Many years ago, at a conference in Vancouver, a woman described her experience in Ontario’s Basic Income Pilot.
She had previously been receiving Ontario Works.
What she remembered most wasn’t the amount of money. It was something much simpler.
She said that while receiving Ontario Works, she had been “kicked off” assistance around fifty times as she tried to work over many years. Under the Basic Income Pilot, that stopped happening.
That one observation has stayed with me ever since.
How much can an Ontario Works recipient earn before they aren’t eligible?
For many years I conducted full-day workshops with Ontario Works and ODSP recipients in Toronto. Together, we would calculate something almost nobody knew—not the recipients, not many workers, and often not community agencies.
How much could each person actually earn before losing eligibility altogether?
The answer was never simple. Every case was different. Shelter costs differed. Family sizes differed. Special diets differed.
The point at which assistance ended—the “break-even” point—was different for everyone. But one thing was always the same. Almost no one knew where the cliff was until they fell over it.
Today, a single person on Ontario Works loses eligibility at annual earnings of roughly $20,000. Full-time work at Ontario’s minimum wage now pays roughly $34,000 per year. That means someone can earn only 59% of a full-time minimum wage income before losing Ontario Works entirely.
Not only do they lose the payment. They often lose prescription drug coverage, dental care, employment supports, medical travel, and the security of remaining connected to the system.
But employment income often isn’t stable
That would be manageable if employment were stable. But for many recipients it isn’t.
Hours fluctuate. Contracts end. Employers cut shifts. Seasonal work comes and goes. The modern labour market is full of starts and stops.
Ontario Works still behaves as though everyone moves neatly from unemployment into permanent full-time work. They do not.
The result is an extraordinary amount of administrative churn. Recipients earn enough to cross the eligibility line. Their file closes. A few weeks or months later their hours are reduced. They need assistance again.
The entire process begins again. Workers process another application. Benefits restart. Then stop again. This is not a sign of fraud. It is a predictable consequence of unstable employment meeting rigid program rules.
The dreaded 3 pay month
One particularly frustrating example involves what workers call the ‘three-pay-month’. Many low-wage workers are paid every two weeks. Twice each year, three paycheques fall within the same calendar month. Nothing has changed about their annual income. Nothing has changed about their hourly wage. Nothing has changed about their financial need.
Yet the accounting system suddenly makes them appear richer for that month than they really are. Benefits may be cancelled. When earnings later fall again, recipients can face new waiting periods before regaining earnings exemptions.
A quirk of the calendar creates hardship that has nothing to do with poverty. This is not intelligent administration. It is administrative whiplash.
Ironically, governments often say they want recipients to work. Recipients overwhelmingly want to work. Yet the system often treats successful work effort as the beginning of another administrative cycle rather than as progress toward lasting independence.
Bridging the gap between assistance and independence
There is a better way.
- Earnings exemptions should be significantly higher. Recipients should be encouraged to build stable attachment to the labour market before approaching the eligibility cliff.
- Ontario Works needs a softer landing rather than a hard exit. Benefits and health supports should taper more gradually as earnings increase instead of disappearing abruptly.
- Eligibility should be based on a longer view of earnings rather than allowing temporary fluctuations—or an extra payday—to trigger case closures.
- Most importantly, we should stop measuring success by how quickly people leave the caseload. We should measure success by how long they stay employed. Those are not the same thing.
The woman from the Basic Income Pilot taught me something profound. She did not say the pilot made her wealthy. She did not even say it paid dramatically more.
She said it stopped kicking her off assistance every time she tried to improve her life. Sometimes the greatest barrier to employment is not a lack of work. Sometimes it is a system that mistakes normal progress for permanent success.
A welfare system should not behave like a revolving door. It should behave like a bridge. Bridges are meant to carry people safely across uncertain ground. They are not meant to disappear halfway over.
More: An Ontario Disability (ODSP) & Ontario Works (OW) Index