Welfare families no better off with National Child Benefit.

OTTAWA -- Most families on welfare are no better off since the federal government introduced the National Child Benefit in 1998 because of the deal that allowed the provinces and territories to claw back part of that money says the National Council of Welfare in its Welfare Incomes Report 2003.

The Council asserts that although the NCB had "a great potential to help reduce child poverty," the benefit actually seems to "have helped those families with modest incomes in which the parents have been lucky enough to find and keep work on a relatively steady basis," while discriminating against families on welfare.

It also notes that despite regular increases in the NCB benefits, which includes the Canada Child Tax Benefit and the National Child Benefit Supplement, incomes for families in most cases actually decreased for people on welfare, including families, subsisting on as little as one-fifth of the poverty line.

"Some would argue that clawing back part of the National Child Benefit from parents on welfare creates an incentive to work. At the National Council on Welfare, we simply have no patience for that argument. Of course, it makes sense to provide incentives to work. But taking money away from people on welfare--with incomes already horrifyingly low--makes no sense at all," said John Murphy, the Council's chairperson.

When the federal government introduced the NCB it allowed the provinces and territories to claw back the supplement from families on welfare. At the time, only Newfoundland and New Brunswick did not opt for the claw back. More recently Nova Scotia, Quebec, Manitoba, Alberta and Ontario have limited their claw back of the supplement, but there are still three provinces and three territories that continue to claw back the NCB. and they have given no indication that this will change anytime soon.

The Council believes that families on welfare are further affected because the provinces and territories had no incentive to increase their welfare rates because of a deal that allowed them claw backs in their first place and due to the regular increases made by the federal government to the NCB.

It points to its 2001 report, Child Poverty Profile 1998, wherein only 66 per cent of poor families with children benefited from the child tax benefit between June 1998 and June 1999 with 79 per cent of poor two-parent families receiving the child supplement and only 57 per cent of poor single-parent families being allowed to keep it.