Increased income support rates will add up to reduced poverty: Minister

Budget 2006 will make major investments in a broad range of programs and services that will help the working poor, youth-at-risk, and families with low incomes, says Paul Shelley, Minister of Human Resources, Labour and Employment, and the lead minister for government�s poverty reduction strategy.

In an address at an event hosted by Stella Burry Community Services at the Wesley United Church in St. John�s, Minister Shelley announced that Budget 2006 will include significant increases for income support ("social assistance") rates.

In the most substantial increase in recent memory, income support rates will increase by five per cent for the approximately 45,700 recipients across the province. This involves $5.6 million in 2006-07 and an annual cost of $7.4 million.

In an ongoing commitment to reducing poverty, income support rates will also be indexed to keep up with inflation. Starting in 2007-08, rates will be tied to the Newfoundland and Labrador Consumer Price Index. Indexing rates will ensure that the province�s 45,700 income support clients become no worse off over time because in subsequent years rates will increase to keep up with the cost of living. This will cost an estimated $3 million annually. Newfoundland and Labrador is the only province besides Quebec to make this commitment.

"Increasing income support rates by five per cent and then indexing them to keep up with the cost of living will put money directly in the pockets of those who need it most," said Minister Shelley, who also noted that these changes build on other positive reforms in social assistance that government has made in the last year. "We are sensitive to daily challenges faced by the thousands of Newfoundlanders and Labradorians who struggle to make ends meet. Throughout government, we are taking an integrated approach to reducing the disincentives to work for income support recipients and helping them to participate in the workforce. Support for families with children who turn 18 while still in high school was increased. Home heating fuel rebates and a low income tax reduction program are other examples of this government�s commitment to reducing poverty. Budget 2006 will contain a broad range of initiatives designed to prevent as well as reduce poverty. We must tackle poverty in both the short and long-terms."

Approximately 66,000 individuals in 33,000 families live in poverty in Newfoundland and Labrador. For the past 15 years, income support rates have increased by no more than 2.2 per cent per year, with nine of those years seeing no increase whatsoever. A long-term poverty reduction strategy is scheduled to be released by the provincial government in late spring 2006.

Stella Burry Community Services (SBCS) was celebrating the graduation of their 9^th Stella Burry Employment Program. Minister Shelley was on hand to present certificates to the graduates. SBCS is a leader in this province in the development of supportive housing for people with complex mental health needs and of employment programs that offer real work experience.

Media contact: Alex Marland, Communications, (709) 729-4062, 690-6047

2006 03 29                                 2:00 p.m.