Iowa's Limited Benefit Plan. E. Government Assistance and Child Support


LBP families' receipt of government assistance other than FIP benefits and their receipt of child support is analyzed in terms of the incidence of receipt and the amount received. The extent to which receipt of other assistance changed coincident with the termination of FIP cash benefits varies by type of assistance.

1. Government Assistance

In the month prior to the termination of FIP cash benefits, 96 percent of the LBP families received Medicaid, 88 percent received Food Stamps, and 28 percent received WIC benefits (Table V.10). General Assistance and SSI, of contrast, were received by only 4 to 6 percent of surveyed cases.

Table V.9
Table V.10

Coincident with the termination in FIP benefits, the percentage of cases that received Medicaid and Food Stamps declined quite dramatically. Between LBP month 6 and the interview month, the share of respondents that received Medicaid fell 29 percentage points (to 66 percent), and the share that received Food Stamps fell 25 percentage points (to 64 percent). Given that the LBP does not directly affect eligibility for Medicaid or Food Stamps, there must be other reasons for these declines. One possibility is that some families mistakenly think that they automatically lose their eligibility for Medicaid and Food Stamps when they lose their eligibility for FIP. Other families may know that their eligibility for Medicaid and Food Stamps is not affected by the LBP but decide that participation in these programs is not worthwhile once they are ineligible for FIP. It is also possible that some actually become ineligible for Medicaid and/or Food Stamps due to increased income from employment or other sources after the loss of FIP cash benefits.(3)

To analyze dollar amounts of government assistance, we first examined average amounts among all survey respondents--including those who reported zero dollars of a given type of assistance--and then examined average levels among the subset of respondents that received assistance in both months, that is, those who reported positive dollar amounts of a given type of assistance in LBP month 6 and in the pre-interview month. Among all survey respondents, there was a net decrease in average Food Stamp benefits and General Assistance, and a net increase in average SSI. The largest change was for Food Stamps: the average amount of Food Stamp benefits was approximately $65 less in the pre-interview month than in LBP month 6. Among recipients (those cases receiving the particular type of assistance in both months), average Food Stamp benefits increased, but only slightly, rising from $271 to $275. Average SSI among recipients also increased moderately, rising from $460 to $469. No respondents received General Assistance in both months.

2. Child Support

Ten percent of survey respondents reported receipt of child support payments in the month prior to termination of cash assistance, and 19 percent reported receipt of child support in the pre-interview month.(4) Among all respondents, average monthly child support income increased by $24 between these two months, from $7 to $31. Among respondents that received child support in both months, the average amount received increased by $89, from $78 to $167. We must be cautious, however, in interpreting this result due to the treatment of child support under FIP. Specifically, when a household receives FIP benefits--as in month 6 of the LBP--only the first $50 of child support paid by the noncustodial parent is distributed to the family, while any amount above $50 is withheld by the state to offset FIP outlays; in contrast, when a household does not receive FIP benefits, the full child support payment is distributed to the family. Hence, some or all of the increase in child support payments reported by survey respondents (between LBP month 6 and the pre-interview month) may stem from the increase in the portion of the payment that is distributed to the family rather than a change in the noncustodial parent's payment amount.