Overly strict welfare eligibility rules are forcing Ontario’s newly unemployed to divest themselves of all their assets, crippling their chances for an economic recovery.

Why Don’t We Want the Poor to Own Anything? by John Stapleton, Metcalf Foundation Fellow and a leading social policy expert, reveals weaknesses in Ontario’s asset limits for those seeking social assistance, disability support, subsidized housing, and legal aid. Current asset rules force those seeking social assistance to liquidate assets, such as savings and RRSPs, in order to qualify for support – stripping them of their own personal safety cushion in future years.

“Ontario’s asset testing rules are harsher than they have ever been and that is throwing many of the province’s recession-unemployed into deeper poverty, preventing them from bouncing back quickly and making them more vulnerable in future,” says Stapleton.

Stapleton makes four clear recommendations to the provincial government to clean up the worst of its asset rules.

• Raise asset limits to $5,000 for single people and $10,000 for families and people with disabilities.
• Follow Alberta’s lead and exempt another $5,000 per adult in Tax Free Savings Accounts and RRSPs and, ultimately, adopt Quebec’s blanket exemption in registered savings of $60,000.
• Follow Newfoundland’s lead and exempt all assets for the first six months.
• Stop asset testing for subsidized housing applicants.

These changes would be a significant step forward in acting on a promised “social assistance review,” a key commitment of the Ontario government’s Poverty Reduction Strategy which has yet to materialize.

“Ontario’s government committed to exploring asset-based approaches in its 2008 budget,” Stapleton says. “Given this year’s recession, the important thing is to provide temporary support to Ontarians who lose their jobs and then, when the economy turns around, help them get back into the labour market.”