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 (NCB