Canadian Social Research Links

Asset-Based Social Policies

Sites de recherche sociale au Canada

Politiques sociales fondées sur l'acquisition d'actifs

Updated June 17, 2017
Page révisée le 17 juin 2017


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The following links will take you further down on the page you're now reading:
* Tax-free Savings Accounts
* Microcredit - Muhammad Yunus and the Grameen Bank
* Registered Disability Savings Plans (RDSPs)
* [U.S.] Assets for Independence (AFI) Program

See also:
February 2011 Task Force on Financial Literacy in Canada
- this link takes you to a section of the Federal Government Department Links page of this website.

Pooled Registered Pension Plans Links page:
http://www.canadiansocialresearch.net/prpp.htm




NEW

Ontario

New social assistance asset test welcome news
http://openpolicyontario.com/new-social-assistance-asset-test-welcome-news/
June 16, 2017
The 50 year experiment forcing welfare recipients and low income persons with disabilities into financial destitution finally appears to be over. In Charles Sousa’s Budget 2017, asset limits for single welfare recipients will be raised from $2,500 to $10,000 for a single person and to $11,000 for a lone parent with two children. Persons with disabilities will have their asset limits raised from $5,000 to $40,000 for singles and from $7,500 to $50,000 for couples. The amount families will be able to donate to family members receiving assistance will go from $6,000 a year to $10,000.
(...)
In the four years since 2013, policy analysts learned what the province of Quebec and Alberta and the states of Ohio, Illinois and Virginia had known for some time – that keeping recipients of social assistance in complete destitution does not save money.

Source:
Open Policy Ontario

http://openpolicyontario.com

---------------------------------------------------------------------------------------

Earlier related coverage in the Toronto Star:
(all dated April 27, 2017)

Welfare recipients see boost in asset limits in Ontario budget
https://www.thestar.com/news/canada/2017/04/27/welfare-recipients-see-boost-in-asset-limits-in-ontario-budget.html
The four-year $480 million investment will raise asset limits, boost exemptions for cash gifts and increase monthly benefits for more than 900,000 Ontarians who rely on Ontario Works (OW) and the Ontario Disability Support Program (ODSP.)

Ontario Liberals unveil balanced budget that features free youth pharmacare plan
https://www.thestar.com/news/canada/2017/04/27/ontario-liberals-unveil-balanced-budget-that-features-free-youth-pharmacare-plan.html

Highlights from the 2017 Ontario budget
https://www.thestar.com/news/canada/2017/04/27/highlights-from-the-2017-ontario-budget.html

Winners and losers from the 2017 Ontario budget
https://www.thestar.com/news/canada/2017/04/27/winners-and-losers-from-the-2017-ontario-budget.html

A pre-pre-election budget to bolster Liberal fortunes: Cohn
https://www.thestar.com/news/canada/2017/04/27/a-pre-pre-election-budget-to-bolster-liberal-fortunes-cohn.html

Source:
Toronto Star
https://www.thestar.com/

When good advice goes bad
http://imagineacity.ca/2013/11/22/when-good-advice-goes-bad/
November 22, 2013
By Adrienne Clarke
This week, Imagine a City is joined by guest blogger John Stapleton, founder of Open Policy Ontario [ http://openpolicyontario.com/ ] and a fellow with the Metcalf Foundation [ http://metcalffoundation.com/ ] . He has some much-needed financial advice for low-income earners, just in time for Financial Literacy Month. Here, he provides a rundown of what low-income earners really need to know, and how the financial-services industry can serve them better.
---
Excerpt:
When assisting low-income people, for instance, many advisors will tell them to max out their RRSPs, forget about Tax Free Savings Accounts (TFSAs), and wait until 65 or later to sign up for Canada Pension. They’ll also be advised to look closely at their taxes to capitalize on tax credits.This is the same advice given (rightfully) to middle- and high-income earners, but for people making ends meet on lower incomes, it’s exactly wrong.

Source:
Imagineacity

http://imagineacity.ca/

Imagineacity is an initiative of the
United Way of Toronto
http://imagineacity.ca/

For more about RRSPs and TFSAs for people in poverty,
see John's comprehensive report:
Planning for Retirement on a Low Income
http://openpolicyontario.com/retiring-on-a-low-income-3/

---

- Go to the Ontario Municipal and Non-Governmental Sites (O-Z) page:
http://www.canadiansocialresearch.net/onbkmrk4.htm

- Go to the Seniors (Social Research) Links page:
http://www.canadiansocialresearch.net/seniors.htm

From Statistics Canada:
http://www.statcan.gc.ca/start-debut-eng.html

June 14, 2013
(Under New products and studies):
The Canadian Economy in Transition:
"Saving and Wealth: The Adequacy of Household Saving in Canada"

HTML version : http://www.statcan.gc.ca/pub/11-622-m/11-622-m2013029-eng.htm
PDF version (528K, 44 pages) : http://www.statcan.gc.ca/pub/11-622-m/11-622-m2013029-eng.pdf
By Huju Liu, Yuri Ostrovsky and Jie Zhou
This paper examines one dimension of the overall state of financial preparedness for retirement in Canada by assessing the adequacy of households’ private saving.

When does it make sense to invest in an RRSP – and when doesn’t it?
http://goo.gl/UY3Sb
February 8, 2013
By Preet Banerjee
(...)
Ultimately, the [RRSP] withdrawal is treated as taxable income at the time it is taken out, which can have a devastating effect on a senior’s Guaranteed Income Supplement (GIS) benefit. It is not only subject to tax, it can also reduce GIS at a rate of 50 cents on the dollar. That’s like getting a 20 per cent refund when making a contribution but being subject to a 70 per cent tax on withdrawal.

Source:
Globe and Mail
http://www.theglobeandmail.com/

New from
Statistics Canada:

http://www.statcan.gc.ca/start-debut-eng.html

February 11, 2013
Registered retirement savings plan contributions, 2011
http://www.statcan.gc.ca/daily-quotidien/130211/dq130211a-eng.htm
Total contributions to registered retirement savings plans (RRSPs) amounted to $34.4 billion in 2011, up 1.6% from 2010. Data are based on tax returns filed for 2011. Just under 6.0 million taxfilers contributed to an RRSP in 2011, virtually unchanged from 2010.
- includes links to two tables:
1. Registered retirement savings plan contributors – Canada, provinces and territories
2. Registered retirement savings plan contributors – Census metropolitan areas

Related subjects:

* Household, family and personal income
http://www5.statcan.gc.ca/subject-sujet/result-resultat.action?pid=3868&id=2812&lang=eng&type=DAILYART

* Pension plans and funds and other retirement income programs
http://www5.statcan.gc.ca/subject-sujet/result-resultat.action?pid=3868&id=70008&lang=eng&type=DAILYART

* Seniors
http://www5.statcan.gc.ca/subject-sujet/result-resultat.action?pid=70000&id=70000&lang=eng&type=DAILYART

* Income, pensions and wealth
http://www5.statcan.gc.ca/subject-sujet/result-resultat.action?pid=70000&id=70005&lang=eng&type=DAILYART

New from
John Stapleton, Open Policy:

http://www.openpolicyontario.com/

Stop wondering about under-subscription of benefits:
Getting the Learning Bond and Education Savings Grants is really hard for low-income parents
http://openpolicyontario.com/stop-wondering-about-under-subscription-of-benefits/
By John Stapleton - Open Policy Ontario
January 22, 2013
A blog about why it is hard for low-income parents to receive the benefits of an RESP, Education Saving Grant or Canada Learning Bond for their children's education.
---
In this blog post, John encounters, along with four single parents, eight of the significant barriers facing low-income parents in the course of the application process for these education-related assistance programs.

Ontario offering loans to help low-income women start businesses
http://www.thestar.com/news/canada/article/1315510
January 15, 2013
By Laurie Monsebraaten
Ontario will spend about $760,000 over the next two years to help more than 800 low-income women become entrepreneurs. The initiative, announced Tuesday by Women’s Issues Minister Laurel Broten, includes financial training and microloans of $500 to $5,000. The money could help a single mother start a new culinary business or a recent university graduate open her own fitness centre, she said.
(...)
Participants in the Microlending for Women in Ontario program will have access to financial literacy training, entrepreneurial mentoring, skills development and life skills support. Those ready to strike out on their own will be eligible for up to 400 microloans.

32 Comments about this article:
http://www.thestar.com/news/canada/article/1315510--ontario-offering-loans-to-help-low-income-women-start-businesses#comments

Source:
Toronto Star
http://www.thestar.com/

From the
Ontario Women's Directorate:
[ http://www.women.gov.on.ca/english/index.shtml ]

Helping Women Achieve Economic Security:
Microlending for Women in Ontario Program
http://www.women.gov.on.ca/owd/english/economic/entrepreneurs.shtml

Registered Retirement Pension Plans (RRSPs) : A Tally of Advantages and Disadvantages (small PDF file - 1 page)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/RRSP-disadvantages.pdf
Examines eight features of RRSPs with respect to advantages for the well-off and disadvantages for the poor.

Source:
Open Policy - John Stapleton's website

http://openpolicyontario.com/

New from
John Stapleton, Open Policy:
http://www.openpolicyontario.com/

Stop wondering about under-subscription of benefits:
Getting the Learning Bond and Education Savings Grants is really hard for low-income parents
http://openpolicyontario.com/stop-wondering-about-under-subscription-of-benefits/
By John Stapleton - Open Policy Ontario
January 22, 2013
A blog about why it is hard for low-income parents to receive the benefits of an RESP, Education Saving Grant or Canada Learning Bond for their children's education.
---
In this blog post, John encounters, along with four single parents, eight of the significant barriers facing low-income parents in the course of the application process for these education-related assistance programs.

Supporting Albertans To Save
An Asset Building Approach to Poverty Reduction Concept Paper
(PDF - 1.9MB, 14 pages) (dead link)
June 29, 2012
(...) Asset building is an emerging area of social policy in North America. Generally, asset-based approaches to social policy emphasize investment and future needs rather than a focus on meeting immediate needs, which is the standard approach of income assistance policy. Based on the success of over 500 matched savings programs operating in the United States, over 30 states have developed state-wide matched savings programs and 18 states are currently investing in matched savings. Several U.S. states have legislated matched savings programs, including Minnesota’s Family Assets for Independence Minnesota (FAIM) [ http://minnesotafaim.com/ ], through state statutes. The State of Oregon’s legislated matched savings program has successfully operated for over 5 years and is unique in its use of matched savings as an ‘add-on’ incentive to other social services provided by the state. In Canada, only the province of Manitoba has thus far developed policy support and dedicated stable funding for savings through its Manitoba Saves initiative. Manitoba is also a leader in revising asset limits as a component of Manitoba Saves resulted in raising liquid asset limits to $4,000 per person to a maximum of $16,000 per household.

Source:
Momentum
http://www.momentum.org/
Momentum is a Community Economic Development (CED) charitable organization that works with people living on low incomes to develop productive futures. Momentum offers award-winning programs that assist people in developing financial, personal, social and professional assets.

Related link:

Alberta Centennial Education Savings (ACES) Plan website (Alberta Govt. site)
The ACES Plan will contribute $500 into the Registered Education Savings Plan (RESP) of every child born to Alberta residents in 2005 and later.
- incl. program info and links to related resources

---

- Go to the Alberta Links page:
http://www.canadiansocialresearch.net/abkmrk.htm

- Go to the Provincial and Territorial Anti-poverty Strategies and Campaigns page:
http://www.canadiansocialresearch.net/antipoverty.htm

How RRSP payments can help seniors with benefits
http://goo.gl/xdkS2
By Preet Banerjee
Posted February 24, 2012
Updated September 10, 2012

There’s been a lot of talk about changes to the Old Age Security program lately, but the Guaranteed Income Supplement (GIS) deserves a lot more attention. For low-income seniors, it could amount to almost $9,000 a year, but a general lack of knowledge in financial planning is leading some people to effectively turn it down.

GIS is a benefit received on top of OAS for seniors whose incomes are below $16,368 (single person). But just as OAS is subject to clawback over a certain threshold, so is GIS. The big difference is that GIS is more aggressively clawed back from people who arguably need it more. The OAS clawback begins once your income has reached close to $70,000 and is clawed back at a rate of 15 cents per dollar. GIS, on the other hand, is clawed back at a rate of 50 cents on the dollar for every dollar of income above $3,500.

This has led to the (not quite yet) conventional wisdom that the Tax Free Savings Account might be a better savings vehicle for low-income seniors. Well, it’s a bit more complicated than just that. It’s true that an RRSP or RRIF withdrawal made if you are eligible for GIS could effectively be taxed at around 70 per cent since you have to pay your marginal tax rate on the withdrawal and it can reduce your GIS payment by 50 cents per dollar. It’s also true that had that withdrawal come from a TFSA, the effective tax rate is zero, since the withdrawal does not affect income-tested benefits. “But there’s sort of an alternate universe that exists for lower-income seniors between 65 and 71”, says John Stapleton, a social policy consultant.

Remember that an RRSP contribution is an income deduction, so when you make a contribution, your income is lowered. Someone who is 65 and whose income is above $16,368 can reduce that income below the threshold by making an RRSP contribution. All of a sudden, that GIS tap is open.

“So yes, while the TFSA can be a better savings vehicle for many lower-income Canadians, you can’t just assume that will always be the case. You need to plan it out. Unfortunately, when I counsel people on this strategy I find that when they bring it to their bank, they get faced with a lot of blank stares”, Mr. Stapleton says...

12 comments about this article
http://goo.gl/CJpZI

Source:
Globe and Mail
http://www.theglobeandmail.com/

Related links:


Retirement income for Canadians with low incomes
http://openpolicyontario.com/retiring-on-a-low-income-3/
By John Stapleton

This page of John Stapleton's Open Policy website contains a new series on retirement income for Canadians with low incomes.
[ NOTE : Some examples in the files below relate to Ontario only.]

1. Maximizing GIS (Guaranteed Income Supplement):
A background paper on retirement financial planning for Canadians with very low incomes
(PDF - 1.5MB, 9 pages)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/maximizing-Paper-V6.pdf
September 2012

2. Toolkit: Determining OAS (Old Age Security)
and GIS eligibility for people who come to Canada as adults
(PDF - 1MB, 5 pages)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/TOOL-questionaireV7.pdf
September 2012

3. Low Income Retirement Planning: Four things to think about (PDF - 2.5MB, 11 pages)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/Slides-Booklet-V8all.pdf
September 2012
* How do I get the Guaranteed Income Supplement?
* Does CPP early retirement make sense for me?
* What’s the smartest way to save before I turn 65?
* A smart way to save between ages 65 and 71

Complete package of the three above files in one download (PDF - 4.9MB, 27 pages)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/allinonelowincomeretirement.pdf
September 2012

Cover page of the report and testimonials
by Sherri Torjman, Richard Shillington and Don Drummond
(PDF - 376K, 2 pages)
http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/Press-Kit-Folder-V5.pdf
September 2012

Source:
Open Policy - John Stapleton's website

http://openpolicyontario.com/

Low Income Retirement Planning in Canada: living in a different world
http://vibrantcanada.ca/blogs/john-stapleton/low-income-retirement-planning-canada-living-different-world
By John Stapleton
September 5, 2012
(...) For most people nearing retirement, the financial advice we get is based on two simple premises:
1. That our post-retirement income will be less than our pre-retirement income; and
2. That our taxable income will be lower at 65.
(...) [However,] for those on fixed incomes before age 65...the reality is that most low income seniors receive higher incomes when they turn 65. Old Age Security, combined with CPP and the Guaranteed Income Supplement, is often significantly higher than the social assistance, disability benefits, and low earnings they realize in the years leading up to age 65. And Old Age Security and CPP are taxable while social assistance and some disability benefits are not. This situation results in higher taxation once they reach 65, not lower.
(...) The document Planning for Retirement on a Low Income provides low income retirees and their advisors with the information and the tools they need to make the right decisions for their financial future:
*
When to take CPP early retirement
* When to avoid an RRSP
* When to buy a TFSA
* When to buy an RRSP

Source of this article:
Vibrantcanada.ca - Vibrant Communities Canada
http://vibrantcanada.ca/
Vibrantcanada.ca is a learning community of members, from diverse sectors, multi-sector roundtables, who share a common interest in reducing poverty, community engagement and collaboration. It is made up of individuals who are united in our desire to see one million people move beyond poverty all across Canada.

---

Low income senior’s income tax shock
http://www.moneyville.ca/article/1231097
By James Daw
July 29, 2012
This article is a case profile of a low-income senior, age 66, seeking advice about how to maximize a modest RRSP, while having minimal impact on her Guaranteed Income Supplement benefits. "Adeline" will have an income of $20,000 this year, including $2,927 from Ottawa’s Guaranteed Income Supplement (GIS). She was surprised to discover she would receive no GIS payments for the second half of the year, after she reported a one-time gain on the sale of some property on her 2011 tax return. Now she is worried she will lose more GIS payments once she starts to withdraw money from her modest $30,000 RRSP (registered retirement savings plan).
Source of the above article:
Moneyville
http://www.moneyville.ca/
---
Moneyville is a subsite of the
Toronto Star:

http://www.thestar.com/

---

- Go to the Ontario Municipal and Non-Governmental Sites (D-W) page:
http://www.canadiansocialresearch.net/onbkmrk3.htm

- Go to the Pension Reforms Links page:
http://www.canadiansocialresearch.net/pensions.htm

- Go to the Seniors (Social Research) Links page:
http://www.canadiansocialresearch.net/seniors.htm

From
Finance Canada:

Minister Menzies Highlights Pooled Registered Pension Plans'
Strengths for Small and Medium-Sized Business

http://www.fin.gc.ca/n12/12-019-eng.asp
February 24, 2012
The Honourable Ted Menzies, Minister of State (Finance), today spoke to the Charlottetown Chamber of Commerce about how the introduction of Pooled Registered Pension Plans (PRPPs) will help small and medium-sized businesses compete for the skilled workers they need to expand and grow.

Source:
Finance Canada
http://www.fin.gc.ca/fin-eng.asp

Related link:

Pooled Registered Pension Plans (PRPPs):
News Coverage, Opinion & Commentary

http://goo.gl/gcQKY
- links to 60+ related resources, including some negative critiques.

Related links:
Go to the Pooled Registered Pension Plans Links page:
http://www.canadiansocialresearch.net/prpp.htm

How RRSP payments can help seniors with benefits
http://goo.gl/NxxTu
February 24, 2012
By Preet Banerjee
There’s been a lot of talk about changes to the Old Age Security program lately, but the Guaranteed Income Supplement (GIS) deserves a lot more attention. For low-income seniors, it could amount to almost $9,000 a year, but a general lack of knowledge in financial planning is leading some people to effectively turn it down.
Tax Free Savings Account might be a better savings vehicle for low-income seniors. Well, it’s a bit more complicated than just that. It’s true that an RRSP or RRIF withdrawal made if you are eligible for GIS could effectively be taxed at around 70 per cent since you have to pay your marginal tax rate on the withdrawal and it can reduce your GIS payment by 50 cents per dollar. It’s also true that had that withdrawal come from a TFSA, the effective tax rate is zero, since the withdrawal does not affect income-tested benefits. “But there’s sort of an alternate universe that exists for lower-income seniors between 65 and 71”, says social policy consultant John Stapleton. (...) while the TFSA can be a better savings vehicle for many lower-income Canadians, you can’t just assume that will always be the case. You need to plan it out.
Source:
Globe and Mail
http://www.theglobeandmail.com/

NEW



To alleviate persistent financial hardship in a segment of the population, traditional government social policies focus on universal or targeted income measures, either direct or through the tax system. A new way of thinking that's gained many converts in the United States and the United Kingdom is an asset-based approach to social policy, where the government encourages low-income individuals and families to save money for their future, or they receive some matching government contributions towards specific types of expenditures, like acquiring a post-secondary education or purchasing a home.

"The Government has received numerous representations from individuals, researchers and businesses that Canada’s tax system should be more conducive to saving. The Government intends to carefully review these representations and to conduct analysis in order to identify possible approaches for future improvements. In particular, the Government will examine whether tax pre-paid savings plans could be a useful and appropriate mechanism to improve the tax treatment of savings and to provide additional savings opportunities for Canadians."
Source:
Investing in a More Productive, Sustainable Economy
(Ch. 5 of The [Federal] Budget Plan 2003)
NOTE: In the fall of 2003, a number of individuals and organizations made presentations and submitted proposals to Finance Canada concerning asset-building social policy options.

UPDATE:

Good news budget? (federal budget 2007)
March 17, 2007
Helen Henderson
There could be some good news in Monday's federal budget for people with disabilities and their families. Finance Minister Jim Flaherty is expected to announce a registered disability savings plan that would help parents set aside money to provide a future for their children. Last year, Flaherty set up a panel of experts to look into the matter. If he follows their recommendations, the plan would work very much like a registered education savings plan and be available to people who qualify for the current disability tax credit.
Source:
The Toronto Star


Here are just some of the areas where asset-based policies are already in place in Canada:
- Tax-free Savings Accounts
- Registered Disability Savings Plans
- retirement (Registered Retirement Savings Plans)
- post-secondary education (Canada Education Savings Grant Program)
- home ownership (various federal and provincial home ownership assistance programs)
- microcredit enterprises (low-or-no interest loans for business startup for people on low income)
- banking services for low-income people
- special treatment of certain types of assets under provincial-territorial welfare programs.


Poverty Is Not Just About Income – It’s Also About Assets
(PDF file - 64K, 4 pages)
Notes for a Presentation to the conference: "Investing in Self-Sufficiency: Moving the Asset-Building Agenda Forward in B.C."
Coquitlam, British Columbia, October 21-22, 2004
By Cynthia Williams, Senior Research Fellow
Source:
Family Network
[ Canadian Policy Research Networks ]
[ Conference information (PDF file - 260K, 13 pages) - from the Family Services Association of Toronto]

----------------------------------------------

Asset-building Approaches and the
Search for a New Social Policy
Architecture in Canada
(PDF -316K, 16 pages)
By Cynthia Williams
Released March 27, 2008
Canada's current social security system has been developed to address the post-war challenge of reconstructing a full-employment economy. Increasingly, social policy experts and government decision-makers reflect on the current system and ask if fundamental changes are needed to meet the challenges and stresses emerging in the 21st century. Former CPRN Senior Research Fellow Cynthia Williams explores this theme in “Asset-building Approaches and the Search for a New Social Policy Architecture in Canada,” published in 2006 by Social and Enterprise Development Innovations (SEDI) in its book, Wealth and Well-Being / Ownership and Opportunity: New Directions in Social Policy for Canada.
Source:
Canadian Policy Research Networks
See also:
Social and Enterprise Development Innovations (SEDI)

The Daily Bread Food Bank announces education savings program to help break poverty cycle
Canadian Scholarship Trust Foundation facilitates starting an RESP for Daily Bread clients

April 10, 2006
The Daily Bread Food Bank announced today a newpartnership designed to help break the poverty cycle through an accessible education savings program. Recognizing the importance of saving for post-secondary education in reducing the barriers to higher education and encouraging self-sustainability, Daily Bread and Canadian Scholarship Trust Foundation (C.S.T.) have partnered to help low-income families take advantage of the Canada Learning Bond (CLB) program by setting up a Registered Education Savings Plan (RESP).
Source:
Newswire.ca

Related Links:

Daily Bread Food Bank
Canadian Scholarship Trust Foundation
Canada Education Savings Grant
Registered Education Savings Plan
Canada Learning Bond

New Asset and Income policies to assist low-income adults under Ontario’s Poverty Reduction Strategy
Towards a comprehensive approach to accommodate new (2008)federal programs and
encourage self-reliance under Ontario’s asset and income tested benefit programs
(PDF - 954K, 58 pages)
Andrea Baldwin/John Stapleton/Don Drummond
July, 2008
Source:
TD Economics

NOTE : you'll find more TD Economics reports on the home page (the link in the previous line)

Ontario can help the poor save
But provincial rules blunt the impact of new tax-free savings plan for people on welfare
July 25, 2008
For eight straight years, the number of welfare recipients in Ontario has remained unchanged, with an approximate caseload of 200,000. This puts into question the current system's ability to effectively transition high-risk groups, including working-age adults, to the labour force. There are enormous social costs to bear when such a large number of people rely on the welfare system. It can place serious strains on recipients, their families and the communities they live in. However, enabling individuals to become self-reliant is not just a social imperative – it's also an economic priority. That's because, in an era of tight labour markets, our province relies on a greater participation in the workforce. We all have something to gain when an individual makes the successful journey from welfare to work.
Source:
The Toronto Star

Can asset-based policies help reduce welfare dependency in Canada?

How can asset-based policies help people and families on welfare when, as social advocacy groups continue to insist (and I agree), welfare incomes are abysmally low?
How low? see the Welfare Incomes series of reports by the National Council of Welfare

"Matched savings and lifetime savings accounts, Individual Development Accounts and tax advantaged approaches to savings (Registered Development Savings Plans) are all elements of asset development and retention that low income people can use. Income maintenance programs, e.g., welfare, can work hand in glove with asset initiatives to reduce inequality of resources and to improve the lives and security of low income Canadians."
John Stapleton, St. Christopher House (December 9, 2003)

What Works When Works Doesn’t?”
Income Security Strategies For Working-Age Adults
(PDF file - 204K, 30 pages)
Project Report
June 24, 2004
"Income Security Strategies for Working-Age Adults (...) explores options for developing practical, responsive and modern strategies for income security for working-age people in Ontario and Canada."
- incl. analysis of the treatment of assets under provincial-territorial welfare programs and, among the the proposed strategies for working-age adults, suggests that assets should be protected and allowed to grow beyond current levels within welfare programs.
Source:
Income Security Strategies for Working Age Adults
[ St. Christopher House ]

Also from St. Christopher House:

From pleasure to terror:
Why unexpected money is a problem for the poor
(PDF file - 107K, 5 pages)
January 2004
"The purpose of this commentary is to build support for assets based approaches to poverty reduction such as those proposed by Social Enterprise Development Innovations (SEDI) in the context of Learn$ave and St. Christopher House in its Registered Development Savings Plan (RDSP) proposals. It was prepared by John Stapleton, Community Undertaking Social Policy (CUSP) Fellow at St. Christopher House and Massey College.

Welfare Asset Tests

Asset-based policies aren't the magic bullet solution to reduce poverty and welfare dependency and to support efforts towards self-sufficiency in Canada, but they do offer governments a new set of tools to help people on welfare to improve their financial well-being. Welfare programs in a number of Canadian jurisdictions already include special (albeit modest) asset-based features, such as specific exemptions (in the determination of eligibility for welfare) for money set aside in a trust fund for a child's education or pre-paid funeral expenses, and special treatment of assets related to a business.

In order for asset-based social policies to work in Canada's welfare system, provincial-territorial welfare programs would have to modernize (i.e., enhance) their asset exemption policies. The National Council of Welfare's report Welfare Incomes 2003 shows (under "Eligibility") that in the determination of eligibility for welfare, asset exemption levels varied in 2002 from $0 (for young single employable applicants) to $5000 (for people with disabilities). In a number of provinces and territories, asset exemption levels are $1500 for a single person and $2500 for a family - levels that were set in 1975 (and some even before then) for cost-sharing of provincial-territorial welfare costs by the Canada Assistance Plan . If provinces and territories would simply adjust those amounts for inflation from 1975 to 2004, welfare asset exemption levels would be just under $5,500 for a single person and $9,100 for a family. (Converted using the Bank of Canada Inflation Calculator )
NOTE:
June 26, 2010

I wrote the above paragraph in 2004. If you're curious about the current provincial/territorial welfare asset exemption levels, check the "Welfare Incomes" section of the Publications page of the website of the National Council ofWelfare website. Asset exemption levels are provided in the bulletins


Down but Not Out: Reforming Social Assistance Rules
that Punish the Poor for Saving
(PDF - 173K, 6 pages)
By John Stapleton
March 2, 2010
Reform is required for social program rules that prevent the poor from saving in Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs), according to a study released today by the C.D. Howe Institute. In “Down but Not Out: Reforming Social Assistance Rules that Punish the Poor for Saving,” author John Stapleton says that encouraging asset accumulation, even in small amounts, is crucial in helping to lift people out of poverty. Yet most Canadian welfare, disability and social service programs deny or cancel benefits if applicants or recipients place a modest level of savings in an RRSP or TFSA. Barring a province-led effort at reform, says Stapleton, the federal government should take the lead by calling on provinces and territories to exempt meaningful RRSP and TFSA amounts from their welfare asset rules, leaving individual jurisdictions to decide the appropriate levels

NOTE: this paper includes a table entitled
"Treatment of Registered Instruments in Provincial Social Assistance Programs in Canada, 2010
"
Recommended reading!!
March 2010
For each Canadian province and territory, you'll find information about how the welfare system treats income from Registered Instruments (including Registered Retirement Savings Plans, Registered Education Savings Plans, Registered Disability Savings Plans and Tax Free Savings Accounts). The table also includes current liquid asset exemption levels for selected family types and sizes in each jurisdiction.
Source:
C.D. Howe Institute

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Report: Why don't we want the poor to own anything?
News Release
October 21, 2009
Overly strict welfare eligibility rules are forcing Ontario’s newly unemployed to divest themselves of all their assets, crippling their chances for an economic recovery. Why Don’t We Want the Poor to Own Anything?, by John Stapleton, Metcalf Foundation Fellow and a leading social policy expert, reveals weaknesses in Ontario’s asset limits for those seeking social assistance, disability support, subsidized housing and legal aid.
Source:
Metcalf Foundation

Complete report:
Why don't we want the poor to own anything?
Our relentless social policy journey toward destitution for the 900,000 poorest people in Ontario
(PDF - 983K, 30 pages)
By John Stapleton
(...) 475,000 families receive social assistance in Ontario. They have stripped themselves of their liquid assets. They must wait until they no longer require legal aid, and leave public housing, before they can resume saving for anything, let alone save for retirement. In a society that promotes saving and cherishes self-reliance, there is no good rationale for public policy that almost guarantees people will grow old in poverty.

Related links:

Open Policy - John Stapleton's website

The welfare asset trap
October 21 2009
It is well known that when the Conservatives came to power in 1995 Mike Harris gutted welfare rates – leaving needy Ontarians living far below the poverty line. Less well known is that changes were also made to force Ontarians to divest themselves of almost every cent of savings, including cashable RRSPs, before they could qualify for a welfare cheque. In a report to be released Oct. 21, Metcalf Foundation fellow John Stapleton presents a compelling case for allowing welfare recipients to keep some savings. (...) Asset-stripping is just one of the failings of our outdated and mean-spirited social assistance system. The government's promised social assistance review – still waiting to be launched – will find many other hurdles in the path of those in need of a helping hand.
Source:
The Toronto Star

- Go to the Ontario Municipal and Non-Governmental Sites (D-W) page:
http://www.canadiansocialresearch.net/onbkmrk3.htm


Examples of progressive welfare policy from Ontario, BC and Alberta:

Education plans safe under welfare change
Savings funds won't have to be liquidated
'It's a dumb rule,' minister says
October 7, 2004
"The Ontario government is scrapping a welfare rule requiring applicants to liquidate their education savings plans, Social Services Minister Sandra Pupatello says. 'It's a dumb rule that works at cross-purposes to what welfare is suppose to be doing for people and their families ... that rule is going to be eliminated,' Pupatello told the Toronto Star yesterday, adding the change should happen before the end of the year."
Source:
The Toronto Star

Related Link:

Change in policy allows disadvantaged to save social assistance benefits
October 11, 2004
"We would like to take this opportunity to commend Sandra Pupatello and the government of Ontario for taking an important step to end the rule that disallows social assistance recipients from saving for their children's future while retaining their eligibility for benefits.

The whole point of social assistance is to help people to maintain themselves with dignity when they find themselves without resources, usually for a temporary period, and to move themselves out of a cycle of poverty. We fully understand that there have to be rules that limit eligibility to those who do not have alternative means to support themselves. However, we strongly agree with the government that denying eligibility to a parent who saves for a child's future simply perpetuates the very situation that such programs should be designed to prevent.

By making this policy change, Pupatello is also permitting parents in economically insecure situations to save with confidence and take advantage of the new Canada Learning Bond and the proposed enhancements to Canada Education Savings Grants through RESPs. They can now purchase tax advantaged savings vehicles like other Ontario parents and secure a brighter future for their children.

We acknowledge that in taking this step, the government is sending the important signal that federal and provincial policies must work together to respond to real need and the public good. We are hopeful that in taking a clear leadership role in this area, other jurisdictions that have yet to make this change will undertake parallel amendments to their regulations underscoring again the crucial role that Ontario can play in shaping positive social policy in Canada. Once again, we commend Ontario for making this change."

Susan Pigott, CEO, St. Christopher House
David Pecaut, Chair, Toronto City Summit Alliance

Asset-based social policies can help reduce welfare dependency in Canada in the following concrete ways (among others):

- asset-based social initiatives can often provide enough support to low-income households to prevent them from falling into the safety net of last resort (welfare) in the first place;
- self-employment supports and business startup funding can help some people already on welfare in their efforts toward self-sufficiency;
- people on welfare who receive modest inheritances or other windfalls could use the money, up to specified limits, to build a nest egg for themselves or their children;
- welfare clients who work are often discouraged by the prohibitive affects of their jurisdiction's earnings exemption policies (see "Earnings Exemptions" in Welfare Incomes 2003, mentioned above); enhancing asset exemption policies would create some "wiggle room" to allow clients to transfer excess resources into a protected area, whether for discretionary or specific purposes;
- American studies have shown that many families receiving benefits under the Temporary Assistance for Needy Families prograam (American welfare, whose benefits are generally lower than in Canada) were able to find resourceful ways to make modest but regular contributions to an Individual Development Account.

April 2011: TAX TIME!

Whether you're in Canada or the U.S., if you're fortunate enough to have a few discretionary bucks left at income tax time, good luck with your deliberation concerning which investment account to choose. I stumbled across the MoneySmarts blog while searching for something else, but found it helpful enough to include a link to some of its content here.

MoneySmarts Blog : Investing and Personal Finance
This is the personal blog of Mike Holman of Toronto, who has worked in the Canadian financial industry for almost two decades. The site offers information about and links to related resources for : the the Canadian RRSP and the American 401(k), the Canadian TFSA and the American Roth IRA, the Canadian RESP vs American 529 plan.

Selected site content:

* 2011 RRSP Contribution Limits and Contribution Deadline

* Registered Education Saving Plan Rules and Strategy

* Tax Free Savings Account (TFSA) rules

* Canadian TFSA Vs American Roth IRA

Related American link:

U.S. Roth IRA
Roth IRA Rules and other useful information
AboutRothIRA.com provides you with the information and resources you need for managing your retirement accounts. Each person’s needs are different, but having all of the information about Roth IRA’s and other retirement vehicles can help you to make the right decisions regarding your financial future. The site provides information from Sandy Baker, author of several books on tax and estate planning and retirement, who has worked in the industry, helping people to build retirement accounts and to build financial wealth for years.

A brief history of pensions.
Pay attention because you may be about to lose yours

August 1, 2009
By Thomas Walkom
The drive to dismantle the welfare state has a new target. Governments have already gutted unemployment insurance and social assistance. Out-of-date labour laws make it tough to organize unions in the new, decentralized, service-based economy. Now, thanks in large part to the dynamics of the recession, pensions are under attack. (...) Even before this recession hit, it was clear that pensions were under the gun. Good retirement benefits, like good wages, interfere with what economists call labour market flexibility – that is, the willingness of workers to take low-wage jobs.
Source:
The Toronto Star

Related links:

Tables by subject: Employment insurance,
social assistance and other transfers

[ Statistics Canada ]

Social and Enterprise Development Innovations (SEDI)
" ... a national charitable organization dedicated to enabling poor, unemployed and under-employed people to become self-sufficient"
NOTE: SEDI is the Canadian pioneer in asset-building approaches --- they introduced the concept of asset-building for the poor to Canada in 1997.

Selected site content:

Independent Living Accounts:
Leaving Homelessness in the Past
(PDF - 5.8MB, 91 pages)
June 2009
This report was made possible through a Vital Ideas grant from the Toronto Community Foundation that recognized SEDI’s Independent Living Account (ILA) for its innovative approach in assisting residents of Toronto’s shelter system to save, build life skills and subsequently move onto independent living. This report quantifies the benefit of the ILA model through a return on investment calculation and highlights how an investment of $1 into this program can result in a $2.19 return to society at large within the first year following program graduation. Feedback from current ILA partners was also gathered in an attempt to reflect the strengths and weaknesses of the model and to evaluate the potential of bringing these benefits to scale. This study also explores the potential of expanding the ILA program to a wider audience of people vulnerable to homelessness including newcomers to Canada, urban Aboriginal Peoples, youth, children/youth living in care, people with mental health and/or addiction issues and people who have come into conflict with the law. This report provides evidence to suggest that there is a significant group of homeless individuals that can achieve a positive housing outcome in an effective and efficient manner and through a somewhat limited intervention.

Related links:
* More information about SEDI's Independent Living Accounts
*
Independent Living Accounts Final Report - July 2006 (PDF - 667K, 84 pages)
The ILA demonstration was to measure the impacts of providing persons living within transitional housing facilities with a mix of financial and training incentives as a means of facilitating their entry into the mainstream housing and rental markets.
* Research highlights - February 2003 (PDF - 168K, 8 pages)
* SEDI Asset-Building Publications and Reports
[ Complete SEDI Publications list ]

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Financial Inclusion for
Homeless Persons and Those At Risk
(PDF - 646K, 58 pages)
Spring 2008
This report emphasizes the need for suitable policy responses and intervention models to improve the financial literacy and financial inclusion for Canadians who are homeless and insecurely housed. It also identifies the necessity for investment in staff training and organizational capacity building among transitional shelters and rent banks to offer intensive and ongoing financial learning opportunities for their clients. Outcomes of the study identify that residents of transitional housing and users of rent banks do not enjoy a full degree of financial inclusion in mainstream banking services. However, they express a strong demand for financial education and for opportunities to practice new financial skills with real money, real financial goals and real financial rewards when they succeed. In addition, housing service providers recognized the importance of financial literacy and financial inclusion among the essential life skills their clients express a need for.
Related link:
* SEDI Financial Capability Publications and Reports

Source:
Social and Enterprise Development Innovations (SEDI)
SEDI is a national nonprofit organization that uses innovative approaches to help low-income Canadians reach self-sufficiency. For over 20 years, SEDI has worked with more than 800 nonprofit and government agencies across Canada to deliver its programs. SEDI's expertise allows it to influence public policy, opening the way for Canadians to enter the social and economic mainstream. The organization's initiatives focus on three areas: financial literacy, asset-building and entrepreneurship.

More selected content from the SEDI website - this link takes you further down on the page you're now reading

Wealth, Low-Wage Work and Welfare:
The Unintended Costs of Provincial Needs-tests
(PDF - 604K, 8 pages)
April 2008
"(...)Assets do matter as an important, but so far largely undervalued, factor in well-being. Assets are more than stored-up income, they are stored-up hope, agency and aspiration. To the degree that welfare policy is ultimately concerned with well-being - and we believe it is - far greater attention should be paid to assets." (Excerpt, p.7)
- includes detailed info on what constitutes assets in the Canadian welfare system as well as asset exemption levels in all Canadian jurisdictions and a number of options for provincial/territorial governments wishing to promote greater asset development within their welfare program.

Source:
Asset-building Program
[ Social and Enterprise Development Innovations (SEDI)
SEDI is are a national charitable organization dedicated to enabling poor and unemployed Canadians become self-sufficient. We take a variety of leading-edge social and economic approaches to this goal in areas such as policy development, program management, capacity building, public education, and research.]

SEDI Publications List

Asset-Building (Powerpoint presentation - 498K, 18 pages)
How SEDI plans to offer low-income Canadians new ways of finding economic independence by helping them save and build assets.

Learn$ave
"SEDI has partnered with the Social Research and Demonstration Corporation (SRDC), a leading expert in the field of social research and evaluation, to design and implement learn$ave. This multi-year (planned to 2009) demonstration of Individual Development Accounts for learning is funded by Human Resources Development Canada. The largest demonstration of its kind in the world, learn$ave will reach 4,875 low-income Canadians who volunteer to take part in one of 10 designated locations (cities/counties)across Canada."

Learn$ave FAQs

Home$ave
"(...) Existing government home buyer and tax credit programs are out of reach for low-income earners, and in major cities like Toronto where home prices are so high, there isn’t nearly enough affordable housing to meet the demand. SEDI is piloting a project called that will give low-income Canadians a place to turn. By putting money aside in an Individual Development Account (IDA), participants can build their personal savings and earn a credit for a matching amount. The savings don’t have to be big, as long as they are consistent. Bit by bit, enough money is collected to put a downpayment on a home. SEDI is currently working in partnership with community groups, financial partners and government agencies to get this project started."
More info on Home$ave - April 2002 (small PDF file)


Social Research and Demonstration Corporation
(SRDC)
SRDC is a non-profit research organization, created specifically to develop, field test, and rigorously evaluate new programs. SRDC’s two-part mission is to help policymakers and practitioners identify policies and programs that improve the wellbeing of all Canadians, with a special concern for the effects on the disadvantaged, and to raise the standards of evidence that are used in assessing these policies.

Selected site content:

Testing an innovative approach to
promote adult learning for low-income Canadians

News Release
Ottawa, November 2, 2010
The Social Research and Demonstration Corporation (SRDC) released today the final results of learn$ave, a demonstration project to test the effectiveness of individual development accounts (IDAs) as a tool to promote adult learning and small-business start-up for low-income Canadians. Recognizing that people who lack sufficient education and basic skills are exposing themselves to lower earnings and higher risk of unemployment, governments in Canada have been looking for innovative approaches to promote adult education and training among vulnerable populations.

The learn$ave project was conceived by SEDI – Social and Enterprise Development Innovations (www.sedi.org) – based on the asset-building concept of Individual Development Accounts, pioneered in the United States.

The final report:

learn$ave
Individual Development Accounts Project
Final Report
(PDF - 2.1MB, 180 pages)
By Norm Leckie, Taylor Shek-Wai Hui, Doug Tattrie,
Jennifer Robson and Jean-Pierre Voyer
October 2010

Report Highlights (PDF - 484K, 8 pages)

-------------------------------------

Encouraging savings to help promote adult learning among low-income Canadians
News Release
March 26, 2009
A new report released today by the Social Research and Demonstration Corporation (SRDC) offers some new results on the effects of the learn$ave project. SRDC is conducting this national demonstration project to test the effectiveness of individual development accounts (IDAs) as a tool to promote adult learning and small-business start-up for low-income Canadians.

Learning to Save, Saving to Learn:
Intermediate Impacts of the Individual Development Accounts Project
(PDF - 1.3MB, 88 pages)

learn$ave
- A national demonstration of matched savings accounts for poor families to encourage learning activities and micro-enterprise development

[ All SRDC Publications ]

Early results show low-income Canadians can save for their education
News Release
January 25, 2008
A new report released by SRDC presents the 18-month results of the Individual Development Accounts project learn$ave. The program has so far yielded positive effects on saving and budgeting, as well as participants’ attitudes towards education.

Learning to Save, Saving to Learn: Early Impacts of the learn$ave Individual Development Accounts Project, a new report released by SRDC, presents the 18-month results of learn$ave, a project designed to demonstrate how Individual Development Accounts can encourage low-income adults to save in order to increase their human capital by participating in education or training, or starting a small business.

Download the full report (PDF file - 525K, 115 pages)
January 2008
Download the executive summary (PDF file - 1.9MB, 12 pages)

Find out more about learn$ave
The learn$ave project was conceived and implemented in 2000 by Social and Enterprise Development Innovations (SEDI), and is being funded by Human Resources and Social Development Canada. The evaluation of learn$ave is being conducted by SRDC.

RRSP/RESPs - to buy or not to buy?

By Ellen Roseman of The Toronto Star :

Low-income parents face RESP barriers [dead link]
March 27, 2004
Ellen Roseman
"Registered education savings plans will become more popular as a result of new budget measures announced this week. Ottawa plans to help low-income families save for children's college or university by giving grants of up to $2,000. And the existing RESP top-ups will be enhanced. But some low-income parents face barriers that prevent them from saving..."

-------------------------------------------------------

Answers to some taxing questions [dead link]
March 3, 2004

"(...) In a column on Feb. 18 [see below], I talked about how some people — specifically, low-income retirees with RRSP savings of $100,000 or less and no employer pension plan — might be better off taking money out of the plan before age 65. This would be a way to protect income-tested benefits, such as the guaranteed income supplement, from being taxed back because of RRSP withdrawals after they retire. In response to the many questions I received, I'm devoting today's column to a more detailed explanation of how the tax and benefits system works."
.....
"Households whose retirement savings are less than $100,000 (excluding CPP and QPP entitlements) are likely to be GIS recipients. And much, if not all, of the proceeds of their savings will be lost to taxes and the clawback of income-tested benefits."
.....
- includes info about:
--- the effect of RRSPs on entitlement to the Guaranteed income supplement (GIS) under the federal Old Age Security program
--- how retirement income is treated under the personal income tax system
--- why "the GIS nullifies the advantages of RRSPs" for people with lower incomes
--- solution: tax-prepaid savings plans
--- where to obtain more info
Source:

-------------------------------------------------------

Cashing out RRSP might make sense [dead link]
February 18, 2004
Ellen Roseman
"If you believe the ads, every Canadian who is eligible to contribute to an RRSP should do so ASAP. It's your patriotic duty to put the maximum allowed into your registered retirement savings plan each year. Don't fall for the propaganda.
Not everyone should contribute every year. Paying off high-interest debt might be a higher priority. Moreover, many lower-income Canadians who do make RRSP contributions should consider cashing out before they turn 65. By leaving their money in the plan, they could be subject to government clawbacks of social benefits such as the guaranteed income supplement or GIS, prescription drug subsidies, meals on wheels and home care."


Registered Disability Savings Plans (RDSPs)

Registered Disability Savings Plan
The Registered Disability Savings Plan is a savings plan designed specifically for people with disabilities in Canada. The first of its kind in the world, this new tax-deferred savings vehicle will assist families in planning for the long - term financial security of their relatives with disabilities.
- incl. links to * What is it? * How do I qualify * Where do I get it?
[ Registered Disability Savings Plan Blog- "...everything you wanted to know about the RDSP" ]
Source:
Planned Lifetime Advocacy Network
Planned Lifetime Advocacy Network (PLAN) is a non-profit organization, established in 1989 by and for families committed to future planning and securing a good life for their relative with a disability.

---


Government launches review of the Registered Disability Savings Plan

News Release
October 21, 2011
The Honourable Jim Flaherty, Minister of Finance, today announced the launch of the Government of Canada’s review of the Registered Disability Savings Plan (RDSP). (...) The Government is inviting stakeholders to comment on RDSPs to ensure that the plans are meeting the needs of Canadians with severe disabilities and their families. “It is important for those who benefit from these plans to give their input, so that RDSPs continue to accurately reflect and address their true needs,” said Minister Flaherty. The RDSP is widely regarded as a major policy innovation and positive development in helping to ensure the long-term financial security of children with severe disabilities. The RDSP was introduced in Budget 2007 and became available in 2008. Budget 2008 announced that the program would be reviewed three years after plans became operational.

These consultations are open to anyone.
The closing date for submissions is December 16, 2011.
Submissions can be emailed to RDSP-REEI@fin.gc.ca

Related Document:

Ensuring the Effectiveness of Registered Disability Savings Plans

Source:
Finance Canada

Provincial/Territorial Updates
Registered Disability Savings Plan
(PDF - 360K, 6 pages)
November 2009
In the determination of financial eligibility for needs-tested welfare or disability benefits, each province and territory decides how it will treat assets and income from various sources, both at the point of application and on an ongoing basis. This page provides a current overview of the treatment of the RDSP in all Canadian provinces and territories, and it includes links to the relevant source material in each jurisdiction.

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National Disability Savings advertising campaign launched July 6
July 6, 2009
Human Resources and Skills Development Canada has launched a new advertising campaign about the Registered Disability Savings Plan (RDSP), Canada Disability Savings Grant and Canada Disability Savings Bond, which help Canadians with disabilities and their families save for the future. The campaign consists of two short radio spots (click the above link to access the transcripts and the MP3 audio files) and a one-page poster (see below) referring people to the Disability Savings website.

The Poster:
Helping people with disabilities save for the future
HTML version
PDF version
(651K, 1 page)
Complete text:
"The Government of Canada has now made available the Registered Disability Savings Plan (RDSP) to help people with disabilities, under 60 years of age, who are eligible for the Disability Tax Credit. A matching Canada Disability Savings Grant of up to $3,500 per year will be paid on eligible contributions made to an RDSP. The Government of Canada will also contribute a Canada Disability Savings Bond of up to $1,000 per year to the RDSPs of eligible low-and modest-income Canadians, even if no contribution is made.
For more information on eligibility:
Go to Disability Savings:
www.disabilitysavings.gc.ca
Or call 1 800 O-Canada (1-800-622-6232)
TTY users may call 1-800-926-9105."

Source:
Human Resources and Skills Development Canada
(HRSDC)

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Government Welcomes National Availability of Registered Disability Savings Plans
and Extends Deadline for Establishing a Plan and Applying for the 2008 Grant and Bond

December 23, 2008
At an event celebrating the national availability of Registered Disability Savings Plans (RDSPs), the Honourable Jim Flaherty, Minister of Finance, and the Honourable Diane Finley, Minister of Human Resources and Skills Development, today announced that the deadline for opening an RDSP, making contributions and applying for the matching Grant and the income-tested Bond for the 2008 contribution year has been extended to March 2, 2009 from December 31, 2008. The 2009 RDSP contribution year will begin March 3, 2009.
Source:
Department of Finance Canada

Related links:

Slow start for disabled accounts
Only one bank to offer registered disability savings plans within contribution deadline
December 20, 2008
For people with severe, long-term disabilities, there are only a few more banking days left in 2008 to take advantage of up to $4,500 in first-year grants and bonds under the federal government's new registered disability savings plan.Only one chartered bank – the Bank of Montreal – has announced it will open qualified RDSP accounts. But that starts on Monday, barely in time for people to meet the Dec. 31 contribution deadline.
Source:
Toronto Star

---

Disability Savings Plan - from Human Resources and Skills Development Canada
- incl. links to info about the Canada Disability Savings Grant, the Canada Disability Savings Bond and the RDSP
- also includes a link to Budget 2007 (Oct. 30/07) when the RDSP was first announced, and more...

**************************************

From Human Resources and Skills Development Canada's Disability Savings page:

Treatment of RDSPs under provincial/territorial welfare programs
Updated to September 2009
In the determination of financial eligibility for needs-tested welfare or disability benefits, each province and territory decides how it will treat assets and income from various sources, both at the point of application and on an ongoing basis. This page provides a current overview of the treatment of the RDSP in all Canadian provinces and territories, and it includes links to the relevant source material in each jurisdiction.

**************************************

Ontario Supports Registered Disability Savings Plans
McGuinty Government Helps Families Save For Children With Disabilities

November 30, 2008
News Release
Ontario is making it possible for social assistance recipients to take advantage of Registered Disability Savings Plans (RDSPs). Like the Registered Education Savings Plan, RDSPs allow family members and loved ones to save money tax free until withdrawal. The program helps people plan for the future needs of children and adults with disabilities. Changes to Ontario’s social assistance rules will make sure that both RDSP assets and withdrawals are fully exempt.
This means:
* RDSP contributions do not impact eligibility for social assistance
* People on social assistance can take money out of an RDSP without affecting their social assistance payments. To further help social assistance recipients with disabilities save for their future, Ontario is also increasing the amount they can receive as a gift or payment from a trust from $5,000 to $6,000 a year.
Source:
Ontario Community and Social Services

Context:
In the determination of financial eligibility for needs-tested welfare or disability benefits, each province and territory decides how it will treat assets and income from various sources, both at the point of application and on an ongoing basis. The next link below opens a PDF file that provides a current (Dec. '08) overview of the treatment of the RDSP in all Canadian provinces and territories, and it includes links to the relevant source material in each jurisdiction

Provincial/Territorial Updates
Registered Disability Savings Plan
(PDF - 360K, 6 pages)
November 2009

Source:
Registered Disability Savings Plan
The Registered Disability Savings Plan is a savings plan designed specifically for people with disabilities in Canada. The first of its kind in the world, this new tax-deferred savings vehicle will assist families in planning for the long - term financial security of their relatives with disabilities.
- incl. links to : What is it? - How do I qualify? - Where do I get it?

Registered Disability Savings Plan Blog
"...everything you wanted to know about the RDSP"

Related links:

Planned Lifetime Advocacy Network (PLAN) is the non-profit organization that proposed, researched, and campaigned for the RDSP.
PLAN created and maintains the RDSP website and the RDSP Blog.

Registered Disability Savings Plan - from Human Resources and Skills Development Canada
- incl. links to info about the Canada Disability Savings Grant, the Canada Disability Savings Bond and the RDSP
- also includes a link to Budget 2007 (Oct. 30/07) when the RDSP was first announced, and more...

From the RDSP Blog:

TOP 10 Reasons Provinces/Territories Should Exempt
the Registered Disability Savings Plan (RDSP) as an Asset and Income

August 14, 2008
By Doug Brodhead
Not including BC, Newfoundland and Yukon (who have all already exempted the RDSP), many provinces/territories are in the midst of deciding how the RDSP will affect someone who is receiving Disability Benefits. We decided to put together a Top 10 list of why we think it is important these provinces/territories exempt the RDSP as an asset and income.
**
Recommended reading for all provincial-territorial government welfare / Disability Benefits administrators!

Context:
In the determination of financial eligibility for needs-tested welfare or disability benefits,
each province and territory decides how it will treat income from various sources, both at the point of application and on an ongoing basis.

Related Document:

Legislative Proposals, Explanatory Notes and
Overview Relating to Registered Disability Savings Plans

Source:
Department of Finance Canada

Related link:

The Working Income Tax Benefit (WITB) and Registered Disability Savings Plan (RDSP):
With the Legislation unveiled, it is time to be heard
By John Stapleton
October 6, 2007
"(...) The Budget bills are important and they deserve discussion and comment. A very small window has been created to allow Canadians to respond. Download the Budget documents and the explanations. Read them carefully and make a submission by October 23, 2007. It is a unique opportunity for your voice to be heard by Members of Parliament, their staff and by the Public Service. "

From pleasure to terror:
Why unexpected money is a problem for the poor
(PDF file - 107K, 5 pages)
January 2004
"The purpose of this commentary is to build support for assets based approaches to poverty reduction such as those proposed by Social Enterprise Development Innovations (SEDI) in the context of Learn$ave and St. Christopher House in its Registered Development Savings Plan (RDSP) proposals. It was prepared by John Stapleton, Community Undertaking Social Policy (CUSP) Fellow at St. Christopher House and Massey College.
Source:
Income Security Strategies for Working Age Adults
[ St. Christopher House ]

Presentation to the Standing Committee on Finance (PDF file - 150K, 1 page)
by Susan Pigott and John Stapleton
St. Christopher House
November 6, 2003

.......................................................................
Click on the link above to read the text of the oral presentation to the Committee; click on the link below to read the detailed paper that was submitted by St. Chris House for consideration by the Committee.
.......................................................................

Registered Development Savings Plan (RDSP) : A Proposal for a Tax Prepaid Savings Plan
Exempt from Welfare Restrictions on Assets and Income
(PDF file - 319K, 26 pages)
- Pre-Budget Submission to the House of Commons Committee on Finance

RDSP Questions and Answers (PDF file - 75K, 3 pages)

Registered Development Savings Plan (RDSP) as a Vehicle for Asset Accumulation for Low Income Canadians
- abstract of a presentation by John Stapleton, Rick Eagan and Maureen Fair of St. Christopher House at the 11th Canadian Social Welfare Policy Conference in June 2003.

Creating assets for poorest among us (small PDF file)
Toronto Star op-ed
June 20, 2003
"The U.S. and Britain have launched innovative social policies to help those in need.
Canada can learn from them."
Source:
Social and Enterprise Development Innovations

---

Punished for their providence (PDF file - 131K, 2 pages)
Ontario non-governmental organization proposing a new tax-sheltered savings plan for low income households
Dec. 3, 2003
Carol Goar
Toronto Star
The proposal, called Registered Development Savings Plan, "...would give poor people a chance to put money into a tax-sheltered account, without losing their eligibility for welfare or incurring financial penalties if they withdrew funds for education, training, medical expenses, starting a business or moving into a new home. It would give families trying to move from welfare to self-sufficiency an economic cushion. Research in the United States has shown that households with savings stand a much better chance of breaking the dependency cycle than those without. Most fundamentally, it would give low-income Canadians the same incentive to invest in their own future as other Canadians."

Caledon Institute of Social Policy


Asset-Based Social Programs: A Critical Analysis of Current Initiatives
(PDF - 211K, 34 pages)
By Michael Mendelson
May 2007
This paper was prepared for an Organization of Economic Cooperation and Development (OECD) conference on asset-based strategies and has also been published by the OECD. The paper reviews the current status of asset-based programs, defined as programs intended to assist low-income households to increase their financial assets. Among OECD countries, only Canada, the UK and the US are identified as having such programs. Two programs in Canada, one of which is a randomized control experiment (RCT) with Individual Development Accounts (IDAs), and the other an education savings plan, are reviewed. (...) The paper concludes that an asset-based perspective is an important way to view social programs, but no panacea. Asset-based programs need to be carefully designed and evaluated, as any other type of social program. [ Excerpt from the report's abstract]

Social Profits (PDF - 49K, 7 pages)
Sherri Torjman
September 2008
This essay discusses the various dimensions of the social economy - a unique and burgeoning sector of the economy in which business enterprises and economic activity seek not only to generate revenue but also to advance social goals. There are hundreds of thousands of hybrid businesses, also known as social enterprises, which are taking their place on the world stage - and increasingly in stock market portfolios. They try both to generate profit and create social value. They are sometimes referred to as ‘blended value’ organizations because that is precisely what they do. This paper explores their many different forms and puts forward policy proposals to bolster social enterprises within the Canadian economy.

The Key to Tackling Child Poverty:
Income Supports to Meet Their Needs and Assets to Support Their Future

Caledon Commentary
By Jennifer Robson-Haddow
March 2004
"
This paper discusses child poverty in Canada in terms of access to savings and assets, as well as income and public services. Middle- and upper-income families have incentives to set aside funds for their child’s future while low-income families are penalized for doing so through welfare needs tests. What’s needed now is a targeted, well-conceived plan for delivering meaningful asset-building opportunities to low-income parents. This paper outlines some of the key features of such a plan, noting progress made in the 2004 federal Budget."
Complete paper (PDF file - 43K, 5 pages)
Related Link:
Social and Enterprise Development Innovations

Asset-Based Social Policies – A "New Idea" Whose Time Has Come?
Andrew Jackson
March 2004
"Asset-building programs invite low-income citizens to participate in forced savings plans by matching their contributions with funds from financial institutions. These programs have enjoyed wide popularity in Canada, the US and the UK over the past few years. Senior economist with the Canadian Labour Congress, Andrew Jackson, questions the significance and long-term benefit of these programs and their possible influence on the development of social policy in Canada."
Complete report (PDF file - 42K, 5 pages)

New Ingredients for the Fiscal Pie
December 2003
Sherri Torjman
"...argues the need for exploring possible methods of expanding the ‘fiscal pie.’ It explores one possible model put forward by PLAN (Planned Lifetime Advocacy Network), a group of parents of children with severe disabilities. The group proposes a combination of private savings and public spending to help develop caring communities. (...) The proposal represents one idea in a range of possible savings and investment mechanisms to expand the fiscal pie – a direction which we should be debating seriously as a nation."
Complete report (PDF file - 19K, 3 pages)

Tax-Free Savings Accounts


Tax-Free Savings Account (Govt. of Canada website)
- incl. links to :
* Home
* TFSA and you
* TFSA calculator
* TFSA vs RRSP
* TFSA and the economy
* TFSA and seniors
* Income-tested benefits
* Things to know
* More information
Source:
Department of Finance Canada


Tax-Free Savings Account (TFSA) for Individuals
A Tax-Free Savings Account (TFSA) is a new way to set money aside tax-free throughout your lifetime. The initial amount contributed as well as the income earned in the account (for example, investment income and capital gains) is tax-free, even when it is withdrawn.
Topics include:
* Who is eligible to open a TFSA? * How to open a TFSA * TFSA contribution room * Making withdrawals * Qualifying transfers * Tax payable * Impact on your benefits * Death of a TFSA holder

---

Registered Retirement Savings Plan (RRSP)

Topics include:
* Setting up an RRSP
* Contributing to an RRSP
* Transferring
* Making withdrawals
* Receiving income from an RRSP
* Death of an RRSP annuitant
* RRSP Tax-Free Withdrawal Schemes

Source:
Canada Revenue Agency

Save more in 2012 with the Tax-Free Savings Account
http://www.fin.gc.ca/n11/11-148-eng.asp
December 30, 2011
The Honourable Jim Flaherty, Minister of Finance, and the Honourable Gail Shea, Minister of National Revenue, today highlighted that, as of January 1, 2012, Canadians will have a new $5,000 of room to invest in their Tax-Free Savings Account (TFSA). (...) The TFSA is a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax-free investment income. A TFSA can contain a range of investments, similar to those in a Registered Retirement Savings Plan, such as mutual funds, listed securities and guaranteed investment certificates. (...) If you are a Canadian resident aged 18 and older, you can save up to $5,000 every year in a TFSA.
Your contributions to a TFSA are not deductible for income tax purposes but the investment income, including capital gains, earned in your TFSA is not taxed, even when withdrawn. Your unused TFSA contribution room is carried forward and accumulates for future years. For more information on TFSAs, please visit the Canada Revenue Agency website or contact your financial institution.
Source:
Finance Canada
http://www.fin.gc.ca/fin-eng.asp

-------------------------------------------

THE RRSP/TFSA DEBATE

From the
Winnipeg Free Press:

Registered Retirement Savings Plan (RRSP) vs. Tax-Free Savings Account (TFSA)
Which tax-friendly savings tool will walk away the champion?
http://www.winnipegfreepress.com/business/finance/rrsp---emvs-em--tfsa-135368028.html
December 10 2011
(...)TFSAs and RRSPs both have uses and in many cases, they can be used in tandem. While you're working, for instance, you can contribute to your RRSP and then contribute the refund to a TFSA, creating a tax-free income source for retirement. If you're retired, you can strategically withdraw from your RRSP/RIF at a lower tax rate and invest those withdrawals in a TFSA so the money can grow tax-free and be used without affecting your OAS, GIS or your tax situation.
Source:
Winnipeg Free Press

http://www.winnipegfreepress.com/

---

From the
Globe and Mail:

* TFSAs: What you need to know (November 2010)
http://www.theglobeandmail.com/globe-investor/investment-ideas/lets-talk-investing/tfsas-what-you-need-to-know/article1668081/

* Careful, that TFSA can be such a tease (March 2010)
http://www.theglobeandmail.com/globe-investor/investment-ideas/careful-that-tfsa-can-be-such-a-tease/article1443909/

* TFSAs, RRSPs or both? (February 2010)
http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/tfsas-rrsps-or-both/article1443393/

TFSA trumps RRSP, report says
By Roma Luciw
http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/tfsa-trumps-rrsp-report-says/article1446307/
January 27, 2010 (updated to June 14, 2010)
Many Canadians would get more bang for their buck by taking a pass on the registered retirement savings plan and plowing any future savings into a tax-free savings account, says a new report. A C.D. Howe Institute e-brief released Wednesday [see the second next link below], in the thick of RRSP season, is challenging the notion that saving for retirement is best done through a tax-deferred plan like the RRSP.

Source:
Globe and Mail

http://www.theglobeandmail.com/

---

From the
C.D. Howe Institute:

Saver’s Choice: Comparing the Marginal Effective
Tax Burdens on RRSPs and TFSAs
(PDF - 332K, 9 pages)
http://www.cdhowe.org/pdf/ebrief_91.pdf
January 27, 2010
By Alexandre Laurin and Finn Poschman
(...)governments wanting to strengthen incentives for private retirement saving – the so-called third pillar of retirement income – should be thinking of expanding opportunities to save on a tax-prepaid basis. One option would be to allow taxpayers more freedom in allocating saving room between RRSP/RSP accounts and TFSAs, and more room for saving in TFSAs.

Source:
C.D. Howe Institute
http://www.cdhowe.org/

---

From the
Financial Post:

Amidst confusion, TFSAs gaining traction
http://business.financialpost.com/2011/11/08/amidst-confusion-tfsas-gaining-traction/
By Jonathan Chevreau
November 8, 2011
In January, Canadians are eligible to make their fourth annual $5,000 contribution to Tax Free Savings Accounts (TFSAs) but an astonishing 37% of us still don’t know what investments are eligible, according to a BMO survey. (...) Just for the record, TFSAs can hold the same investments as RRSPs, including cash, bonds, GICs, mutual funds, stocks and exchange-traded funds (ETFs). (...) Unlike RRSPs, TFSA contributions do not create tax deductions. However, unlike the forced taxable withdrawals of RRIFs, withdrawals of TFSAs are free of tax. And of course, investment income earned inside a TFSA (interest, dividends or capital gains) are never taxed.

Source:
Financial Post
http://www.financialpost.com/

---

From the
Penny Saver Blog:

Should I Contribute to an RRSP or a TFSA?
http://www.pennysaverblog.com/should-i-contribute-to-an-rrsp-or-a-tfsa/
February 9, 2010
(...) An extremely important advantage to using a TFSA to supplement retirement income is that money in a TFSA will not impact the amount of Canada Pension (CPP) and Old Age Security (OAS) you will receive. However, when you withdraw from an RRSP, you need to add that amount to your income for the year and that can decrease the amount of CPP and OAS that you receive, so it’s not wise to have all your retirement savings with an RRSP.
Source:
Penny Saver Blog

http://www.pennysaverblog.com/

Minister of Finance Releases Draft Proposals on Tax-Free Savings Accounts
News Release
April 30, 2010
The Honourable Jim Flaherty, Minister of Finance, today released for consultation a package of draft Income Tax Act amendments relating to Tax-Free Savings Accounts. These proposed amendments, when enacted, will implement the measures announced in the October 16, 2009 news release entitled Government of Canada Proposes Technical Changes Concerning Tax-Free Savings Accounts.

The accompanying explanatory notes provide additional details regarding the proposed legislative amendments.
This consultation ended May 31, 2010.

Related Documents:

* Draft Legislation
* Explanatory Notes

Source:
Department of Finance Canada

---

January 2, 2009
Government helps Canadians maximize their savings with the new Tax-Free Savings Account
January 2, 2009
The Honourable Jim Flaherty, Minister of Finance, the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture), and Mr. Peter Aceto, President and CEO of ING DIRECT Canada, today welcomed the availability of the new Tax-Free Savings Account (TFSA) introduced by the Government of Canada in the 2008 Budget.

---

New Tax-Free Savings Accounts Can Help Break Down
Barriers to Saving for Lower-Income Canadians: C.D. Howe Institute
Toronto, Sept. 30, 2008
Lower-income Canadians are entangled in government programs that discourage personal saving, says a study released by the C.D. Howe Institute, and the federal government’s new Tax-Free Savings Accounts (TFSAs) could help correct the problem. In “No Strings Attached: How The Tax-Free Savings Account Can Help Lower-Income Canadians Get Ahead,” authors John Stapleton and Richard Shillington explain how.

Complete study:

No Strings Attached:
How The Tax-Free Savings Account Can Help
Lower-Income Canadians Get Ahead
(PDF - 176K, 5 pages)
September 30, 2008
By John Stapleton and Richard Shillington
Lower-income Canadians are entangled in government programs with clawback provisions that discourage or effectively prohibit personal saving. The federal government’s new Tax-Free Savings Accounts (TFSAs) can help correct the problem, provided that provinces and territories refrain from imposing new asset tests and clawbacks that undo savers’ potential gains. Governments should also consider supplementing the savings of poor Canadians, whereby TFSA savings are matched by special funds from government.

Source:
C.D. Howe Institute

A New Option for Retirement Savings: Tax-Prepaid Savings Plans (PDF file - 175K, 47 pages)
February 2001
Jonathan Kesselman
Finn Poschmann
Source:
C.D. Howe Institute

New Poverty Traps: Means-Testing and Modest-Income Seniors (PDF file - 148K, 13 pages)
Backgrounder
April 2003
Source:
C.D. Howe Institute
Written by:
Richard Shillington
Tristat Resources

Saving’s Grace: A Framework To Promote
Financial Independence for Low-Income Canadians
(PDF file - 83K, 15 pages)
November 2004
Backgrounder
"Finn Poschmann, the Institute’s associate director of research, and William B. P. Robson, senior vice-president and director of research call for a federal tax-prepaid savings plan to help modest-income Canadians reaching for financial independence."
Source:
C.D. Howe Institute

-------------------------------------------------------------------------------------------------------------

Education investment of $500 for each child born in 2005 or later - Alberta
News Release
February 17, 2004
"Babies born in Alberta in 2005 or later will benefit from a $500 investment by the Alberta government into individual education savings plans. The Alberta Centennial Education Savings Plan Act, which is the first bill introduced in the spring sitting, sets the stage for a new program that will encourage parents to open a Registered Education Savings Plan (RESP) for their child with a $500 grant from the government."

Alberta Centennial Education Savings (ACES) Plan website
The ACES Plan will contribute $500 into the Registered Education Savings Plan (RESP) of every child born to Alberta residents in 2005 and later.
- program info and links to related resources
ACES - Commonly Asked Questions


Canadians and Their Money: A National Symposium on Financial Capability
Government Conference Centre, Ottawa
June 9-10, 2005
"How well do Canadians understand financial matters, apply their knowledge and take responsibility for financial decisions? What does that mean for policy makers? The Policy Research Initiative (PRI), Social and Enterprise Development Innovations (SEDI) and the Financial Consumer Agency of Canada (FCAC) have partnered to seek answers to these questions. The symposium will feature leading-edge national and international experts who will engage with government, non-profit sector and business representatives in two days of discussions about the current state of policy and practice surrounding this increasingly important topic."

Conference Program (PDF file - 1.2MB, 6 pages)
Presentations - links to over a dozen presentations (mostly slides)

Financial Capability and Poverty: Discussion Paper (PDF file - 249K, 29 pages) - July 2004
Exploring the Promise of Asset-Based Social Policies: Reviewing Evidence from Research and Practice
Synthesis Report from the [Dec/03] Conference on Asset-Based Approaches
(PDF file - 179K, 27 pages)

PRI Poverty and Exclusion Project

Source:
Policy Research Initiative (PRI)
Partners:
Social and Enterprise Development Innovations (SEDI)
Financial Consumer Agency of Canada (FCAC)


Exploring the Promise of Asset-Based Social Policies:
Reviewing Evidence from Research and Practice
Conference on Asset-Based Approaches
December 8-9, 2003
Gatineau (Aylmer), Québec
"This conference is part of an interdepartmental research project entitled New Approaches for Addressing Poverty and Exclusion. It will provide a unique opportunity for policymakers and experts to examine what we have learned so far from Canadian and international research, policy and practice on the strengths and limitations of asset-based approaches (saving programs for individual development, learning, housing, etc.). The goal will be to stimulate debate and reflection on the potential role of these approaches in our poverty prevention and reduction policies."
Program details
Source:
Policy Research Initiative (PRI)

Exploring the Promise of Asset-Based Social Policies: Reviewing Evidence from Research and Practice
Synthesis Report from the Conference on Asset-Based Approaches
(PDF file - 179K, 27 pages)
December 8-9, 2003
Gatineau, Québec
(Posted February 2004)

Also from PRI:

Financial Capability and Poverty (PDF file - 249K, 29 pages)
Discussion Paper
July 2004
"This discussion paper, prepared by the Social and Enterprise Development Innovations (SEDI), focuses on developing financial literacy as a complementary strategy to asset building through a review of existing research and current initiatives in Canada and abroad."
Source:
New Approaches for Addressing Poverty and Exclusion
(NOTE: click on the "Publications" link on that page for a list of other relevant reports, or click on the nearly-invisible link in the last sentence for more information on this PRI project.)

Poverty Is About Assets as Well as Income
Research Brief
Peter Nares and Jennifer Robson-Haddow
Social and Enterprise Development Innovations (SEDI)
"Between 1984 and 1999, the median net worth of the wealthiest 20 percent of Canadians increased 39 percent while the net wealth of the poorest 20 percent of Canadians actually fell."
Source:
Horizons Volume 6 - 2003 : Social Capital
November 2003
[ Policy Research Initiative (PRI) ]

Social Capital Partners (Toronto)
"Social Capital Partners will invest in revenue generating social enterprises that employ populations outside the economic mainstream in Canada. The goal of these social enterprises will be to acquire scale, to eventually exist without external funding, and to create improved social outcomes and financial self-sufficiency for the populations they employ. SCP will be a catalyst for encouraging other creative approaches in the sector aimed at improving social outcomes through the use of innovative funding mechanisms."
- incl. links to : Who We Are - Financing Available - Our Portfolio Organizations - How We Work With Social Entrepreneurs - Measuring Success - Media Box - What We've Learned - Relevant Resources - Acknowledgements - Contact Us

Canadian Co-operative Association (CCA)
"The Canadian Co-operative Association (CCA) is a national umbrella organization representing co-operatives and credit unions. We are a not-for-profit co-operative owned by our members. (...) Our mission is to promote the growth and development of the co-operative sector for the economic and social betterment of communities and people in Canada and internationally."

Building Community Assets - The Co-Op Advantage

International links

From Spotlight on Poverty and Opportunity:
[ http://www.spotlightonpoverty.org/ ]

Breaking Down Barriers to Build Assets
http://www.spotlightonpoverty.org/ExclusiveCommentary.aspx?id=a22b0bbb-3e1d-46f8-8328-5e7b236aed29
By Marybeth Foster (Iowa Credit Union Foundation)
January 2, 2013
Individual Development Accounts, or IDAs, were developed as a means to help low-income families develop financial assets. In 1993, Iowa was the first state in the nation to pass IDA legislation, ahead of 34 other states that eventually followed. Even so, 19 years later, IDAs are still not widely known or utilized in Iowa. Although IDAs are a proven strategy for asset development, they have not been deployed at a greater level in Iowa and nationally. This is due to the fact that they face challenges with sustainability and a lack of longitudinal evidence of their positive impact.
(...)
The barriers to IDAs are real, but our experiences have proven that they can be overcome. Making IDAs available not only encourages saving and financial literacy, it is a solid community and economic development tool, rural or urban, large or small.

From the
Heritage Foundation:
[ http://www.heritage.org/ ]

Improving Economic Mobility Through Increased Savings
HTML version : http://www.heritage.org/research/reports/2012/12/improving-economic-mobility-through-increased-savings
PDF version (508K, 7 pages) : http://thf_media.s3.amazonaws.com/2012/pdf/CPI_DP_06.pdf
By Diane Calmus
December 21, 2012
Since the recession began, Americans’ rate of savings has been on the rise. Yet too many still do not have savings to buffer them against an emergency.
This is especially true for low-income Americans, far too many of whom are just a medical bill or broken-down car away from financial ruin. Fortunately, our better understanding of the role of savings in mobility, together with interesting experiments and programs to foster savings, could enable us to make a significant difference in the accumulation of financial capital in poorer households. Innovative programs of the sort outlined in this
paper could engage Americans in setting aside money to plan for large purchases, unexpected emergencies, and retirement.

Asset Building: A Bipartisan Policy Solution
June 27, 2011
Commentary
By Representative Eric Pettigrew (D) and
Representative Bill Hinkle (R),
Washington State Legislature

Many working families in America are facing a savings crisis. Over half of the families with incomes under $24,800 could not remain above the poverty line for a mere three months if they lost their source of income. For these families, both sides of the aisle agree the answer is not just to boost incomes, it’s to help them save for the future and become more financially secure through asset building.

Source:
Spotlight on Poverty and Opportunity
Spotlight on Poverty and Opportunity was launched in October 2007 by major U.S. foundations to foster non-partisan debate during the 2008 campaign season about policy approaches for addressing poverty and opportunity. Today, Spotlight provides a platform for ongoing discussion about how best to address the needs of those who have fallen into poverty during the Great Recession and those who have struggled for generations to move up the economic ladder.

Microfinance in Bangladesh and India : FAIL?

The crisis of microfinance
Once hailed as a solution to poverty, microfinance lenders are criticised for profiting from exploitative usury.

Opinion
By Shashi Tharoor
11 March 2011
The recent ouster of the Nobel Prize-winning Bangladeshi economist Mohammed Yunus as Managing Director of the Grameen Bank, which blazed a trail for microfinance in developing countries, has thrown a spotlight on the crisis engulfing a business that was once seen as a harbinger of hope for millions.

[ See "Banking pioneer challenges sacking", March 3.]
Yunus's tussle with the government of Bangladesh, which had tried to retire him on grounds of age (he is 70) before firing him from his own board, is entangled in his country’s complicated politics.
But Bangladeshi President Hasina Wajed’s remark that Yunus had "spent years sucking the blood of the poor" echoes similar charges being made in neighboring India against companies and banks that sought to emulate Grameen.
(...)
Indian regulators are sorting out the tangle of issues that have plunged India’s microfinance industry into crisis. Ironically, none of these problems seems to have befallen Bangladesh’s Grameen Bank, which survives largely on donor grants and sustainable repayments. Yunus’s ouster, it is suggested, has much more to do with his having once expressed political ambitions. But association with a suddenly tarnished industry cannot have helped

[ Writer Shashi Tharoor, a former Indian Minister of State for External Affairs and UN Under- Secretary General, is a member of India’s parliament. ]
Source:
Al Jazeera English

---

Microfinance struggles to restore its reputation
By Erika Kinetz
March 7, 2011
Long heralded as a way to lift the downtrodden out of poverty, microfinance is under a cloud. The stories of lives being changed by a $27 microloan and picture perfect scenes of smiling women with colorful handlooms, empowered by affordable credit, have been replaced by headlines about borrowers driven to suicide. At best, microfinance seems to be failing to achieve its most noble goal: poverty alleviation. At worst, some lenders are contributing to a cycle of indebtedness and abuse, just like the loan sharks they sought to replace.
Source:
The Boston Globe

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India’s poor need help to help themselves
By Sarika Bansal
March 7, 2011
Until recently, microfinance has been the golden child of international development. Microfinance companies would lend small amounts of money to poor women who would, in the ideal scenario, use them to start small businesses. Their interest rates were typically lower than loan sharks’ but still high enough to make a profit. Around the world, development experts believed microfinance was an ideal way to alleviate poverty, a smart way to ‘do good’ while also ‘doing well’. How times have changed
Source:
The Guardian (U.K.)

----------------------------

The links to the Boston Globe and Guardian
articles above appeared in the Poverty Dispatch
from the Institute for Research on Poverty (IRP)
at the University of Wisconsin-Madison

Gates Foundation pledges $500 million to help the poor save money
Co-chair Melinda Gates and others at a Seattle forum look into cellphone
banking in the developing world and other ways to help some of the world's
poorest families begin much-needed savings accounts.
November 17, 2010
The Bill & Melinda Gates Foundation pledged $500 million Tuesday to help create new banking systems that will reach into the world's most impoverished corners and allow families earning $2 a day or less to begin saving money. After years of promoting microcredit borrowing to help impoverished farmers and bottom-of-the-rung entrepreneurs expand their business opportunities, foundation leaders said it was increasingly apparent that saving, not just credit, is crucial to helping poor families weather crises, pay for schooling and make small investments to expand their incomes.
Source:
Los Angeles Times

Saving: a simple solution to the fight against poverty [Australia]
If we want to end poverty, we’ve got to start championing policies to build families’ assets, writes Gerard Brody
Commentary
09 August 2010
Source:
Australian Policy Online (APO)
APO is a news service and library specialising in Australian public policy reports and articles from academic research centres, think tanks, government and non-government organisations. The site features opinion and commentary pieces, video, audio and web resources focussed on the policy issues facing Australia.
[ About APO ]


[U.S.] Assets for Independence (AFI) Program

- incl. links to: * About AFI * Prospective Grantees * Current Grantees * Guidance, Policies, and Procedures * Publications and Reports * Contact AFI * Frequently Asked Questions

The Assets for Independence (AFI) is a Federal program that provides grants to enable community-based nonprofits and State, local, and Tribal government agencies to implement and demonstrate an asset-based approach for offering low-income families help out of poverty. (...) Asset building is an anti-poverty strategy that helps low-income people move toward greater self-sufficiency by accumulating savings and purchasing long-term assets. The theory behind this approach is that helping people purchase an asset, as opposed to simply increasing their income, provides stability that may allow them to escape the cycle of poverty permanently. Examples of long-term assets include a home, higher education and training, and a business.

AFI Project Locator
Individuals interested in building assets through participation in an AFI program can browse the Project Locator to find opportunities in their communities.

AFI - Eighth Annual Report to Congress PDF (897K, 90 pages)
File dated June 2009
The Eighth Annual Report to Congress provides an update on the status of the Assets for Independence (AFI) program through the end of Fiscal Year (FY) 2007. The program was established by the Assets for Independence Act in Title IV of the Community Opportunities, Accountability, and Training and Educational Services Act of 1998.
(...)
The FSA program allows participants to use FSA savings to purchase the three AFI allowable assets: homeownership, postsecondary education or training, and business capitalization. Authorized uses of funds also include home repair and car purchase, computer purchase, or day care (if the car, computer or day care is related to employment or education). Federal AFI funds may be used to match savings for any of these asset purchases.
Source:
Office of Community Services
[ Administration for Children and Families ]
[ U.S. Department of Health and Human Services ]

Do Assets Help Families Cope with Adverse Events?
By Signe-Mary McKernan et al
December 01, 2009
Abstract (HTML)
Complete brief (PDF - 197K, 12 pages)
Family events, such as a job loss, the onset of health limitations, and a change in family structure, can adversely affect family well-being. The impact of these events may be mitigated if the family holds assets that can be used to maintain consumption. Using the SIPP, this study examines the role of assets in families' economic stability. We find that families in all parts of the income distribution experience material hardship after a negative event. Further, in the aftermath of a negative event, asset-poor families experience more hardship than non-asset-poor families, with assets helping most for low- and middle-income families.
Source:

The Urban Institute
In the mid-1960s, President Johnson saw the need for independent nonpartisan analysis of the problems facing America's cities and their residents. The President created a blue-ribbon commission of civic leaders who recommended chartering a center to do that work. In 1968, the Urban Institute became that center.
Today, we analyze policies, evaluate programs, and inform community development to improve social, civic, and economic well-being.

Assets for all? A review of the
Australian Government’s $77 billion support for asset building
(PDF - 161K, 14 pages)
By Gerard Brody and Elizabeth McNess
03 January 2010
The authors of this report argue that Australia’s current asset-building policies largely support those who are already well off. Tax concessions on housing and superannuation in particular enable wealthier households to further accumulate assets while doing little for poorer families. Significant reform of the tax and transfer system is required so that policies to encourage asset building will benefit those who need support the most.

Source:
Brotherhood of St Laurence - "Working for an Australia Without Poverty"
Established during the Great Depression, the Brotherhood of St Laurence was the vision and creation of Fr Gerard Tucker, a man who combined his Christian faith with a fierce determination to end social injustice. The Brotherhood has developed into an independent organisation with strong Anglican and community links. Today, we continue to fight for an Australia free of poverty.

From Spotlight on Poverty and Opportunity (U.S.):

Asset Poverty

Policy Proposals to Reduce Poverty
February 2009
- this five-page document covers a range of asset-building initiatives, along with Community Factors (Reducing Poverty & Recidivism), Education, Family Policy, Health Care, Making Work “Work” and
Strengthening Civil Society.
- includes brief summaries of each proposal, complete white paper policy proposals (PDF links after each section of the white paper), and a press kit.
- recommended reading for all poverty reduction researchers!
Source:
Poverty Forum
The Poverty Forum is made up of 8 teams who, in February 2009, came up with 25 policy proposals addressing domestic poverty.
The Poverty Forum is composed of a select group of leaders and policy experts representing divergent political perspectives but sharing biblical values surrounding God's concern for the poor and a commitment to address poverty.

Source:
Spotlight on Poverty and Opportunity
Spotlight on Poverty and Opportunity is a foundation-led, non-partisan initiative aimed at ensuring that our political leaders take significant actions to reduce poverty and increase opportunity in the United States.

Enabling Families to Weather Emergencies and Develop:
The Role of Assets

By Signe-Mary McKernan, Caroline Ratcliffe
Posted to Web: July 16, 2008
Abstract
Low-wage jobs can be unstable, leaving families struggling to cope with employment gaps and financial emergencies that can strike without warning. About four in five low-income families are "asset poor," lacking enough liquid savings to live for three months at the federal poverty level without earnings. In this essay, McKernan and Ratcliffe suggest a cluster of policies that would improve financial markets and savings opportunities for low-income families across the life cycle.

Complete report:

Enabling Families to Weather Emergencies and Develop:
The Role of Assets
(PDF - 285K, 30 pages)
"(...) This essay proposes five complementary types of asset policies that enable families to weather emergencies and promote their long-term development:
1. Increase regulation of small loans, preferably with a savings component, to help families with few assets weather an emergency.
2. Match children’s accounts and EITC savings (when deposited into longer-term savings accounts, such as IDAs, or when used to buy U.S. savings bonds) to incentivize savings, help low-income working families get a toehold in the financial world, and increase financial literacy.
3. Allow incentivized savings accounts to be used for vehicle ownership and set up a national grants program to expand ownership of reliable vehicles.
4. Modify the mortgage interest tax deduction and increase oversight of “nonbanks” so low-income working families receive some of the same incentives and protections that higher-income families receive when buying a home.
5. Promote retirement savings through automatic IRAs to provide low-income working families with easy access to a retirement savings mechanism and thus a more secure retirement."

Source:
A New Safety Net for Low-Income Families
[ The Urban Institute - Washington ]

Two days, two reports, two very different worlds
June 29, 2007
The World Wealth Report 2007 released on Wednesday by Merrill Lynch and Capgemini reports that the very rich (so-called high net worth individuals – HNWI) are getting even richer. And the forecast is the extremely wealthy are going to get even richer due to their dominance of global capital markets, especially commercial real estate and real estate investment trusts. Meanwhile, the Canadian Centre for Policy Alternatives released a detailed research report on Thursday called Rising Profit Shares, Falling Wage Shares which shows that real hourly wages for workers (the people that do things, rather than own things) “have been stagnant for 30 years running”.The two studies make fascinating reading, when set side-by-side...
Source:
The Wellesley Institute Blog
[ The Wellesley Institute ]

The two reports:

Canadian workers’ paycheques in 30-year holding pattern : Study
Press Release
June 28, 2007
OTTAWA – Canadians are working harder and smarter, contributing to a growing economy, but their paycheques have been stagnant for the past 30 years, says a new study by the Canadian Centre for Policy Alternatives.

Complete study:

Rising Profit Shares, Falling Wage Shares - (PDF File, 301K, 16 pages)

Related link:

www.GrowingGap.ca
GrowingGap.ca is a project of the Canadian Centre for Policy Alternatives
"(...)What does the growing gap look like? In 2004, the richest 10% of families raising children earned 82 times more than the poorest 10% -- almost triple the ratio of 1976, when they earned 31 times more. In after-tax terms the gap is at a 30-year high"

Source:
Canadian Centre for Policy Alternatives

...and:

Merrill Lynch and Capgemini Release
11th Annual World Wealth Report
(PDF file - 55K, 4 pages)
Press Release
27 June 2007
New York, June 27 – Driven by a strong global economy, the wealth of the world’s high net worth individuals (HNWIs1) increased 11.4 percent to US$37.2 trillion in 2006, according to the 11th annual World Wealth Report, released today by Merrill Lynch (NYSE: MER) and Capgemini.

World Wealth Report page
- incl. links to : * Fast Breaking Headlines * World Wealth Report Overview * State of the World's Wealth * HNWI Asset Allocation * Spotlight - New Service Model for HNW Clients * Regional Facts * About the World Wealth Report * Capgemini Wealth Management Offerings * Merrill Lynch Global Private Client * WWR Press Releases * WWR Archive * more...

Complete report:

World Wealth Report 2007 (PDF file - 3.9MB, 36 pages)

Source:
Merrill Lynch
Capgemini

Luxembourg Wealth Study Working Papers
- links to four papers released from August to November 2006

The Luxembourg Income Study
NEWSLETTER
Volume 17 Number 1 Winter 2007
(PDF file - 225K, 12 pages)
February 2007
Table of contents:
Director’s Column * New Staff * 2006/2007 LIS Summer Workshops * Belgian Workshop Summary * 2006 Visiting Scholars * Update on the Luxembourg Wealth Study * 2006 Staff Presentations & Meetings * Upcoming Local Workshops * Local Advisory Board Meeting Update * Grants for Visiting Scholars * Call for Papers * New Working Papers * In the Press/ Where They’ve Turned Up * Staff Directory
[ Earlier issues of the newsletter - links to 13 issues back to December 1998]

Source:
Luxembourg Income Study

The World Distribution of Household Wealth:
Pioneering Study Shows Richest Two Percent Own Half World Wealth
(PDF file - 252K, 14 pages)
Press Release (incl. tables)
5 December 2006
A new study on The World Distribution of Household Wealth by the World Institute for Development Economics Research of the United Nations University (UNU-WIDER) was launched on Tuesday 5 December 2006. According to the study, the richest 2% of adults in the world own more than half of global household wealth. "The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth."

Complete report:

The World Distribution of Household Wealth (PDF file - 1.14MB, 70 pages)
James B. Davies, Susanna Sandstrom, Anthony Shorrocks, and Edward N. Wolff
5 December 2006
Department of Economics
University of Western Ontario

Source:
World Institute for Development Economics Research (WIDER)
"WIDER seeks to raise frontier issues and provide new and original insights and policy advice aimed at bosdting the economic and social development of the poorest nations."
- WIDER Publications

WIDER is part of:
United Nations University (UNU)
- incl. links to : About UNU * UNU System * Environment & Sustainable Development * Peace & Governance * Capacity Development * Online Learning
- UNU Publications

Office of Community Services Assets for Independence - U.S.
The AFI Page features federal programs that give assistance to low-income families so they can accumulate assets and rise out of poverty.
- incl. links to : Home | About Asset Building | Assets for Independence | Apply for Funding | For Grantees | Resources | Contact AFI | Frequently Asked Questions
Assets for Independence
"Assets for Independence (AFI) is a Federal grant program that enables community-based nonprofits and State, local and Tribal government agencies to implement and demonstrate an asset-based approach for giving low-income families help out of poverty."
Source:
Administration for Children and Families
[ U.S. Health and Human Services ]

The Saver's Credit:
Expanding Retirement Savings for Middle- and Lower-Income Americans
- U.S.
March 2005
"(Enacted in 2001, the Saver's Credit ... provides a government matching contribution, in the form of a nonrefundable tax credit, for voluntary individual contributions to 401(k)-type plans, IRAs, and similar retirement savings arrangements. Like traditional retirement savings plan subsidies, the Saver's Credit currently provides no benefit for households that owe no federal income tax. However, for households that owe income tax, the effective match rate in the Saver's Credit is higher for those with lower income, the opposite of the incentive structure created by traditional pension tax preferences."

Complete report:

The Saver’s Credit:
Expanding Retirement Savings for Middle and Lower-Income Americans
(PDF file - 188K, 24 pages)

Source:
Retirement Security Project
"The Retirement Security Project is dedicated to promoting common sense solutions to improve the retirement income prospects of millions of American workers. It is supported by The Pew Charitable Trusts, in partnership with Georgetown University's Public Policy Institute and the Brookings Institution."

Google.ca Web Search Results: "Saver's Credit"
Google.ca News Search Results: "Saver's Credit"

Source:
Google.ca

From the U.S. Agency for International Development :

Asset Building for Sustainable Development (Workshop)
Washington, DC
January 14-16, 2004
Workshop Materials - incl. links to the workshop agenda, speaker bios, presentations (Powerpoint and videos) and links to related online content
Sample:
Michael Sherraden: Asset-Based Development Approaches in the U.S.
PowerPoint Presentation (requires Microsoft Powerpoint or compatible software to read) - 202K, 46 slides

Financial Institutions and Individual Development Accounts: Results of a National Survey (PDF file - 466K, 64 pages]
October 2003
- survey of participation by American financial institutions in Individual Development Accounts
Source:
Center for Community Capitalism
[Kenan-Flagler Business School - University of North Carolina ]

Asset Building Program - from the New America Foundation

Recent reports from New America’s Asset Building Program:
[ New America Foundation ] - U.S.

Federal Assets Policy Report and Outlook 2004 (PDF file - 71K, 10 pages)
February 19, 2004
By Reid Cramer, Papia Debroy, Leslie Parrish, and Ray Boshara
"The purpose of this annual report is to summarize and assess federal assets policy efforts from last year, in the President’s new Budget, and for the coming session of Congress. To date, there has been no comprehensive analysis of federal policy from an assets perspective. While not intended to be exhaustive, this report identifies almost $320 billion in resources related to asset building included in the Bush Administration’s 2005 Budget. The overwhelming majority of these resources, $302 billion, are catalogued as tax expenditures, while almost $17 billion of discretionary spending is proposed."

College Savings Plans: A Platform for Inclusive Saving Policy? (PDF file - 95K, 23 pages)
Margaret Clancy, Peter Orszag, Michael Sherraden
February 12, 2004

Promoting Retirement Savings: The Bush Plan vs. A Better Way (PDF file - 353K, 7 pages)
Bernard Wasow
February 06, 2004

Policy Options to Encourage Savings and Asset Building by Low-Income Americans (PDF file - 62K, 6 pages)
By Ray Boshara, Reid Cramer, and Leslie Parrish,
January 2004

Breaking the Savings Barrier: How the Federal Government Can Build an Inclusive Savings System (PDF file - 176K, 15 pages)
- by Anne Stuhldreher and Jennifer Tescher, New America Foundation, February 2005

America Saves - "Building savings and wealth for you"

AssetBuilding.org - "Ideas, Policies and Programs to Broaden Asset Ownership"

National Center for Children in Poverty
The National Center for Children in Poverty (NCCP) is the nation’s leading public policy center dedicated to promoting the economic security, health, and well-being of America’s low-income families and children.

Asset Poverty and Debt Among Families with Children
By Yumiko Aratani and Michelle Chau
February 2010
HTML version
PDF versio
n (783K, 12 pages)
Increasingly the significance of asset ownership among low-income families is being recognized. Assets such as savings and homeownership are vital components of a family’s economic security, along with income and human and social capital. In this report, we use the term “assets” to refer to financial and economic resources, not including human capital. Unlike labor market earnings, income generated from assets provides a cushion for families in case of job loss, illness, death of a parent, or even natural disaster. This cushion may be especially important for the working poor, whose economic lives can be severely impacted by even short periods of unemployment. Asset ownership can also have long-term consequences for children...

Summary of Main Findings:

* More than half of American families with children are asset poor based on their financial assets, and in particular, more than two-thirds of African-American families and female-headed families are asset poor.
* The percent of families with debt is increasing.
* Approximately a half or more poor families with children (under 100 percent of FPL) are experiencing debt hardship.
* Less than half of poor families with children (income under 100 percent of FPL) own a bank account.

State Policy Choices: Assets and Access to Public Assistance
October 2003
Fact sheet
Overview of the treatment of family assets in benefit eligibility criteria for major public assistance programs in the U.S.
- incl. asset exemption levels under the following programs : Cash Assistance under Temporary Assistance for Needy Families (TANF) - Food Stamps - Public Health Insurance - Other Government Assistance Programs (child and dependent care tax credits, earned income tax credits, Section 8 housing vouchers, unemployment insurance, and (in most states) Child and Dependent Care Fund (CCDF) subsidies.

United Kingdom

HM Treasury (British Government)

Child Trust Fund
"The Chancellor announced his intention to introduce the Child Trust Fund (CTF) in the April 2003 Budget. The CTF is part of the Government's strategy for saving and asset ownership."
- incl. links to further CTF resources

Work, Welfare and Savings : Modernisation of Tax and Benefits (U.K.) - from H.M. Treasury
[see esp. files #7-8-9 - also includes info about the U.K.'s child and working credits]
NOTE: the dates on these files range from 2000 to 2002

Institute for Public Policy Research (IPPR) - "Britain's leading progressive think tank"

The Child Trust Fund and Saving Gateway
"The two most high profile asset-based welfare policies are the Saving Gateway and Child Trust Fund."
- incl. links to five documents pertaining to these two initiatives

Organisation for Economic Co-operation and Development

Asset Building and the Escape from Poverty: A New Welfare Policy Debate
November 2003
"Governments in developed countries have long used, directly or indirectly through their tax systems, policies that subsidise or otherwise encourage the population at large to acquire assets such as financial savings, home ownership, retirement funds, education (human capital) or business capital. (...) This book establishes the context for a fruitful debate on the merits and demerits of asset building for the poor by setting out the basic ideas involved in asset-building programmes and proposals. It also outlines the social policy advantages that their proponents claim, and documents what the existing programmes and demonstration projects look like."
- incl. info about existing asset-building developments in the U.S., the U.K, Canada, Mexico, Ireland, and more
Source:
Organisation for Economic Co-operation and Development

................................................................................................................................

Microcredit:

Can microcredit work in Canada?
http://goo.gl/KeaFH
January 30, 2012
By Craig and Marc Kielburger
In December, Craig and Mark travelled in Africa with Sir Richard Branson, the billionaire founder of the Virgin Group and avid philanthropist. They visited microcredit programs that provide small loans to people in poor communities to start businesses and become financially self-sufficient. During that journey, Branson pondered aloud whether such a model could apply to the developed world and achieve scale through commercial banking. (...)
Microcredit is a simple but powerful concept: Lend small amounts to people who wouldn’t have the collateral for a regular bank loan to start a self-run business. Because the loans typically go to groups of people who vouch for and support each other, repayment rates are as high as 99 per cent. (...) Microcredit isn’t a cure-all, but its spirit of supporting entrepreneurship could be helpful for tackling some of the challenges of poverty in this country.

Craig and Marc Kielburger co-founded Free the Children:
[ http://www.freethechildren.com/ ]

Source:
Globe and Mail

http://www.theglobeandmail.com/

-----------------------------------------------------------------

Muhammad Yunus and the Grameen Bank

Controversy and conversation continue about the transparency of microcredit lending organizations

Since Muhammad Yunus and the Grameen Bank were jointly awarded the Nobel Prize in 2006 for their work on microcredit lending, a number of institutions working on similar issues have received a great deal of attention and press coverage. One such organization is Kiva, which was founded in 2005 by Matt and Jessica Flannery. Kiva prides itself on serving as a link "between small individual lenders and small individual borrowers", and on their website visitors can select the person they would like to support. Recently, this personal connection came under question by David Roodman, a research fellow at the Center for Global Development. In a lengthy blog post, Roodman questioned the direct one-to-one relationship between the lender and the borrower, while remaining largely positive about Kiva's mission. Some commentators have continued to raise the question of transparency, and in the wake of the news, Kiva amended a statement on their website to state simply "Kiva connects people through lending to alleviate poverty." This controversy has not been bad for Kiva, and the president of Kiva, Premal Shah, commented this week "If anything, it has drawn more people into the nuance and beauty of this model of microfinance. It's highly imperfect, but it's like a 3 ½ year-old child: it has a lot of potential." [KMG]

The first link below will take users to an article from this Monday's New York Times which talks about this recent controversy surrounding Kiva. The second link leads to an article from the Mercury News that provides additional background on the nature of microfinance programs and their mission. Moving on, the third link leads visitors to David Roodman's original blog post about Kiva. The fourth link will whisk users away to a post on creating a "real marketplace for development" by Dennis Whittle, the CEO of Global Giving. The fifth link leads to the Microfinance Gateway homepage. Here visitors can learn about how microfinance works in different countries around the world, read papers from their online library, and peruse announcements from the microfinance industry. The last link leads to the homepage of Kiva, and it's well worth looking at some of the profiles and success stories featured here.

Confusion on Where Money Lent via Kiva Goes
[Free registration may be required]
http://www.nytimes.com/2009/11/09/business/global/09kiva.html

Microfinance programs harness Web to connect borrowers and lenders
http://www.mercurynews.com/business/ci_13726179?nclick_check=1

Kiva is Not Quite What It Seems
http://blogs.cgdev.org/open_book/2009/10/kiva-is-not-quite-what-it-seems.php

Innocuous Changes vs. Grand Designs
http://www.huffingtonpost.com/dennis-whittle/innocuous-changes-vs-gran_b_350588.html

Microfinance Gateway
http://www.microfinancegateway.org/p/site/m/

Kiva
http://www.kiva.org/

Reviewed by:
The Scout Report, Copyright Internet Scout Project 1994-2009.
http://scout.wisc.edu/

---

The Consultative Group to Assist the Poor
With offices in Paris and Washington, DC, The Consultative Group to Assist the Poor (CGAP) is a consortium of 33 public and private development agencies working together to expand access to a variety of financial services for the poor in the developing world. The agencies involved with this project include The World Bank, the European Commission, and the Bill and Melinda Gates Foundation. For those who are less well versed in the world of microfinance, the “About Microfinance” section is a great place to begin, as is its counterpart, “Key Principles of Microfinance”. Included in the other sections (such as “Financial Transparency” and “Poverty Outreach”) are well-written briefs and reports that explain a wide range of related matters, including their poverty assessment tools, microfinance regulation, and documents on how to train people in the nuances of microfinance lending. Rounding out the site is a link where visitors can offer feedback or also just ask questions.
Review by:
The Scout Report, Copyright Internet Scout Project 1994-2007.
http://scout.wisc.edu/

-----------------------------------------------------

As founder of the Grameen Bank
receives Nobel Peace Prize, the profile of microcredit lending grows

Source:
The links and text below are extracted from the December 15/06 issue of The Scout Report

Bangladeshi Economist Claims Nobel Peace Prize
http://www.npr.org/templates/story/story.php?storyId=6605060

Nobel Peace Prize Award Ceremony 2006
http://nobelprize.org/award_ceremonies/ceremony_oslo/video/2006/index.html

Grameen
http://www.grameen-info.org/

The Microcredit Summit Campaign
http://www.microcreditsummit.org/

Web-Based Microfinancing
http://www.nytimes.com/2006/12/10/magazine/10section4.t-6.html?ex=1323406800&en=72e9b0bb93393330&ei=5090&partner=rssuserland&emc=rss

Kiva.org: Loans that change lives
http://kiva.org/

This Sunday, the 2006 Nobel Peace Prize was formally awarded in equal parts to Muhammad Yunus and Grameen Bank "for their efforts to create economic and social development from below." In his remarks, Yunus commented "Grameen has given me an unshakeable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty." Over the past thirty years, Yunus and his colleagues at the Bank have championed the cause of microcredit lending. The idea behind microcredit lending is relatively simple, and it has seen its greatest application in the developing world. Essentially, it involves making small loans to people so that they can engage in any number of self-employment projects, such as selling foodstuffs or engaging in the small-scale production of goods. When the Bank was founded thirty years ago, there were many who maintained that the Bank was lending to people who would never be able to repay their small loans, much less generate a profit. While some skeptics maintain that microcredit lending may encourage national governments to focus less on providing a social service safety net, others remain adamant about the benefits of these programs. [KMG]

The first link will take users to a NPR report on Yunus and the Nobel speech he gave this past Sunday. For those whose interests are piqued by the first link, the second link leads to Nobelprize.org, where they can watch a video of the entire award ceremony. The third link leads to the homepage of the Grameen Bank. Here visitors can learn about their lending practices and philosophy and they can also find a selection of writings by Yunus. The forth link leads to the homepage of the Microcredit Summit Campaign, which is based in Washington, DC. Moving along, the fifth link leads to a news article from Sunday's New York Times on how various groups are using the power of the web to bring microfinancing to more and more people. Finally, the last link leads to Kiva.org, which is a website where people can assist persons seeking a microcredit loan in making their businesses a reality.

Source of text and links:
The Scout Report, Copyright Internet Scout Project 1994-2006
[ Internet Scout Project ]
[ University of Wisconsin - Madison ]

Related Links:

From Wikipedia, the free encyclopedia:
- Muhammad Yunus
- Grameen Bank

Global Microcredit Summit
November 12-15, 2006 - Halifax

Canadian Gateway to Microcredit

International Year of Microcredit Site

-------------------------

Bangladeshi microcredit pioneer Muhammad Yunus win Nobel Peace Prize
October 13, 2006
OSLO, Norway (AP) - Bangladeshi microcredit pioneer Muhammad Yunus and his Grameen Bank were awarded the Nobel Peace Prize on Friday for their work in advancing economic and social opportunities for the poor, particularly women. The economist and the bank he founded will share the prize. They were cited for their efforts to help "create economic and social development from below" in their home country by using innovative economic programs such as microcredit lending. Grameen Bank has been instrumental in helping millions of poor Bangladeshis, many of them women, improve their standard of living by letting them borrow small sums to start businesses. Loans go toward buying items such as cows to start a dairy, chickens for an egg business, or mobile phones to start businesses where villagers who have no access to phones pay a small fee to make calls.
Source:
CBC.CA

Related Links:

Prof. Muhammad Yunus & Grameen Bank
Awarded The Nobel Peace Prize for 2006
OSLO, 13 October 2006
The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means.
Source:
Grameen Bank
"(...) Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. (...) Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS)."

From Wikipedia, the free encyclopedia:
- Muhammad Yunus
- Grameen Bank

Global Microcredit Summit
November 12-15, 2006
World Trade and Convention Centre
Halifax
"On November 12, 2006, 2,000 delegates from more than 100 countries will gather in Halifax, Nova Scotia, Canada for the Global Microcredit Summit, to assess progress toward the Summit’s goal of reaching 100 million poorest families, and to launch the second phase of the Campaign with two new goals.
- incl. links to : General Information - Program - Registration - Accommodations - Travel to Halifax - Associated Sessions - Exhibiting - Volunteers - Summit Materials - Summit 2006 Sponsors

Canadian Gateway to Microcredit
http://www.microfinance.ca

International Year of Microcredit Site
http://www.yearofmicrocredit.org

Exclusive Global Microfinance Forum to be held at the United Nations in November
November 7, 8, and 9, 2005
Location: UN Headquarters, New York City
http://www.yearofmicrocredit.org/pages/getinvolved/getinvolved_forum2005.asp

The 2005 State of the Microcredit Summit Campaign Report
"The 2005 State of the Microcredit Summit Campaign Report was released on December 7th at the UN in New York.
The Report presents end of 2004 data on the progress made towards the Campaign's goal of reaching 100 million of the world's poorest families with microcredit."

Complete report:
State of the Campaign Report 2005 (PDF file - 763K, 68 pages)
December 7, 2005

Related Link:
Global Microcredit Summit 2006 (November 2006, Haifax)

-----------------------------------------------------------------------------

Microcredit Loans Continue to Improve the Lives of the Rural Poor
February 13, 2004
Tiny Loans Trigger Big Change in Rural Bangladesh
Microcredit Summit Starts February 16
Palli Karma-Sahayak Foundation
Microcredit Summit Campaign
Grameen-Banking for the Poor
The End of Poverty: An Interview with Muhammad Yunus
"In 1976, Dr. Muhammad Yunus lent a small amount of money (approximately $27) to a group of 42 women near his home in the port city of Chittagong in Bangladesh. Out of this rather inauspicious beginning, the roots were planted for the Grameen Bank (Grameen means village in Bengali), an organization that has made over $4 billion in small loans to poor Bangladeshis in an effort to provide credit, or more accurately microcredit, to persons unable to receive this type of assistance from traditional banks. The Grameen Bank is in the spotlight this week as a high-profile regional summit on micocredit (which will feature visits from Queen Sofia of Spain and talks by Dr. Yunus), is convened in Dhaka on February 16. The summit on microcredit will involve serious discussion about how to bring 100-million poor persons around the world under the microfinance program by the year 2005. While Dr. Yunus has been criticized by some in the banking community as merely performing a type of glorified charity work, he remains confident about his rather successful efforts noting, "I don't care if the rich get rich. It doesn't bother me. They should get richer. I'm worried about the poor getting poorer and not getting richer."

The first link leads to a recent news story from The New Nation newspaper about the continued efforts of the Grameen Bank to improve the lives of the rural poor throughout Bangladesh. The second link leads to a news piece from The Daily Star about the upcoming microcredit summit that commences on February 16 in Dhaka. The third link will take visitors to the homepage of the Palli Karma-Sahayek Foundation, which was set up by the Bangladeshi government in 1990 in order to assist in the alleviation of persistent poverty. The Foundation is also responsible for organizing the upcoming Asia Pacific Regional Microcredit Summit, and ample information on this important event is provided here as well. The fourth link will take visitors to the homepage of the Microcredit Summit Campaign, which is dedicated to providing credit assistance to 100-million of the world's poorest families by 2005. Additionally, visitors can read the most recent "State of the Microcredit Summit Campaign" Report here at their leisure. The fifth link leads to the homepage of the Grameen Bank, and provides detailed updates about the progress of its work and overall mission. The final link provided here will take visitors to an extended interview with Dr. Muhammad Yunus conducted by Sarah Van Galder of the Global Vision group."

Source:
The Scout Report, Copyright Internet Scout Project 1994-2003
[Volume 10, Number 6 - February 13, 2004]


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