2 ONTARIO WORKS DISCRETIONARY BENEFITS RESPONSE TO PROVINCIAL FUNDING CHANGES

Transcription

1 2 ONTARIO WORKS DISCRETIONARY BENEFITS RESPONSE TO PROVINCIAL FUNDING CHANGES The Community and Health Services Committee recommends the adoption of the recommendation contained in the following report dated May 30, 2013, from the Commissioner of Community and Health Services. 1. RECOMMENDATION It is recommended that: 1. Council approve adjustments to York Region s Ontario Works discretionary benefits policy to respond to the Province s cost share changes and to support client employability and health, as highlighted in Table 1 of this report, effective January 1, PURPOSE This report seeks Council approval to implement adjustments to York Region s Ontario Works discretionary benefits policy. This responds to the Province s decision in July 2012 to cap cost-shared funding provided to municipalities for Ontario Works discretionary benefits. The policy changes highlighted in this report will maintain critical supports to Ontario Works and Ontario Disability Support Program clients in York Region while introducing reasonable benefit policy changes that will help control discretionary benefit costs going forward. 3. BACKGROUND Ontario Works discretionary benefits help meet health and employment needs of Ontario Works and Ontario Disability Support Program clients Under the Ontario Works Act, the Community and Health Services Department acts as the Administrator for the Ontario Works program. Ontario Works, in addition to basic financial assistance, includes both mandatory and discretionary benefits. Mandatory benefits are provided to all eligible Ontario Works clients and include such items as drug coverage, dental and vision care to children, eye examinations for adults, and supports for full-time and part-time employment.

2 Ontario Works discretionary benefits are provided on a case-by-case basis to Ontario Works clients who have a need for important supports that are not covered by mandatory benefits. Ontario Works discretionary benefits include a range of both health and non-health related items, including but not limited to: Health: Dental care for adults Vision care for adults Prosthetics (including orthopaedic shoes and foot orthotics) Beds and cribs Mobility/medical devices Non-health: Funerals and burials Baby supplies The Ontario Disability Support Program is a provincially administered and funded program that provides financial help for people with disabilities who are in need. However, Ontario Disability Support Program clients are also eligible for Ontario Works discretionary benefits for items that are not covered or not fully covered under the provincial program. Ontario Works Administrators have the flexibility to make their own policies to determine which discretionary benefits they provide to Ontario Works and Ontario Disability Support Program clients, including the amounts and frequency. Ontario Works discretionary benefit costs vary year to year based on client need Ontario Works discretionary benefit costs are not static. The amounts vary year to year based on caseload need and size. In York Region, gross costs have ranged from $3.053 million in 2009 to $3.999 million in About two-thirds of these costs have been for Ontario Works clients and one-third for Ontario Disability Support Program clients. Like most municipalities, dental benefits make up the largest category of Ontario Works discretionary costs in York Region, ranging from 59 65% of the total costs between 2009 and This is followed by a broad category of other health items (e.g. beds, surgical stockings, prescription drugs not covered under mandatory benefits, medical/mobility aids) at 14 17%, prosthetics at 9 10%, funerals and burials at 6 8% and vision at 4%.

3 In 2012, the Province reduced funding for Ontario Works discretionary benefits As communicated to Council on September 20, 2012 as Item 2 of Report No. 7 of the Community and Health Services Committee, the Province announced changes to the way discretionary benefits are funded as part of the 2012 Ontario Budget. Previously, provincial cost-shared funding was only capped for non-health discretionary benefits. There was no cap on cost-shared health-related discretionary benefits. Effective July 1, 2012, the Province now caps cost-share funding for both health and non-health discretionary benefits at $10 per case (i.e. $10 multiplied by the Ontario Works and Ontario Disability Support Program average monthly caseload within an Ontario Works Administrators geographic area). York Region s cost per case for Ontario Works discretionary benefits has ranged from $17 to $21 between 2009 and Capping of funding has resulted in provincial revenue short-falls to York Region in both 2012 and 2013 of $633,100 and estimated $1,619,000 respectively. The decision to cap Ontario Works health discretionary benefits is linked to the provincial government s commitment to eliminate the deficit by However, in the 2013 provincial budget, the government did announce an improvement to benefit rates, earning exemptions and the treatment of some assets. No major reforms in Social Assistance were announced. Community and Health Services has developed a short-term strategy to manage the impact of provincial capping of discretionary benefit funding On September 20, 2012, Council approved a short-term strategy to: Maintain the current level and range of Ontario Works discretionary benefits for 2012 and 2013 with the provincial funding reduction off-set by the Social Assistance Reserve. Explore local policy adjustments or efficiencies to help manage Ontario Works discretionary benefit costs with minimal impact on service to clients. 4. ANALYSIS AND OPTIONS York Region has generally provided a high level of support Since each municipality has discretion over the benefits they provide, service levels and costs have always varied across Ontario based on local needs or priorities (i.e. from $3 to $27 cost per case in ). Of 47 municipalities, excluding first nations, 24 were

4 over $10 per case in York Region has generally provided a high service level among its comparators. This is mostly due to York Region s strong focus on addressing urgent and basic health needs (i.e. where the failure to provide a benefit would result in a detriment to the health or safety of a client). York Region has also invested in preventative health benefits that support client employability. York Region s provision of adult basic and preventative dental care is a key example. Tooth decay or loss are barriers to successful job search and employment, and can lead to other health problems. Preventative dental care helps maintain good oral health, builds self-esteem in finding and keeping work and reduces the need for more costly emergency services for untreated conditions. York Region s policy has also recognized the need to fill service gaps. Ontario Works discretionary benefits are often the program of last resort. The costs of many of the items are difficult for clients to afford at the current level of Ontario Works basic needs and shelter allowances and are also often beyond the capacity of community or charitable organizations to provide. Provincial capping of Ontario Works discretionary benefits funding means municipalities must spend 100% municipal dollars or reduce service levels As a previously uncapped program, health-related discretionary benefits were demand driven. This meant that provincial cost-share funding was responsive to changing or increasing client needs. Under the new funding cap, municipalities must decide to either spend 100% municipal dollars to maintain service levels above the $10 cap or reduce service levels to manage within the $10 cap. Staff have reviewed how other municipalities are responding to the provincial cap. Like York Region, many municipalities where the cost per case is higher than $10 per case are maintaining service levels for 2012 and 2013 while considering adjustments or reductions in some benefits to better manage the tax levy impact of operating under a capped budget. In moving forward, York Region s challenge is to balance client needs with cost containment Supporting residents to stay or become healthy and employed remains a key focus of Ontario Works discretionary benefits policy. However, there is a concurrent need to address key cost drivers in the program to ensure that benefit expenditures remain sustainable.

5 To balance these two priorities, staff used the following criteria in considering local policy changes to Ontario Works discretionary benefits: Maintain focus on health and employment supports for clients. This means continuing to fund the same basic range of benefits as currently provided and avoiding any serious disruption in services. However, making adjustments to the frequency and maximum amounts allowed will provide a measure of cost control going forward without significantly reducing support to clients. Address key cost drivers. As previously noted, dental services, other health-related benefits (i.e. beds) and prosthetics (i.e. foot orthotics) make up the highest cost items in York Region. Cost containment priority will need to focus here. Administrative cost-effectiveness. Policy changes should be implemented within current staffing or resources. The tracking of benefit items and costs will need closer monitoring. Current provincial technology has limited capacity to do this. The Province is introducing new technology in spring Staff will explore how this can be used to enhance tracking and reporting systems, as well as to support more detailed program analysis going forward. In 2014, pending the Province s anticipated changes to Ontario Works, minor adjustments will be made to preserve benefits that support client employability and health while helping mitigate cost pressures Using the criteria above, staff are proposing minor policy adjustments that will help reduce current cost per case for York Region from the $17-21 range to $ Table 1 highlights where these policy changes will be made. Staff will develop a communications strategy to notify clients and vendors/service providers.

6 Table 1 Adjustments to Local Ontario Works Discretionary Benefit Policy in 2014 Benefit Current Policy Changes for 2014 Rationale Adult Dental Services Basic and preventative dental services Bed Allowance $110-$150 (based on bed size) Implement minor service restrictions (e.g. restrict fillings to silver amalgams, restrict root canals on molars) Maintain current amounts but reduce frequency to once every five years Maintains focus on basic and preventative care Other jurisdictions have implemented some combination of these service restrictions Maintains beds as an essential household item but provides greater cost control over time Issued as required no frequency defined $200 every two years for off-the-shelf orthopedic shoes Foot Orthotics $350 every two years for modified orthopedic shoes Focus orthotics on medically verified needs Maintain amounts and frequency but eliminate off-the-shelf shoes Maintains support to clients with medically necessary orthotic needs assessed by specialists. Currently there are no restrictions on who can prescribe orthotics except for custom-made shoes. $500 every two years for orthotics Up to $2,500 for custommade shoes for severe feet deformities Off-the-shelf shoes are usually used to address minor or general comfort issues Staff will monitor these policy changes and make additional adjustments if needed to help contain York Region s costs within the $15-$19 range. These could include: Replacing cash benefits with vouchers where possible (e.g. issuing a voucher to purchase a mattress instead of issuing cash) Seeking preferred vendors, group discounts or bulk tendering of certain benefit items Exploring third party administration of dental benefits

7 York Region s Ontario Works discretionary policy will be monitored to align with actions being taken in other municipalities Further changes to discretionary benefits to meet the Province s cap of $10 cost per case would require significant changes to service levels and/or eliminating benefits altogether that would impact negatively on client health and employability and create pressures on community resources. By moving forward now with the actions outlined in this report, the Region will be better positioned to implement any further adjustments to discretionary benefits in the future. In the meantime, staff will continue to engage the Province on the impact of other possible reforms and discretionary benefit changes on municipalities through the Association of Municipalities of Ontario and the Ontario Municipal Social Services Association. Moving to a target of $10 cost per case would require severe reductions in service and support Policy changes to achieve a $10 cost per case would, as previously noted, require even more severe reductions in services (e.g. emergency dental care only, loss of baby supplies, reducing benefit levels in dentures, mobility/medical aids, prosthetics, and vision care). Such changes would potentially impact on client employability and health. If this option was pursued, engaging clients and community partners in a comprehensive process would help prioritize which services/benefits to maintain. In the shorter term, until further details are confirmed by the Province, discretionary benefits shortfalls can be mitigated through use of Social Assistance Reserves and Ontario Works uploading savings. Link to key Council-approved plans Ontario Works discretionary benefits support the following Regional strategies: A place where people achieve optimal health (Vision 2051 action area). Contributing to Regional economic vitality by helping low and moderate income residents with access to basic needs (2011 to 2015 Strategic Plan strategic objective and goal under the Community and Health Services Multi-Year Plan).

8 5. FINANCIAL IMPLICATIONS Provincial capping of Ontario Works discretionary benefits funding has created a revenue short-fall The revenue impact in 2012 was $633,100 and the shortfall was funded out of surplus. The projected revenue shortfall for 2013 is $1,619,000. As a mitigation strategy, the 2013 shortfall has been offset by the Social Assistance Reserve with no tax levy impact. If no policy changes are implemented, in 2014 the revenue shortfall could be approximately $1,707,000 or greater if caseload and client need increases. This will also be offset by the Social Assistance Reserve. Decisions to address the shortfall in subsequent years through the tax levy will be considered as part of the 2015 Regional budget process. Policy adjustments and uploading of benefit costs will help mitigate budget impact Ontario Works discretionary benefit costs vary year-to-year depending on client need and caseload size, so cost savings and impact on cost per case can only be estimated. Assuming that benefit costs remain similar to trends, this would translate into a cost per case from $17-$21 to $15-$19. York Region is also benefiting from the Province s on-going upload of Ontario Works benefit costs by 2018 as part of the Provincial-Municipal Fiscal and Service Delivery Review. The upload includes municipal Ontario Works discretionary benefit costs up to the $10 cap. This may also provide an estimated $350,000 to York Region by LOCAL MUNICIPAL IMPACT Ontario Works and Ontario Disability Support Program clients live in all nine local municipalities in York Region. Preserving Ontario Works discretionary benefits will ensure clients have access to critical supports in their community that are not otherwise provided through other programs or community resources including adult dental services, vision care, prosthetics, and other health benefits. 7. CONCLUSION The Province implemented a new funding cap on Ontario Works discretionary benefits effective July 1, 2012 which has resulted in a revenue short fall for York Region. Ontario Works discretionary benefits provide important health and employment supports to Ontario Works and Ontario Disability Support Program clients. As Ontario Works Administrators, municipalities have the flexibility to decide the level and range of Ontario Works discretionary benefits they provide. In York Region, the Community and

9 Health Services Department is the Ontario Works Administrator, which includes establishing local policy for Ontario Works discretionary benefits. This report seeks Council approval to implement local policy changes that will help mitigate the impact of provincial funding changes while continuing to provide critical support to clients. Staff will also continue monitoring Ontario s broader reform of the social assistance system. For more information on this report, please contact Cordelia Abankwa, General Manager, Social Services at Extension The Senior Management Group has reviewed this report.