My friend Emily is a single mom. She works full time for a salary that keeps her and her child above the poverty line but doesn’t allow for much more. Her income is low enough that she qualifies for temporary relief from paying her student loans (which are massive even though she is yet to complete her degree). She lives in subsidized housing and receives the provincial childcare subsidy, which certainly help a lot. But she still has trouble making ends meet and spends considerable time worrying about how she’d cover unforeseen expenses such as car repair.
It’s hard for me to see friends struggle financially, so I’ve tried to encourage Emily to get a better job. Though she doesn’t have a degree, Emily is bright and a hard worker — she should be able to do better.
But Emily doesn’t want to get a better paying job. There is no point, she tells me, because she’s close to the cut off point of many of the government subsidies she relies on and if she made even $1,000 more per year, she’d lose so much in government benefits that her net income would end up lower.
She’s calculated that she needs to earn thousands of dollars more per year to compensate for the value of the lost benefits and she figures that she can’t get such a job without finishing her degree. Which she can’t afford because her low income doesn’t allow her to save up for school. But she can’t get a higher-paying job to help finance her education because if her income went up she’d lose her childcare subsidy, her housing subsidy and will have to start making payments on her student loans.
It seems like the system is stacked against her.
And she’s not the only one. Many low-income people find themselves in a similar position as the majority of government benefits are targeted to the lowest income categories and phased out quickly as soon as the family’s income gets above the bare minimum. A recently released CCPA brief addresses the problem of benefit “stacking” and presents some possible solutions. You can read more about it here.
It’s a classic case of unintended consequences: policy-makers start with the laudable goal of helping the most needy first and they try to avoid spending scarce resources on those who are able to pay for themselves, but in targeting benefits narrowly to the lowest income families they make it very difficult for people like Emily to break out of the low-wage cycle of economic insecurity. For those who need to obtain further post-secondary education or training to be able to move up, the system becomes a catch-22 when BC’s high tuition fees are taken into account.
Benefit stacking is a real problem in BC and it needs to be considered carefully in the design of all new low-income tax credits and other benefits. I haven’t run the numbers, but my guess is that the new low-income credits the government just introduced in the last budget (the HST credit and the new premium assistance) are only compounding the problem.
Iglika Ivanova // Oct 19, 2009 at 11:50 am
Thanks for all the comments. As you all point out, there are many cracks in our social safety net and many policies that need fixing. The story in my post was meant to illustrate the problems with one particular policy – benefits “stacking” at low income levels – not to argue that this is the single biggest problem of single moms.
Shannon, I’m sorry to hear about your struggles. It seems clear that you’re falling through a crack in our justice/family policy system and I hope that you can find help soon. You might also want to try the YWCA – they’ve got lots of support programs for single moms and may be able to assist with advocacy.
Geneva, I agree with you. Guaranteed income policies or other “negative income tax” policies are a promising way of dealing with the “stacking” issue.
Geneva // Oct 17, 2009 at 8:46 pm
Many, if not all, of these problems could be cured or greatly alleviated by a Guaranteed Livable Income! A Senate Subcommittee was struck to discuss the idea this spring.
http://www.livableincome.org
http://www.vancouversun.com/business/Guaranteed%20annual%20income%20needs%20look/2105244/story.html
Kim Poirier // Oct 16, 2009 at 4:34 pm
Shannon, what about the anti poverty groups in your neighbourhood, they often have advocates. Also, who is your mla? Mine, John Horgan, holds legal advice sessions once a week. Pivot legal society. Together Against Poverty. The provincial ombudsman? Keep digging, be the greasy wheel!
Shannon LeBlanc // Oct 16, 2009 at 12:03 pm
I don’t mean to be a wet blanket, but I guess I will be. I can only envy the position of people who, without having finished their degrees, can get jobs that allow them to access services and programs. I have finished a degree and diploma program, have high student loans, and have not been able to find any work at all since I graduated. I am separated from an abusive ex who is stalling any separation agreement, which results in preventing me from access to any services that depend on finances because I technically have “money in the bank” in the form of the funds from the sale of the marital house. Funds which I cannot access without a separation agreement. I have been chased down by collectors from Legal Aid because they claim that the house money is available to me, when it is not. They want me to repay my Legal Aid bills, even though the lawyers’ services did not result in any separation agreement or divorce, and it has been over a year and a half. Same for the rental subsidy. No subsidy if I technically have funds in the bank. The family court system has no way of assisting me unless I go to court myself, paying all the fees due in Supreme Court, which is where the ex started the suit so that he could ensure that I would not be able to afford to pursue the matter in an affordable way. I have two children who have had no summer camps or activities in two years because of these financial games played by an emotionally and physically abusive person who is using the complete lack of assistance to a single unemployed mother as a weapon to keep me under his financial threats and harassment. My only recourse will be to default on my student loans, lose all child tax benefit support to pay off the student loans, and pray that I find a job somewhere in the mean time because this person and the family law system are functioning to prop up his financial threats. I am barely holding together our household, my children live off the charity of others which is running thin after a year and a half, and we could be homeless by Christmas. I have been to all the avenues of support, including the Ministry of Children and Families, the Family Justice Centre, the schools, the BCFIT, Legal Aid, and more. And in the end, the result I have found is that I have been doubted, blamed, and turned away from assistance of any kind. My ex no longer needs to hold his fist to my head, he can simply use the advice of an abusive lawyer using the system to keep me in financial limbo where I can become homeless while having money in the bank. I have lost out on my chances for grad school, or moving to where there are jobs. This person is perfectly within his legal rights to do this. And to make matters worse, I simply cannot find a job in this city. I have been to career counselling and told that I am doing everything right. There just are no phone calls, day after day. So homelessness is the threat we face now, and the system is helping the abuser do this to us. So if I could get any job I would be happy, if I could get some form of assistance to get a separation agreement I would be able to access funds to take care of my children. Then I would be happy to worry about whether or not to take a higher paying job or leave it at one that gets provincial aid. Right now I just want help to end the abuse of the system and take care of my kids.
Oemissions // Oct 16, 2009 at 11:38 am
When we work at low wage jobs, time is measured in commodites. A lb. of butter is a luxury item because its a quarter of an hours worth of work.
A movie is an hour. You bring your own popcorn.
The worst for me was all the extra work spent trying to keep the house, apartment clean: old tiles, years of built up grundge and cheap paint on cupboards and old appliances take so much extra work to keep clean. Then there are the hours spent trying to find a second hand vacuum or clothing, shoes and find that they breakdown, wear out, need repairs. Its FRUSTRATING!
Kim Poirier // Oct 14, 2009 at 6:42 pm
My son was over the other day to collect his mail, his GST cheque was 12o. He made over 20,000 last year. My income was less than 9000, my gst rebate, $23. My partner recieved 38 months worth of CPP Disability this last spring. I’m not counting on GST/HST rebates!
Iglika Ivanova // Oct 14, 2009 at 4:17 pm
Valerie, you raise some really important issues. You’re quite right that benefits stacking is not only a single parent problem, it’s a low-income problem for both unattached individuals and for families. In fact, the CCPA Behind the Numbers brief that I linked to provides an example of a 2 parent family with 2 children, whose net income falls when the parents get a raise (because of the loss of benefits).
And I agree that BC’s hard to access childcare services do not fully serve the needs of working parents in this province. This is partly because we do not currently have a childcare system but a patchwork of services that parents have to contend with. Gradual school entries and pro-D days are a big deal for working parents who have to take time off to cover for the lack of flexible childcare alternatives. And you are right to point out that this does limit the type of job that the child’s primary caregiver can take, regardless of whether we’re talking about a single parent or a couple.
There is a role that employers can play here in offering workplace flexibility. Many (though not all) jobs can be done well on a flexible schedule and do not require a strict start time for the work. But flexibility on its own is not enough to support parents to work *and* to care. We also need better family care leave provisions.
Valerie // Oct 14, 2009 at 1:32 pm
Housing subsidy is an interesting issue in itself. Because housing has become so unaffordable, the province stepped in with a subsidy for ‘low-income’ families to help pay the rent. Interesting to look at would be the corresponding increase in rental rates when the system was implemented. My personal experience is that there is no net gain, (except for the land lords or property managers).
Also in-line with your comments about the childcare issue – with more pay for many jobs comes more responsibility. I have had to take a total of 7 days off work in the last 2 months to accommodate daycare issues, gradual school entries, Pro-D days, illnesses. I was at a park talking with a helping Grandmother who was watching her grandson after kindergarten let the kids out early for parent teacher interviews. (daycare wouldn’t open for 2 more hours) She mentioned she was one of four working people that were on standby to watch the child because daycare and school are not always available and reliable.
She mentioned after her retirement that she would take up the cause of improving childcare services. She thought it was bad in the 80′s – 20 years later she didn’t think she would see it get this bad.
My family and I can’t wait for my retirement to see change come through. This issue isn’t only affecting single parents – it is everyone.