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January 29, 1999
(Human Resources and Employment)

Initiatives to improve financial position of social assistance clients

Julie Bettney, Minister of Human Resources and Employment, today announced the details of new initiatives which will improve the financial position of many social assistance clients. These initiatives include a $500 income tax refund exemption, extended drug card enhancements, and NewfoundJOBS.

"The Strategic Social Plan recognizes the need to find the most effective way, through all of our programs, to remove barriers to employment, encourage self reliance and improve the quality of life for people in Newfoundland and Labrador," said Premier Tobin. "Today's announcements are progressive social policy initiatives."

"The Department of Human Resources and Employment has been actively working towards a redesigned income support system that will be simpler, more equitable, remove disincentives to employment, encourage self reliance and provide help to find and maintain jobs. Today marks a major step forward in the redesign effort," said Minister Bettney. "The redesign of the department's programs and services will make them more responsive to the real needs of the people of this province."

Effective January 1, 1999, social assistance clients who receive income tax refunds will be able to keep the first $500 of the refund. Clients have often said they feel they are being penalized for having found a job. The department, by providing the $500 exemption, is supporting the efforts of social assistance clients to find and retain employment. The $500 exemption will allow social assistance clients, like many other members of the community, to use the tax refund to meet additional family needs. All 3,000 social assistance clients receiving income tax refunds will benefit from this initiative.

Minister Bettney also announced improvements to the Extended Drug Card Coverage program, a National Child Benefit initiative. Assessments of the program to date have indicated that it is possible to extend coverage from three to six months within the existing $1 million program. "This drug card extension provides an important safety net for families moving from social assistance into employment," said Minister Bettney.

These initiatives are in keeping with the department's new direction to encourage social assistance clients to become self reliant by actively seeking employment. "By allowing clients to keep the first $500 of their income tax refund and by providing extended drug card benefits, government is addressing long standing barriers to employment."

NewfoundJOBS will help 2,000 social assistance clients enter or re-enter the labour market by the year 2000. The program is about helping social assistance clients who are interested in and ready for work.

The department recognizes the importance of providing supports to help people prepare for the labour market. However, it also recognizes that individuals who are ready for work may need help in finding and maintaining employment. Minister Bettney said: "NewfoundJOBS is about community partners working together to achieve real outcomes - jobs."

NewfoundJOBS will reinvest social assistance funding into work. The department will shift $2 million from its existing social assistance and employment budgets into the new program. Funding will be available to help individuals on their "steps to employment". Program dollars will be available for such initiatives as short term training, job vouchers and/or wage subsidies. NewfoundJOBS will add to our existing employment and career programs. These other programs will continue to be available to underemployed and unemployed individuals.

NewfoundJOBS will use a two-pronged approach. Five hundred social assistance clients will be assisted directly by provincial career development specialists through the development and implementation of employment plans. An additional 1,500 social assistance clients with EI eligibility will be assisted through the Canada/Newfoundland and Labrador Labour Market Development Agreement.

Work has already begun on the process of shifting to more proactive employment programming. Seventeen new career development staff have recently been hired across the province and are working with clients and community partners. Over the next couple of months referral processes and program procedures for NewfoundJOBS will be finalized.

Over the past year, the Department of Human Resources and Employment has made considerable progress towards its new mandate of assisting people to prepare for, attain and maintain employment while continuing to support those who are unable to work. In 1998 the department increased basic social assistance rates, extended drug card benefits for families moving to employment, increased the earnings exemptions for families with children to $150 per month and partnered with the Single Parent Association of Newfoundland to offer an employment program for single parents.

Media contact: Karen Kelloway, Communications, (709) 729-4062.

For general information contact: Career Information Hotline, 1-800-563-6600.



Prior to January 1, 1999 the greater portion of income tax refunds received by social assistance clients was recovered through a deduction in the social assistance allowance. This affected an average of 3,000 social assistance clients. The average income tax refund received was approximately $500. This policy change which is effective January 1, 1999 for the 1998 taxation year, will allow all social assistance clients who receive income tax refunds to retain the first $500 of the refund. This will mean that the majority of social assistance recipients who receive income tax refunds will experience no deduction in their social assistance.

This former policy was perceived to be unfair for a number of reasons. Clients who had plans to use refunds for legitimate needs found that these plans could not be realized. Clients felt they were being penalized for having secured employment. The department also found that the policy of deducting refunds was administratively inefficient and cumbersome, resulting often times in increased emergency assistance.

The mandate of the department is to support and encourage employment. Since Income Tax refunds are received as a result of employment, increasing the exemption amount to $500 is consistent with the department's philosophy of encouraging employment while at the same time improving the overall circumstances of clients.


  • Effective January 1, 1999 the first $500 of an income tax refund received by a social assistance recipient will not be considered income.

  • All social assistance clients who receive income tax refunds will benefit by this change.

  • The current policy of clawing back the major portion of income tax refunds is a disincentive to employment.

  • Some 3,000 clients are expected to receive income tax refunds in 1999. The majority of these will receive less than $500. These clients will be able to retain the full income tax refund.

  • The estimated value of the new initiative is $700,000 which will be available through the reprofiling of savings from the Income Support Program.



Extended Drug Card Coverage is an initiative under the NCB Re-investment Program, which came into effect October 1, 1998. This initiative extends health care coverage to families who leave social assistance due to employment. These families retain the same drug card coverage as a recipient of social assistance would receive. Initially this program provided unlimited drug care coverage for a three month period after families were no longer eligible for social assistance. A preliminary analysis of usage of this program has indicated we can extend the coverage from three months to six within the existing $ 1 million dollar program.

Why provide this type of benefit? In many cases, families who move from social assistance to independence are placed in financial hardship during the transition to work phase when they have to purchase prescription drugs. The rational for this initiative is to ensure, where possible, as families initially move from dependence on social assistance to independence due to employment, that they are not faced with a financial loss as a result of prescription drug costs.

How many families use this service? Approximately 1,300 families (2,000 children) will have access to Extended Drug Card Coverage because they have left social assistance due to new employment or increased employment.


  • This active measure began in October 1998, and provided transitional support to families who left social assistance due to employment.

  • This initiative is funded through the National Child Benefit Re-investment Fund.

  • Originally a pilot program to provide prescription drug coverage for three months for these families, the Extended Drug Card Coverage has now been extended to provide the same coverage for six months.



NewfoundJOBS will assist social assistance clients to get back to work - 2,000 jobs by the year 2000. NewfoundJOBS will involve a two-pronged approach:

  • 500 social assistance clients will be assisted directly by provincial career development specialists through the development and implementation of employment plans.

  • 1,500 social assistance clients with EI eligibility will be assisted through a coordinated referral system under the Labour Market Development Agreement (LMDA). The LMDA is jointly managed by the federal and provincial governments and offers a range of employment programs and services.

NewfoundJOBS is about supporting social assistance clients who are interested and ready for work with funding support to meet their employment objectives. NewfoundJOBS will provide intensive one-on-one employment and career counseling thus allowing people to identify and address the current barriers to employment they are facing. At least 35 per cent of people on the current social assistance caseload are either underemployed or looking for work.

NewfoundJOBS will use social assistance funding in a new way - to support people going to work. The program is one of the first steps in HRE's efforts to redesign its programs and services to become more responsive to the needs of the people of this province.

How Will The Program Work?

This program will do two things:

  • provide specialized employment and career counseling; and provide special financial support to help people implement their employment plans.

  • Once clients have completed their employment plan with the support of the career development specialist, a flexible envelope of money will be allocated on an individual basis, to be used to fund the various "steps to employment" outlined in their plan, such as short-term training, job vouchers, wage subsidies, etc.

  • Through this support clients will be better equipped to make choices about their careers which are "right" for them. With a focus on employment, clients will  have relevant and reliable information which will help them make decisions on training, financial supports, and occupations they may wish to pursue. Ultimately  social assistance clients will be more successful in getting back to work.

Where Will the Jobs Come From?

  • Last year, through HRE's short and long-term general and youth wage subsidy programs, nearly 5,000 jobs were created.

  • NewfoundJOBS is not just about getting people ready for work, in fact that is not enough. The program is also about creating a new and more effective way of   government agencies, business sector and the community working together to achieve real outcomes - work. NewfoundJOBS advances the province's Strategic  Social Plan unveiled in August 1998.

  • Through NewfoundJOBS HRE will lead the way in setting up effective partnerships with community economic development agencies, for example, to identify   and facilitate the creation of employment.

Are there programs available for individuals not on social assistance?

  • NewfoundJOBS is in addition to HRE's current employment and career services. Programs will continue to be available to other underemployed and unemployed individuals.


  • NewfoundJOBS will not require any new money.

  • NewfoundJOBS is about reinvesting social assistance funds into work. HRE will reprofile $2 million from within its existing budget to fund the program, with $1 million coming directly from the social assistance budget.

Getting Ready to Deliver

  • HRE has just hired 14 new career development specialists and three regional career development officers, all strategically positioned across the province. These highly skilled employment and career counselors will, along with the coordinated efforts of all HRE staff, assist social assistance clients in making the all important transition into the workforce.

  • Work will begin immediately to prepare HRE staff for the delivery of NewfoundJOBS. Over the next couple of months referral processes and program procedures will be finalized in preparation for the start of NewfoundJOBS.

  • Once program details have been finalized information will be provided on how to access the program.

1999 01 29 12:00 p.m.

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