In Economic Security, News Releases, Reports

For Immediate Release
Feb. 2, 2023

Contact:
Laura Millard Ross
lauramr@mlpp.org
517-281-1084

New report sounds alarm on Michigan’s historically underfunded cash assistance program amid inflation, price hikes

FIP cash assistance program does not cover basic costs of living, even for those in deep poverty 

LANSING — Years of legislative neglect and harmful policies have caused a sharp decline in the number of Michigan families who can access cash assistance, according to a recent report by the Michigan League for Public Policy. In the report, Raise the Standard: Revitalize the Family Independence Program to Help More Michigan Families Reach Financial Stability, the League calls for the Michigan Department of Health and Human Services to raise the payment standard to at least $1,084, which would open the initial income eligibility to those who make 75% of the poverty line.

“Raising the cash assistance payment standard is long overdue–it hasn’t been increased since 2008. The maximum benefit a family of three can receive is $492 per month if they have no other income. This is not even enough to cover the basics. And right now we’re reaching crisis level as prices are sky high on groceries, cleaning supplies and other necessities. We know when faced with this kind of economic stress, people are forced to make risky tradeoffs. In order to cover rent and other expenses, they may have to heat their homes with kerosene heaters or skip taking medication. We need to act swiftly to help families in deep poverty make ends meet,” said Monique Stanton, president and CEO of the Michigan League for Public Policy. 

Cash assistance, called the Family Independence Program (FIP) in Michigan, is funded through the federal Temporary Assistance for Needy Families, or TANF. The federal money is given in a lump sum to Michigan, which then uses it not only for payments to families but for other things such as college financial aid and child protective services. The money allotted is set at approximately $775 million per year, and has not increased in the past 26 years, even though the cost of living has increased drastically.

“This report explains the context behind the drop from 229,000 families on cash assistance in 1993 to fewer than 12,000 families today—it is certainly not due to a rapid decline in poverty.  FIP has failed families in Michigan because instead of prioritizing financial stability for people, the state has—especially since 2011—prioritized pushing families off assistance or prevented them from qualifying altogether. Policymakers are treating TANF as a cash cow, using federal funds that should be directed toward families that are truly in need to supplant spending that should be paid for from the state General Fund. One example is Michigan’s current use of TANF to pay 75% of the funding for college financial aid grants that mostly benefit middle-class and even affluent families,” said  Stanton.

A family’s monthly income must be at 39% of the poverty line ($814 for a family of three) to initially receive assistance through the Family Independence Program. When a family’s monthly earnings reach 57% of the poverty line ($1,183) they will lose it. 

“I first went on FIP when my daughter was born. She was premature and weighed only three pounds. I had to quit my job as a child care worker so that I could drive to the hospital in Kalamazoo to be with her every day. The cash assistance wasn’t enough to cover the cost of gas to get me there,” said Kenarda Rouse, a Benton Harbor resident and former recipient of FIP. Rouse also expressed concern that, with the strict lifetime limit of 48 months, she might not be able to access FIP if she again falls on hard times when she is older.

The League also recommends removing the asset test and drug felony ban for FIP recipients, as well as targeting TANF spending only to populations with low incomes. 

###

The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on opportunity for all. Its mission is to use data to educate, advocate and fight for policy solutions that undo historic and systemic racial and economic inequities to lift up Michiganders who have been left out of prosperity. It is the only state-level organization that addresses poverty in a comprehensive way.

 

worried family with financial documents at home