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Expected to Work/Barriers to Full Employment Policy & Procedures

Published Date: July 09, 2019
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02 Income Support Overview

Indexing of Benefits

AUTHORITY
Income and Employment Supports Act, sections 1(a), 1(c.1), 1(c.2) and 5.1; Schedule

INTENT


To ensure that Income Support benefits provided to clients to assist with their needs are adjusted according to the increased cost of living over time.

POLICY


Income Support (IS) benefits are adjusted annually on January 1, using the Alberta Consumer Price Index (CPI). Indexing applies to Barriers to Full Employment (BFE) and Expected to Work (ETW) IS benefits as follows: 

Core benefits
  • The following core income support benefits are indexed:
    • Core essential payment including the comforts allowance
    • Core shelter payment
      • For client household units living in an auxiliary hospital or nursing home, the accommodation rates are indexed separately in accordance with section 3.1 of the Nursing Homes Operation Regulation


Supplementary benefits

  • Supplementary income support benefits are indexed except in the following circumstances:
    • If they are provided for the actual cost of an item,
    • If they are based on an amount set in an agreement between the Minister and another party; or
    • If they are based on an amount set in legislation separate from AISH or by another government program.


How benefits are indexed

Annual benefit rate changes are calculated using the Alberta CPI (All-items, not seasonally adjusted). The Alberta CPI is published monthly by Statistics Canada and measures the change in price for goods and services bought by Albertans. The Alberta CPI is calculated by comparing the cost of a fixed set of commodities purchased by Albertans across time. This set, or “basket,” of commodities includes food, shelter, clothing, transportation, and other average household expenditures.

If the CPI is not available to calculate the annual indexation of benefit, the Minister, in consultation with the Minister responsible for the Financial Administration Act, will determine the amount benefits will be adjusted.

Calculating annual benefit increase amounts

Benefits are adjusted annually on January 1. The increase in benefit rates in a given year is the percentage change in the average monthly Alberta CPI from the most recent 12 month period from October 1 to September 30 over the previous 12 month period from October 1 to September 30.

Adjusted amounts are determined by taking the previous year’s benefit amounts and multiplying them by the change in the Alberta CPI.

Change in the Alberta CPI is calculated using the following formula:  

X=A/B-1

X is the change in the Alberta CPI
A is the sum of the Alberta CPI indexes for each month of the 12 month period ending on September 30 prior to the adjustment date.
B is the sum of the Alberta CPI indexes for each month of the 12 month period ending on September 30 preceding the 12 month period referred to in A

Subtracting 1 from the ratio identifies the percentage increase in the CPI used for indexing benefits.

The benefit rates effective January 1, 2020, and each January 1 thereafter, are calculated by taking the previous year’s benefit amount and adding the percentage increase determined by the above calculation.

See also: Rounding Benefits.

Note
In rare circumstances, the change in the Alberta CPI may be a negative number (e.g. where the cost of the “basket” of commodities decreases from one year to the next).  Benefits are not adjusted in a year where the change in the Alberta CPI is a negative number to ensure there is not a decrease in benefit amounts.

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