The financial future of Canadians with disabilities is uncertain

The gap between rich and poor in Canada is widening. It’s especially shocking for persons with impairments, who have little to no money set up for emergencies.

Individuals and families with disabilities are currently facing financial instability as provinces seek to reduce disability assistance.

Alberta’s ruling United Conservative Party proposes to de-index payments paid to people with disabilities through the Assured Income for the Severely Handicapped (AISH) program as part of sweeping cuts to social services. This means that benefits will not rise in line with inflation, reducing AISH payments each year.

Doug Ford’s Conservative administration in Ontario has been playing with the idea of slashing subsidies and other assistance, including in education. While the government has now reversed its decision to abolish Ontario Works, persons with disabilities in the province continue to face the possibility of losing what little economic independence they have.

The basic truth is that slashing disability benefits while giving little in the way of education and job training will only increase poverty and widen the disability wealth gap.

Millions of people are disabled.

According to the latest recent statistics, there are 6.2 million Canadians who are disabled.

According to Statistics Canada, many people live in poverty, with poverty rates reaching around 30%. In 2015, only 59.4 percent of disabled Canadians were employed, compared to 80.1 percent of the general population.

When they do work, Canadians with disabilities are more likely to be in low-paying, often precarious jobs that are at risk of being automated out of existence. This explains why full-time workers with disabilities earn $2,000 to $8,000 less each year on average. Gaps were even wider for individuals who worked part-time.

However, unemployment and poor pay aren’t the primary causes of inequality.

Disability assistance programs limit assets, while rising housing and healthcare costs and limited access to credit make it difficult for people with disabilities to save money.

Having trouble making ends meet

The Toronto Star published an article two years ago about the difficulties that Canadians with disabilities experience in making ends meet. People with impairments were remained poor despite receiving government assistance.

This inspired us to conduct a research on asset creation among Canadians with impairments, which we recently released.

We looked at the assets of over 33,000 Canadians. Even after accounting for education, employment, and financial circumstances, families with a disability had 25% fewer non-housing assets than households without a disability.

There was more to the chasm than that. Because people with impairments earn significantly less from their jobs, the wealth gap between disabled and non-disabled Canadians widens even further. After accounting for work earnings, we discovered that disability resulted in a 5.9% reduction in non-housing assets.

Putting the responsibility for saving on the people

Regrettably, government policies have always placed a premium on a person’s ability to save. For example, Registered Disability Savings Plans (RDSPs) are a non-tax-deductible program in which the government matches individuals who qualify for the Disability Tax Credit in their savings contributions.

There are a number of drawbacks to this approach, the most significant of which being the expectation that people have some money set aside. After paying for food, lodging, and other daily needs, people with disabilities frequently have next to nothing left.

Instead of condemning people for not saving enough, we need programs that address the underlying systemic issues.

We need policies and programs that address the core causes of inequality, such as health-care expenses, educational access, vocational training, and government subsidies that are means-tested. Otherwise, talking about human rights and equality will not be enough to eliminate this historically disadvantaged community’s economic marginalization.