Basic income pilot in Ontario would provide monthly payments of at least $1,320
Hugh Segal, Ontario’s special adviser on basic income, wants province to test the merits of replacing social assistance program with no-strings attached version
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Ontario’s special adviser on basic income, says the government should test the merits of replacing the province’s meagre and rule-bound social assistance program with a monthly payment of at least $1,320 for a single person or about 75 per cent of the province’s poverty line.
For participants with disabilities, Hugh Segal suggests a top-up of at least $500 a month.
The no-strings-attached payments would be non-taxable and participants would be allowed to keep a portion of any additional income earned through employment, Segal suggests in “Finding a Better Way: A Basic Income Pilot Project for Ontario.”
Participation would be voluntary and no one would be financially worse off as a result of the pilot, which would include adults between the ages of 18 and 65.
“Testing a basic income is a humane and useful way to measure how so many of the costs of poverty (in terms of productivity, health, policing, and other community costs, to name only a few) might be diminished, while poverty itself is reduced and work is encouraged,” Segal says in the discussion paper released at Queen’s Park Thursday.
A single person on Ontario Works (OW) currently receives up to $706 a month, while a person relying on the Ontario Disability Support Program (ODSP) can get up to $1,128.
Although Segal does not say where in Ontario the proposed three-year experiment should take place, he says locations should include a neighbourhood in a large urban centre, a “saturation site” in both southern and northern Ontario as well as in a First Nations community.
In communities where all welfare recipients are participating in the pilot, OW and ODSP caseworkers would be redeployed to provide one-on-one support with financial literacy, skills development and job counselling, Segal suggests.
Work on choosing a pilot site should begin before March 1, he suggests.
Ontario currently spends about $9 billion a year on social assistance, Segal notes, excluding costs to the health care, education and legal systems produced by the effects of poverty.
Ontario defines its poverty line as the Low Income Measure, (LIM) after taxes, or about $21,000 for a single person.
Segal says the pilot should help Ontario determine if a basic income can build on other government initiatives, such as increases in the minimum wage, changes to the Ontario Student Assistance Plan (OSAP) and the Ontario child benefit to cut the depth and incidence of poverty in the province.
The Wynne government signaled its intention to fund a basic income pilot in this year’s spring budget. In June, Community and Social Services Minister Helena Jaczek appointed Segal, a former senator and long-time advocate of a basic income or guaranteed annual income, to prepare a design and implementation plan.
Other countries such as Finland, the Netherlands and Kenya are developing pilot projects to test the idea.
Switzerland rejected a national guaranteed income plan in a referendum last summer.
Canada explored the concept in the late 1970s when the community of Dauphin, Manitoba tested a “mincome” for low-income residents, set at 60 per cent of the poverty line. Results showed a drop in hospital admissions and mental health problems, an increase in high school completion among young men and little impact on attachment to work.
“If a basic income can be designed in such a way that it provides incentives to work by reducing the worst excesses and claw backs associated with the welfare wall, and confirms as a matter of right and dignity the opportunity to make individual choices regardless of income, why would we not try to test the potential benefits and potential costs in a coherent and focused pilot?” Segal asks in his report.
The public will be invited to comment on Segal’s proposed design from mid-November until the end of January.
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