New report highlights inadequacies in state cash assistance program for poor Michigan families

According to a new report from the Michigan League for Public Policy (MLPP), the maximum cash benefit families in need receive through the Family Independence Program (FIP), Michigan’s cash assistance program to provide an adequate safety net to help state families become financially independent, is not enough for basic needs like housing, food, transportation, and healthcare.

 

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Michigan’s FIP receives funding through the federal Temporary Assistance for Needy Families (TANF) block grant, which has been $775 million per year since 1997. The report notes that only 12,600 families per month received cash assistance through the FIP in Fiscal Year (FY) 2021, a significant decrease from nearly 80,000 families per month in FY 2011.

In addition to direct cash assistance for families, according to the federal Office of Family Assistance, states can use TANF dollars as long as they align with 1 of 4 general purposes:

  1. “Provide assistance to needy families so that children can be cared for in their own homes or in the homes of relatives.
  2. End the dependence of needy parents on government benefits by promoting job, preparation, work, and marriage.
  3. To prevent and reduce the incidence of out-of-wedlock pregnancies.
  4. Encourage the formation and maintenance of 2-parent families.”

MLPP says the maximum benefit a family of 3 can currently receive is $492 per month—a number that has not been raised since 2008—is too low. According to the ALICE Household Survival Budget, in 2019, the monthly total budget for survival for a 2-person family in Michigan was $2,864—$616 for housing, $200 for child care, $453 for food, $606 for transportation, $403 for healthcare, $55 for technology, $271 for taxes, and $260 for miscellaneous purposes.

The report notes that many families below the poverty line are ineligible for cash assistance due to the income limit for eligibility falling further below the poverty line every year. Since 2017, a family has had to be below 50% of the poverty line to be eligible for any amount of cash assistance, and currently, the income limit is at 42%. Families will lose FIP cash assistance when their earnings reach only 62% of the poverty line.

The report also notes that inflation has decreased FIP recipients’ ability to afford essentials much less than they could in previous years. In terms of housing costs, in the 1980s, the monthly assistance for a family of 3 was equal to 110% of the Fair Market Rent for a 2-bedroom house in Wayne County. In 2008, the monthly assistance for a family of 3 covered 61% of Fair Market Rent, and currently covers only 45%.

MLPP recommends that the Michigan Department of Health and Human Services revise the payment standard so the maximum household income for initial eligibility is attached to a percentage of the federal HHS poverty guidelines each year, raising it to at least 75% of the poverty level in 2022. According to the report, this will increase the amount of money families receive and make FIP available to more Michigan residents who are struggling financially.

MLPP emphasizes that the current state of the FIP in Michigan ultimately falls short of the program’s intended purpose.

“It is a failure because Michigan has made it difficult for families to qualify, limiting assistance to only the most destitute of households,” the report states. “It is a failure because even the families who do qualify do not receive a monthly benefit that is adequate to meet their needs. Ultimately, it is a failure because state policymakers have not prioritized the federal TANF dollars toward helping families with basic assistance, but have instead kept caseloads down in order to free up dollars for other purposes.”