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Opinion

Opinion | Michigan’s Cash Assistance Program is Failing to Reach Families in Need

Credit: iStock

by Peter Ruark, Michigan Advance

In Fiscal Year (FY) 2011, the year Republican Gov. Rick Snyder took office, an average of 79,660 Michigan families per month received cash assistance through the Family Independence Program (FIP). Eleven years later, in 2022, only 11,947 families received it.

What happened?

First, let us not think for a second that this had to do with family well-being or the economy. There is no reason to believe that only 11,947 families are living in poverty in Michigan. In fact, the 2021 American Community Survey census numbers show a 15% poverty rate for families with children. And that number jumps to 36% in a single-parent family.

No, the low number of families receiving FIP cash assistance is because, due to various state policies, very few families in poverty can actually receive assistance through the program.  Family Independence Program payment standard | MLPP chart

A new report from the Michigan League for Public Policy addresses how misguided policymaking has made cash assistance unavailable to families in poverty, even when those families are working and trying to become economically independent.

First among these policies is an eligibility standard so low that a family has to not only be in poverty, but in deep poverty. In order to begin receiving cash assistance, a family’s total household income must be no higher than $814 per month, which equates to only 42% of the federal poverty line for 2022. If the family begins to increase its earnings, the FIP monthly benefit will decrease until the family household income reaches $1,183, equivalent to 62% of the federal poverty line.

Another significant state policy preventing Michigan families from accessing temporary cash assistance when experiencing financial hardship is the 48-month lifetime time limit set by the state in 2011. The months a family has already received cash assistance are counted against the time limit even if they received very low monthly benefit payments.

In fact, for several years, all families who started earning too much to be eligible for FIP automatically received $10 per month (called Extended FIP) for an extra six months in order to continue eligibility for Medicaid coverage — and those six months count against the 48-month lifetime limit.

Along with the limited access struggling families have to cash assistance, there is also the issue of the very low monthly benefit. The maximum amount that a family can receive is $492 per month, and that is only if the family has no other income. As the family brings in earnings, that benefit amount decreases (although the benefit decreases more slowly than the earnings increase to encourage work).

That $492 maximum FIP grant will only cover 45% of rent for a modest two-bedroom dwelling in Wayne County, and no more than 65% of rent in any of Michigan’s 83 counties. Section 8 housing subsidies are largely unavailable to most families who qualify due to limited funds and long waiting lists. 

For a family with no other income, the FIP grant must cover not only housing costs, but clothing, school expenses, transportation, personal care, and many other monthly expenses. Food is subsidized by the Supplemental Nutrition Assistance Program, for which all families receiving FIP are categorically eligible, although it may not offer enough to cover a family’s entire monthly grocery needs.

Does it really make practical or moral sense to require a family with children to be in near-destitution before allowing the family to receive temporary cash assistance that could help them pay the bills, buy clothing for their children and keep their car running? Does it make sense to pay such a low monthly benefit that they still have trouble meeting their basic needs?

About 166,500 families in Michigan are living in poverty. Bringing Michigan’s cash assistance program up to date would help them receive temporary relief.

Michigan Advance is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Michigan Advance maintains editorial independence. Contact Editor Susan Demas for questions: info@michiganadvance.com. Follow Michigan Advance on Facebook and Twitter.