Iowa's Limited Benefit Plan. B. The Limited Benefit Plan


The LBP is a short-term alternative assistance program introduced under Iowa's welfare reform program. In the LBP, a case's cash benefits are reduced and then terminated for a fixed period of time after which the case can reapply for benefits. FIP recipients are usually assigned to the LBP as a result of not meeting FIP requirements relating to PROMISE JOBS participation.

Under FIP, able-bodied adults who are not caring for infants and are not working 30 or more hours per week at the time of FIP application are required to develop, sign, and carry out a contract called the Family Investment Agreement, or FIA, under the auspices of the PROMISE JOBS program. The FIA specifies the steps that will be taken to achieve self-sufficiency and a date by which this goal will be achieved; this date can be revised if life circumstances change. Failure to develop, sign, or follow through with the FIA results in assignment to the LBP. Welfare clients or applicants may also volunteer for assignment to the LBP. Heads of families who believe that their need for assistance is temporary or who prefer to avoid dealing with PROMISE JOBS may be especially inclined to volunteer for assignment. Opportunities to return to FIP through cancellation of an LBP assignment are strictly limited for all LBP assignments.

Although it is the individual who is assigned to the LBP, the FIP case to which he or she belongs is greatly affected by the assignment; most notably, the entire case's cash assistance is reduced and then terminated as a result of the LBP assignment.(3) Under the former AFDC program, the consequences for nonparticipation in PROMISE JOBS were less severe than in the LBP and applied to fewer welfare recipients. The new policies reflect the philosophy behind welfare reform in Iowa that the choices individuals make have real consequences that may affect the entire family.

As originally designed and implemented, the LBP was a twelve-month plan. It provided cases with three months of cash assistance at the same level as under FIP, three months of reduced cash assistance,(4) and six months of ineligibility for cash assistance. After twelve months, LBP participants could reapply for cash assistance. Throughout the full twelve-month period, LBP participants could continue to qualify for and receive Medicaid and Food Stamps as long as they met the eligibility requirements for these programs. However, they could not receive the Transitional Child Care assistance or Transitional Medicaid that were (and are) provided to former FIP clients whose eligibility for cash assistance has ended as a consequence of increased income from employment. As part of the LBP, registered nurses or social workers employed by local public health agencies would attempt to conduct two "well-being" visits with LBP families to inquire about the children, to ask parents whether they need information about their rights and responsibilities, and to provide referrals to community agencies.

A redesigned LBP, eliminating the initial three months of level benefits, was implemented in February 1996. The redesigned LBP is a nine-month plan, which provides reduced cash assistance during the first three months, followed by six months of ineligibility for cash assistance. In redesigning the LBP, a policy for second or subsequent LBPs was also implemented. Specifically, any second or subsequent LBP is a six-month plan in which benefits are canceled immediately for the entire case with no reconsideration option. Most other provisions of the redesigned LBP are unchanged from the original LBP design. Results presented in this report pertain to cases whose experiences with the LBP occurred under the original design.