Overview of the Final Report of the Seattle-Denver Income Maintenance Experiment. Administration of the Treatments


The cash transfer treatment, as has been noted, was defined by a guarantee and a tax rate.  The amount of payment actually received by a family was calculated according to information regarding non-experimental income, assets, and expenses contained in a monthly Income Report Form submitted by the family to the SIME/DIME payments office.  This information was used to calculate the benefit to be paid by check to the family in the subsequent month.

Such a reporting and payment system differed from what was then common state welfare policy, where benefits were calculated for a future period based on projected income and the expected expenses for that future period.(6)  Another important difference between the payment calculations used in the income maintenance experiments and those still prevailing under state welfare policy is that, in the former, the underlying basis for experimental benefits was the income received over the previous year.  This ensured that families with the same annual income received the same total benefit over the course of a year.  For those families whose income remained below their breakeven level throughout the year (most of the sample), this constraint made no difference to the amounts received each month.  For those whose incomes fluctuated around their breakeven levels — so that in some months they were above it and in some months below it — receipt of benefits in any month depended not only on whether the family income was below the breakeven level for the most recent month, but also on the family's non-experimental income over the previous twelve-month period.  A third important difference in SIME/DIME was the monthly Income Report Firm.  The conventional welfare system had no regular reporting form for clients.

Families were enrolled into the experiment in a face-to-face interview at which they were told about the guarantee level and tax rate of the negative income tax plan to which they had been assigned, how the benefit payment was calculated, and how long the experiment would last for them.  The filing and record keeping responsibilities of the sample families, the specifics about what counted as income and what were deductible expenses, the details of the payment calculation formula, and the conditions under which the experiment could withhold benefit checks were all spelled out in considerable detail in a set of rules and regulations given to each family.  Penalties for misrepresentation were also specified, and appropriate audit and appeal procedures were set up.  Although, as in any program, many cases of misreporting did occur, the incidence of deliberate fraud seems to have been low and repayments were usually achieved through appropriate deductions from future payment streams.

Throughout their period of experimental eligibility, families in the treatment group who were also eligible for AFDC or AFDC-UF were allowed to choose which program they wished to receive benefits from in any given month.  They were not however, allowed to receive checks from both SIME/DIME and AFDC simultaneously.  A major part of the auditing function thus involved making sure that families were not benefiting from both SIME/DIME and AFDC in the same payment period.

The administration of the counseling/training subsidy treatment involved informing families of their eligibility for the counseling/training subsidy program at the time of the enrollment interview mentioned above.  A counselor then contacted them and arranged individual or group sessions for those individuals who desired counseling.