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

Parking time is to be limited in one spot on 9th. (Houston Today photo)
District seeks grant to update bylaws

And decides on 15-minute parking

Bench installation on 9th Street is another sign the project is nearing completion. (Houston Today photo)
Progress being made on 9th Street finish

District aiming for June completion

File photo
Mental health checks proving valuable

Police officer and nurse team up each week

The two billboards for the Cow Moose Sign project arrived in Topley last week with Justin Cradock, owner of Pitbull Trucking Ltd. and the area is now getting prepared for installation. (Dan Simmons photo/Houston Today)
Cow Moose sign project billboards arrive in Topley

Two billboards for the Cow Moose Sign project have arrived in Topley… Continue reading

File photo
Snow clearing changes would cost money, survey finds

Council being asked to give direction

Conservation Service Officer Kyle Bueckert holds a gold eagle that was revived from acute rodent poisoning Monday, May 12. Photo: Submitted
‘Obviously, he’s a fighter’: Golden eagle, recovered from poisoning, back in Kootenay wild

CSO Kyle Bueckert released the eagle into the wild Thursday, May 13

A fledgling white raven was spotted near the end of Winchester Road in Coombs. (Mike Yip photo)
Legend continues as iconic white raven spotted once again on Vancouver Island

Sightings rare everywhere in world except for central Vancouver Island location

Capt. Jenn Casey died in a crash just outside of Kamloops, B.C., on May 17, 2020. (CF Snowbirds)
Snowbirds to honour Capt. Casey, who died in B.C. crash, in 2021 tour

Tour will kick off in Ontario in June before heading west

A pedestrian wearing a mask to curb the spread of COVID-19 is bundled up for the cold weather as snow falls in downtown Vancouver on Saturday, February 13, 2021.THE CANADIAN PRESS/Darryl Dyck
Snow possible in mountain passes as cold front hits southern B.C.

Much of B.C.’s southern interior will see temperatures plunge from highs of 30 C reached over the weekend

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., Thursday, April 22, 2021. Dr. Ben Chan remembers hearing the preliminary reports back in March of blood clots appearing in a handful of European recipients of the Oxford-AstraZeneca COVID-19 vaccine. THE CANADIAN PRESS/Jeff McIntosh
Science on COVID, VITT constantly changing: A look at how doctors keep up

While VITT can represent challenges as a novel disorder, blood clots themselves are not new

Poached trees that were taken recently on Vancouver Island in the Mount Prevost area near Cowichan, B.C. are shown on Sunday, May 10, 2021. Big trees, small trees, dead trees, softwoods and hardwoods have all become valuable targets of tree poachers in British Columbia as timber prices hit record levels. THE CANADIAN PRESS/Jen Osborne.
Tree poaching from public forests increasing in B.C. as lumber hits record prices

Prices for B.C. softwood lumber reached $1,600 for 1,000 board feet compared with about $300 a year ago

The warm weather means time for a camping trip, or at least an excursion into nature. How much do you know about camps and camping-related facts? (John Arendt - Summerland Review)
QUIZ: Are you ready to go camping?

How many camp and camping-related questions can you answer?

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

Most Read