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I’m Back, and Crunchin’ Numbers

January 20, 2012

It’s good to be back.  Since I’ve been away, ironically, I’ve started getting attention from the blogosphere and obtaining subscribers.  Perhaps going on hiatus was the best thing for me.  I certainly feel refreshed, and glad to put a few personal issues behind me.  At any rate, all that will be the topic of a future post.

For now, I want to share some stark, cold numbers with you. Oh, sit down, will you?  It’s not that bad!  I want to show my fellow Ontarians — and anyone unfamiliar with our social services — what it means in absolute terms to both work and receive Ontario Disability Support Program payments.

He'll guard my cash! GRRR! No?

In fact you should thank me.  I did this for you. It took me all night to do it (I suck at Excel), but this was something that started nagging at me as I was walking home, braving the cold of a January night. I really had to get it down. And what would “it” be? Nothing less than a quick ‘n’ dirty boo at an ODSP recipient’s wages, should he or she obtain employment earnings.

An ODSP recipient who lives in a single-person household, such as myself, will max out at $1053 a month from the Province or from a combined Federal CPP pension and ODSP support. I’ve got the $1053, thank you very much, but it’s not my only recourse. Recipients can also work for wages, and are encouraged to do so.

Well, sort of.

Setting the Table

People on ODSP can keep 50% of what they earn. The other half is clawed back in the form of a deduction from one’s monthly support cheque. But it’s not all bad news. I mean, the government makes sure that so long as we’re employed, we get an extra $100 tacked onto our cheques. For example, if your gross earnings from employment in one month come to $100, the Province claws back half of that ($50), but gives you back $100. So you wind up with $150. With our minimum wage of about $10/hour, $100 would represent nearly 10 hours of work – but if you get paid $150 to do 10 hours of work, that means that you sorta kinda made the equivalent of $15 an hour. Pretty cool, huh?

Actually, pretty weird. Because if you had only worked for one hour, you will have worked for $105 an hour! Think about it – or better yet, consult the crazy chart I made up, as found below. One hour gives you about $10. Lose half to the clawback but snag the free $100 and you end up with $105!

Take a look, right there in our number table, near the beginning.

ODSP Numbers

Breaking Even

A little elementary ‘rithmetic points out that the break even point in that trend is reached at $200. Anywhere below that, you come out ahead. Anywhere above that, and you endure a net loss. Check out the following graph of the break even point. Column A (blue) represents your gross earnings from income, column B (red) what you wind up with after the Province adjusts. As earnings increase (the horizontal axis – in this graph, as in all of them, the horizontal axis advances in increments of 10), your advantage from your gross income earnings diminishes until they and your adjusted earnings intersect at about $200. Then you actually start to lose out on the clawback.

Now, why would this be? Methinks it’s because the bean counters don’t expect you to work more than 20 hours in a given month. After all, if you could work more than 20 hours a month, then why would you be on disability? I need not go into detail as to the various possible scenarios, especially as regards recipients with psychiatric diagnoses. Some of these would be incomprehensible to people with little or no experience of psychiatric conditions. There’s often a huge gulf between our bare capacity or skill at a task, and our ability to exercise those skills and capacity. So I’ll just say that ODSP, at least, is a significant help to those who are only capable of working a few hours a week, or can only find jobs with limited hours.

Adjustments

Now, let’s look at the second graph.

This graph extends your gross-versus-adjusted earnings trend right up to $1000. If you make $1000 in one month (column A), you only wind up keeping $600 of that. Well, what’s the big whoop, you say? After all, the recipient is getting free guv’mint money and some earnings! He should shut up and be grateful, right?

Not so fast. First off, if you’re on disability, dollars to donuts you have some sort of health requirements that are not covered by our Provincial health care plan (which, let’s face it, is half-decent, but nothing to brag about – sorry to burst your bubble, Americans). Many meds and procedures are not covered, and these can get expensive. You might have special dietary requirements. You might not be able to qualify for subsidized housing, and might be forced to pay market rates in places you can’t afford. And in the end, that whole “50% + $100” thang really just pads out a measly, subsistence-level pension.

How Measly?

The next graph tells us.

Here is your net monthly income, in column C (yellow). It starts off at the left with the base amount of $1053. Sure, everything trends to the right with a nice steady rise. But here’s something funny here. Though I didn’t illustrate the full projection, see how the blue line of your gross income from earnings could intersect with the yellow line of your adjusted net income? That would happen at $2303 dollars. At $2303 a month, ODSP and your earnings would cancel each other out.

So what, you may say? Well, chew on this. You’re disabled, and the most you can hope to make is $2303 per month. But that’s not likely to happen, as those of us who do work usually do so for minimum wage, and part time at that. Not too many “able” folks can make $2303 per month on minimum wage (that would amount to four 57-hour weeks). And yet, $2303 per month amounts to a whopping $27,636 a year: opa!, as they say in Greece.

Which brings us to the next chart.

Slumdog Thousandaires

For reference, your monthly gross earnings are still in blue. Now the red line of column D represents your total annual income: the combo of your net adjusted employment earnings and your ODSP support payment, over the course of the year. Column E in yellow is the poverty line for small communities with fewer than 30,000 inhabitants and column F in green is the poverty line in cities with a population of 500,000 or more. At this point the graph is a little crowded, because we’re in the tens of thousands. So I’ll refer you to the number table way back near the beginning.

According to the stats I used, the poverty line for the small towns – and Owen Sound, my new old sod, with +/- 20,000, is just such a one – was set at $16,273 per year – and remember, this is for 2006! The level for the large cities was set at $20,778.

To make $16,000 per year in 2012 dollars, and so concievably live above the 2006 poverty level, one would have to gross $400 from employment income, which will adjust down to $300. Right now, that’s about what I’m making. I’m only good for a maximum of about 10 hours a week, averaged out.

But in a large city, I’d be toast. That’s because I’d have to make over $1000 per month gross, thus $600 adjusted, in order to get that. I’d need to put in 25 hours a week, which is something I’m not quite capable of at this point in my life.   Oh, and ever spent time in Toronto?  It’s like they charge for the oxygen in that town.  So good luck.

In Sum

What to say, in the end? To me, the conclusions speak for themselves. And sound all the louder when you consider that the support payment amounts, as with all government assistance, rise sporadically but never at a rate even close to the cost of living.

Oh, and we have a $5000 asset cap. Yup, you read that. You can’t have more than five grand in your account. Ever. Indeed, there is such a thing as the Federal Registered Disablity Savings Plan (RDSP), which allows for disabled folks or people on their behalf to save up until the age of 59, then cash it in like an RRSP (similar to a 401K) but not everyone on Disability is eligible. For this taxation year I shall investigate whether I qualify – I don’t think I do, because the feds have a whole different set of criteria, and they are tuffer. But then, if anything can stave off premature rot in some Dickensian Nursing Home of Decrepitude, I’ll try to hit it. Until then, I shall be cagy and crafty, and I advise you to do the same.

Just don’t go hiding your cash in pillow cases or coffee cans in the fridge. There’s no need. Your savings will probably fit nicely in a piggy bank.

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7 Comments leave one →
  1. January 20, 2012 1:10 am

    Nice post! It’s really something to think about.

    Here, I don’t even qualify for disability because I have been too disabled my whole life to contribute to the disability fund…Makes sense right?

    And as a two adult one child family, we are too rich for me to get social assistance…

    As such, we are a family of three on 1 income.

  2. January 20, 2012 1:26 am

    I always thought that Québec was more socialized than Ontario — and it is. It does, however, seem to be the biggest, most nonsensical administrative mess I’ve ever heard of. I’m still not sure I get it. I’m stumped. Québec seems to run their program as if it were Employment Insurance or Welfare…. WTF?

    • January 20, 2012 1:36 am

      I know, I was stumped by the whole situation as well. I keep thinking I may have made a mistake but I really did check every website I could, did all the required paperwork (rejected is the answer) and made all the phone calls I could. And what I stated above is pretty much the conclusions I got from my research. I am stumped and shocked. Mostly, I am sad that my hubby and child have to pay for the fact that I am disabled and have no income…

  3. Caro permalink
    January 20, 2012 5:42 am

    I may be wrong, but I was under the impression that you had to earn at least $100.00 before you get the extra $100.00. Otherwise, great charts!

  4. January 20, 2012 4:11 pm

    According to ODSP, if you made a measly buck, they’d hack off 50¢. Why? Probably … because they can!

  5. jaded1374 permalink
    January 22, 2012 11:40 pm

    its standard policy to turn down basically all first applications to see if you mean it. appeal appeal and you may get in…

    I suspect the line would intersect at a slightly different place if you were to factor in a few other variables… for example, child support/alimony is deducted dollar for dollar from ODSP (and you are legally required to seek support if they believe you are entitled to any) which means having a rich ex won’t get you or your child ahead of the game so much as a cent. If you are also receiving a pension, they deduct that dollar for dollar too. Oh and if you start your own business, they base your earnings on your gross income minus the deductions they decide you can deduct (no matter how much it actually costs!). Don’t bother keeping your gas receipts either. They’re useless. What ODSP wants is a before and after odometer reading (but they won’t tell you this unless you ask them). If you’re VERY lucky, you may get a worker who will tell you what deductions are available should you decide to work. Daycares sometimes give preference to consistent non-subsidized spots and ODSP doesn’t want you to pay to keep the day open on a day you don’t work even if you do normally work on Wednesdays so that off day is at your own expense.. Of course, chances are fairly strong that your worker mention that. Oh and once you’re in subisidized housing on a limited income, good luck getting out. Heck good luck getting ranything done. Nothing like a government sponsored slumlord but of course, you have more to worry about between the drunk beating his wife out back and the druggies sharing their weed out front

    • January 23, 2012 5:17 am

      Excellent stuff, Jaded. Being like I’m mathematically negligible, I had to stick to the simplest possible set of #’s. Moreover, these are the numbers as they apply to me, a simple kind of guy with the most straightforward file around. All the things you mention serve to illustrate how frikkin’ appalling the situation really is when any other variable is brought into the mix. Though frighteningly, compared to the draconian approach used in Quebec, we’re actually better off! (That says something rather sickening.) Thanks for the reply, and keep fighting!

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