April 1, 2021 – The government of Alberta should undertake a review of its social assistance programs to reduce long-term dependency of recipients and ensure overall program sustainability, according to a report by the C.D. Howe Institute.
In “Mending the Safety Net: Social Assistance Reform in Alberta,” authors Parisa Mahboubi and Mariam Ragab evaluate Alberta’s social assistance programs—Income Support and Assured Income for the Severely Handicapped—and offer policy options to improve their efficiency.
“Rather than improving social assistance through stricter eligibility criteria for access to benefits,” said Mahboubi, “support programs should focus on increasing work incentives, reducing the cost of returning to work, and tackling other barriers to employment.”
Alberta’s social assistance programs have been the fastest growing among provincial income support programs with caseloads doubling between 2008 and 2019. Over the same period Alberta has also seen the largest growth in its dependency rate, social assistance recipients relative to its working age population, increasing from 1.8 percent to 4.4 percent.
Effective social assistance programs should provide appropriate support for those in need while discouraging long-term dependency. Currently, Alberta’s high clawback rates and low earnings exemptions decrease the likelihood of recipients bouncing out of the social safety net and back into the labour market. The approach for disability programs should also gear towards empowering people with disabilities with increased opportunities to join the workforce.
The report highlights several factors that contribute to Alberta’s social assistance challenges, and recommends:
- A single program for all persons with disabilities, assessing their capability to work and developing appropriate Service Plans, and reviewing eligibility on an ongoing basis.
- Reducing the cost of working. More generous clawback rates and higher earnings exemptions improve incentives to seek and maintain employment, and can generate long-term cost savings as recipients leave the program or rely less on it.
- Providing the right tools for people to re-enter the workforce. Subsidizing part-time work and providing appropriate work-experience placements will help provide social assistance recipients with the skills needed to re-enter the labour market.
- Supplemental benefits, such as health and housing, should be offered separately from basic social assistance. The loss of supplemental benefits as employment incomes grows creates disincentives to labour participation and encourages social assistance reliance.
For more information contact: Parisa Mahboubi, Senior Policy Analyst, C.D. Howe Institute; Mariam Ragab, former Research Assistant, C.D. Howe Institute; or Nancy Schlömer, Communications Officer, C.D. Howe Institute, email: nschlomer@cdhowe.org.
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.