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Alberta Supports Contact Centre

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Important Context for Counselling Persons With Low Income

Persons with low income may experience both systemic and personal obstacles to gaining employment.

Causes of poverty

“There are so many issues that push people into poverty. For many, health issues are prevalent. Family support may be lacking—they may be geographically separated. And for some, a generational situation exists where a second generation now needs help.”

—Susan Watson, Edmonton Food Bank

Obstacles include:

  • A sense of personal failure, low self-esteem, and fear of trying again
  • Physical and mental health concerns
  • Transportation issues
  • A shortage of low-cost housing
  • Addictions
  • Single parenting, often as very young parents
  • Parenting concerns and child care
  • Lack of basic skills
  • Relationship difficulties
  • A low level of education and literacy
  • An unstable work history

Trying to address these complex issues with limited resources creates a very challenging situation for most clients.

Terminology and definitions

Low income

The term low income is a relative one. It is used here to refer to the situation of persons who may or may not be employed and who, for various reasons, have both limited financial resources and limited opportunity to share in other resources. Low income may result in a person living below a poverty level though that person may be working or receiving some form of income support.

Persons with low income may be working part time or full time or not working at all. They may be parents who need more income for basic needs for themselves and their dependants, or they may be learners in a training program. They may receive income support payments and other benefits, such as health care.

The common experience of this population is that of receiving a low income—in most cases, a lower income than they require for their day-to-day needs.

Poverty

The low income cut-off line

“Although Canada has no official measure of poverty, the Statistics Canada measure [low income cut-off line or LICO] is probably the best known… Statistics Canada itself does not claim to measure poverty; rather, it defines a set of income cut-offs below which people may be said to live in straitened circumstances. Most social policy analysts, politicians and editorial writers treat the cut-offs as poverty lines.”

The Canadian Fact Book on Poverty

Canada has no official definition of poverty. Different organizations use a variety of approaches and measures to determine at what level people are judged to be poor.

Here, the term poverty will be used to refer to a level of income below the low income cut-off line.

The poverty rate for unattached persons historically has always been 3 to 4 times higher than the poverty rates of families. Poverty rates for unattached working-age women historically are always higher than those for men.

Depth and duration of poverty

Depth of poverty is how far below the poverty line (low income cut-off or LICO) a person or household unit’s income is. The average depth of poverty has increased dramatically. Working-age households have experienced the greatest increase in depth of poverty.

Duration of poverty is the amount of time a person’s income falls below the poverty line. Certain groups are more likely to experience long periods of poverty:

  • Lone parents
  • Persons with disabilities
  • Members of visible minorities
  • Recent newcomers
  • Persons with low levels of education
  • Unattached persons
  • Indigenous persons

The longer a person remains in poverty, the more difficult it is to move out of poverty.

Income support recipients

Although people talk about welfare as a single entity, there are many welfare systems in Canada: a separate system in each province and territory and another system for certain Indigenous people. Despite the fact that each is different, they have many common features. They all have complex rules that regulate all parts of the system. These include eligibility for assistance, rates of assistance, allowable income from other sources, and appeal processes for cases.

Persons who receive income from government financial assistance programs may have the qualifications and the desire to work. But they may fear jeopardizing their benefits if they take a full-time job. Because medical costs may be among their basic needs, many feel that a potential loss of government assistance is too big a risk to take. Some fear losing benefits not just because of the cost, but also because it may be hard to get the benefits back if they lose their jobs.

People receiving financial assistance are encouraged to be as self-sufficient as possible. Those who are working while receiving financial assistance may receive a supplement to their earnings. In other words, a portion of their wages may be considered exempt when their benefits are calculated. In Alberta, people leaving financial assistance for jobs may continue to receive health benefits both for themselves and for their children. So, while loss of health benefits may still be a concern for clients, it may not be a reality.

Financial pressure

Decision making under stress

“We often meet people in crisis situations in their life. Their behaviours and concerns are not long-term focused. Stress is high and their decision-making abilities are not at their best.”

—Lynn Crump, Career and Employment Consultant, Government of Alberta

For income assistance recipients, the stress of financial hardship is often the most prominent part of their life. They tend to feel it as a “downward pull.” It may lead to family friction, misunderstandings among friends, loss of self-esteem, and an inability to provide for one’s family.

Financial pressures for income support recipients are distinct from pressures experienced by displaced middle- or high-income earners. Income support recipients report enormous difficulty in meeting their families’ basic survival needs, such as food, clothing, and shelter. Lack of money for transportation and child care becomes a major concern when they begin to look for work.

Duration of income support

The length of time that people receive income support varies a great deal. For some, it is a temporary situation: the assistance they receive tides them over until they find work, and they are able to move forward without requiring further assistance. Others with more complex situations, who find maintaining employment a challenge, may need assistance over a much longer period.

Working poor

The downward slide

“Many people could experience some of the challenges that drive people into poverty, for example, mental illness. Without sufficient support, a downward slide can happen very quickly. People’s savings are eaten away, and they have no further resources. Both financial and emotional support are so important.”

—Marjorie Bencz, Edmonton Food Bank

The incidence of low income in Alberta is particularly high for earners with the following characteristics:

  • Living outside of Calgary or Edmonton
  • Aged 18 to 24
  • Female
  • Separated or divorced
  • Recently immigrated
  • Disabled (except those working more than 2,000 hours per year)
  • Indigenous (except those working more than 2,000 hours per year)
  • Completed high school or less
  • Unattached (sole earners)
  • Lone parent
  • Working on a part-time, seasonal, or temporary basis
  • Working in a small firm with under 20 employees
  • Not receiving medical or dental benefits from the employer

Most low-income children in Alberta live in households where there is a lone parent who works either full time or part time.

Precarious jobs

Precarious jobs are those that combine low wages with a high risk of termination. They are a major cause of low family incomes and poverty in Canada. People in precarious jobs are generally excluded from opportunities for job laddering and further skills development. Precarious work is concentrated among defined groups, including recent newcomers, single parents, and women. It is often experienced alongside multiple other sources of disadvantage.

Health

Adults with low incomes tend to experience more health-related problems than those in higher income brackets. Low incomes do not cause these related health concerns. In fact, in some cases, health issues may be the cause of low incomes.

The following social determinants interact with basic determinants of health, such as genetic endowment and the physical environment, to determine why some people are healthy and others are not:

  • Income inequality
  • Social inclusion
  • Employment and job security
  • Working conditions
  • Contribution of the social economy
  • Early childhood care
  • Education
  • Food security
  • Housing

Compared to adults with middle incomes, a higher percentage of adults with low incomes have 2 or more of the following chronic conditions:

  • Asthma
  • High blood pressure
  • Stomach ulcers
  • Effects of stroke

Mental and emotional health

Persons with low income tend to have more difficulties related to mental and emotional health than their counterparts with middle or high income. The experience of unemployment is marked by varying degrees of depression as well as:

  • A continuous struggle to meet survival needs
  • Pessimism about becoming employed
  • Low self-esteem
  • Negative feelings about being on welfare
  • A lack of significant or lasting positive emotional shifts
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