Basic Income: What is it and what could it mean for social assistance? Jennefer Laidley, Research & Policy Analyst Income Security Advocacy Centre (ISAC) October 14, 2016 Who is ISAC?
Income Security Advocacy Centre since 2001 Part of community legal clinic system Work at provincial level Advance systemic interests and rights of lowincome Ontarians around income security programs and employment Test-case litigation, policy advocacy, community organizing, public education Website: www.incomesecurity.org A little about you Poll 1:
What part of Ontario are you joining us from? A little more about you Poll 2: Whats your interest in this topic? This presentation Why are we talking about basic income? What is a basic income? How could it work? What problems do supporters say a basic income could fix? Opportunities and risks
Six key questions Final thoughts and whats next? Questions Why are we talking about basic income? Ontarios 2016 Budget said: 1. Income security / social assistance reform This year, the government will continue to engage with delivery partners, clients and sector advocates to chart the path to comprehensive reform that effectively reduces poverty, supports people in their efforts to participate in the economy, and provides human services in a way that makes sense to the
people who need them 2. Basic Income pilot One area of research that will inform the path to comprehensive reform will be the evaluation Basic Income pilot of a Whats happened since? Income Security Reform Working Group Appointed June 2016
Must report back in summer 2017 Advice on social assistance reform, income security, and supports for housing, health and employment Basic Income pilot to inform this work Announcement: https:// news.ontario.ca/mcss/en/2016/06/ontario-establishing-income-security-refo rm-working-group.html Membership: https:// news.ontario.ca/mcss/en/2016/06/membership-of-ontarios-income-securityreform-working-group.html Special Advisor Hugh Segal appointed June 2016
Long-time advocate of Guaranteed Annual Income His job: Provide advice on the design and implementation of a Basic Income Pilot in Ontario Note: Pilot Project is not a whole new program only a test to see what might happen Report and discussion paper coming Oct 2016 Consultation will happen quickly Where does it come from? Very old idea with long history Proposed by people with very different political views
Right-wing, left-wing, middle. Milton Friedman, John Kenneth Galbraith + more! Current international interest Finland is testing a program Switzerland had a referendum Netherlands has a proposal What about Canada? Last cycle of interest in late-1960s / early-70s Mincome Pilot - Dauphin, Manitoba 60% of LICO (fairly low income) resulted in:
Big reduction in hospitalization Lower health care expenditures More high school completion More caring activities (kids, elderly) No significant work disincentive
Stability of income very important Most recently Quebec Cabinet minister appointed to investigate Federal government Interested, but waiting for provinces Ontario Pilot Project Lots of municipalities interested
What is a Basic Income? Various terms Basic Income Guaranteed Annual Income Minimum Income Basic Income Guarantee... No agreed-upon standard definition General features Cash transfer from government
Based on some minimum (basic) income floor No eligibility requirements to work or take education / training Administered through a benefit program or the tax system Replaces some or all current income supports Two models 1. Universal Demogrant Same amount goes to everyone Your income does not determine how much you get Typically taxed back from those with higher
incomes (where taxback rate starts is key) Universal Demogrant size of the benefit is the same (but taxed back!) Amount of the Benefit 6 5 4 3 2 1
0 0 100 200 300 Income
400 500 600 models 2. Negative Income Tax Everyone is eligible, but your income determines how much you get Amount goes down as your income goes up Amount is some proportion of the difference between
your actual income and a basic income threshold Whats the basic amount? Whats the income level when the benefit starts going down? As income goes up, how much is deducted? Negative Income Tax benefit goes down as income goes up Amount of the Benefit 6 5 4
3 2 1 0 0 100 200 300
Income 400 500 600 Delivery Benefit program or through the tax system If the benefit amount depends on previous years
income, filing tax returns is key NOTE: Moving benefits out of OW / ODSP and into the tax system Long-standing part of social assistance reform discussion Like Ontario Child Benefit Reasons: more people are eligible, less stigma, easier administration, no onerous rules to follow Which model gets chosen? The objective of the program is important What is the purpose of the program?
What problems are we trying to fix? The problems depend on who you ask Problems that people think a income can fix basic Poverty-related issues: Welfare / other programs arent adequate Welfare is degrading and punitive and imposes too many restrictive rules
Current welfare rules and issues in the labour market mean women and people with disabilities are forced to be financially dependent on family Labour market isnt working too many low-paid jobs leave people in poverty Technological change puts people out of work problems Administrative complexity: Current programs are cumbersome, hard to administer, not coordinated, too many rules
Issues with autonomy: Societys focus on work prevents people from doing other productive things (education, caregiving, etc.) or achieving other life goals problems Government / public sector criticisms: Government shouldnt be telling people how much they can spend and on what nanny state Current programs arent doing a good enough job of getting people to work (the welfare trap) Costs of administering current programs are too high
Costs of current programs are too high Government should be smaller / shouldnt be in the business of providing social welfare programs Problem definition is critical Defining the problem shapes the program Which will drive the program? Can several problems be resolved all at once? Who gets to decide? Opportunities Could provide more income than OW / ODSP
Associated benefits in health, social integration, etc. Addresses problems created by OW / ODSP system Conditionality i.e., requirement to work Monthly eligibility policing Surveillance (e.g., who are you living with, where, etc.) Complete depletion of assets Stigma and discrimination re: being on welfare Could allow caseworkers to better support recipients (instead of being eligibility police) opportunities
Could result in better quality of work People not desperate for any possible job might mean higher wages and better quality work Engages unusual suspects People outside social assistance brought into the conversation about improving the social safety net Gets people talking about what income adequacy means and for whom Reinforces the idea that government has a leading role in ensuring people have enough income
Risks Could be very expensive Total cost is important as it affects: Amount of the benefit Impact on other benefits / public services Political support and public support Total provincial revenue = $130 billion Current Low-Income Measure = $21,000 $21k / low-income working-age Ontarian = $25 billion Current OW/ODSP spending = $8 billion risks
Could lose connection to programs / services Getting just a cheque could mean no connection with other supports Could be used to stop improving quality of work Focus could shift away from creating good jobs Could end up subsidizing bad quality, low-paying work Could be used as reason to not improve public programs & services Poverty isnt just about income also need better programs like childcare, extended health benefits, etc.
risks At extreme, could be used as reason to cut back or eliminate public programs & services Replace public programs with a cheque What if these things arent available to buy? What if these things are too expensive? What happens to public sector workers? Lets take a breath here Six Key Questions
1. What is the program objective? Poverty reduction / elimination? Administrative efficiency / simplification? Labour market attachment? Something else?
How will the program achieve its objective? Will there be trade-offs? What are they? questions 2. How basic is the income? More than single Ontario Works income (about $8,000)?
More than single ODSP (about $14,000)? Enough to pay for basic cost of living? More than poverty line? Some other amount? What amount? Why? questions 3. How would it align with income from work? Is the deduction amount reasonable?
Will it will address poverty for both people who work and people who dont? questions 4. What would be replaced? What could be lost? Social Assistance Ontario Trillium Benefit? Ontario Child Benefit? Rent subsidies? Childcare subsidies? OW / ODSP supplementary benefits? Financial: Special Diet, MSN, employment, etc. Non-financial: Drug / dental / vision, assistive devices, etc.
questions 5. Who would get it? And how? Target Working-age adults only? Children? Seniors? Benefit unit Individual? Family / household? Whose income would count to determine the amount of the benefit you get? Would it be enough to support everyone?
questions Those currently eligible for OW / ODSP People without regular immigration status? People who dont file income tax returns? Indigenous Peoples on reserve 1965 federal-provincial welfare agreement Who would have jurisdiction and control? Important role of caseworkers on reserve questions 6. What happens when things go wrong? Appeal rights?
Right now, appeal to Social Benefits Tribunal Would there still be appeal rights? To who? Tribunal? Court? Tax court? How hard are those processes to navigate? Change in circumstances What happens in emergency situations, like losing your job? Final thoughts We want to see progress on poverty and improvements to benefit programs The devils in the details
Do the opportunities outweigh the risks? Examine any proposal closely to decide if its worth support Whats next? Hugh Segals report coming soon Recommendations on: Program objective Amount of the benefit How to select target populations / locations Delivery Length of the pilot
Evaluation, etc. Consultations to follow 3 months(?) Another ISAC webinar (?) whats next? In the interim: Continue to push for OW / ODSP improvements More money Better treatment Ending harmful and counterproductive rules
2017-18 Ontario budget this spring Watch for our pre-budget submission on improvements government can make now Thanks! and Questions Resource: Basic Income: Rethinking Social Policy: https:// www.policyalternatives.ca/publications/reports/basic-incom e -
Canadian Centre for Policy Alternatives, Ontario My piece: The Devils in the Details
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