What happens when you move from a universal benefit program for older adults to a more restrictive, income-tested program?
The Yukon government’s financial advisory panel mentioned making changes to programs like Pharmacare, moving away from a universal program to co-pay or income tested program. Given these kind of suggestions, it’s worth looking at what happened when the Pioneer Utility Grant (PUG) stopped being one-size-serves-all program in 2015.
In 2015, the Yukon Party Government amended the Pioneer Utility Grant Act so that the grant would no longer be the same for everyone, but would decrease based on income. The Yukon Party cabinet then passed regulations so that single older adults would receive much less than a couple.
The grant assists Yukon seniors with the cost of heating their homes, whether they own or rent. To be eligible, you must be at least 65 years old and have lived in Yukon at least six months of the year, three of them in the winter. The 2018 maximum is $1,206 for residents in communities, $1,122 for Whitehorse residents.
It sounds kind of reasonable on the face of it – single people with an income over $117,000, and couples whose income was over $165,000, would receive no grant.
But what wasn’t widely known is that the reductions to the grant start at $40,000 for a single person and $56,000 for a couple. These are hardly high-income earners in the Yukon, where the 2017 living wage for a single person is calculated at $33,000. In addition, the grant changed so that people living alone would receive less than couples. Does anyone know of a case where heating a home cost less for one person than for two?
There were good intentions but the low threshold for implementing the cuts wasn’t the only problem with implementing the new system for the grant.
The government of the day said that the goal wasn’t to cut spending overall on the grant, but to redirect the savings from higher-income households to lower-income ones.
Here is what was said by the minister of health and social services: “…what we intend to do is ensure that there will not be a reduction in the overall package of funding for the Pioneer Utility Grant.”
“So if the applications for the Pioneer Utility Grant in 2015 are lower than the budgeted amount, what we would intend to do is use that surplus amount to add to the pot and therefore be able to bring up the base amount of the Pioneer Utility Grant for all seniors.
“The intent is not to save money. I think it’s really important, and I made sure that I emphasized that part with the seniors groups when we met. The intent is not for the government to save money on the backs of seniors; it’s to redistribute the money so those who need it most will receive it.” (Hansard, Oct. 28, 2014)
And what actually happened? The maximum grant increased by the magnificent sum of $19 a year – or just over $1.50 a month. And the amount spent on the Pioneer Utility Grant decreased dramatically:
• 2014/15: $2,128,000 total spent
• 2015/16: $1,641,000 total spent ($487,000 decrease)
• 2016/17: $1,634,000 total spent ($494,000 from 2014/15)
Source: Yukon Public Accounts
When is that almost half a million dollars a year in savings going to be used to increase the base amount for lower-income seniors, as committed by the previous government?
Is the Department of Health and Social Services simply ignoring this commitment to support low-income seniors, and is the new Liberal government going to let them?
It’s also worth noting that no information is included in YG’s budget materials about the cost of instituting the new sliding scale grant and the ongoing cost of administering it.
When PUG was a universal program, the application process was relatively simple. Now seniors have to fill out a complicated form, attaching “true copies” of various documents like their income tax assessment, their home tax assessment or a tenancy form, and so on, as well as disclosing their marital status.
Did the almost $1 million in savings over the past two years simply disappear into administrative costs?
The cuts to the PUG were prompted by the 2008 healthcare review commissioned by the Yukon Party government. Led by an elite panel, the review called for an income-tested model of the grant.
Why is this of concern now? The 2008 review has been endorsed by another expert panel – the financial review panel commissioned by the current Liberal government.
The latest panel report lists a series of options for raising revenue including expanding residency requirements for eligibility to long-term care facilities, introducing an income or asset test and scaling user fees accordingly.
According to the report the government could also introduce means-tested fees for home care. For individuals of means, increase fees to be in line with other jurisdictions, the report says.
“On the funding side of health care it may well be worth the effort to examine the potential for relatively low-impact changes to co-pay arrangements in areas such as pharmacare,” the report says.
“Given that total drug requirements and costs tend to rise markedly for older individuals, this will be an increasingly important issue to address. The levels of co-pay in Yukon appear to be well below what one finds in many other Canadian jurisdictions. Both equity and fiscal considerations would justify consideration of income-related cost sharing of drug costs.”
The report also suggests a review of the home owner grant, potentially cancelling it or better targeting it so only those in need receive it.
The PUG experience shows that government can realize massive savings by changing universal programs, and keep silent about the true costs including costs to individual Yukoners.
The government should stop supporting these kinds of changes recommended by the financial review panel. The government should also restore the funding levels for the Pioneer Utility Grant.
Otherwise, it very much looks like the Silver government will go ahead with saving money on the backs of Yukon seniors and elders – people who have and continue to contribute so much to our economy and our community.
Deborah McNevin is one of the co-facilitators with Seniors Action Yukon, an independent voice for older adults (55+) committed to speaking out and opening dialogue about issues that affect the well-being of older Yukoners.