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A Case for Decoupling Employment Income and Benefits for People Living With Disabilities

A Case for Decoupling Employment Income and Benefits for People Living With Disabilities
 
A CASE FOR DECOUPLING EMPLOYMENT INCOME AND BENEFITS FOR PEOPLE LIVING WITH DISABILITIES ENDownload
(Ottawa, July 24, 2025) 

The National Educational Association of Disabled Students (NEADS) is pleased to announce the release of the white paper “A Case for Decoupling Employment Income and Benefits for People Living with Disabilities.” Produced in collaboration with the Council of Canadians with Disabilities, Sustainable Livelihoods Canada, the Manitoba League of Persons with Disabilities, and the Quebec Association for Equity and Inclusion in Post-Secondary Education (AQEIPS), this report establishes a clear case for governments in Canada to completely decouple employment income from provincial and federal disability benefits for Canadians with disabilities. This shift away from traditional clawback models ensures that people with disabilities are able to continue to collect monthly benefits while simultaneously engaging in work if they can choose to do so. 

While we celebrate the launch of the Canadian Disability Benefit (CDB) this July as a supplement to the currently insufficient provincial benefits for Canadians with disabilities, we continue to draw attention to how the refusal of all levels of government to decouple employment income from disability benefits forces disabled Canadians to live in legislated poverty.  

“A Case for Decoupling Employment Income and Disability Benefits is a very important contribution to a growing body of research that demonstrates the serious social and economic disadvantages faced by disabled persons in Canada,” says Frank Smith, National Coordinator of NEADS. “Across provinces and territories, the authors from the NEADS team have clearly identified inadequate disability benefits and supports that often force persons with disabilities to live below the poverty line. The current benefits systems, including federal benefits programs, create an almost inescapable cycle of poverty. They also needlessly create disincentives and penalties to work for those disabled folks – including post-secondary students and graduates with disabilities – who are motivated and qualified to fully participate in the labour market.”  

Throughout the white paper, we identify the harms of tying employment income to disability benefits. The Medical Model of disability causes substantial harm to people with disabilities by reducing their identity to a diagnosis or impairment that must be “fixed” or “treated,” rather than recognizing societal barriers as the primary disabling factor. When applied to income support systems, the Medical Model forces people with disabilities into the demeaning position of emphasizing their limitations and incapacity to qualify for essential benefits—creating a psychological trap where acknowledging strengths or capabilities can threaten their economic survival. This contradiction is particularly evident when the same systems that require people to prove they cannot work also expect them to seek employment opportunities, creating an impossible double bind. 

Both federal and provincial disability support programs in Canada create a problematic link between employment status, earned income and benefits eligibility that undermines financial security and workforce participation of people with disabilities.? 

Some provincial programs encourage people receiving benefits to work to their full capacity while others require it. However, once employed, the programs are quick to push people off their entitlements based on arbitrary and inconsistent earned income thresholds, without taking into consideration the complex life need or the higher costs related to disabilities, creating a greater risk of income precarity and poverty experienced by people with disabilities.? 

The positive reasons to decouple earnings from disability benefits are many. There would be an expansion of Canada’s productive workforce with increased labour market engagement by people with disabilities. This would result in reduction of their long-term economic dependency and there would be growth in the generation of income tax revenue. Sales tax revenue would also have potential for growth as individuals with disabilities increase their disposable income, which would enhance consumer spending. Local and regional economies would benefit from the stimulation of this economic activity. The strain on social support systems would be considerably reduced over time.? 

You can access “A Case for Decoupling Employment Income from Disability Benefits” and related materials for NEADS’ Pathways to Employment program on our Breaking It Down website: https://breakingitdown.neads.ca/additional-resources/ 

Isabella Fiore (they/she | iel/elle)
NEADS Communications and Partnerships Director
National Educational Association of Disabled Students (NEADS) 

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