................................................................................... 1 The Basic Income Approach to Financial Support - An Overview ....................................... 2 Delivery of the Basic Income .............................................................................................................. 3 Why Pilot the BI? ..................................................................................................................................... 4 The Pilot(s) ................................................................................................................................................ 5 Personal Information ............................................................................................................................ 7 Appendix 1 - Discussion Questions .................................................................................................. 1

Setting the BI Amounts .................................................................................................................... 1 BI Eligibility Determination ........................................................................................................... 2 Calculating the BI ............................................................................................................................... 2 Delivering the BI ................................................................................................................................. 2 Outcome Evaluation .......................................................................................................................... 3

Other Questions of Interest to Ontario ........................................................................................... 4

Eligibility to Participate In The Pilot .......................................................................................... 4 Selecting and Type of Pilot Sites................................................................................................... 4 Privacy and Information Control ................................................................................................. 4


page 1

Some Background For many years, Ontario has provided welfare payments to those members of the society who are unable in the short or longer term to support themselves through employment or self-employment. Employable people receive last-resort financial assistance through the Ontario Works (OW) Program and people with disabilities receive financial support through the Ontario Disability Support Program (ODSP). Both of these programs have been repeatedly and roundly criticized, for example: • as providing too little income (in relation to the cost of living), • as demeaning to those in need of financial support, and • as having the consequence of trapping many people in a vicious cycle of

welfare dependency - and generating well-documented personal and social ills. In its most recent budget, the Ontario Government announced that, as one element in its effort to reform the welfare system, it is going to pilot and evaluate a significantly different approach to ensuring that individuals and families in need receive financial assistance. This approach is called a “Basic Income” or a Basic Income Guarantee. While different than the current system of last resort financial assistance, this is not a particularly new approach as it has been under periods of discussion since the 1940’s, was first experimented with in Manitoba in the 1970’s and is currently being experimented with in other countries, including the United States. Ontario contracted with former Senator Hugh Segal to write a discussion paper to guide consultation about a Basic Income pilot project across Ontario. This paper was recently released to the public and is available on line (www.ontario.ca/page/finding-better-way-basic-income-pilot-project-ontario). In addition, Ontario has used Segal’s paper to develop a “Consultation Guide” which includes a series of questions about program design, pilot site selection and program evaluation - also available on line www.ontario.ca/basicincome . Consultation sessions are being organized at locations across the province. Finally, Ontario has posted two on-line surveys that anyone can complete. The plan is to begin a 3-year pilot of the idea in selected locations sometime in 2017. This discussion paper draws from all of these sources and others, but is meant to serve as a meaningful basis for discussion of the Basic Income (BI) approach to

http://www.ontario.ca/basicincome


page 2

providing financial support as a replacement for OW and ODSP in the First Nation context.

The Basic Income Approach to Financial Support - An Overview The objective of a Basic Income (BI) approach to financial support is to ensure that all individuals and families in society benefit from a more meaningful level of income or, you could say, receive a reasonable, livable share of the wealth generated by society - a share that: • is provided in a way that is much simpler than the current process (OW and

ODSP) of ensuring there is income security, • is provided in a way that is much less intrusive compared to the OW/ODSP

approach, • is big enough to help ensure no one who needs financial support lives in

poverty, • is enough to ensure better health through better diet and less worry about

money, • is enough to ensure people can afford housing without having to spend food

and clothing money on rent and utilities, • empowers people to pursue their interests and engage in society by reducing

the time it takes to access and retain current OW/ODSP financial support programs.

Ontario is considering setting the BI pilot benefit rate (for adults 18 to 64) at, at least 75% of the “Low Income Measure” (LIM)1 for persons currently on OW.

1 The LIM is a common income-based measure used to define poverty. The LIM is equal to 50% of median household income for the province, adjusted for household composition. Adjustment means that it reflects the fact that a household's needs increase as the number of household members increases.


page 3

The following table compares this BI rate with the current OW rates:

Comparison of Pilot Basic Income model (at 75% LIM) and Ontario Works

Household size Annual Basic Income Benefit Amount (at 75% LIM, 2016e)

Annual Ontario Works Basic Needs + Max Shelter

Single adult $16,989 $8,472 Single with one child $24,027 $11,592 Single with two children $29,427 $12,228 Couple $24,027 $13,140 Couple with one child $29,427 $13,776 Couple with two children $33,979 $14,460

Ontario is considering setting the BI benefit rate (for adults 18 to 64) at, at least 75% of the LIM plus an additional $500 per month for persons currently on ODSP. The following table compares the proposed BI rate with the current ODSP rates: Comparison of Pilot Basic Income model (at 75% LIM) and ODSP (assume 1 disabled adult family member)

Household size Annual Basic Income Benefit Amount (at 75% LIM, 2016e)

Annual Ontario Works Basic Needs + Max Shelter

Single adult $22,989 $13,536 Single with one child $30,027 $18,540 Single with two children $35,427 $19,296 Couple $30,027 $20,256 Couple with one child $35,427 $21,012 Couple with two children $39,979 $21,852

Under the proposed BI approach to financial support, single parents and couples with children engaged in the pilot would continue to receive the separate child benefit in addition to the BI. Also, former OW and ODSP recipients would continue to be eligible for existing supplemental benefits such as prescription drug coverage, dental care, assistive devices, vision care, special purpose allowances for things like special diets and home and appliance repair and would maintain their eligibility for subsidized housing.

Delivery of the Basic Income A Basic Income would be delivered as non-taxable cash transfer that has no or very few strings attached. For example, recipients will not be required to work, look for work, or participate in education or training to receive the payment.


page 4

Ontario is considering providing the basic income benefit to all those whose income falls below a minimum income level (yet to be specified). Under this approach, people earning below this level receive a full BI cheque. Then, for each dollar of earned income, the benefit is reduced by some percentage of earnings until the BI cheque is reduced to zero (at a yet-to-be-specified earned income cut-off level). For example, if a couple with two children earned $0.00, they would receive a total transfer payment of $39,979 over the course of the year. If they earned $10,000 and they were allowed to keep 75% of their earned income, the transfer payment would be reduced to a total of $39,979 - $2,500 = $37,479. However, they would have a higher total income of $37,479 + $$7,500 = $44,979. The simplest way for the provincial government to determine the size of the BI benefit in relation to earned income is to require everyone who thinks they might be eligible for all or part of the BI to complete a tax return indicating earned income (whether taxed or not). This is what single parents and couples with children or disabled dependents do now on reserve to access the Canada Child and other Benefits and what seniors do to access the Guaranteed Income Supplement2. Once the level of benefit is determined, it would be directly deposited to the person’s bank account bi-weekly or monthly (possibly weekly). The BI would be adjusted each year based on the income tax return or earned income report for the past year. Essentially, all this means no more monthly visits to a “welfare” office to submit receipts and pick up cheques, no more submission of proof of eligibility other than a statement of earned income on an annual basis, no more monthly line-ups, no monitoring of participation, etc.

Why Pilot the BI? A BI approach to financial support is criticized as being too expensive for society to support. It is also rejected by critics on the grounds that it will take away the motivation to get a job or engage in self employment.

2 Use of tax system does not mean a First Nation person would pay income tax on money earned on reserve, It is simply an existing and efficient means of a) determining if an individual or family is eligible for any portion of the BI in relation to earned income and b) delivering the benefit - same as the Child Benefit and Old Age Benefits.


page 5

However, against that critics, there is growing evidence that a BI approach to community-member support will save society money - and that it will result in an enhanced motivation to work. For example: i. It has been demonstrated in some studies that, with an increase in basic

income, the number of people living on an unhealthy diet goes down with the result that overall health improves and there are fewer hospital and clinic visits - thus reducing the cost of health services.

ii. With less worry about having enough money to eat well or about affording

shelter costs, mental health issues decline - again resulting in less use of the health system and a reduction in the cost of mental health services.

iii. People are in fact more likely to pursue employment and especially self-

employment when they have a secure basic income (and the more they eventually earn the less the BI cost).

iv. There is also evidence that with a reasonable BI, involvement with the legal

system declines. In other words, the higher cost of the proposed BI (and the fact that the low-wage workers would receive a portion of the BI) may well be significantly offset by savings in other areas of social, health and legal system spending. Ontario therefore wants to fully evaluate and determine the actual impact of a BI in health, social, legal, economic and of course in financial terms before making a decision on whether this approach to support should be rolled out across the province.

The Pilot(s) Ontario proposes to select a single urban site in which there is strong support for being a pilot - a site that is also representative of Ontario’s population and has a dynamic labour market. Pilot participants at this site would be randomly selected to receive the Basic Income benefit (participation would be voluntary). Information about those receiving the BI would be compared to the same information about the members of a “control group” i.e. those at the site not receiving the BI. This approach to testing the BI is called a “Randomized Controlled Trial“ or RCT site.


page 6

In addition to the RCT site, it is proposed that three, small and relatively isolated “saturation” sites be selected - one in southern Ontario, one in northern Ontario and a First Nation site. In these sites, all eligible individuals would receive the BI benefit (or some portion depending on their earned income level). In contrast to the RCT site, the study of these sites will capture any changes in the community as well as changes in individual behaviour that follow implementation of the BI. It is currently proposed that the Pilot Study measure changes in the following 10 areas of outcome: • health

Measurable outcomes could include the number of primary care/emergency department visits (for psycho-social, mental or physical health reasons), prescription drug use, utility-based measures of health, etc.

• life choices

Measurable outcomes could include career choices, training decisions, living arrangements, family formation, fertility decisions, etc. for participants

• education

Measurable outcomes could include attendance, highest achievement, completion/drop out, re-enrolment, results on standardized tests, number of courses taken, etc. for participants in the pilot and for their children.

• work behaviour

Measurable outcomes could include participation, job search, employment status, sideline employment, overtime, self-employment, paid hours worked, number of jobs, job tenure, earned income, etc

• community-level changes

Measurable outcomes could include the impact on the local labour market tightness and labour force attachment, on certain prices (rent, etc.), on community safety (crime prevention, incarceration rates, arrests and traffic accidents) as well as potential changes in the utilization of certain public services (libraries, etc.) and in social interactions (civic participation, voting turnout, etc.).

• food security

Measurable outcomes could include changes in food security for pilot participants on the basis of information obtained through surveys/interviews, which would include the questions from the CCHS Household Security Survey Module.

• perception of citizenship and social inclusion

Measurable outcomes could include changes in people's perceptions of their place in society, their capacity to contribute, their social environment's capacity to protect them, and their feelings towards their community could mostly be collected through interviews with participants.

• housing stability and quality


page 7

Measurable outcomes could include changes in aspects of an individual’s quality of life that could be impacted by a Basic Income by obtaining information from administrative files with reporting addresses.

• interactions between Basic Income and other benefits, such as Ontario Child

Benefit, EI, etc. It is proposed that the pilot be in place for at least three years in order to generate enough data to be able to determine whether a BI has a positive impact and is therefore worth rolling out across Ontario.

Personal Information In order to evaluate the outcome of the BI pilot and determine whether and to what extent the BI is making a significant difference in the lives of people, it will be necessary for the research team to have access to personal information about the individuals participating in the BI pilot as well as the members of the control group. Some of this information is available in government data bases, some will be gathered through interviews, surveys, questionnaires and focus groups. Ontario is committed to ensuring that all private and personal information collected during the Pilot complies with the rules and regulations in provincial privacy laws. Furthermore, the collection of personal information will only apply to persons wanting to participate and willing to sign a consent permitting the research team to access identifying information for the sole purpose of studying BI impact.

What Do You Think of the BI Approach to Providing Financial Support? Appendix 1 (attached) contains a set of questions to guide a discussion of the BI concept and its implications in the First Nation context. Discussion need not be limited by these particular questions.


Appendix 1 - page 1

Appendix 1 - Discussion Questions There are a number of questions being asked by Ontario during the consultation sessions being held across Ontario in the lead up to the final design of the Pilot. Some of these are relevant to First Nations discussion, some may not be so relevant.

Setting the BI Amounts 1. Should the Basic Income be enough to significantly raise current OW/ODSP

and working poor incomes and thereby reduce poverty? or

Should the BI provide only a base level of income to provide a certain level of stability/certainty?

That is, should the BI alone get people out of poverty?

or Should a combination of BI and earnings get people out of poverty? Why? 2. Do you think that the proposed level of basic income (see charts above) is too

much or too little? - Why? 3. The currently proposed basic income level is set at 75% of the Low Income

Measure (which is equal to half of median household income for the province adjusted for household composition).

Are there particular considerations that should be taken into account when

determining a Basic Income level - (specifically for First Nations)? Why? 4. Ontario Works and ODSP benefits include:

• an amount for basic needs, • an amount for shelter costs and • some additional mandatory, discretionary and transitional benefits.

The current proposal for a BI is to replace only the basic and shelter amounts.

People dependent on the BI would still be eligible for OW mandatory, discretionary benefits (i.e. help with such things as childcare, employment start-up costs, appliance repair/replacement, prescription costs, dental costs, etc.), transitional support and employability development support.


Appendix 1 - page 2

Do you agree or disagree with this proposal? If not, how would you address the issue of periodic, special costs that are now covered under mandatory, discretionary and transitional benefits?

BI Eligibility Determination As noted, it is proposed that eligibility for the BI be based solely on earned income: 5. Should eligibility for the basic income (or a portion of the basic income) be

based on each individual adult’s income in a household, or should eligibility be determined by total family income? Why?

6. Should income be reported using the annual federal/provincial tax return? If

not, how should earned income be reported and to who for the purpose of determining the level of Basic Income provided to a given individual or family?

Note: Using the tax system to determine eligibility for some or all of the BI does not mean

that income earned on reserve is to be taxed.

Calculating the BI 7. The Segal Discussion Paper recommends that individuals and families with $0

income receive the full BI. Individuals and families with earnings would receive a portion of the full BI that decreases as earned income rises (the greater the earned income, the less the Basic Income received until it reaches $0 at some, as yet to be determined, earned income level)

Do you agree with this recommendation? Why or why not? If not, how would you prefer to treat a person’s or family’s earnings in relation

to the amount of BI made available? 8. Should the BI system be set up to respond to in-year changes in individual or

family circumstances (increases or decreases in income, change sin family composition, etc.) rather than being determined only on an annual basis?

Delivering the BI 9. Should the Pilot transfer the BI to individuals and families using the Canada

Revenue Agency (CRA) delivery system - or should it deliver payments by some alternative method to the CRA delivery system?

(Note: Segal’s discussion paper includes the following: “Payments should be made using direct deposit, mailed cheques, or via a community agency...”. This would appear to leave the door open for delivery of the Basic Income by a First Nation or First Nation Organization)


Appendix 1 - page 3

10. Segal recommends that the BI amount for a couple with children be provided in equal portions to the individual adults rather than the full amount being paid to one or the other as “head of household”. Do you agree or disagree with this recommendation? Why?

11. Beyond money, what other services and supports (e.g. self-development/life

skills services, mental health and addiction services, employment assistance, housing, etc.) are needed to accompany the introduction of a BI?

Outcome Evaluation 12. What changes in behavior would you expect to see following a BI

implementation in the First Nation context? What kind of results should we see from the Pilot to call it a success? Why?

13. The discussion paper recommends measuring changes in ten areas of outcome:

• health • life choices • education • work behaviour • community-level changes (e.g. crime rates, local labour market) • administrative efficiency compared to social assistance • food insecurity • perception of citizenship and social inclusion • housing stability and quality • interactions between Basic Income and other benefits, such as Ontario

Child Benefit Are there any other outcome areas you think should be measured - especially in the First Nation Context?


Appendix 1 - page 4

Other Questions of Interest to Ontario

Eligibility to Participate In The Pilot 14. Would you suggest that there are there specific groups of people or

populations who should be targeted to participate in the Pilot, such as the under-employed, social assistance recipients, newcomers? Why?

15. Should people be encouraged to participate in the Pilot? If so, how might this

be done?

Selecting and Type of Pilot Sites 16. What are the most important things to think of when selecting a Pilot location?

Why?

17. How do you think Pilot sites should be selected? 18. Do you think it’s important to have saturation and an RCT site? Why?

19. Should the government consider phasing in sites e.g. starting with RCT and doing saturation sites later?

Privacy and Information Control 20. To measure outcomes, we would need people to share their personal

information, including linking administrative data together. What concerns would you have about using this information to see how people use benefits and services differently after getting a Basic Income? How can we make you feel that your information is secure?

21. So that we can compare the outcomes of Basic Income to the status quo, we

would need people to share their personal information, even if they didn’t receive the Basic Income. Would you be comfortable with this so that we can understand these differences?

22. Do you think that data and evaluation results should be made public on an

ongoing basis? 23. If you are a Pilot participant (test or control group), should you receive results

prior to any public report release?

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