Single adults struggling to break out of deep poverty

Nick Falvo | December 28, 2020

Imagine living on $10,000 per year in Toronto, searching for work while trying to stretch that $815 a month to cover housing, food, transportation and all other necessities. This is the reality for single people on social assistance.

To help them avoid falling into deep poverty ‚Äď and the consequences that¬†poverty has on their overall health¬†‚Äď Ontario must increase the social assistance benefits that unemployed Ontarians who do not qualify for Employment Insurance often rely on. Single adults without dependants who are deemed employable receive about¬†$8,800 in social assistance benefits¬†annually, plus $980 in other tax credits and benefits (e.g., GST/HST tax credit). This income amounts to 40 per cent of Toronto‚Äôs poverty line. In other words, singles on social assistance can purchase only 40 per cent of the goods and services they need to achieve a basic standard of living.

These individuals live in deep poverty, a term reserved for those whose incomes amount to less than 75 per cent of the official poverty line, according to Statistics Canada. Just under half of the nearly 2 million Canadians living in deep poverty are working-age singles.

Poverty and health go hand in hand. Research indicates that individuals in poverty have a relatively low life expectancy and high suicide rates. They also are more likely to suffer from heart disease and mental health issues than most Canadians.

In October 2018, the federal government released¬†Opportunity for All ‚Äď Canada‚Äôs First Poverty Reduction Strategy, which set targets to reduce overall poverty rates. However, the risk in its approach is that overall poverty rates may decline without any improvements for those experiencing deep poverty. For example, families with children that once had incomes just below the poverty line could move above the line thanks to increases in the Canada Child Benefit, thereby lowering poverty rates. However, singles who remain below the poverty line ‚Äď and do not qualify for child benefits ‚Äď could see little improvement or fall further behind. Success should be defined by both the overall rate and the depth of poverty.

Ontario’s provincial poverty reduction strategy considers unattached individuals between the ages of 45 and 64 to be a vulnerable population. Yet the percentage of these individuals who are living in poverty increased from 32 to 36 per cent between 2012 and 2017, according to the last annual report on the status of the strategy. Ontario has work to do. Why not start by increasing benefits?

One reason policymakers tend to avoid increasing benefits is that they fear this will make paid work less attractive, a valid concern but only to a point. In a recent report for the Institute for Research on Public Policy, I investigated how increases to social assistance benefits over time increase the number of singles who take up social assistance across Canada. I found that a 10 per cent increase in benefits leads to just a two to five per cent increase in the number of singles who sign on. Although there is a link between benefits and caseloads, it is a weak one. Work provides dignity. It provides purpose and breaks the stigma of unemployment. These factors counteract, in large part, concerns that more generous benefits would drastically reduce the desire to work.

Singles are the household group most likely to face homelessness and to use food banks. Homelessness results in a wide range of health problems. And those who are homeless often face major barriers in accessing health care services.

A national study estimates that a $1,500 per year increase in social assistance benefits for an employable single without dependants would reduce the use of shelter beds on any given night by nearly 20 per cent. Also, research finds that overall rates of food security improved among social assistance recipients in British Columbia after a one-time increase in benefit levels in that province.

Singles on social assistance are more likely to report the negative effects of social isolation. Isolation often results in depression, poor sleep quality, accelerated cognitive decline, poor cardiovascular function and impaired immunity.

Less homelessness and improved food security would result in better overall health and less use of public health care, meaning cost savings to governments to partially offset the additional costs of increased benefits and a modestly higher number of people taking up social assistance. Further, better benefits could encourage more economic and social interactions, which would reduce the negative mental health effects from social isolation.

Reducing poverty can improve health. Although poverty reduction measures of recent decades have succeeded in boosting the incomes of seniors and low-income families with children, not enough has been done for singles on social assistance. To hit federal and provincial poverty reduction targets while mitigating the risks of deep poverty, Ontario must extend higher social assistance benefits to singles.

This article originally appeared in Healthy Debate.
Lifting Singles Out of Deep Poverty: The Case for Increasing Social Assistance Benefits

Lifting Singles Out of Deep Poverty: The Case for Increasing Social Assistance Benefits