National Child Benefit Supplement [NCBS] Backgrounder
What is the National Child Benefit Supplement?
The National Child Benefit Supplement [NCBS] was introduced in 1997 as a measure to prevent and reduce child poverty. The NCBS is part of the Canada Child Tax Benefit [CCTB]. Similar to what used to be known as the 'baby bonus,' the CCTB replaced existing child benefits including the Working Income Supplement.
The CCTB is delivered to families with children under the age of 18 through a Basic Benefit and the NCBS. The Basic Benefit is provided to approximately 80% of Canadian families.
Approximately 40% of families also receive the NCBS. The amount of NCBS received goes down as a family's income goes up. Families with incomes less than $22,615 receive the full NCBS, while a family with an income of more than $35,000 does not receive any NCBS.
In 2004-05, the full NCBS provides $1,511 a year for the first child, $1,295 for the second child, and $1,215 for each additional child. That is approximately equal to $115/month for each child.
The NCBS Clawback
The 1997 agreement between the federal, provincial and territorial governments required that the amount of the NCBS be deducted from the families on social assistance. This is known as the NCBS clawback. In spite of the agreement, Manitoba and New Brunswick do not clawback the NCBS. All of the other provinces and territories clawback some or all of the benefit.
The Ontario government claws back the NCBS from both Ontario Works and Ontario Disability Support Program recipients.
What Happens to the Clawed Back Funds?
The monies that are clawed back from families on social assistance are supposed to be reinvested in new programs for low-income families.
In Ontario, approximately $250 million is reinvested in various provincial and municipal programs. Approximately 80% of the NCBS clawback is invested in provincial programs, such as, the Ontario Child Care Supplement for Working Families. Families in receipt of social assistance do not usually benefit from this program because of the way the program is designed. The remaining 20% of the NCBS clawback is distributed among municipalities and used in a broad range of programs. Many of the reinvestment programs are important and need to be funded - but not by taking money away from the poorest families in our communities.
The Liberal Promise in Ontario
During the last provincial election, Dalton McGuinty acknowledged that the NCBS clawback was wrong and promised to end it in his first mandate. Six months into their mandate, the Liberals announced that, instead of ending the clawback, they would "cap" it while they conducted a review of the program. The effect of the cap is to allow social assistance families to keep the July 2004 increase in the NCBS. For a family with one child, the increase amounts to $48 a year, a far cry from the $1,511 in benefits that go to low-income families that are not on social assistance.
The Myth of the 'Welfare Wall'
Governments say that the NCBS must be clawed back to ensure that working families are always better off than families on social assistance. Governments argue that clawing back the NCBS from families on social assistance is necessary because parents on social assistance "need" an incentive to find paid work.
This argument reinforces discriminatory stereotypes about persons on social assistance. It ignores the reality that social assistance recipients face numerous systemic barriers, including disability, access to affordable childcare, and lack of jobs. We do not structure our labour market to provide full employment. To benefit other players in our economy, the unemployment rate in Canada hovers around seven percent. In addition, minimum wage jobs, where much of our labour market growth is found, do not provide enough income to allow even a single person to get above the poverty line.
Imposing the clawback on social assistance families also ignores the reality that the same families may cycle between social assistance and precarious paid work. It does not provide the kind of meaningful support that low-income families need to stay out of poverty. This so-called "incentive" plan does nothing more than punish families who need to rely on social assistance.
Discrimination Against People on Social Assistance
Families on social assistance are generally the poorest people in our communities. For instance, a single mom with one child is supposed to make ends meet on the $957/month she receives from social assistance. How can a family of two survive when the average cost of a two-bedroom apartment in Ontario is $886/month?
It is simply not fair that the Ontario government is taking away the NCBS from families on social assistance that so desperately need it.
TAKE ACTION to End the NCBS Clawback
Sign a Petition to End the Clawback of the National Child Benefit Supplement (NCBS)
Ending the clawback of the National Child Benefit Supplement (NCBS) would make a big difference in the lives of families on social assistance. When you’re already living below the poverty line, being able to keep the approximately $115 you get every month for each of your children would go a long way towards paying your bills. But that’s not what happens.
Every month the federal government allows the Ontario government to clawback the NCBS from 163,726 children across the province – simply because their parents are on social assistance. It’s not right.
Tell the Ontario government to end the clawback immediately!
For additional information
Blog: The Welfare Wall - Hiding the Truth About Poverty http://www.care2.com/c2c/share/detail/77114
Poverty in Canada and the Clawback of the National Child Benefit Supplement http://www.care2.com/c2c/share/detail/78571
Poverty in Canada and the National Child Benefit Supplement (NCBS) Claw Back
Poverty in Canada
The low-income cutoff (LICO) is still the most used "poverty" indicator. As a measurement, it is based on the concept that people in poverty live in compromised circumstances (defined as spending a disproportionate amount of their total gross income on food, clothing, and shelter). Household expenditure surveys conducted by Statistics Canada show that the average family spends 35 per cent of its gross income on food, clothing, and shelter. A family is considered to be in difficult circumstances if it spends 55 per cent of its income on those three items. Source: Mapleleafweb.com
The low-income cutoff (LICO) is still the most used "poverty" indicator.
As a measurement, it is based on the concept that people in poverty live in compromised circumstances (defined as spending a disproportionate amount of their total gross income on food, clothing, and shelter).
Household expenditure surveys conducted by Statistics Canada show that the average family spends 35 per cent of its gross income on food, clothing, and shelter.
A family is considered to be in difficult circumstances if it spends 55 per cent of its income on those three items.
Which Provinces & Territories claw back & which do not
Provinces & territories with clawbacks (funds diverted into other programs): Prince Edward Island Ontario Saskatchewan Alberta British Columbia Yukon Northwest Territories Nunavut Provinces & Territories with no clawbacks: Newfoundland and Labrador New Brunswick Nova Scotia Manitoba Quebec is the only province that doesn't participate in the National Child Benefit Supplement. Source: National Council on Welfare
Provinces & territories with clawbacks (funds diverted into other programs):
Provinces & Territories with no clawbacks:
Quebec is the only province that doesn't participate in the National Child Benefit Supplement.
Source: National Council on Welfare
The Present & Future of Child Poverty
A 2002 NCB report showed that child poverty was declining in Canada, from a high of 15.8 per cent in 1996 to 11.4 per cent in 2000. Now, for the first time in five years, child poverty is on the rise again. Some 55,000 children who had been living in poverty before the NCB supplement was introduced were no longer in a low-income situation by 2000. By the year 2007-08, the federal government will spend $10 billion to support low-income families with children through the Canada Child Tax Benefit and the NCB Supplement. Benefit levels for a family of four (with two children) should rise from the current maximum of $4,680 to a projected $6,260 by 2007-08. Sources: The 2002 National Child Benefit Progress Report & Campaign 2000 Clawbacks cause child poverty, families charge by Lindsey Coad, Producer: Jaimie Banks http://www.carleton.ca/jmc/cnews/n1.shtml
Sources: The 2002 National Child Benefit Progress Report & Campaign 2000
Clawbacks cause child poverty, families charge by Lindsey Coad, Producer: Jaimie Banks http://www.carleton.ca/jmc/cnews/n1.shtml
Poverty by province Find out which of Canada's provinces & territories are most affected by poverty, and which are least affected requires FlashPlayer
National Child Benefit Supplement - backgrounder http://dawn.thot.net/ncbs_backgrounder.html
An Ontario Child Benefit? http://dawn.thot.net/isac_s-2003.html#5
Child Benefits in Ontario - Q & A's http://dawn.thot.net/child_benefits_q_a.html
Charter Challenge of the National Child Benefit Supplement http://dawn.thot.net/cc_clawback.html
Legal Challenge to the NCBS Clawback from families on social assistance http://dawn.thot.net/ncbs_clawback_legal_challenge.html
Higher Child Benefits Needed To Counter Persistent Poverty http://dawn.thot.net/c2000.html
Social Safety News - the OSSN Newsletter Issue 28 May 2004 http://dawn.thot.net/ossn/may_2004.html
Legal Challenge to the NCBS clawback Follow this link - too long to post
National Anti-Poverty Organization (NAPO) Statement on Budget 2005 http://dawn.thot.net/napo_budget2005.html
Presentation to Judy Marsales, MPP & staff of Ted McMeekin MPP at the Meeting of the Campaign for Adequate Welfare & Disability Benefits Presented by Mike Hogeterp and Darlene Burkett http://dawn.thot.net/cawdb.html
Why the poor are getting poorer Op/Ed in Toronto Star, by Jacquie Chic & John Fraser, ISAC http://dawn.thot.net/tstar-op_ed.html
Joanne Bury's Speech to CAW workers at Port Elgin http://dawn.thot.net/bury1.html
Provincial Party Leaders Respond to Letter from Ontario’s Religious Leaders http://dawn.thot.net/isarc1.html
Canadian Social Research Links http://www.canadiansocialresearch.net/caselaw.htm
Women & Housing in Canada: Barriers to Equality Report by CERA - Centre for Equality Rights in Accommodation Women’s Housing Program http://dawn.thot.net/cera1.html
Challenging Homelessness and Poverty as Human Rights Violations http://dawn.thot.net/cera3.html
Sign a Petition on Care2 to End the Clawback of the National Child Benefit Supplement (NCBS)
Background Information NCBS Backgrounder The Welfare Wall -- Hiding the Truth about Poverty