Feds to spend millions to reverse low take up rates for low-income benefits

Liberals plan to spend $7 million over three years on a way to spend untapped cash

Feds to spend millions to reverse low take up rates for low-income benefits

The Liberals are looking beyond the bureaucracy to figure out how to spend more than $1 billion in uncollected benefits meant to help low-income families save for their children’s post-secondary education.

Federal officials have tried for years, with only limited success, to boost take-up of the Canada Learning Bond, which gives up to $2,000 to a registered education savings plan (RESP) for eligible children.

An estimated 1.8 million children don’t receive the benefit — about two-thirds of those eligible — while the government estimates that at least $900 million in available program funds are going unclaimed.

The most recent attempt to cut those numbers was a “nudging” trial that made small changes to the letters family receive about the benefit. The results led to a small bump in uptake: about four per cent for those who received personalized letters, or roughly $1.18 million more in benefits than would have otherwise been paid out over the seven-month test.

A report on the trial, obtained by The Canadian Press under the Access to Information Act, said that low-income families are “sensitive to nudges. However, we haven’t found the ones that increase uptake yet.”

The Liberals plan to spend $7 million over three years, starting mid-2018, on a way to spend that untapped cash. A further $5 million will be spent starting in mid-2021, all of it going to fund community projects to boost take up rates.

Federal officials say the findings from the first wave of spending may help solve low take up in other benefit programs aimed at low-income families, including the Working Income Tax Benefit, which the Liberals plan to expand in 2019, the Canada Child Benefit, and help in the development of a proposed housing benefit for low-income tenants that won’t be available until 2021.

The hurdles to increasing take-up of the existing benefits and tax credit stem from similar issues outlined in other government documents: getting low-income and Indigenous families to file a complete tax return, a necessary step in order to collect the Canada child benefit, the working income tax benefit and the Canada Learning Bond.

On the tax benefit, Finance Department officials in June wrote in an internal memo that said “lack of awareness of the credit” and the “complexity of the application process” were the most likely culprits for $175 million in unpaid benefits to about 240,000 low-income workers.

On the child benefit, a pair of research reports for the Canada Revenue Agency, which cost about $245,000, concluded some Indigenous Peoples didn’t believe they had to file taxes; those who did found the forms difficult to understand or even access.

With the learning bond, there are other issues: getting the necessary documents to open an account, understanding financial jargon from banks, and parents’ levels of education — the more education they have, the more likely they are to sign their children up for the savings plan.

Jennifer Robson, an assistant professor of political management at Carleton University who has studied issues with the learning bond, said the government should automatically enrol low-income families in the learning bond program and bypass the RESP system. Dealing with banks and government bureaucracy, among other institutional barriers, are more problematic than federal officials have been willing to consider, she said.

Civil servants have spent the last year trying to deal with these issues. CRA and Service Canada officials have held information sessions on reserves about accessing benefits, including the learning bond and child benefit, and offering social insurance number services.

A spokesman for Social Development Minister Jean-Yves Duclos said the government will expand a nudging trial that helped increase take up of the tax benefit by sending tax packages with details on how to claim the benefit and how much a person might receive. Spending on the benefit in 2016 won’t be made available until late next year; recently released figures showed little change in spending overall on the benefit between 2014 and 2015.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

From left: Thomas Kuecks, David Lane, John Ivison, Denis Berger, Rod Gray, and James Kuecks are Cabin Fever. Catch their performance on the Cowichan Performing Arts Centre website. (Ashley Foot photo)
A&E column: Music Festival winners, CVAC awards, and Cabin Fever

The latest from the Cowichan Valley arts and entertainment community

BC Green Party leader and Cowichan Valley MLA Sonia Furstenau introduced a petition to the provincial legislature on Thursday calling for the end of old-growth logging in the province. (File photo)
Cowichan Valley MLA Furstenau introduces old-growth logging petition

BC Green Party calls for the end of old-growth logging as protests in Fairy Creek continue

The city-owned lot at 361 St. Julien St., which has been home to a temporary homeless site for more than a year, will be sold and plans are to build a three-storey mixed-use development there, Peter de Verteuil, Duncan CAO explained at a recent council meeting. (File photo)
New development planned for homeless site in Duncan

Lot on St. Julien Street would see three-storey building

Historian and longtime Citizen columnist T.W. Paterson photographs the historical wreckage of a plane on Mount Benson. Paterson recently won an award from the British Columbia Historical Foundation. (Submitted)
Cowichan’s Tom W. Paterson wins award for historical writing

British Columbia Historical Federation hands Recognition Award to local writer

This electric school bus is the newest addition to the Cowichan Valley School District’s fleet. (Submitted)
Editorial: New electric school bus good place to start

Changing public transit like buses to electric really is important.

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

The Co-op gas station at Whiskey Creek is burning after a camper van exploded while refueling just before 4 p.m. on Thursday, June 17, 2021. (FACEBOOK PHOTO)
Exploding camper van torches Highway 4 gas station between Qualicum Beach and Port Alberni

Highway traffic blocked after Whiskey Creek gas station erupts into flames

Helen Austin performing with Trent Freeman at the 2018 Vancouver Island MusicFest. Austin is one of the many performers listed for the 2021 event.
Vancouver Island MusicFest goes virtual for 2021

Black Press to stream 25 hours of programming July 9-11

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Greater father involvement in the home leads to improved childhood development and increased marital satisfaction, says expert. (Black Press Media file photo)
Vancouver Island researcher finds lack of father involvement a drag on gender equality

Working women still taking on most child and household duties in Canada: UVic professor

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

A Heffley Creek peacock caught not one - but two - lifts on a logging truck this month. (Photo submitted)
Heffley Creek-area peacock hops logging trucks in search of love

Peacock hitched two lifts in the past month

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

Most Read