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

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

Ymir’s pronunciation still baffles newcomers

PLACE NAMES Ymir: In Norse mythology, Ymir is pronounced ee-mer. So why do we say why-mer instead?

Tell the Times

Web poll: How many Friday markets have you attended in the last two years?

Find Your Fit tour comes to Trail Monday

Public event at Warfield’s Webster school allows students to get valuable hands-on experience with career-planning tools.

Lacing up for Minor Hockey day in Trail

See Minor Hockey Day insert in our Friday edition

Self-watering first step in modern blooming city

Trail Coun. Carol Dobie is focusing on youth involvement in gardening city beds

B.C. cougar kitten rescued after mother struck by vehicle

Conservation Officers find home for young kitten found dehydrated and frostbitten near Williams Lake

Two Canadians, two Americans abducted in Nigeria are freed

Kidnapping for ransom is common in Nigeria, especially on the Kaduna to Abuja highway

Are you ready for some wrestling? WWE’s ‘Raw’ marks 25 years

WWE flagship show is set to mark its 25th anniversary on Monday

B.C. woman who forged husband’s will gets house arrest

Princeton Judge says Odelle Simmons did not benefit from her crime

Women’s movement has come a long way since march on Washington: Activists

Vancouver one of several cities hosting event on anniversary of historic Women’s March on Washington

Liberals’ 2-year infrastructure plan set to take 5: documents

Government says 793 projects totalling $1.8 billion in federal funds have been granted extensions

Workers shouldn’t be used as ‘pawns’ in minimum wage fight: Wynne

Comments from Kathleen Wynne after demonstrators rallied outside Tim Hortons locations across Canada

John ‘Chick’ Webster, believed to be oldest living former NHL player, dies

Webster died Thursday at his home in Mattawa, Ont., where he had resided since 1969

World’s fastest log car made in B.C. sells for $350,000 US

Cedar Rocket auctioned off three times at Barrett-Jackson Co., netting $350,000 US for veterans

Most Read