Iowa's Limited Benefit Plan. E. The Termination of FIP Cash Benefits


The termination of FIP cash benefits affected LBP families in a variety of ways. The analysis of the effects of terminated benefits is based on responses to a series of open-ended survey questions, which asked respondents to describe the overall impact of the loss of FIP benefits, the difficulties and successes they had following benefit termination, and their plans for meeting their financial needs in the next two months.

1. Overall Effect of the Loss of FIP Benefits

The overall effect of the loss of FIP benefits varied widely. Negative effects were most commonly reported, but nearly 24 percent of respondents reported positive effects, and 14 percent reported that their lives had not been affected one way or the other (Table VI.9).

The most common effect of the loss of FIP cash benefits was chronic worrying, which was reported by 52 percent of respondents. According to one parent, "I worry all the time. Every month it gets harder and harder trying to make ends meet."(7) Forty-four percent of respondents cited financial problems as an effect of the loss of FIP benefits. Many of these individuals worried about paying their rent and feared the possibility of being evicted from their homes. One parent explained, "I don't know what will happen next month [about paying the rent]. I've asked all of my friends and family for money." Another theme was insufficient resources to purchase groceries. One parent stated, "We have Food Stamps, but that isn't enough to feed two growing teenagers." Some respondents commented that they were unable to provide clothes or shoes for their children, or to pay for automobile expenses such as gas, registration, and insurance.

Table VI.9

About one quarter of respondents reported that the loss of cash benefits had positive effects, particularly in the form of increased independence and self-esteem. Some had become more independent through employment or increased earnings. One respondent said, "I really like working. I like being able to provide for my family. It is better for my kids that they see me working." Others experienced an increase in their self-esteem as a result of no longer relying on welfare and the consequent removal of the stigma associated with welfare receipt. One respondent remarked, "It was hard being on welfare. Neighbors and people at stores look down on you. Now, I don't feel so ashamed."

2. Difficulties After Losing Cash Assistance

The two greatest difficulties facing families following the termination of FIP cash benefits were meeting household expenditures and providing for children. Over half of the respondents reported that meeting household expenditures--rent, bills, car expenses, food, clothes--was one of their greatest difficulties (Table VI.9). One respondent said, "It's hard to pay my bills on time. I only pay some [bills] each month." Another explained, "I try to borrow enough money from my friend every month to make sure the bills are covered. It's a lot of stress."

After household expenditures, providing for children was the next most common difficulty. This was cited by nearly 40 percent of survey respondents. One parent said, "My son wants to join the school band, but I don't have the money for that." Another parent explained, "I don't have enough [money] to buy gym shoes for my two kids." Smaller shares of respondents reported that some of their greatest difficulties after benefit termination were securing child care and transportation (9 percent), the loss of health insurance (8 percent), obtaining employment (6 percent), and loss of independence (2 percent).

Nearly one-fifth of the respondents commented that they had not experienced any difficulties since losing FIP cash benefits. One of these respondents said, "Things really haven't changed. I'm working now, so I'm doing OK."

3. Successes After Losing Cash Assistance

The two greatest successes of respondents after losing their FIP cash benefits were greater personal independence and keeping families intact. Over half of the respondents (Table VI.9) reported increased personal independence and self-sufficiency as one of their greatest successes. Some noted an increased sense of accomplishment and pride because they were "making it on their own" without government assistance. One respondent said:

Things are going OK. It makes me feel good about myself to work and earn money rather than getting money for nothing. I have a sense of accomplishment now. I'm more independent. I'm out doing something for my family. I hope I'll keep working or get a better job.

After increased independence, the success that respondents most commonly reported was keeping their families intact in the face of adversity (20 percent). One respondent said, "At least we are together as a family." Another said, "My kids are still with me." Still another noted, "My husband and I are staying together. We made it through this."

While many families did experience successes after their FIP benefits were terminated, 42 percent of survey respondents stated that they had experienced no successes during this time. One said, "It's been really hard. There hasn't been one good thing." Another remarked, "I can't think of any successes. We're just doing the best we can to get by." Comparing this to the number of respondents that reported no difficulties following benefit termination, we find that reporting no successes was more than twice as common as reporting no difficulties.

4. Plans for Meeting Short-Run Financial Needs

Respondents' plans for meeting financial needs in the next two months without FIP cash benefits most often took the form of employment, their partner's employment, or child support payments. Employment was by far the dominant strategy (Table VI.10), cited by nearly 70 percent of respondents.(8) Those who were unemployed intended to find employment; those who were employed intended either to remain at their current jobs or to find new jobs providing higher wages and benefits. One respondent explained, "I'll keep working. Everything will be fine if I don't lose my job." Another parent noted, "I'm working now, but I need to work more hours to get full [fringe] benefits. After another six months, I'm up for a raise, too."

After their own employment, respondents most often cited increased income through their partner's employment or through regular child support payments as part of their plan (21 percent). Only a few respondents identified government assistance as the means to achieving financial stability over the next two months. Seven percent stated that their plan was to reapply for FIP benefits,(9) and one percent planned to apply for SSI.