Agenda Item # Page # CHAIR AND MEMBERS COMMUNITY AND PROTECTIVE SERVICES COMMITTEE MEETING ON NOVEMBER 24,2008
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1 ' I TO: FROM: I I SUBJECT CHAIR AND MEMBERS COMMUNITY AND PROTECTIVE SERVICES COMMITTEE MEETING ON NOVEMBER 24,2008 ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES SOCIAL ASSISTANCE TRENDS QUARTERLY REPORT THIRD QUARTER 2008 (I RECOMMENDATION That, on the recommendation of the General Manager of Community Services the following report BE RECEIVED for information purposes. PREVIOUS REPORTS PERTINENT TO THIS MATTER 1 With some exceptions, starting in 2002 until June 18, 2007, Ontario Works Caseload information reports were submitted at the last Community and Protective Services Committee (CPSC) meeting of each month. Copies of these reports can be accessed through the City Council, Community and Protective Services Committee, Agenda section of the City of London website. As of September 24, 2007, the Social Assistance Trends Quarterly Report replaces the Ontario Works Caseload Report. The Quarterly Report is submitted no later than eight weeks following the end of the quarter. BACKGROUND At its meeting held on October 1, 2007, Municipal Council resolved that the General Manager of Community Services replace the "Ontario Works Caseload Trends Monthly Report" with the "Social Assistance Trends Quarterly Report". The quarterly reports are intended to more fully advise Council and the community on caseload activity as it relates to service levels and the caseload profile. The following report provides a detailed description of London's social assistance caseload, including: Current and historic figures for caseload sue and expenditures for Ontario Works and for the Ontario Disability Support Program (ODSP); Current Ontario Works caseload dynamics figures including the number of people contacting the application office, applying for assistance, becoming eligible for assistance, gaining employment and leaving assistance; and Current and historic Ontario Works caseload profile data including family type, children on the caseload, time on assistance, and current figures for the number of ODSP participants involved in Ontario Works employment programs. This report also provides a brief review of economic, labour market, policy, and demographic factors that may have influenced the Ontario Works and ODSP caseloads in this quarter. This information may be used to support planning and trend analysis.
2 HIGHLIGHTS Ontario Works An average monthly caseload of 8,172 in the third quarter of 2008 is the highest we have experienced since 2002: o London has experienced caseload increases for each of the last four quarters. This duration of increases has not occurred since the early 1990's. o The number of people applying for assistance is 12% higher in 2008 compared to 2007; and the number eligible for assistance is 10% higher. o The proportion of the caseload exiting from Ontario Works each month is lower by 0.3 percentage points than in o The number entering the caseload exceeds the number exiting the caseload for the first time in recent history. The slowing economy has contributed to our growing caseload: o The number of people receiving Ontario Works who find employment is slightly o lower in 2008 compared to In the last two quarters, London's unemployment rate has been above 7.0%, and is in the area of the 2002 annual unemployment rate (7.1%). The cumulative impact of social assistance rate increases may contribute somewhat to the increasing caseload, however, the extent of the impact is difficult to assess as small rate increases have been occurring annually since 2005 and caseload began increasing at the end of 2007, two and half years later. 0 Despite the increasing caseload, the total gross Ontario Works caseload expenditures (year to date) are below budget in As of the end of September 2008, the number of Ontario Disability Support Program recipients receiving employment services from the Ontario Works office each month is 43 per cent higher than in the same time frame of ODSP The average monthly Ontario Disability Support Program caseload is 315 cases higher in 2008 compared to Total gross Ontario Disability Support Program expenditures (year to date) are below budget. Economic and Political Trends Canada and Ontario, similar to rest of the world, is in a period of significant economic uncertainty. Recent employment figures for the London CMA from the local labour force survey reveal that the number of unemployed workers increased in the last half year. These economic and employment trends may place upward pressure on the Ontario Works caseload. SOCIAL ASSISTANCE CASELOAD SIZE AND EXPENDITURES Ontario Works Caseload Size and Expenditures Ontario Works caseload size is driven primarily by the local economy and by Ontario Works policy changes, particularly benefit level changes. The strong local economy has contributed to the decrease in the number of households and individuals receiving Ontario Works assistance over the past number of years. Ontario Works benefit rates have increased by 2% each year for the past number of years. Local negative economic trends and recent job losses might have resulted in increasing caseloads. Detailed caseload size figures are provided in the Appendix. Third Quarter Figures The average monthly number of households and individuals receiving Ontario Works was 6.6% higher (535 cases) by the end of the third quarter of 2008 compared to the end of the third quarter in The Ontario Works caseload is the highest it has been since By the end of the third quarter, gross expenditures for social assistance benefits provided is higher in 2008 than in previous years. This is due to a combination of a higher caseload and higher social assistance rates.
3 Figure 1: January to September Ontario Figure 2: January to September Ontario Works Works Caseload Figures, 2004 to 2008 Total Gross Expenditures, 2004 to 2008' 2 16,000 5 t2,ooo Sn E!i $,ooo m 2 4, , , Year Year ODSP Caseload Size and Exaenditures While municipalities do not administer the Provincial Ontario Disability Support Program (ODSP), the costs of the program are shared by the municipality and the province. In August, 2007, the Province announced that the current cost-sharing arrangements will change. More details on this change are still to follow. This report provides historic information on the total cost to the Province and Municipality for ODSP benefits. Detailed caseload figures are provided in the appendix. Third Quarter Figures The average monthly number of households and individuals receiving ODSP was 3.8% higher (315 cases) by the end of the third quarter of 2008 than in Total gross expenditures for social assistance benefits provided are higher in 2008 than in previous years. The higher caseload and the benefit rate increase implemented in the fourth quarter of 2007 contributed to increased expenditures in (Figures 3 and 4). Figure 3: January to September ODSP Caseload, Average Monthly Figure 4: January to September Total Gross ODSP Caseload Expenditures u) 80,000 P m 70,000 u) 3 60,000 E 2: UT 30, o,oco 5 10,000 m ~05 20% 2007 zoo8 - I m Year Year $ Source: ODSP Caseload Trend Report provided by Community Services Operational and Financial Management Division. Source: ODSP Caseload Trend Report provided by Community Services Operational and Financial Management Division. ONTARIO WORKS CASELOAD DYNAMICS The Ontario Works caseload is dynamic, with many individuals and households entering and exiting the caseload each month. Eligibility for social assistance is based on financial need. Continued eligibility for assistance requires that individuals provide information that is mandated by Provincial legislation and that individuals participate in employment related activities. Policy impacts eligibility for social assistance. Detailed caseload dynamics figures are provided in the appendix. Expenditures shown reflect benefits paid, including Full Time Employment Benefit (effective August, ). These expenditures do not include administrative costs.
4 Applications to Ontario Works From 2000 to 2005, calls and initial Applications were made through the Southwest Region Intake Screening Unit. Since June 2005, calls and initial Applications for the London Ontario Works office have been done by our local office. Following the initial Application, a Verification Interview is conducted in our local office to determine final eligibility for Ontario Works. Our local intake office serves London and Middlesex. The average monthly number of calls made to the local intake office is 20% higher in 2008 compared to Some of these calls are inquiry calls, not applications. The number of applications made to the London office each month increased by 12.3%. The average monthly number of eligible applications is higher by 10.3% in 2008 compared to (Figure 5) Exits from Ontario Works Individuals and families leave Ontario Works for a variety of reasons including employment, relocation to another municipality, eligibility for other social assistance programs such as Employment Insurance, Ontario Disability Support Program and Old Age Security, and due to administrative reasons such as failing to provide required information. As of the third quarter of 2008 an average of 8% of the caseload exited London s Ontario Works caseload compared to 8.3% in 2007 (Figure 5). The number of exits in 2008 is lower than 2007, this means that fewer people are leaving, consequently contributing to caseload growth. The number of individuals and households entering the Ontario Works caseload exceeded the number of individuals and households exiting the Ontario Works caseload by an average of 6 each month. Figure 5: Caseload Dynamics, January to September, Average Monthly Figures. 1,500 & 1,000 n f; Incoming Calls Appllcatlons Number Eligible Exits Activity Sources: SDMT intake and Verification Reports, and Internal Intake Tracking report provided by Ontario Works Employment Preliminary figures for the London and Middlesex Ontario Works caseloads (including the ODSP participating caseload) show that a total of 2,412 individuals found employment by the end of the third quarter in 2008 (Figure 6) Figure 6: Individuals Gaining Employment. - u) 3000 ij 2000 E > Year Source: SOMT Service Contract Report. Data reflect the first Service Contract report released immediately following the quarter. These data continue to be updated up to the end of April of the Following year, and, do not, therefore reflect the final figures submitted to the Ministry of Community and Social Services. The data in this table is not consistent with the data in the appendix of this report as the data in the appendix are the most recent figures. Note that it is not possible to reconcile average monthly caseload figures with monthly eligibility and exit figures as multiple data sources must be used for these figures.
5 Seasonal Patterns Figure 7 shows the fluctuating pattern of the social assistance caseload. As can be seen from the chart, the third quarter is a time of caseload increase compared to previous quarter. The chart shows that the 2008 third quarter caseload is atypical in that caseload growth continued. We are now in a situation of four quarters of caseload growth, with an average growth rate of 0.6% per month. If this trend continues, program planning and budgeting may be affected. Figure 7: Average Monthly Change in Caseload Size, 2004 to 2008 ONTARIO WORKS CASELOAD PROFILE The Ontario Works caseload is diverse, and changes over time as a result of changing policies in many different areas, such as social assistance and immigration. Social, demographic and economic trends also impact the caseload profile. This report features profile data on family type, time on assistance, and children living in families who are participating in Ontario Works. Detailed Caseload Profile figures are provided in the Appendix. Family Type The family type profile has remained fairly stable over the past years. Over the past five years, there has been a slight decrease in the proportion of sole support families and an increase in the proportion of children in temporary care receiving benefits and in couple families, however the changes have been very slight. (Figure 8). Figure 8: Caseload by Family Type, Average Monthly Proportions, January to September 9 60% c 2 40% E a, $ 20% n 0% Year Children The average monthly number of children on the caseload increased by 208 by the end of September 2008 compared to This is due to an increase in the number of families receiving social assistance. Between January and September of 2008, just under half (48 per cent) of children on the caseload were younger than age seven, 30 per cent were between seven and twelve years of age, and 21 per cent were between thirteen and seventeen years old.
6 A comparison of the age profile over the past four years shows that the proportion of 0 to 6 year olds have increased slightly from 2004 to 2008, while the proportion of 7 to 12 year olds and 13 to 17 years old has decreased slightly (Figure 9). Figure 9: Proportion of Children by Age, Average Monthly Figures, January to September Oto6 7to to 17 nge Time on Assistance From 2004 to 2006, the average number of months that individuals and families had received Ontario Works benefits showed an increasing trend3 Since then, the average time on assistance has decreased. The lower average time on assistance figures in 2007 and 2008 compared to 2006 may reflect the caseload increases in the first half of the year, particularly in the month of January, for these two years. People entering the caseload have a "time on assistance" figure of zero months. Longer times on assistance are considered to be an indicator of increasing service needs to support individuals to gain employment. (Figure IO) Figure IO: Average Time on Assistance, January to September "- E "1 Source: SDMT Benefit Unit Summary Repolt ODSP Participating in Ontario Works Employment Programs In 2006, the Ministry of Community and Social Services mandated that spouses and adult children who are unemployed and are living with an individual who is receiving social assistance through the Ontario Disability Support Program and who are not disabled or who are not assuming a caregiver role must participate in Ontario Works employment programs. Our office provides employment supports to these individuals. By the end of September 2008, an average of 376 additional individuals per month has been served by our office as they are participating in Ontario Works employment programs. This is 113 more than in the same time period in This figure does not reflect the number of months until individuals and families exited the caseload but represents the number of consecutive months that assistance had been received for those still receiving Ontario Works at that time.
7 -- Agenda Item # Page # ECONOMIC AND POLITICAL TRENDS INFLUENCING THE CASELOAD Ontario Works caseloads are influenced primarily by the economy, the labour market and income security policies (including employment insurance and social assistance)! Ontario Disability Support Program caseloads are influenced primarily by income security policies and administrative practices in the Ontario Disability Support Program5 Local Economic and Labour Market Trends The third quarter of 2008 continues to show a tightening labour market. The total number of people employed in the third quarter of 2008 is 5,500 below the number employed in the same time period in Full time employment increased in the third quarter of 2008 but still declined from the third quarter of 2007 while part- time employment has been declining since the start of The unemployment rate in the third quarter of 2008 is similar to the second quarter 2008 and is at a high of 7.3%. Participation and employment rates are higher than the second quarter of 2008 but slightly lower than the same time period in Detailed Labour Force Survey data are provided in the Appendix. American and Canadian indicates that unemployment rates may be indicators of social assistance caseload size changes. A period of sustained increases in the unemployment rate may signal a potential increase in social assistance caseloads for anywhere from six months to a few years later. Based on this research, it is likely that the recent caseload increases may be strongly related to the increasing trend in unemployment rates. (Figure 11) Figure 11: Unemployment Rates, Unadjusted, First Quarter 2006 to Third Quarter 2008' - " st Qtr 2nd Qtr 3rd Qtr 4th Qtr Quarter The unemployment rate in the third quarter of 2008 (similar to the second quarter) was 7.3%, 14% higher than the third quarter of 2007 where unemployment rates were 6.4%. This is a large increase. Southwestern Ontario continues to experience plant closures and layoffs. While there have also been openings and expansions, these have not totally mitigated the job losses resulting from the closures. lncome Security Policies The 2008 Provincial budget announced a two per cent social assistance rate increase, effective November 2008 for ODSP and December 2008 for Ontario Works. This is the fourth increase since March These small incremental increases widen the window of eligibility slightly, which may contribute somewhat to an increase in the caseload. 4 Social Research and Planning. Community Services Department. Caseload Trends Report, July, Ministry of Community and Social Services Statistics and Analysis Unit. Factors Behind Recent (ODSP] Growth Bell, Stephen H. "Why are Welfare Caseloads Falling?" Washington D.C.: The Urban Institute. $ssessing the New Federalism. Policy Brief A-32. March Human Services Policy. Determinants of Aid to Families with Dependent Children Caseload Growth. $Iy From the Internet April 26, 2002 Finnie, Ross. & Irvine, Ian. "The Welfare Enigma: Explaining the Dramatic Decline in Canadian's Use ff Social Assistance, '. C.D. Howe Institute Commentary. June Calculated by Social Research and Planning using Statistics Canada Monthly Labour Force Survey data.
8 There have been no changes to Employment Insurance (El) policies to widen or narrow the eligibility window. Individuals who are not eligible for El or who exhaust El benefits may need to access social assistance. Figure 12 shows the number of regular El beneficiaries in the London CMA over time. In the second quarter of 2008, the number of El beneficiaries represented 47% of the number of unemployed individuals." Figure 12: Average Monthly Number of Regular Employment Insurance Beneficiaries, London CMA, 2004 to 2008" 12,000, 10,000 8,000 6,000 Z 4,000 2, st Qtr 2nd Qtr 3rd Qtr 4th Qtr Qwlter FINANCIAL IMPACT Ontario Works Actual and Budget Figures Ontario Works caseload in the third quarter has been steadily increasing and is higher than the 2008 budget by 363 cases. The total gross expenditure (year to date) is below budget for The risk of over expenditure is currently mitigated through case cost surplus. Figure 13: 2006 Monthly Gross Expenditures Thousands Figure Monthly Caseload 8.500, 1 5,200 Jan Feb Mar Apr MayJuneJulyAugSept Month (+&ai +Budnet 1 --B-Actu*+BWioet Jan Feb Mar npr MayJuneJulyAugSept Month Source: Caseioad Monitoring Repolt provided by Community Services Operational and Financial Management Division 10 Calculation: average monthly number of beneficiaries from Stats Can CANSIM table/# of unemployed from Labour Force Survey 11 Statistics Canada. Table Employment Insurance Program (EL), beneficiaries by province, census metropolitan areas, census agglomerations and sex, monthly (persons), CANSIM (database). The number of beneficiaries receiving total income benefits excludes employment insurance claimants receiving employment and support measures benefits. h~u://cansim2.statcan.ca/c~i-win/cnsmcal.exe?lana=e&cansimfile=cii\cii 1 E.htm&RootDir=CII/ (accessed: October 28,2008)
9 Ontario Disability Support Program Actual and Budget figures Monthly ODSP caseload figures for 2008 are lower than budget by 47. expenditures for the year to date are below budget (Figures 15 and 16). Total gross Figure 15: 2008 Gross Expenditures Thousands 8,400 8, ,000 U 2 4 g 7, Figure 16: 2008 Monthly Caseload 8,500 +Actual +Budget -e-actul --t-bud!ael
10 Aaenda Item # Paae # Social Assistance Caseload Size Appendix The number of individuals and households participating in Ontario Works and the Ontario Disability Data sources: London Ontario Works: SDMT Form 5 Report I 2008 Ontario Disability Support Program Caseload percent change Data source: London Ontario Disability Support Program: ODSP Caseload Trend Report prepared by the Community Services Finance Division
11 Caseload Dynamics Definitions and Data Sources: Incoming Calls- The number of calls made to London's Intake Unit, including inquiry and application calls for London and Middlesex. Internal Report Applications- The number of applications where an SDMT record was created for London by any office in Ontario. SDMT Intake Performance Report - Verification, (SIE400M) - number screening Eligibility- The number of individuals and households who are eligible for assistance following a verification interview. Intake Tracking Report - (SIEIOOM) - Date Granted Number Finding Employment - The number of Ontario Works participants who started employment Iselfemployment through employment assistance services. This figure is subject to change. SDM-SCRZOO7 Report. Total Exits- The number of individuals and households leaving assistance every month for any reason, including reasons such as "missing information". Many who leave for this type of reason are reinstated within two weeks. SDMT Terminations Detail Report (SPRIGOM)
12 Caseload Profile Data Sources: Family Profile - Form 5 Caseload Statistics, Finance Children - Benefit Unit Summary Report, SAR 140M ODSP Participating in Ontario Works Employment - ODSP Participants Participating in Ontario Works Employment Programs as at the end of the month. Internal Report provided by Ontario Works Time on Assistance - Benefit Unit Summary Report, SAR 140M ('000s) Participation rate (%) O Unemployment rate (%) Employment rate (%) '2 Calculated by Social Research and Planning using Statistics Canada Monthly Labour Force Survey data as provided by Service Canada.
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