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social assistance in Canada: An Overview

February 20, 2013

Social assistance in Canada is also known as income support, income assistance, welfare and a few other program names, depending on the jurisdiction. No matter the name, all provincial and territorial social assistance programs provide financial assistance and in-kind goods and services to cover the cost of basic living requirements for an individual or family when all other financial resources of that individual or family have been exhausted.


Social Assistance in Canada: An Overview

The formal division of powers between the federal government and the provincial and territorial governments respecting social services is based on The Constitution Act, 1867. The Act itself did not refer to social services; however, the legislative authority for social services has been inferred from the interpretations of sections 91 and 92 of the Act. These sections of the Act set out the division of authority between the federal and provincial governments and the constitution has been interpreted to mean that the provinces have primary jurisdiction over social services. As such, the legislation governing the provision of social assistance varies by jurisdiction.

Following the approach of their provincial or territorial counterpart, Indian and Northern Affairs Canada (INAC) has adopted similar terms and conditions of social assistance programs. Funding for social assistance activities is provided by INAC to First Nations communities, who in turn deliver programs and services to community members.1

A Brief History of Federal Social Assistance

1966 – Canada Assistance Plan (CAP) – The federal government shared the eligible costs that provincial, territorial and municipal governments incurred in providing provincial social assistance and welfare services to persons in need.

1996 – The Canada Health and Social Transfer (CHST) replaced CAP. The CHST was a federal transfer provided to provinces and territories in support of provincial health care, post-secondary education, social assistance and social services, including early childhood development and early learning and child care

2004 – The CHST was replaced by the Canada Health Transfer (CHT) in support of health care and the Canada Social Transfer (CST) in support of post-secondary education, social assistance and social services, including early childhood development and early learning and childcare.


In general, assistance may be granted to any individual or family head who has been determined, on the basis of need, unable to provide adequately for themselves and any dependants. Employable recipients may be required to participate in one or more employment activities as a condition of eligibility for financial assistance. Most jurisdictions require applicants to attain the age of majority prior to application, and be a resident at the time of their application and while receiving benefits.

The following groups of individuals may be eligible for social assistance:

  • Canadian citizens;
  • persons granted permanent resident status under the Immigration and Refugee Protection Act; and
  • persons who have made a claim for refugee status or have been granted asylum in Canada under the Immigration and Refugee Protection Act.

Administrative Requirements

Depending on the jurisdiction, to establish a social assistance initial eligibility, an applicant may be required to:

  • submit a completed application;
  • provide all documentation or necessary information to verity his/her eligibility, such as proof of age, a medical certificate to confirm disability, pay cheque stubs, etc.;
  • meet a representative from the ministry and discuss the financial and social situation of the household;
  • provide consent for verification of any statement made in the application and any supporting documents concerning financial resources or any other circumstances of the household;
  • report any change in circumstances that may affect continuing program eligibility or the amount of assistance to which the household is entitled.

Employment Requirements

Eligible employable persons are actively encouraged to pursue, accept, and retain any reasonable offer of employment or retraining as an initial and continuing condition of eligibility for social assistance. Thus, many jurisdictions offer employment services and training opportunities in combination with financial assistance. Should a recipient choose not to pursue employment or retraining, he/she may be subject to penalties ranging from a specified reduction in benefits over a prescribed period of time to the full cancellation of benefits.

To ensure that those who successfully leave social assistance for employment are better off working, a number of provinces and territories have introduced earned income or working income supplements.

Categories of Beneficiaries

Employable Persons – A number of measures promote the entry or re-entry of employable persons into the active labour force. These measures may include different exemption levels on assets and income, lower benefit levels to reflect the temporary nature of their reliance on social assistance, and a wide range of employment support services and programs.

Recipients may be required to sign and adhere to an individualized contract that stipulates training and rehabilitation measures to be undertaken in order to regain financial independence. However, assistance may be granted only when:

  • unemployment is due to circumstances beyond the person’s control;
  • the person is willing to accept employment which he/she is capable of handling, or to engage in academic upgrading, re-training or other measures to reach a state of job readiness; and
  • the person is making reasonable efforts to secure employment.

Single-Parent Families – A sole support parent may be required to either initiate legal proceedings against an absent spouse (or ex-spouse), including common-law partners, respecting maintenance payments, or to subrogate that right to the government. Generally, single parents are considered as employable and required to actively seek and accept reasonable employment, where the parent and dependent child(ren) are physically and mentally healthy and when the dependants have reached a certain age.

Persons with Disabilities – An applicant with a disability is generally required to submit a medical certificate completed by a licensed physician indicating the level of the impairment and the potential for rehabilitation. Evidence of a continuing disability on an annual basis may also be required. These requirements may be waived where the disability is obvious.

All programs have design features to assist persons with disabilities, including higher exemption levels on assets and income, higher basic assistance levels, special disability-related allowances, and supplementary health and medical benefits.

Persons with Multiple Barriers to Employment – A variety of situations and personal circumstances could make it difficult for recipients to find and maintain employment. They are identified by the fact that they face multiple significant barriers to employment, including substance abuse, childcare or transportation issues, histories of long-term unemployment, and/or low basic skills.

They require interventions to address their personal circumstances in order to be able to find and maintain employment. They may have higher benefit levels and exemptions to reflect their longer-term reliance on social assistance.

Aged Persons – Seniors may qualify for social assistance notwithstanding their eligibility for benefits from other federal, provincial and territorial programs. Financial hardship might be due to some age-related special needs, the number of dependants in the household, or ineligibility for Old Age Security benefits. Most jurisdictions have established higher basic assistance benefit levels or other special considerations for aged persons.

Students – Post-secondary students are generally not permitted to receive social assistance while attending university, college or trade school. Students requiring financial assistance during their study period are expected to contact the appropriate student loan organization to receive financial assistance.

Financial Eligibility

Needs Test – Social assistance is generally granted to eligible persons on the basis of a needs test. It takes into account the basic needs and the financial resources available to an individual or family (assets and income), and the ability of those financial resources to meet their basic needs.

Assets – A household’s assets may be considered as exempt or non-exempt for the purpose of calculating the social assistance entitlement. In most jurisdictions, liquid assets are defined as any assets that are readily convertible into cash including cash on hand, bank accounts, stocks and bonds, or other securities. Certain exemptions are allowed with respect to actual and potential liquid assets and the property of an individual or family. A portion of the cash value of a life insurance policy may be exempt from the calculation of liquid assets.

Homeowners applying for social assistance are not required to sell their principal residence and household effects (within reason) as a condition of eligibility. Similarly, applicants are not required to sell their primary vehicle as long as the value of the vehicle does not exceed an allowable limit. Provisions regarding the treatment of assets such as Registered Retirement Savings Plans and Registered Education Savings Plans vary between the jurisdictions.

Assistance may be withheld, reduced or terminated where an applicant or recipient has disposed of his/her assets in an unreasonable manner in order to qualify for assistance.

Income – In addition to assets, income from all sources is examined in the calculation of entitlement to social assistance. The following types of income may be exempt:

  • Canada Child Tax Benefit;
  • foster home payments;
  • child welfare payments;
  • GST/HST rebates;
  • insurance settlements;
  • federal compensation payments (such as those under the Hepatitis C Program, those infected with the human immunodeficiency virus (HIV) virus through blood transfusions or blood products, and the Canadian merchant mariners who served in the First and Second World Wars or the Korean War);
  • involuntary deductions from pay;
  • gifts and inheritances; and
  • income from full-time employment held by dependants who are students.

Partial exemptions for employment income exist in most provinces and territories. These income exemptions may be granted as an incentive for the individual to gain financial independence. The income exemption provision may take effect only after initial eligibility for social assistance has been established.

Other types of unearned income, such as Workers’ Compensation benefits and Old Age Security, are non-exempt, and thereby reduces the amount of social assistance payable dollar-for-dollar.

In the determination of financial eligibility, some jurisdictional authorities may include imputed income as part of a household’s income even though the household is not actually receiving money from a particular source. Living rent-free in return for janitorial or superintendent services is a common example of imputed income.


Basic Assistance – Basic assistance generally covers the cost of food, shelter, clothing, personal and household items, and may cover regularly recurring special needs. There are three basic methods used to calculate the amount of benefits to which an individual or family are entitled:

  • Pre-added budget method – It combines all non-shelter requirements into a single support allowance. A separate shelter component is then provided.
  • Itemized budget method – It provides a standard allowance for each of the non-shelter and shelter requirements. The sum of the individual items to which the individual or family is entitled then forms the total benefit payable.
  • Flat rate of assistance – It is for non-shelter and shelter items based on a household’s structure and the program in which it is participating.

Variables affecting the amount of shelter allowance payable include the number of beneficiaries in any given household, the type of living arrangement and the cost of fuel and utilities. In some jurisdictions, the shelter amount varies depending on the season, location and relative remoteness of the area in question.

Special Needs Assistance – Generally, this type of assistance provides items, services, or allowances related to age, disability, employment, education, training, and other special circumstances. It varies widely between jurisdictions but examples include transportation allowances, employment-related allowances, child-care subsidies, drug and medical services, as well as furniture replacement, minor home repair allowances, special diet allowances, school supply allowances, and funeral services. The provision of items of special need is on a case-by-case basis in accordance with the applicable policies and guidelines.

Transitional Assistance – In an effort to increase labour market attachment and reduce reliance on social assistance, attempts have been made to lessen the financial impact of the transition from social assistance to employment. For some jurisdictions, child-care and transportation allowances have been increased to facilitate the participation in employment and retraining activities. Extended drug cards and supplementary health benefits, valid after leaving social assistance (subject to renewal) have further lessened the financial impact of accepting employment.

Indexation – Each province and territory is responsible for the indexation of its benefits. While most revise their rates on an adhoc basis, Quebec annually indexes its benefits paid within their financial assistance program. Therefore, the benefits paid to those with severe constraints to employment are adjusted at the same indexation rates used in the personal taxation system. The benefits to those who are employable are increased at a rate corresponding to half of the fiscal indexation system.


Referral to Other Government Programs – An applicant’s circumstances are reviewed to determine if social assistance is the most appropriate intervention for them. If it is determined that another governmental program may be more suitable, then the applicant is referred to that program.

Method of Payment – Social assistance benefits can be paid in a variety of ways-by cash, payroll or manual cheque issue, direct deposit, voucher or authorization to purchase, or direct payment to a third party vendor or supplier.

Case Review – As a condition of continuing eligibility for financial assistance, beneficiaries must report immediately any change in the circumstances of their household that would affect their entitlement to financial assistance. In addition, some jurisdictions require that long-term social assistance recipients be reviewed every year, and more frequently for short-term recipients.

Recoveries and Reimbursement – There are established procedures and policies concerning the recovery of social assistance granted to a person who was not entitled because of a change in household income or other circumstances, such as, accidental or wilful representation, or fraud. Certain forms of assistance may be conditional upon a formal agreement signed by the recipient to reimburse the government for such assistance.

Appeals – An applicant or recipient is entitled to file a request for reconsideration or appeal where he/she is dissatisfied with a decision affecting his/her entitlement to social assistance. Some provinces and territories have established limits on issues that may be formally appealed, while others allow an individual to question any determination bearing on his/her case. Most jurisdictions have adopted a two-step appeals process in which social services personnel first conduct an internal administrative review before being subject to a formal Appeals Board consisting of appointed members.

Children’s Benefits

Some provinces and territories have child benefit programs for all low-income families with children, whether they are working or on social assistance. Some programs were in existence when the National Child Benefit (NCB) program was established, and others were implemented afterwards. The NCB is a joint initiative of federal, provincial and territorial governments2, which includes a First Nations component, to support Canadian children living in low-income families. The goals of the NCB are to help prevent and reduce the depth of child poverty, to promote attachment to the labour market by ensuring that families will always be better off as a result of working; and to reduce overlap and duplication by harmonizing program objectives and benefits, and through simplified administration.

The NCB is a component of the Canada Child Tax Benefit (CCTB). The CCTB provides a base benefit to all low- and middle-income families with children. The NCB Supplement is provided to low-income families with children, whether the parents are working or receiving social assistance.

Approaches to Replacing Social Assistance Benefits for Children

Jurisdictions have the flexibility to adjust social assistance or child benefit payments by an amount equivalent to the NCB Supplement. First Nations follow the approach of the relevant province or territory. Funds resulting from such adjustments support new or enhanced programs benefiting low-income families with children and are referred to as NCB Reinvestment Funds. Jurisdictions may also invest additional funds, known as the NCB Investment Funds, in benefits and services consistent with the objectives of the NCB.

Since the inception of the NCB initiative, three distinct approaches have evolved by which provinces and territories replace social assistance benefits for children with the NCB Supplement.

The Social Assistance Offset Approach – Under this approach child benefits remain within the social assistance system, but these benefits have been gradually displaced by federal increases to the NCB Supplement. Provinces and territories either deduct the NCB Supplement as an unearned income charge against social assistance or reduce their social assistance rates for children. In the case of income offset, social assistance recipients have the amount of the NCB Supplement they receive deducted from their social assistance entitlement. This approach is used in Prince Edward Island3, Ontario4, Yukon, Northwest Territories and Nunavut. In the case of rate reduction, the social assistance rates are reduced by the maximum NCB Supplement. Alberta5, 6 uses this approach. Reinvestment fund under the social assistance offset approach are the savings in social assistance.

The Integrated Child Benefit Approach with Adjustment – Several jurisdictions restructured their social assistance system and children’s benefits are now delivered through a separate income-tested child benefit program that is integrated with the CCTB. Under this approach, increases in the NCB Supplement are offset in full or in part against the provincial child benefit. In British Columbia, the savings from this offset become the province’s reinvestment funds. In Saskatchewan, the amount of reinvestment funds is set at the amount that was being used for basic child benefits under the social assistance system at the time the system was restructured.

The Integrated Child Benefit Approach without Adjustment – Other jurisdictions also restructured their social assistance system as basic benefits for children were removed from the social assistance program and these benefits are now provided through a separate income-tested program integrated with the CCTB. In these cases, however, there is no offset of the NCB Supplement against provincial child benefits. The amount of reinvestment funds is set at the funds that were being used for basic child benefit under the social assistance system at the time the system was restructured and has remained the same for subsequent years. Newfoundland and Labrador7 and Nova Scotia8 have adopted this approach. Two jurisdictions, New Brunswick and Manitoba9, do not adjust social assistance benefits for children.

Other Approach – In Quebec, children needs are covered by the Canada Child Tax Benefit and the improved Quebec Family Allowances, since January 2005, by a new Tax Credit Reimbursement for Child Support. This new income support to families with children allows Quebec families with children, in particular those receiving last-resort financial benefits or those with a low income, to obtain transfer payments benefiting more their children. Those benefits are adjusted on January 1st of every year at the same indexation rate as the personal taxation system.

In 2007, provinces and territories provided NCB programs and services in six key areas: child/day care initiatives, child benefits and earned income supplements, early childhood services and children-at-risk services, supplementary health benefits, youth initiatives, and other NCB programs, benefits and services. First Nations reinvestments covered a broader range of programs in five key areas: childcare, child nutrition, support to parents, home-to-work transition and cultural enrichment.

Additional information on the NCB is available in annual progress reports, which are available on the NCB Web site at:

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