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Staying the Course on Welfare Time-Limits

An Abridged version appeared in the Province, February 5, 2004
Release Date: February 5, 2004
NDP leader Carole James must be misinformed about welfare reform. How else could one explain her outright rejection of policies that have proven so successful in other jurisdictions?

While BC’s reforms aren’t nearly as far-reaching as those introduced in the US, the province is the first in Canada to introduce benefit time limits that restrict eligibility for single, employable individuals to two out of every five years. On Tuesday, Ms. James called on Stan Hagen, BC’s newly appointed Minister of Human Resources, to scrap the two-year time limits.

This is a bad idea. Welfare time limits were critical to the success of the US reforms. By capping the amount of time that employable individuals could collect benefits, welfare was turned back into a system of insurance and temporary relief. This was, of course, the intended purpose of a “social safety net” in the first place – to catch those who temporarily fall on tough times when no other supports are available from family or community.

This is a far cry from the inter-generational poverty trap that welfare system became over the course of the twentieth century. As temporary social assistance benefits were expanded into permanent income transfers, welfare dependency steadily grew even in times of economic boom.

Time limits don’t just reduce long-term welfare dependency. They also change the behavior of current welfare recipients by encouraging them to seek employment or other income sources before turning to welfare. In addition to diverting people from welfare in the first place, time limits give existing recipients incentives to leave welfare faster, saving government benefits as a last resort.

The results of US welfare reform, including time limits, are clear; 7.5 million fewer people are stuck on welfare; between 63 and 87 percent of former beneficiaries are back at work; and the poverty rate fell to its lowest level since 1979. And don’t just assume that this success was due to a booming economy. Most academic research indicates that the economy only explains a small portion of the success.

Further, historically disadvantaged groups including women, single mothers and visible minorities have faired especially well under the new policies, experiencing both the highest welfare rate declines, and improvements in both employment and earnings.

Welfare time limits, in conjunction with other reforms, do work and their success is already evident in British Columbia. Remarkably, there has been a 28 percent decline in welfare cases since the spring of 2001. According to the BC government’s most recent survey of welfare leavers, released in November, over two thirds of those of welfare leavers left for work and were earning more than double, on average, the income they would have on welfare.

When social activists and politicians such as James advocate for the removal of welfare time limits they claim to be looking out for best interests of BC’s most vulnerable citizens. Ironically, eliminating welfare benefit time limits will only perpetuate the dependency and hopelessness that really makes them vulnerable. We all want a compassionate social safety net; one that promotes independence rather than dependence. To that end, British Columbians would be well advised to pressure the BC Liberals to stay the course on welfare time limits.