Minister announces changes to current income support regulations

Ralph Wiseman, Minister of Human Resources and Employment, today announced changes to his department�s Income Support Program. These changes build on the substantive changes introduced in recent years which have been focused on simplifying income support rules and regulations, improving services to clients and removing barriers to employment. They will take effect upon publication of the amended regulations in the Newfoundland and Labrador Gazette

These changes will provide for a simplification of the income support eligibility rules, a standardized definition of "relative" and a revision of assets that can be considered exempt when applying for income support.

Minister Wiseman said: "These changes reflect the continuing process of redesigning the Income Support Program and coincide with our proposed new act. Over the past few years, we have implemented a number of changes to better support clients by removing disincentives to work as well as maintain or increase attachment to the workforce ."

Simplification of income support eligibility rules
Simplification of the income support eligibility rules will prove beneficial for clients, especially for new or returning income support applicants, and make the assessment process for qualifying for assistance more equitable and less cumbersome in terms of paper work. The change involves the process for calculating the way an applicant�s income for the previous 60 days is assessed to determine eligibility. An additional 40 per cent of basic benefits will be added to the calculation process, in lieu of the current process of deducting expenses from income. Some applicants will qualify for income support on a slightly earlier date than under current rules.

Standardized definition of "relative"
The three current definitions of "relative" within the Income Support Policy will be replaced by a common definition of relative to mean "son, daughter, parent or grandparent". One common definition of relative will ensure a greater consistency in determining the supports to which a client is entitled. Clients, currently in board and lodging arrangements or renting from other relatives no longer included under the definition, will qualify for the higher benefit rate applicable to non-relatives.

Treatment of RRSPs
Clients will be able to retain RRSPs up to $10,000 during the first 90 consecutive days in receipt of assistance. The new policy ensures applicants who require short-term income support will not have to jeopardize future financial security because of a short term employment or financial crisis.

Other regulation changes include a revised scholarship policy to simplify the eligibility assessment of this type of income and a number of administrative improvements which are designed to provide an efficient and consistent application to current policies.

"These latest initiatives help us move forward in our goal to assist and support people as they prepare for, attain and maintain employment while ensuring equitable and simplified supports for those who are unable to work, " said Minister Wiseman.

Media contact: Simon N. Lono, Communications, (709) 729-4062.

• Currently assessment for income support requires clients to declare income received in the 60 days prior to application. The applicant is deemed eligible only if income, less certain expenses, does not exceed what they would have received from income support for the same 60 day period.
  
• Expenses relating to this income can be taken into account, often requiring clients to produce or search out numerous receipts. Policy permits the income to be reduced by specific work related expenses and the earned income exemption ($75 for singles; $150 for families). In practice, other types of expenses have also been considered on a case by case basis. The final decision relating to income available to the applicant is used to determine the date on which the applicant is considered eligible to commence receiving income support.
  
• The process is unnecessarily stressful for clients, many of whom are already under stress, and contributes to a time consuming administration process.
  
• To simplify the eligibility calculation process, a change will be made to the eligibility rules such that while the applicant�s income in the past 60 days continues to be considered, an additional 40 per cent of basic benefits will be added to the calculation process, in lieu of the current process of deducting expenses from income. As a consequence, the process of applying for income support will be simplified and the applicant will no longer be required to submit documentation for expenses. The change will mean consistency in how applicants are treated. In addition, some applicants will qualify for income support on a slightly earlier date than under the current rules.

• There are currently three different definitions of "relative" within the Income Support Policy. One is defined by policy and two by regulation.

• Rate of board and lodging provided to a client (policy) defines relative as mother, father, son, step-son, daughter, step-daughter, grandparents, grandchildren, sister, brother, aunt, uncle, niece or nephew. Rates are as follows:
  Single persons under 30: relative - $96; non-relative - $140
  Single persons over 30: relative - $254; non-relative - $421
  Single parent: relative - $458; non-relative - $556
  Couples: relative - $505; non-relative - $596
  
• Rate of rent to be paid when renting from a relative (regulations) defines relative as mother, father, child, grandparent or grandchildren. Rates currently range from:
  Relative: - $225 for families to $100 for single persons;
  Non-relative - $372 for families to $149 for single persons.
  
• Boarder income paid to a social assistance client by a relative (regulations) defines relative as son, daughter, parent, grandparent.

• The Income Support Program will introduce changes to create one common definition of relative to mean "son, daughter, parent, grandparent".
  
• This change will ensure departmental policy is consistent and more equity applies across different client groups. Clients, currently in board and lodging arrangements or renting from other relatives no longer included under the definition, will now qualify for the higher benefit rate applicable to non-relatives.

RRSP policy changes

• Today, individuals and families may require income support benefits on a short term basis but are deemed ineligible based on RRSP savings/assets. The holder is required to liquidate this income source prior to becoming eligible for benefits.
  
• This new regulation will enable applicants to retain $10,000 RRSPs for the first 90 consecutive days in which they receive benefits.

• The Income Support Program recognizes that opportunities for long term employment are directly associated with educational attainment. Families with children who are enrolled in post-secondary education may qualify for income support if they meet eligibility criteria.
  
• Current policy enables these income support clients to retain the first $3,000 of any scholarship income, with no impact on their eligibility for benefits. Between $3,000 - $5,000 the funds are considered partially exempt income. A complex process of treating that portion of the scholarship income as if it were earned income subject to a monthly earnings exemption ($150) is then applied.
  
• The change will now enable these clients to retain $5,000 from scholarship income per year without impacting their eligibility for benefits.

These changes are the most recent in the department�s overall redesign. Since 1999 the Income Support Program has introduced a number of changes which enable low income individuals and families to access needed supports and services and has addressed a significant number of identified "disincentives" to accepting employment and/or pursuing training.

2002 11 19                                        5:15 p.m.