5.1- Income Support Programs for Low-income Groups or Disabled Workers
In North America the number of workers with low incomes is large and has increased. In Canada, 7.1 million people had earnings lower than the median for 1997. In Mexico, 7.8 million people, or 25.8 percent of total employment, had earnings lower than the minimum wage in 1997.11 In the United States, wage-earning and salaried workers paid by hourly rates whose incomes were equal to or lower than the minimum wage numbered 5.9 million in 1998, or 8.3 percent of total.12
This section describes the main income support programs each country provides for workers whose incomes are low. Among these programs are those designed to support low-income families and families with children under a specified age. It also includes information about income benefits for people disabled for reasons other than job-related injury or illness.
5.1 What benefits can I receive if I have a low income?
Canada
NATIONAL CHILD BENEFIT (NCB)
The National Child Benefit (NCB) is an innovative national approach to programs and services for children in low-income families. Goals of the NCB are:
to help reduce the depth of child poverty;
to promote attachment to the workforce; and
to reduce overlap and duplication between Canadian and provincial/territorial programs.
Benefits
The NCB will provide more consistent support to low-income families with children across Canada through an enhanced Canada Child Tax Benefit (CCTB). For example, the new CCTB can mean up to $3,050 per year for an eligible low-income family with two children, an increase of up to $1,010 for families with net incomes below $20,921.
The NCB will provide the same amount of income support to all children in low-income families whether the parents are working or on social assistance. This means that, as they leave social assistance for work, they will continue to receive financial support for their children. This will help families stay in the work force and reduce the need for social assistance.
SOCIAL ASSISTANCE OR WELFARE
Social assistance (also known as welfare) provides financial assistance to individuals and families whose resources are inadequate to meet their needs and who have exhausted other sources of support. Each province and territory is responsible for the design, administration and delivery of its own social assistance program. Every jurisdiction has detailed regulations concerning eligibility, administration and benefit levels.
Eligibility
Low-income Canadians can apply for welfare as individuals or family heads. If their non-exempted financial resources are insufficient to cover the costs of their basic needs and those of their family (in the case of a family head), the provincial or territorial authority may grant social assistance.
In addition to the needs test, special eligibility conditions may be imposed on different categories of applicants. For example, all jurisdictions require unemployed employable applicants to engage in activities related to employability. Failure to comply with this condition can result in refusal, suspension or reduction of benefits (see Appendix A).
In the case of single-parent families, the family head is reclassified as employable in all jurisdictions when dependent children reach a certain age (or start school, in some provinces). When this happens, they are subject to the same employability requirements as any other employable client.
A worker whose non-exempted income is insufficient to cover his or her household's basic needs can qualify for a welfare top-up that varies by jurisdiction. In addition, once eligible for basic assistance, the client household may qualify for non-cash benefits such as no-premium health care coverage and assistance with the cost of prescription drugs, vision care and dental services.
Welfare benefits are also available for low-income disabled workers (see Question 5.2). EI recipients from low-income families with children receive the family supplement (see Question 1.1).
Mexico
There are various social programs to support the incomes of poor families. Programs are mainly intended to improve the nutrition and health of children in poor urban and rural areas. Among these programs are the following.
Programa de Educación, Salud y Alimentación, PROGRESA ( Education, Health and Food Program). Its main objective is to promote basic education among children and youths in families in extreme poverty. Some of the benefits provided are scholarships for children, health care services, and packages of basic food products.
Sistema Nacional para el Desarrollo Integral de la Familia, DIF (National System for Family Development). This system provides poor families with free school breakfasts and basic food packages through various programs. Some of these programs are Programa de Raciones Alimenticias (Food Program), Programa de Asistencia Social Alimentaria (Assistance Food Program), Programa de Cocinas Populares y Unidades de Servicios Integrales (Popular Kitchens).
Programa de Abasto Social de Leche, LICONSA (Program of Milk Distribution), through which families with children under a specified age can buy milk at reduced prices.
Programa de Subsidio al Consumo de la Tortilla, FIDELIST (Program for Tortilla Consumption), through which poor families can receive one free kilogram of tortillas per day.
Individuals with low incomes who are not covered by the social security system are provided with medical assistance by public hospitals and medical centers such as the Secretaría de Salud (Secretary of Health), Gobierno del Distrito Federal, and IMSS-Solidaridad (Social Security Institute).
United States
MEDICAID
This is a jointly funded federal-state health insurance program that provides medical assistance for certain individuals and families with low incomes and resources.
Eligibility
Groups eligible for Medicaid include: Temporary Assistance For Needy Families (TANF) which replaced the former AFDC program; infants born to Medicaid-eligible pregnant women; children under age six; and pregnant women who meet the state's TANF financial requirements or whose family income is no more than a specified percentage of the federal poverty level. The Medicaid program varies considerably from state to state, as well as within each state over time.
Low income is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds. For example, medically needy persons who would be eligible except for income or assets may become eligible for Medicaid solely because they have excessive medical expenses. States may also allow families to establish their eligibility as medically needy by paying monthly premiums to the state in an amount equal to the difference between their family income (reduced by unpaid expenses, if any, incurred for medical care in previous months) and the income eligibility standard.
Coverage generally stops at the end of the month in which a person's circumstances make him or her no longer eligible. If you would like to file an application for Medicaid, go to your state Medicaid agency.
MEDICARE
Medicare is a national health insurance program for people 65 years of age and older, certain younger disabled people, and people with kidney failure.
Eligibility
You are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years old and a citizen or permanent resident of the United States. You might also qualify for coverage if you are a younger person with a disability or with a chronic kidney disease.
Benefits
Medicare is divided into two parts:
Hospital Insurance (Part A), to help people pay for care in a hospital or a skilled nursing facility and for home health and hospice care; and
Medical Insurance (Part B), which helps pay doctor bills and for outpatient hospital care and various other medical services not covered by Part A.
You may have to pay a fixed monthly premium as well as a co-payment each time a service is used. The premiums and co-payments vary from plan to plan and can be changed each year.
If you already receive Social Security or Railroad Retirement benefits when you turn 65, you do not have to apply for Medicare. You are enrolled automatically in both Part A and Part B, and your Medicare card is mailed to you about three months before your 65th birthday. If you do not receive Social Security or Railroad Retirement benefits, you need to apply for Medicare three months before you turn 65. You apply by contacting any Social Security Administration office or, if you or your spouse worked for a railroad, the Railroad Retirement Board.
Even if you continue to work after you turn 65, you should at least sign up for Part A of Medicare. Part A may help pay some of the costs not covered by your employer's health plan. It may not be advisable, however, to sign up for Part B at the same time.
CHILDREN HEALTH INSURANCE PROGRAM
In 1997 a new Children Health Insurance Program was created. This program enables states to initiate and expand health insurance coverage for uninsured children. The law allows states to expand coverage for children through a separate child health insurance program, through the Medicaid program, or through a combination of these programs.
5.2 If I am a worker disabled for reasons unrelated to my employment, can I receive any income support?
Canada
CANADA/QUEBEC PENSION PLANS
Yes; if you have contributed to the Canada Pension Plan or Quebec Pension Plan (CPP/QPP), you may receive benefits if you become disabled for a reason unrelated to your employment.
Benefits
You will receive benefits for as long as your disability is severe and prolonged, or until the CPP/QPP retirement pension begins. The cash benefit is made up of two parts: a flat-rate component and an earnings component. In 1998, the maximum amount allocated was $895 per month. Benefits paid by the CPP/QPP are considered as income for federal and provincial income tax purposes. Through the CPP, vocational rehabilitation services are also available under certain conditions (see Appendix A).
Eligibility
To qualify, you must be between 18 and 65 years old and have contributed to the CPP for four of the past six years, or to the QPP for two of the past three years or five of the past 10 years.
Disabled persons may apply for CPP/QPP disability benefits at an Income Security Programs Office.
SOCIAL ASSISTANCE
Income support is also available under provincial and territorial social assistance programs for disabled workers. All provincial welfare programs have features designed to assist disabled persons, including one or more of the following:
higher exemption levels on assets and income;
higher basic assistance levels;
special disability-related allowances; and
supplementary coverage for health and medical services.
Income support from welfare can vary considerably from one jurisdiction to another, and benefits are calculated according to the situation and status of the disabled person.
For welfare disability benefits, applicants must submit an application to the provincial/territorial authority responsible for income security.
Mexico
Yes; if you become disabled for reasons other than a job-related injury or illness your Disability and Life Insurance at IMSS (Seguro de Invalidez y Vida) entitles you to qualify for disability income benefits. Disability income benefits may be temporary or permanent.
If you are a worker disabled for non-professional reasons with a physical or mental incapacity or obvious disability making it impossible for you to perform your work, you are entitled to receive a compensation for the termination of your labor relationship, according to the Article 54 of the LFT (Federal Labor Law).
Benefits
If you are a worker insured by IMSS, your income benefit will be equal to 35 percent of your average earnings for the last 500 weeks of insured work (9.615 years) plus payments for family assistance. Your disability payment, including dependents' assistance, cannot be less than the minimum wage in the Distrito Federal, and cannot be higher than the average wage upon which the payment was fixed. Payments will be updated annually based on the national consumer price index.
You will receive income benefits for as long as you are disabled. If disability prevents you from doing the job you had at the time you became disabled or another job, you are entitled to continue receiving disability income support. In addition to your monthly disability pay, you are entitled to receive at the end of the year the aguinaldo, which can not be lower than your monthly payment. An employee unable to work because of a mental or physical disability due to a non-job-related injury will be entitled, according to the Article 54 of the Federal Labor Law, to receive compensation equal to one month's salary plus 12 days' wages for each year of service with the same employer or, if it is possible and the employee agrees, to be employed in another job compatible with his or her abilities. This compensation is in addition to any other benefit mandated by law.
Eligibility
You must have paid Disability and Life Insurance premiums for at least 250 weeks to the Instituto Mexicano del Seguro Social (Mexican Institute of Social Insurance) at the time your disability is declared. If your disability is 75 percent or greater, the period you must have paid premiums is reduced to 150 weeks. Workers lose their legal right to disability benefits if the disability was incurred or already existed before the worker was insured.
If you have not paid the required minimum weeks of premiums and you have a permanent disability, you are entitled to withdraw funds from your individual account of Seguro de Retiro, Censantía en Edad Avanzada y Vejez (Retirement, and Old-age Retirement Insurance).
Note that if your employer did not insure you at IMSS you have the right to file an action with the Junta de Conciliacion y Arbitraje (Conciliation and Arbitration Board) to be registered at this institution.
Who pays?
El Seguro de Invalidez y Vida (Disability and Life Insurance) is financed by premiums paid by you (0.626 percent of insurable earnings) and your employer (1.75 percent of insurable earnings), plus a federal contribution equal to 7.143 percent of the total premiums paid by employers.
United States
Yes; when you and your employer pay into the Social Security Program you are buying long-term disability insurance. These disability payments are not intended to cover temporary, short-term or partial disability, but you may have other income support options for these, such as workers' compensation.
Eligibility
To receive social security disability benefits, you must have a physical or mental impairment that prevents you from doing any substantial gainful work. The disability must have lasted or be expected to last at least 12 months, or must be expected to result in death.
Benefits
The law states that the sum of all your disability payments cannot exceed 80 percent of your average earnings before you became disabled. Individuals qualifying for disability benefits may receive average monthly payments of about $625. If you are able to earn your own living, benefits may be discontinued, but if your wage is much lower than the one you had before your disability, you can claim some compensation. You may also try different jobs for a period of time without losing your benefits.
Disability benefits are paid to you or your family when you have enough credits to qualify. The amount of your monthly disability payment is based on your age and earnings records. Your spouse and children under 18 may also be eligible for dependents' benefits.
If you receive workers' compensation payments, the total income benefits you receive, including disability payments, cannot be greater than 80 percent of your average wage before you became disabled.
Eligibility
To be eligible for benefits you must have earned the required credit for at least 20 quarters during the 10 years before you became disabled.