(Source: MIRS.news, Published 02/14/2024) The Governor wants Michigan to be substantially more focused on direct cash assistance to severely poor families when spending federal Temporary Assistance for Needy Families (TANF) dollars, with her budget proposal increasing spending on "assistance payments" by more than $150 million.
In Fiscal Year (FY) 2022, Michigan obtained a regular TANF grant from the federal government worth $772.8 million and, because the federal money can be carried forward to future years, the state was able to kick off FY '23 with an expected $114.7 million in leftover TANF dollars ready to be deployed. But, in both FY '22 and FY '23, less than $90 million was appropriated for assistance payments.
According to the Michigan Department of Health and Human Services (DHHS), 7.4 percent of Michigan's share of TANF funding was directed to "basic assistance," which can include cash, vouchers and the delivery of other benefits related to food, clothing, shelter and personal care items.
The Governor's proposal would change Michigan's present-day use of TANF. In her executive budget proposal for Fiscal Year (FY) 2025, which was revealed on Feb. 7, Gov. Gretchen Whitmer called for making $46 million worth of changes to the Family Independence Program (FIP).
FIP – the program used by the state's health department for administering payment assistance from TANF – would receive a new TANF appropriation of $34.8 million to increase the base monthly payment to cash assistance recipients by 35 percent. Also, FIP would have access to $10 million to enlarge young child support payments to enrolled children under 6-years-old from $50 to $150 monthly.
Moreover, $1.2 million in TANF bucks will be used to extend a family's lifetime eligibility for FIP assistance from 48 months to 60 months.
Between the ongoing FY '24 and FY '25, under Whitmer's suggestions, TANF spending on assistance payments would grow from a little more than $100 million to more than $250 million.
"We're seeing a lot of need around housing assistance, utility assistance, etc . . . and what we know is our TANF program is like the base foundation for the poorest Michiganders to help support them if they have kids. The reality is, that program has really been stripped away over the last 20 years," Lewis Roubal, DHHS' senior advisor of human services, told MIRS.
Roubal said DHHS hopes that through the Governor's plan, "we're going to hopefully see that we take some pressure off our child welfare system where, unfortunately, poverty and neglect at times get conflated with one another, and we think that that investment will really help stabilize families that are most needy in Michigan."
He clarified that direct cash payments overseen by FIP are issued through an electronic benefits transfer (EBT) card, which families can use at the point of sale for non-food items, or they can withdraw cash from the card at an ATM.
A part of the Governor's game plan consists of replacing $127.8 million in TANF funding that was spent on college scholarships with money from the General Fund, shifting the TANF money away from Michigan's scholarship landscape and into family welfare.
"In this budget proposal for 2025, we really have an opportunity to stop paying for something big, which is college scholarships, and that will free up dollars to be used for direct cash payments . . . while we think investing in post-secondary education is essential – it's really important – we shouldn't be using our TANF allocation for that," Monique Stanton, president of the Michigan League for Public Policy (MLPP), told MIRS on Monday.
Stanton said direct cash assistance can be spent on all different types of things, like rent, transportation, utilities and on "paying for things really just to make ends meet in order for you to get by."
She added that as adults are receiving TANF payments, they are required to be either working or participating in employment readiness activities.
"It is really difficult to make ends meet enough in order for you to find employment, go to an education program . . . doing some of those things that you're required to do," Stanton said. "We really believe that people need to have, and should have, autonomy to figure out what they need in their lives. People who are struggling, and living either paycheck-to-paycheck or who are living in poverty . . . should have the ability to make decisions that are best for themselves and their family. They know where they need to spend their dollars."
As for the lifetime limit, 35 states – including Alabama, Iowa, Kentucky, New York, Ohio and Washington – already cap monthly payments at 60 months. Meanwhile, Michigan is one of 12 states with a limit lower than 60 months, although 60 months is the time limit set in the federal statute affiliated with TANF.
If the Governor's recommendations are seriously looked at and worked on by legislators, the MLPP would like lawmakers to look at Michigan's position on "clock stoppers." Currently, some FIP participants, after technically exiting out of the cash assistance program, will receive $10 monthly payments for six months to maintain categorical eligibility for Medicaid or Supplemental Nutrition Assistance Program (SNAP) benefits.
Those six months of $10 monthly payments can be counted into a recipient's 48-month lifetime cap, according to Monique and MLPP Economic Security Analyst Patrick Schaefer.
"What this $10 does is it means for the next six months, you'll continue to be qualified for these other services because you're receiving money through TANF, but you're not technically receiving your full TANF benefit anymore. It's to ease a family's transition from this level of deep poverty to what we may think of as a stable working family," Schaefer said. "There would still be ways you could qualify for Medicaid, you just wouldn't have this broad automatic eligibility from TANF anymore."
Stanton said the MLPP would like to see "clock stoppers," shielding non-full TANF payments from being counted as part of a family's lifetime caps, reinstated after they were removed in 2011.
According to the MLPP, the maximum monthly benefit for a severely low-income family, made up of one parent and two children, has grown from $459 in 1993 to $492 in 2022. If adjusted for inflation, the MLPP calculates that the maximum benefit in 2022 should have been $882, with the actual payment worth 56 percent of what the 1993 payment was.
While presenting to the Senate Appropriations DHHS Subcommittee this afternoon, DHHS Director Elizabeth Hertel said families with an income of $11,000 or more in Michigan are unable to access FIP assistance, although the federal poverty level for a family of four was $28,000 in 2022. Through Whitmer's proposed budget, Hertel said families making less than $14,000 annually will be eligible for approximately $480 in monthly payments.
