[homeles_ot-l] Fwd: Stand Up Against the Backlash from the Auditor General�s Report
Rob MacDonald
robm at housinghelp.on.ca
Fri Dec 11 13:58:08 EST 2009
---------- Forwarded message ----------
From: Income Security Advocacy Centre (ISAC) <isac at lao.on.ca>
Date: Fri, Dec 11, 2009 at 1:52 PM
Subject: Stand Up Against the Backlash from the Auditor General�s Report
To: bobm at housinghelp.on.ca
*25 in 5 Network for Poverty Reduction
**Dec 11, 2009: Stand Up Against the Backlash from the Auditor General’s
Report*
------------------------------
*In this week's eBulletin:*
- Quote of the Week
- Ontario Auditor General’s Report Underlines Need for Social Assistance
Reform
- Backgrounder: Just the Facts
- What Can You Do? TAKE ACTION
------------------------------
*Quote of the week*
“There are consequences when societies develop an underclass, demoralized
and falling out of contact with the mainstream. The inequality that matters
here is ... between the poor and the middle class. A poor family is not
demoralized because it cannot afford a yacht, but because it cannot aspire
even to the sorts of everyday things that average families take for
granted.”
Who said it? Andrew Coyne, in *Maclean’s Magazine*, December 8, 2009.
------------------------------
*Ontario Auditor General’s Report Underlines Need for Social Assistance
Reform*
*Source: Income Security Advocacy Centre *
Whether he meant to or not, the auditor general’s December 7th analysis of
OW/ODSP let a dysfunctional social assistance system off the hook, instead
laying blame with the people who have nowhere else to turn for basic
support.
The ensuing debate risks losing sight of the simple fact that when it comes
to social assistance, it’s not the people who are the problem. Instead it’s
the 800+ rules that trap people in poverty and powerlessness, fail to
provide social and community supports and education and training tools to
enable opportunity, and leave people so short of income that living a
healthy, dignified life is impossible.
As Premier McGuinty recently stated, social assistance “stomps people into
the ground” and something must be done to make the system work the way it
should. That something cannot come soon enough, as evidenced by the
confusing picture painted by the auditor general’s report:
- *The AG’s analysis compares apples with oranges*: Comparing the yearly
cost of OW and ODSP ($5 B annually) with the historical value of all
unrecovered overpayments in the system over decades ($1.2 b over 5+ years)
is highly misleading;
- *The AG’s analysis inflates the reality of overpayments*: The
comparison between annual and historical amounts invites the public to
falsely conclude overpayments make up 24% of the cost of OW and ODSP. It’s
more like 1.4%. That’s not even including the 20% municipal contribution
which would bring this numbers even lower
- *Overpayments are endemic to the OW and ODSP systems* and are routinely
generated because of the way the system works. In fact, 'Overpayment' is a
misleading term: ‘Overpayments’ are automatically generated by the system
for the smallest of routine changes, such as a recipient getting
long-awaited back pay from a previous job or child support arrears.
- *The AG questions the growth of “special diet” benefits* simply based
on the growth of claims. No medical evidence is offered to suggest that a
single recipient does not qualify for this vital medical benefit.
- *The AG report does not address the fact that incomes for people on
social assistance are dangerously low* and compromise people’s health and
dignity, leaving society with higher costs down the road. Welfare literally
makes people sick. People who experience chronic food insecurity and a lack
of access to a healthy diet suffer from numerous negative effects on their
health, including higher risk of chronic illness, depression, heart disease,
diabetes, and high blood pressure.
------------------------------
*Backgrounder: Just the Facts*
*Source: Income Security Advocacy Centre *
*1) Overpayments and Program Costs: Comparing Apples to Oranges*
The yearly cost of both OW and ODSP was reported by the auditor general as
$5 billion. In addition, the historical value of all overpayments in the
system, potentially reaching back many decades, was reported as $1.2
billion. Comparing these two numbers leads to the faulty conclusion that
overpayments make up 24% of the cost of programs.
This is simply not true. It’s unfair and misleading.
Doing the math the right way compares annual program costs with the annual
amount of overpayments – which the report indicates is about $26 million.
That means that overpayments account for only 1.4% of the cost of the
programs. That’s not even including the 20% municipal contribution, which
would bring this numbers even lower
*2) What Is An Overpayment?*
The auditor general’s press release on Ontario Works states that, “More
should be done to ensure these overpayments do not occur in the first
place,” and “if the required financial and other eligibility procedures were
being properly followed, many of these overpayments might not have been
given out."
The problem is, even the term ‘overpayment’ is misleading.
In other business systems, what social assistance calls ‘overpayments’ are
called ‘adjustments’ or ‘debits’. Heating and hydro bills, for example, are
typically adjusted at the end of the year to account for credits or debits.
When families use more heat or water than expected, they owe money to the
utility company. We don't think of this as 'abuse' or 'fraud'.
Unfortunately, OW and ODSP calls these routine debits and adjustments
'overpayments', which contributes to a misperception that there is
widespread abuse in the system.
*3) The System Routinely Generates Overpayments *
The real issue is that overpayments are endemic to the OW and ODSP systems
and are routinely generated because of the way the system was set up in the
first place.
Both OW and ODSP subtract any income a person makes in a month from their
monthly benefit cheque. But any number of daily life occurrences can cause
an “overpayment” to be generated by the system. For example, overpayments
are automatically generated when:
- Income from work or any other source is estimated by a worker or a
recipient and the amount actually received is higher than estimated;
- A benefit like back pay, child support arrears, or any kind of
retroactive payment is paid to a recipient for a previous time period.
The fact is, the vast majority of what we call 'overpayments' are these
kinds of routine occurrences. They are systemic differences between
‘budgeted’ and ‘actual’ amounts of assistance caused by normal changes in
people's lives. So, for example:
- Being asked by a part-time employer to work an extra hour will result
in an overpayment;
- An former spouse unexpectedly paying a bit more child support in a
month will result in an overpayment;
- An unexpected cheque from any program will create an overpayment.
The irony is that from the point of view of the system, overpayments are a
good thing. They mean that more money is being paid to recipients from
‘other sources’ – which reduces the cost of social assistance to government.
In fact, if there were fewer overpayments, the programs would cost much
more.
*4) Overpayments are Generated Monthly – Increasing Misperceptions*
The income tax system and businesses like hydro or home heating companies
reconcile debits (or ‘overpayments’) and credits on a yearly basis.
For example, the federal government determines how much GST credit or child
benefits a person is entitled to once a year. Typically, the amount that
person gets from credits or benefits is not adjusted until the following tax
year. Utilities also do a yearly reconciliation of their billings and costs
and either credit a person’s account or send a notice for payment.
OW and ODSP, on the other hand, adjust credits and debits on a
month-to-month basis.
Not only does this result in additional paperwork and scrutiny, it also
multiplies the appearance of abuse twelve-fold over other similar systems.
It also results in a huge number of underpayments, which continue to cause
hardship for people but so far have not been accounted for by either the
auditor general or the public at large.
If social assistance adopted the same reconciliation rules as most other
businesses and major public sector programs, they could slash overpayments
and underpayments by a factor of 12 – and they could do it with one simple
rule change.
*5) Overpayments and Breaking the Rules*
While government and society need to be concerned about fraud, it’s clearly
the case that fraud in the social assistance system is low.
The number of people convicted of social assistance fraud is a tiny fraction
of the number of overpayments in the system. In fact, to quote one report,
“more people cheat on their income taxes and lie about their cross-border
shopping than defraud the welfare system. Corporate crime, white collar
fraud and tax evasion in Ontario cost the public more every year than the
entire cost of the social assistance system,” (Six Degrees from Liberation:
Legal Needs of Women in Criminal and Other Matters” Department of Justice,
Canada, 2003.)
The difference is that, under social assistance, breaking the rules is often
committed out of desperation.
The system may in fact encourage breaking the rules by setting rates at
levels that no one can live on, and by clawing back half of any income that
people earn from employment. Worse yet, on Ontario Works, any money that a
person receives from any source other than employment is clawed back at a
rate of 100%, forcing people to live on incomes that are below subsistence
levels.
It would be laudable and visionary to undertake an accounting of just how
far social assistance incomes are from any measure of acceptable living
standard. For example, how does one account for the feasibility of having a
healthy life given a monthly income of $585 for a single person on Ontario
Works in a city like Toronto?
Indeed, under these dire living standards, expecting recipients to quickly
settle overpayments and is unrealistic and punitive.
*6) Program Complexity and 800 Rules*
The social assistance system is so overly and unnecessarily complicated that
any number of situations can generate an overpayment.
In fact, in a 2004 report, Deb Matthews, the former Minister for Poverty
Reduction and current Minister of Health, indicated that,
“There are now approximately 800 rules and regulations within the system
that must be applied before a client’s eligibility and the amount of their
monthly cheque can be determined. Many of those rules are punitive and
designed not to support people, but rather to keep them out of the system.
Because there are so many rules, they are expensive to administer and often
applied inconsistently from one caseworker to another, even within the same
office. Further, the rules are so complicated that they are virtually
impossible to communicate to clients, and it takes years to train a
caseworker.”
Little has changed since then. The system is overburdened. Overpayments –
and, more troubling for people who need the support, underpayments – are
inevitable. It’s time for a new system.
*7) “Temporary” Assistance?*
Unfortunately, the auditor general made unwarranted comments on issues
outside the laws and rules that are in place. He observed that:
"Although the government considers Ontario Works assistance as temporary,
about one-third of recipients in three municipalities were paid longer than
two years and 13% longer than five years."
There is no legislation, no regulation, no guideline or government directive
that places time limits on the receipt of Ontario Works.
Rather than commenting on issues outside the legal and accounting frameworks
within which government does business, it would be more helpful to comment
on issues like the systemic nature of overpayments or the other procedures
endemic to social assistance that cause the situations that the auditor
general calls to task.
For example, it would be more than fair to comment that a 55% increase in
Ontario Works rates is required to bring them to the levels that they stood
at in 1993. It is possible to argue that many of the “problems” that have
been identified in the social assistance system can be related to the
considerable loss in purchasing power of the extremely low incomes on which
people have to survive.
*8) Special Diet*
The Special Diet program provides additional funds for people whose medical
needs, as determined by a physician, require particular nutritional
treatment. There are a limited number of conditions for which a special diet
allowance is available, and these conditions must be verified by a
physician.
There are many people on ODSP who continue to suffer from medical conditions
with documented nutritional treatment needs that are not funded by the
program because they don’t appear on a list of conditions for which support
will be provided.
In fact, the government appointed Special Diets Expert Review Committee
recommended a number of conditions that can cause unintended weight loss be
added to the list, including multiple sclerosis, congestive heart failure
and muscular dystrophy. Multiple sclerosis and lupus were added to the list
only after a legal challenge to the program.
The auditor general makes the following observation:
“Many special dietary allowances were paid under questionable circumstances.
The total amount spent on the allowances has increased from $5 million in
the 2002/03 fiscal year to more than $67 million during 2008/09.”
He does not mention that the increase in program costs were in large part a
result of Ministry staff promoting what had been an under-utilized program.
Furthermore, what does “questionable” mean in this instance? Innuendo rules
the day over facts, debasing a program that provides vital support to people
for whom nutritional treatment can mean the difference between managing a
health condition or sliding into serious deterioration.
*CONCLUSION*
The welfare system as it now stands fails to adequately provide for people’s
basic needs and offers few real supports or opportunities to help people
climb out of poverty, build better lives and play their part in the economy.
That’s why it’s critical that Ontario move ahead with its promised review of
social assistance – to remove the stigma and shame that accompany these
programs and to align these programs with what should be their real goal –
support and opportunity for all Ontarians.
The 25 in 5 Network for Poverty Reduction has offered the following five
benchmarks for a successful Social Assistance review.
1. The review must be grounded in a bold vision: economic security and
opportunity for all Ontarians. Tinkering with Ontario Works and Ontario
Disability Support Program rules is simply not enough. We need social
assistance programs that ensure people’s well-being, and provide the
opportunities people need to contribute to the province’s prosperity –
because the province is going to need all the help it can get.
2. The review must be proactive. Immediate changes must be made to unfair
and counterproductive rules that deny people supports they need to get ahead
– rules like asset limits that virtually guarantee more hardship, not less,
and that continue to hamper Ontario’s recession recovery efforts.
3. A timely process to launch deep reforms must be part of the review
package. A fundamental transformation must be made to overcome the silos of
current programs and make further progress in crucial areas like the early
childhood years, housing security, dental care and more.
4. Providing decent, adequate income supports must be a stated outcome of
the review. Immediate and longer term steps must ensure that people who rely
on social assistance, and all low-income people, are assured living
standards of health and dignity as well as access to supports and tools,
like meaningful training and education, to enable the pursuit of
opportunity. The 25 in 5 Network has proposed two policy actions that
government can take to move quickly on adequacy – a $100 a month nutritious
food supplement for adults on social assistance, and the creation of an
Ontario Housing Benefit to help low income renters, including the working
poor.
5. People who have had to rely on Ontario Works and the Ontario
Disability Support Program must have a leading role in shaping the review’s
recommendations. This means seeking out and heeding the expertise of people
who have been there. They have much to teach the committee – and all of us –
in the review.
Right now, Ontario’s social assistance system is simply not up to the task.
Making social assistance consistent with Ontario’s goals for poverty
reduction and economic opportunity is the right move now.
------------------------------
*What Can You Do?*
*TAKE ACTION*
Renowned social justice activist Anna Willats writes in today’s
Toronto Star<http://www.cleonet.ca/maillist/lt/t_go.php?i=135&e=MTg3Ng==&l=http://cts.vresp.com/c/--Q-CommunitySocialPlann/ac10ea88b5/79a3c43c8c/b79ad6f0be>that
"we must not allow ourselves to descend into the shameful poor-bashing
that was used so cynically by the Mike Harris Tories to propel themselves to
power."
*Send a letter to the editor of your local paper, phone in to call-in shows,
use Facebook, Twitter, your blog, and other web-based media. *
*It is critical that we make our voices heard in support of the integrity of
people on social assistance is challenged. Send the message that
poor-bashing does not belong in today's Ontario! *
Let’s underscore that:
- When it comes to social assistance, it’s not the people who are the
problem, it's the system that is broken.
- The welfare system as it now stands fails to adequately provide for
people’s basic needs and offers few real supports or opportunities to help
people climb out of poverty, build better lives and play their part in the
economy.
- That’s why it’s critical that Ontario move ahead with its promised
review of social assistance and take action to ensure everyone can live in
dignity.
*Are you a recipient of OW or ODSP? *Tell your story of how the system*really
*works at www.sareview.ca/tell-your-story<http://www.cleonet.ca/maillist/lt/t_go.php?i=135&e=MTg3Ng==&l=http://www.sareview.ca/tell-your-story>.
**
*Please forward your letters, op-eds, web posts, and any record of calls to
radio to *info at 25in5.ca*.*
------------------------------
*About the 25 in 5 eBulletins*
The 25 in 5 Network is steered by a coalition of Ontario organizations
including Campaign 2000, the Income Security Advocacy Centre, the Social
Planning Network of Ontario the Interfaith Social Assistance Reform
Coalition, The Colour of Poverty Project, the Ontario Coalition for Social
Justice, Voices From the Street, among others.
This is a bulletin from 25 in 5 to its contact list of supporters and
interested parties across the province. The Bulletin is intended to keep you
up to date on the implementation of a poverty reduction plan for Ontario and
to let you know how you, your organizations and networks can help make it
happen.
For more information visit
www.25in5.ca<http://www.cleonet.ca/maillist/lt/t_go.php?i=135&e=MTg3Ng==&l=http://cts.vresp.com/c/--Q-CommunitySocialPlann/ac10ea88b5/79a3c43c8c/ffd10ead4f>
**
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--
Rob MacDonald,
"Warriors, warriors we call ourselves. We fight for
splendid virtue, for high endeavour, for sublime wisdom,
therefore we call ourselves warriors."
Aunguttara Nikaya
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