| Feb 10, 2005

The National Child Benefit Supplement

Legalese February 10, 2005

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This column is not intended to provide legal advice. You should contact a lawyer to determine your legal rights and obligations.

The National Child Benefit Supplement

The National Child Benefit Supplement which was introduced as a measure to prevent and reduce child poverty is not benefiting families in Ontario who most need it.

The Supplement is part of the Canada Child Tax Benefit (CCTB) which is the successor to federal child benefits previously known as the Family Allowance and baby bonus. The CCTB is made up of two parts: a Basic Benefit and the Supplement.

The Basic Benefit is currently about $100 per child per month and is paid to families with children under the age of 18, approximately 80% of Canadian families.


The Supplement is currently a maximum of approximately $115 per child per month. The amount of the Supplement goes down as a familys income goes up. A family with an income of less than $22,615 receives the full Supplement while a family with an income of more than $35,000 receives no Supplement. Approximately 40% of Canadian families receive a Supplement.

The theory behind the Supplement is sound - to provide monies to low income families for the benefit of their children. In practice the theory falters. When the Supplement was introduced in 1997, the agreement between the federal and provincial governments required that the amount of the Supplement be deducted from social assistance benefits paid by the provinces to families. The net result of this clawback is that families in receipt of social assistance do not benefit at all from the Supplement as an equivalent amount is deducted for their social assistance benefits.

All provinces, except Manitoba and New Brunswick, clawback some or the entire Supplement from social assistance benefits. In Ontario, the government claws back an amount equal to the Supplement from both Ontario Works and Ontario Disability Support Program recipients.

Although the monies that are clawed back are reinvested in various programs for low-income families, the benefit of these programs pales compared to the benefit of having ones income increased by the amount of the Supplement. In Ontario, approximately 80% of the 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 it is designed. The remaining 20% of the clawback is distributed among municipalities and used in a broad range of programs.

Many of the reinvestment programs are important and should be funded but not by taking money away from the poorest families in our communities. For example, a single parent with one child must make ends meet on the $957 per month he or she receives from social assistance. This is a monumental task when the average cost of a two-bedroom apartment is Ontario is $886 per month.

During the last provincial election, Dalton McGuinty promised to end the clawback of the Supplement from social assistance benefits. The governments announced plan falls far short of ending the clawback.

In our next legalese column we will detail the governments plans to address the clawback problem and a court action which has been started in an attempt to force the government to end the clawback.

The National Child Benefit Supplement Part Two

On December 10, 2004 the Income Security Advocacy Centre, the Centre for Equality Rights in Accommodation and the Charter Committee on Poverty Issues launched a legal challenge to the clawback of the National Child Benefit Supplement (the Supplement) from families on social assistance. The applicants are three single parents who have been struggling on Ontario Works and the Ontario Disability Support Program to make ends meet, without the benefit of the Supplement.

In our last column we explained the Supplement, which is part of the Canada Child Tax Benefit, and how the Supplement failed to help children from the poorest families in our communities. The failure is due to the clawback of the Supplement from social assistance benefits.

During the last provincial election, the Liberals promised to end the clawback of the Supplement in its first mandate. However, six months into their mandate, the Liberals announced that, instead of ending the clawback, they would cap the clawback while they conducted a review of the program. The effect of the cap is to allow families on social assistance to keep the July 2004 increase in the Supplement. For a family with one child, the increase amounts to $4 per month, a far cry from the $126 in benefits that is received by low-income families who are not on social assistance.

Governments argue that the Supplement should be clawed back to ensure that working families are always better off than families on social assistance. Also, they argue, the clawback of the Supplement is necessary because parents on social assistance would then have an incentive to find paid work.

The position of the applicants in the court challenge is that the governments view reinforces discriminatory stereotypes about persons on social assistance. The governments position ignores the reality that social assistance recipients face numerous systemic barriers, including disability, access to affordable childcare and lack of jobs. The labour market, they argue, is not structured to provide full employment. In addition, minimum wage jobs, where much of the labour market growth is found, do not provide enough income to allow even a single person to live 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. The level of social assistance, reduced by the amount of the Supplement, does not provide the kind of meaningful support that low-income families need to stay out of poverty. This so-called incentive plan of the government does nothing more than punish families, and more particularly, the children of families who rely on social assistance.

The court challenge of the Supplement clawback is based on the legal argument that the clawback is contrary to both Section 7 (right to life, liberty and security of the person) and Section 15 (equality rights) of the Canadian Charter of Rights and Freedoms. The applicants will be relying on case law to support the argument that the clawback violates the Charter by discriminating against parents and children because they are in receipt of social assistance.

A recent government report on social assistance reform recommended that Ontario move towards elimination of the clawback of the Supplement. It is hoped that the legal challenge will convince the government of Ontario to take immediate action to eliminate the clawback and the federal government to take steps to eliminate the clawback across Canada.

Peter Graham, Lawyer

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