Inflamatory headlines re social assitance in Ontario

Many people in Ontario heard the news that there is $1.2 Billion that had been given out to people who did not qualify for assistance and not recovered. Wondering if this was a political agenda at work I looked into it a bit more closely.

Turns out this is a historical number. Since February 2002 the actual number is $186 million (About 24 million a year considering this is less than 8 years).

The annual budget is 1.9B for the entire program.

The current loss rate therefore represents about 1.26% of the total budget.

The same report documents companies providing assistive devices taking 400% margins in some cases and even higher markups in others- but that is not the headline.

Read the report yourself:

http://www.auditor.on.ca/en/reports_en/en09/2009AR_en_web_entire.pdf

So we are seeing the number $1.2B bandied about without context (nobody saying this is a historical total). They make it out like this is a huge boondoggle yet it is only 1.2% of the budget. In perspective this is less than the average shrinkage in retail inventories.

The federal government estimates that tax fraud represents 13% of tax collected. The Ontario government collects $65 Billion a year in taxes. The social assistance loss as a percentage of that total would be 0.00035%. The amount presumed to be lost in tax fraud is $8.45 Billion.

Now compare the $8.45 Billion per year in lost taxes due to Ontario tax cheats with the poor who are presumed to only scam the system to the tune of $24 million a year.

But the headline of those welfare cheats feeds a political purpose not served by context.

So we have some 1.2% of people on social assistance said to be scamming the system and this is more of a headline than 13% scamming the tax system for a lot more money.

Now a social assistance overpayment is anything from a failure to prove your eligibility to an inadvertent overpayment, to a change in eligibility without paying the money back to an actual scam-- all that is included in the figures and poor people are not all good at proving their eligibility.

No doubt there are many poor people unable to get what they do qualify for as well-- homeless people cannot get social assistance in spite of obvious need. I suspect the number of poor people who are unable to access services they qualify for due to homelessness or disability is greater than the number who fail to prove eligibility or even those who scam the system. Again perspective.

Think of that as you listen to Hudak (Conservative leader of Ontario) cry foul over the next few days fed by apparently an AG and media with a shared political agenda to advance a problem that is only there if you ignore all context and perspective. But the media is getting ready to elect a new Harris government in Ontario.