Iowa's Limited Benefit Plan. G. Monthly Patterns of FIP Benefit Receipt During and After the LBP

05/01/1997

In this section, we describe monthly patterns of FIP benefit receipt over time and compare them for canceled and never-canceled LBP cases. For the set of never-canceled LBP assignments, we highlight whether or not the case returns to FIP after the LBP.

1. Monthly Patterns of FIP Receipt

Table III.9 displays the percentage of cases receiving FIP cash benefits in each of the months 1-12 of the LBP and in each of the first three months after the LBP for all LBP cases, canceled LBP cases, and never-canceled LBP cases.(19) The shading in this table highlights the key periods in the LBP: months 1-3 when cases on the LBP receive regular FIP cash benefits, months 4-6 when cases on the LBP receive reduced FIP cash benefits, and months 7-12 when LBP cases are ineligible for FIP cash benefits.

In month 1 of the LBP assignment, 83 percent of cases receive FIP benefits while 17 percent do not. Additional calculations show that most of these 17 percent are never-canceled LBP cases that leave cash assistance (FIP) by the time the LBP starts.(20) As expected, the largest drop in receipt of FIP benefits among LBP cases occurs at month 7, when the period of ineligibility for cash assistance begins for those remaining on the LBP. Receipt of FIP benefits does not go to zero during the ineligibility period because about half of the LBP assignments have been canceled, enabling these cases to return to FIP immediately following cancellation. In the three months after the end of the LBP term, approximately 38 to 40 percent of all LBP cases receive FIP cash benefits.

Table III.9

Cases with canceled LBP assignments have a high frequency of FIP benefit receipt that declines gradually over time. This high frequency of receipt by the canceled cases is not surprising for two reasons. First, cancellation eliminates the FIP ineligibility period, when no benefits can be received. Second, cancellation is more likely to occur among cases that desire to return to FIP, particularly when cancellation occurs because the client signs an FIA.

As shown in Table III.9, never-canceled LBP cases compared with canceled LBP cases have a lower level of FIP benefit receipt that declines more rapidly. Approximately 72 percent of never-canceled LBP cases are receiving FIP in the first month of the LBP.(21) By month 6, the month prior to FIP benefit termination, only 30 percent of never-canceled cases are receiving FIP. These never-canceled cases are also unlikely to receive FIP after the LBP ineligibility period has ended. In the first month of renewed eligibility, only 12 percent are receiving FIP benefits. In the third month, still less than 20 percent are receiving FIP benefits. These figures are small both in absolute terms and relative to the 30 percent of never-canceled cases receiving FIP in the month before benefit termination and the 62 percent of canceled cases receiving FIP in the first month after the LBP period.

2. Return to FIP After the LBP by Never-Canceled LBP Cases

Table III.10 provides more detail on the frequency of return to FIP after the LBP by cases subject to the full term of the LBP. In particular, it presents the percentage of cases receiving FIP benefits in each of the three months immediately following the LBP for three groups of never-canceled cases corresponding to key paths through the LBP: those who exit before the LBP starts, those who exit after the LBP starts, and those who do not exit early (12 months on the LBP). There is considerable variation from one group to the next in the extent to which cases return to FIP after the LBP. Return to FIP is the lowest among those that exit prior to month 1 of their LBP assignment. Less than 10 percent of these cases receive FIP benefits in any of the first three months of renewed eligibility following LBP month 12. Return to FIP is highest for never-canceled LBP cases that do not exit early. Approximately 34 percent of these cases receive FIP benefits in any of the first three months of renewed eligibility. While 34 percent is high when compared with the comparable figures for the other two groups of never-canceled cases (10 percent and 14 percent), it is quite low when we consider that 100 percent of cases in this particular group--cases that do not exit early--were receiving FIP immediately preceding the ineligibility period.