Province reducing housing subsidies for 7,000 low-income renters

June 6, 2017

Cuts to the province’s Rent Assist program will hit 7,000 households on July 1. Affected households include low-income renters not receiving EIA (Employment and Income Assistance). The changes will not affect EIA recipients. People who will be hurt by these changes include minimum wage workers, students, newcomers, families and seniors.

While the government has not released the full details of how much the cuts will affect households, calculations based on information provided by the department show that the impacts could be severe. An increase in Rent Assist is mandated under regulation for July 1 each year to account for rising rents. This year instead, families will experience either a cut in benefits or reduction in the planned increase.

For example, a minimum wage earner working full-time is currently eligible to receive approximately $106 per month. Under the existing regulation, this would increase to approximately $136 starting next month. After the anticipated changes take place July 1, the worker will have their benefit cut to only $62 per month.

A single parent with two children living at the market basket measure of the poverty line would see their benefit reduced from $119 currently to only $49 under the new regulation, even as rents have increased significantly.

A median one-bedroom apartment in Winnipeg increased from $806 to $852 per month last year and a three-bedroom apartment went up from $1133 to $1306 per month.

Rent Assist rates for minimum wage worker and families at poverty line

Family type Rent Assistance
Income Current July 1, existing regulation July 1, new regulation Change – new vs old regulation
Single minimum wage worker: (15 and 37.5 hours per week)
$8,580.00 $374.25 $404.25 $362.80 -$41.45
$21,450.00 $106.13 $136.13 $62.50 -$73.63
Single parent; 2 children, at MBM:
$31,611.00 $119.44 $148.19 $49.16 -$99.03
2 parents; 3 children, at MBM:
$35,342.00 $133.71 $263.71 $155.35 -$108.36

These cuts will put affordable housing further out of reach for low-income renters in Manitoba. Rising housing costs in Manitoba mean families have to put more of their money towards rent, leaving less available for food and other necessities. The short timeline for implementing the changes also leaves families with little time to adapt. The Province only informed affected recipients in a letter last week that there would be changes to the program, directing them to contact the department for more information about how these would affect their benefits. The impact of the changes will be reflected in the July Rent Assist cheques that are distributed in late June.

Rent Assist currently provides a vital support for low-income renters not on EIA. One of the goals of the program is to provide a bridge in supports for families and individuals leaving EIA and entering the workforce. Without Rent Assist, new workers risk facing a drop in income as other social assistance benefits decline. Economists have called this effect the “welfare wall”. The changes in the program will reduce the effectiveness of Rent Assist in addressing the welfare wall, making it more difficult for EIA recipients to enter the labour market.

The changes to Rent Assist also run counter to the Province’s long-standing position that Rent Assist is central to the province’s poverty fighting strategy. As recently as last month, Families Minister Scott Fielding took credit for the planned increases to Rent Assist, noting that they have “taken thousands of people, low‑income and vulner­able Manitobans, given them supports that weren’t there before.” Now his government is taking back some of those increases leaving vulnerable Manitobans without the supports they need.

The Province is not releasing how much it plans to save from the changes. In April, the Province estimated that it would cost $12 million to implement the July 1 Rent Assist increase.

Make Poverty History Manitoba is calling on the Province to rescind the proposed regulation change and implement the July 1 increase as currently scheduled.