The real work on the new Canada disability benefit is just beginning. Policymakers now need to apply a pro-work lens to the design of the benefit, both in terms of the overall guiding principles and in its specific provisions to improve workforce participation by people with disabilities.
Much of the program design in the Canada Disability Benefit Act (Bill C-22) has been left to regulations. Now that it has received royal assent, the government will need to fill in the blanks of how the benefit will work in practice. The government’s intention is to model the benefit after the Guaranteed Income Supplement (GIS) with direct payments to low-income, working-age people with disabilities.
Context is key here. Significantly more federal spending goes toward income support than to employment support. A Cardus study found that in 2019-20, 90 per cent (or close to $8 billion) of federal disability expenditures went to income support. In comparison, only five per cent of disability spending was targeted to employment programs. This imbalance can be found at the provincial level as well, although to a slightly lesser degree.
Despite these large spending levels, poverty rates for people with disabilities remain stubbornly high. Working-age Canadians with disabilities who live below the poverty line receive 65 per cent of their income from government social assistance. Only 35 per cent comes from employment income.
The federal government wants to address these poverty rates with the new benefit program. To do that, it must design support that allows people with disabilities to live with dignity while encouraging employment for those who can work.
The risk is that if the program is designed without work in mind, the benefit could effectively lower the workforce participation of those it is trying to help. The federal government must therefore design the new Canada disability benefit in a way that incentivizes work.
Principles to guide benefit design
Cardus’s paper Breaking Down Work Barriers for People with Disabilities conducted a broad analysis of the effect that disability programs have on labour-market participation for people with disabilities. The three pillars that underpinned the research should also guide the design of the Canada disability benefit.
1. Work is a fundamental human good to which all people should have access. Work does more than just pay people a wage. The non-financial benefits of work include higher quality of life, self-esteem and better mental health. The social benefits include social inclusion in workplaces as well as lower levels of loneliness and isolation. Working also generates positive ripple effects on family life.
2. Social-policy frameworks should, wherever possible, be biased toward supporting work. That is to say, disability policies should be designed in a way that encourages recipients to work or to seek employment.
3. Every person should receive a living wage through private earnings, public income support or some combination of them. Governments should provide income support to those people with disabilities for whom employment income cannot meet their basic needs. Ideally, this income support supplements, not replaces, the maximum income a person with disabilities is able to earn.
Over the course of the debate on Bill C-22, Cardus has made several recommendations to the Commons and Senate committees studying the legislation. Now that the bill has received royal assent, these recommendations should be adapted to the regulation development phase and in negotiations with the provinces and territories.
First, the benefit should provide graduated support to beneficiaries according to the severity of their disability while supporting entry or re-entry into the workforce. The labour-market experiences of people with disabilities vary because each individual’s experience of disability results in different employment outcomes.
Data from 2017 show the percentage of Canadians aged 25 to 64 with mild disabilities who were employed was high at 76 per cent. At the same time, those experiencing very severe disabilities were employed at the much lower rate of 31 per cent. The benefit should reflect this and provide more support to those who need it most.
Second, the government should ensure that the benefit is phased out gradually as incomes rise. This will ease the financial impact for the recipients of the benefit as they transition into work.
People with disabilities can and want to work but the data shows they are not working as much as they would like. The percentage of working-age Canadians with disabilities who were employed in 2017 was 59 per cent. However, our analysis found that 76 per cent of those with disabilities are able to work. With this in mind, the benefit should not add further barriers or disincentives to their full employment.
Without a graduated phase-out, Canadians with disabilities may find that the marginal benefit in income does not justify the hours spent at work. Therefore, the government should make it as easy as possible for recipients to earn employment income. The government can find models for this in its own policy toolbox by borrowing the design from the disability supplement of the Canada workers benefit and the employment insurance (EI) Working While on Claim program.
Third, the Canada disability benefit should also include active engagement with employers and other stakeholders such as non-profit organizations that help people with disabilities find jobs.
Governments must realize there are limits to what the benefit can do on its own. Employers have an important role both in hiring and in ensuring the continued employment of those who have recently acquired a disability. This consultation with employers should provide an understanding of the extent of discrimination that people with disabilities face when seeking employment.
It should also assess the extent to which employers know about the support available to them when hiring and making accommodations for an employee with a disability. Government policy should involve options such as expanding training opportunities for people with disabilities while assisting employers with accommodation costs. This approach addresses both the supply (training) and demand (accommodation) sides of employment for people with disabilities.
Fourth, the federal government needs to consider how the benefit may inadvertently discourage employment for those who are able to work, as well as the long-term implications this has on their well-being – personally, socially and financially. To help with this analysis, the government should provide detailed reporting on the labour-force participation of benefit recipients.
The creation of this benefit is no small undertaking. Careful, data-driven feedback on the labour-market effects will be crucial in ensuring that it is accomplishing its goals.
The debate around Bill C-22 has focused on the urgency for benefit implementation and the potential it holds to lift people with disabilities out of poverty. Others have focused on the lack of details in the legislation and the anticipated complexity of how the benefit will interact with policies within provincial jurisdiction. However, a discussion around the benefits of work has been notably absent.
People with disabilities are among the most vulnerable in our society, so it is right and just to support them in gaining a living wage. At the same time, the government should pay attention to the financial and non-financial benefits that work provides. If it does, the Canada disability benefit will advance the full flourishing and integration of Canadians with disabilities.
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