March 26, 1998
(Human Resources and Employment)
(Health and Community Services)

Government reinvesting $10.15 million in children and families

Joan Marie Aylward, Minister of Health and Community Services, and Julie Bettney, Minister of Human Resources and Employment, jointly announced today that under the National Child Benefit (NCB), Newfoundland and Labrador will have more resources to reinvest in new programs and services for children and families.

As a result of this joint federal/provincial initiative Newfoundland and Labrador will have $10.5 million annually which it will use to improve and expand licensed child care, provide additional family resource project sites, develop a coordinated regional youth service network and provide initiatives under the social assistance program to assist families in making the transition to work. Because the NCB will not commence until July 1, 1998, the reinvestment fund available for 1998-99 is $7.7 million.

"The extra resources we now have available will allow us to work together to prevent and reduce child poverty, give needed support to low income families and reduce barriers to employment," said Minister Bettney.

Minister Aylward added: "These reinvestment dollars give us the ability to support the overall strategic direction of government by investing in youth and the capacities of communities. Community Youth Networks will serve as a central point for coordinating provincial government programs and services."

The National Child benefit and the Provincial Reinvestment Plan demonstrate that both levels of government are working together to ensure low income families gain support services which will help them enter or remain in the labour force.

The province has identified a number of strategic areas in its Reinvestment Plan which reflect the findings of a number of recent public consultation processes including the Select Committee on Children’s Interests, the Strategic Economic Plan and the Classroom Issues Report. These areas include early childhood services, supportive services for families and children and income support measures that address disincentives to employment.

"Reinvesting money towards our children and families who are facing numerous challenges is something we should be doing as both a government and as members of our community," said Minister Bettney. "Government is maintaining its commitment to those already in receipt of social assistance and we will build on those resources to ensure all members of our society have equal footing in the way of education, employment and general support."

Contact:

Karen Kelloway, Human Resources and Employment, (709) 729-4062

Glenn Bruce, Health and Community Services, (709) 729-1377

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Backgrounder
National Child Benefit

The National Child Benefit is an innovative partnership between federal and provincial/territorial governments and represents an important first step in a collaborative action plan to address child poverty. The Government of Newfoundland and Labrador is proud to have played a role in the development of this program. The National Child Benefit (NCB) will significantly improve the way income support for Canadian children in low income families is provided in the future and will enable provinces and territories to undertake major investments in additional programs and services that complement the objectives of the NCB.

The long term goal is to increase over time the benefits provided through the Canada Child Tax Benefit (CCTB), to the point that eventually it becomes the primary source of income support benefits for children. Most importantly, this approach will ensure a secure, uniform and basic level of support for children in low income families across the country. When a family leaves social assistance, they will retain access to the benefits payable under the CCTB with the maximum benefits available until their income exceeds $20,921 of net family income. This on-going, stable and uniform income source will provide families with the assurance of an income benefit that remains constant at low income levels and does not vary with changes in family circumstances.

NCB Provincial Reinvestment Fund

Under NCB, Newfoundland and Labrador will have available approximately $10.15 million annually to reinvest in new programs and services. The Reinvestment Fund in fiscal year 1998-99 will be somewhat less at approximately $7.7 million, because the NCB will not commence until July 1998. These figures represent projections and may vary slightly, with some adjustments still possible pending final NCB implementation details. The initiatives that will be introduced by this province commencing in fiscal year 1998-99 (costed at projected funding levels for a full fiscal year) include:

• $1.15 million for additional family resource project sites to provide a range of supportive and early intervention services and programs to meet the needs of families with children 0-6 years of age. Similar programs have been established in the province under the federally funded Community Action Program for Children (CAPC);

• $4.6 million for the improvement and expansion of licensed child care services in the province, including additional child care subsidies, the introduction of licensed family home child care, the introduction of licensed infant child care, and the provision of a range of supportive programs funds to assist with the development of the child care services generally;

• $2.8 million to develop coordinated youth service networks, in partnership with existing community programs, to support youth at risk 12-18 years with an emphasis on prevention and early intervention support services such as peer counselling, self-help, mental health services, and back to school initiatives. This initiative will be designed to support young people to make a successful transition from school to independence and adulthood;

• $1.6 million for initiatives under the social assistance program designed to assist families in making the transition to work including an increase to the child care expense deduction and the extension of drug card benefits for families moving into employment.

These initiatives reflect government’s commitment to a number of strategic directions, including:

• Supporting the new legislative directions being proposed for the licensing of Child Care Services and the proposed Child, Youth and Family Services Act, the latter slated for introduction into the Spring Session of the House of Assembly;

• Emphasizing prevention and early intervention services as a preferred service model, building on the existing network of family resource centres and the current licensed child care program;

• Emphasizing a coordinated and holistic approach to meeting the needs of families and their children, by uniting government programs and resources at the delivery level in pursuit of common goals and outcomes;

• Emphasizing community and consumer involvement in the design, development and delivery of services.

These directions are consistent with the views expressed in a number of public consultation processes including the House of Assembly Select Committee on Children’s Interests, and Social Policy Advisory Committee (SPAC) consultations on the Strategic Social Plan. As well, these directions are consistent with on-going initiatives including the Coordinated Model for Social Services to Children and Youth and the provincial Strategy on Violence.

Implementation of these initiatives will be done in conjunction with the proposed introduction of new legislation governing child welfare services and the licensing of child care services, scheduled for the up-coming fiscal year. As a consequence, some initiatives may not achieve full implementation in the 1998-99 fiscal year. Community and consumer participation in the planning and implementation associated with these new initiatives will be sought. A process for such input will be announced shortly.

The NCB: How It Will Work

The primary objectives of the NCB are to help prevent and reduce the depth of child poverty and to promote attachment to the workforce, resulting in fewer families having to rely on social assistance, by ensuring that families will always be better off as a result of working. In addition, federal and provincial governments have pledged to reduce overlap and duplication in income support programs for low income families with children through closer harmonization of program objectives and benefits.

The National Child benefit will come into effect in July 1998. The agreement to implement the NCB involves the commitment of federal and provincial governments to the following:

• a federal increase, targeted specifically to low income families, in the Canada Child Tax Benefit (CCTB) level, currently with a maximum basic benefit of $1,020 for each of the first two children annually ($1,095 for each additional child), The increase, which will be known as the NCB Supplement, will provide annually $605 for the first child; $405 for the second child; and $330 for each additional child. The NCB Supplement will replace the Working Income Supplement;

• a corresponding decrease in provincial social assistance related to children, not exceeding the CCTB increase;

• the reinvestment of provincial social assistance funds, freed-up under this approach, into benefits/services for low-income families.

This arrangement will:

1. ensure that social assistance families receive the same in total combined income from both income sources - social assistance and CCTB
   
   
2. increase the benefit level available to low income working families not in receipt of social assistance;
   
   
3. give provinces financial flexibility to design additional or top-up benefits/services to assist low income families and their children, utilizing the freed-up social assistance funds.

Provincial Implementation of the NCB

The Department of Human Resources and Employment will be responsible for managing the administrative arrangements necessary between the NCB and provincial social assistance. Effective in July 1998, the month in which the NCB increase is payable, social assistance families will have the monthly NCB increase deducted as income for the purposes of calculating their monthly entitlement. This change will be implemented on an automatic basis and families will be required to take any action or have contact with a Financial Assistance Officer for this purpose. In order to facilitate the change over, for July 1998 only one-half of the monthly NCB increase will be recovered from social assistance families to allow a smooth transition between the two programs. It should be emphasized that social assistance families will also continue to receive the basic CCTB benefit of $1,020 for each of the first two children annually ($1,095 for each additional child) and, as before, this will not be deducted from social assistance.

As noted, social assistance families will not experience any reduction in total combined income from social assistance and the Canada Child Tax Benefit as a consequence of the introduction of the NCB. Social assistance families will also benefit from the additional programs and services introduced under the NCB Provincial Reinvestment Plan and the 1998 Budget measures. These include:

• Social assistance families along with other persons in receipt of social assistance will receive a 2% rate increase in basic social assistance. This rate increase will be unaffected by the introduction of the NCB;

• Specific NCB Reinvestment Plans, including the additional funding for licensed child care services and family resource programs will provide more families with access to these important support services;

• The specific measures being introduced under the social assistance program for families with children to significantly increase the child care exemption, to increase the earned income exemption, and to extend drug card benefits for families leaving social assistance, should assist families in their efforts to find and retain employment.

Together these combined measures provide tangible evidence of government’s commitment to support families in their quest for self-reliance and a better future for their children.

The Fiscal Commitment to the NCB

The Government of Canada has committed $850 million to the NCB commencing in July 1998. In addition, in the February 1998 Federal Budget, the Government of Canada extended its fiscal commitment to another $850 million bringing the total annual commitment to the NCB to $1.7 billion by the year 2000. The specific breakdown for these new monies is an increase of $425 million starting in July 1999 and an additional $425 million starting in July 2000. These additional on-going commitments will significantly contribute to achieving the long term goal of a national income support program for Canada’s children.

Complementing the federal investment, provincial and territorial governments will undertake to improve the availability and accessibility of programs and services for low income families and their children, using the reinvestment funds freed-up under the NCB. The NCB agreement allows jurisdictions to design these new or additional benefits/services according to provincial needs and priorities, as long as the beneficiaries are low income families and the programs conform with the NCB objectives.