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B.C. budget: Clawbacks of child support payments to end

Parents on income or disability assistance will soon be able to keep every dollar they get in child support from an ex-spouse under changes revealed in the B.C. budget Tuesday.
B.C. Finance Minister Mike de Jong, tables the budget in the Legislative Assembly in Victoria, B.C., Tuesday February 17, 2015 as Premier Christy Clark (left) looks on. THE CANADIAN PRESS/Chad Hipolito

Parents on income or disability assistance will soon be able to keep every dollar they get in child support from an ex-spouse under changes revealed in the B.C. budget Tuesday.

Bowing to pressure from the Opposition and anti-poverty advocates, Finance Minister Mike de Jong announced that government will stop clawing back child-support payments as of Sept. 1.

“This means an additional $32 million over three years for some of the neediest children and families in British Columbia,” de Jong said as he tabled the government’s third consecutive balanced budget, which projects surpluses for the next three years.

The change follows months of protests and ends the practice by which a single mother had her income assistance cheque reduced by the exact amount she received in child support.

The new policy will benefit about 3,200 families and 5,400 children on income or disability assistance.

In another change aimed at the needy, de Jong said a single person can earn more than $19,000 a year — up from $18,327 — before paying any provincial income tax. The change will cost the province about $5 million a year.

“Modest as it is, this measure will benefit roughly half a million taxpayers, letting them keep a little more of their hard-earned income,” de Jong said.

Government critics, however, were quick to point out that de Jong offered greater relief for the rich than he did for the poor.

They noted that people earning $150,000 or more a year will receive a $227-million tax break at the end of December with the expiration of a two per cent increase on their personal income tax.

By comparison, ending the clawback will cost the government $13 million a year, said Iglika Ivanova, a senior economist with the Canadian Centre for Policy Alternatives. “I don’t think the priorities are in the best interests of British Columbians when you consider that the richest two per cent of British Columbians are getting 17 times more than the poorest single moms.”

Victoria’s Together Against Poverty Society, which was among those pushing for an end to the clawback, celebrated the change.

“It’s by no means going to solve the problem of poverty in British Columbia,” said Stephen Portman, interim executive director. “But it’s going to be a breath of fresh air; it’s going to be a bit of relief in what is an incredibly challenging life.”

He expressed disappointment, however, that de Jong failed to raise overall rates for people on income or disability assistance.

The rates have remained stagnant since 2007 despite steady increases in the cost of living. A single income-assistance recipient currently receives $375 a month to pay for shelter, which Portman described as a “homelessness-creating” provision.

“Now is not the time to give tax breaks to people who need them the least,” he said.

Opposition Leader John Horgan said the budget favoured the rich at the expense of middle-income families, who continue to get hit with higher fees and Medical Services Plan premiums.

“The government clearly has an agenda and that is to pander to those who support them and leave the rest of British Columbia to fend for themselves,” he said.

Businesses were more complimentary.

Iain Black, president of the Vancouver Board of Trade and a former Liberal cabinet minister, applauded the budget’s frugal approach.

“There’s always going to be appetite to spend more money on programs,” he said. “There’s always going to be an appetite to spend more money on capital projects.

“But, I think at this stage in our history, with all of the uncertainty that’s out there, you’ve got to take care of your books when you have the chance.”

Budget highlights

On Tuesday, the government tabled a third consecutive balanced budget and projected surpluses for the next three years. Here are some of the highlights:

  • Total government spending of $45.8 billion in 2015-16 on revenues of $46.3 billion with a projected surplus of $284 million.
  • The budget surplus for 2014-15 is forecast at $879 million, nearly double the prediction in December.
  • Medical Service Plan premiums will increase by four per cent on Jan. 1, 2016. For a family of three or more, that represents an increase of $6 a month to $150.
  • Health spending will increase by nearly $3 billion over three years. The government will spend an additional $10 million to increase the number of hospice beds.
  • Kindergarten-Grade 12 education will get an extra $564 million over three years, largely to cover labour agreements.
  • Government predicts 2.3 per cent economic growth in 2015, rising to 2.4 per cent in 2016.
  • The cement industry will receive $22 million in incentives over three years to encourage cleaner production.
  • The Ministry of Energy and Mines will get an extra $6.3 million to improve permitting and mine oversight.
  • Community Living B.C. will get an additional $106 million over three years to serve adults with developmental disabilities.
  • Families can claim a children’s fitness equipment tax credit worth $12.65 per child annually.
  • Income-assistance programs will receive an additional $20 million in 2016-17.
  • Government will spend $25 million over three years to modernize B.C.’s water laws, regulate groundwater use and improve provincial water management.
  • The B.C. SPCA will receive $5 million to replace or renovate aging facilities on Vancouver Island, the Lower Mainland and elsewhere.
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