Earlier in 2016, the Ontario government under Kathleen Wynne announced they would be trialing a basic income program within the 2016 budget. This announcement has prompted government figures at the Federal level to investigate the possibility of instituting basic income for all Canadians.
When analyzing the potential of basic income and its impact on the economy, many are now wondering how basic income will prevent personal bankruptcies in the future. In this article, we’ll address this question as we highlight the benefits that basic income might bring to the economy.
Helps Tackle Credit Issues
One of the most important benefits of the basic income program is that it will help prevent Canadians from turning to credit cards when they suffer a job loss. Many thousands of people across the country are now in credit card debt, simply because of the required food and other resources during a period when they had little or no income. A guaranteed income will help safeguard these credit card users and will work to prevent them entering bankruptcy.
Reduce Government Costs
Another clear advantage of a basic income program is that it would help Canadians and the government save money on other social programs. Canadians that are better able to afford housing through a basic income program, for example, would not need social housing assistance. The government could also cut back on health care costs significantly, as income is closely correlated with health. The data shows, for example, that almost every major medical condition has worse outcomes for those with low incomes than those with higher incomes.
Not a Clear Solution to Bankruptcy Issues
It’s important to recognize the limits that a guaranteed basic income would have across the country. While the income would assist families in the event of a job loss, it might not stop a person from risking their resources to gain more money over time. For example, it’s unlikely that basic income will stop Canadians from gambling their money or turning to consumer credit options for luxuries such as high priced vehicles and vacations. While the idea of basic income will be of great interest to many, and will help thousands maintain their financial independence, Canadians are still likely to enter the bankruptcy process as a result of high net spending on nonessential items.
The basic income program could offer Canadians a number of benefits as we tackle a significant consumer debt issue across the country. To learn more on basic income and its potential impact or to discuss your options for your current debt situation, speak with our trusted team today.