# Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2002-FY2004 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL33340 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** March 27, 2006 - **Citation:** RL33340 ## Text Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2002-FY2004 (name redacted), Coordinator Specialist in Social Policy March 27, 2006 Congressional Research Service 7-.... www.crs.gov RL33340 CRS Report for Congress Prepared for Members and Committees of Congress Cash and Noncash Benefits for Persons with Limited Income Summary More than 80 benefit programs provide aid—in cash and noncash form—that is directed primarily to persons with limited or low income. Such programs constitute the public “welfare” system, if welfare is defined as income-tested or need-based benefits. This definition omits social insurance programs like Social Security and Medicare. Income-tested benefit programs in FY2004 cost approximately $583 billion: $427 billion in federal funds and $156 billion in state-local funds (Table 1). Spending on these programs represented 18.6% of all federal spending, with medical aid accounting for 9% of the budget. Total low-income spending in FY2004 equaled 5% of the gross domestic product and set a record high, up $34 billion (6.2%) from the previous peak of FY2003. In current dollars, spending on income-tested programs increased during the year for all forms of aid except jobs, training, services, and energy aid. Higher medical spending accounted for $26 billion of the net increase in FY2004, and 55 cents of every low-income dollar went for medical assistance. Expressed in constant FY2004 dollars (Table 2), income-tested spending increased by 3.8% from the 2003 level. The composition of low-income spending differed by level of government (Tables 3 and 4). Medical aid consumed nearly 82% of state-local funds, but 46% of federal low-income dollars. Most income-tested programs provide benefits in the form of cash, goods, or services to persons who make no payment and render no service in return. However, in the case of the job and training programs and some educational benefits, recipients must work or study for wages, grants, or loans. Further, the block grant program of Temporary Assistance for Needy Families (TANF) requires adults to start work after a period of enrollment, the food stamp program imposes work and training requirements, and public housing requires residents to engage in “self-sufficiency” activities or perform community service. Finally, the Earned Income Tax Credit (EITC) is available only to workers. An unduplicated count of beneficiaries of income-tested programs is not available. Enrollment in TANF and food stamps remained below 1994-1995 peak levels during 2002-2004 (although food stamp enrollment rose from the 2000-2002 period), while Medicaid enrollment set a record high. Average 2004 monthly numbers: food stamps, 24.9 million; TANF, 4.7 million; and Supplemental Security Income (SSI), 7.1 million. During the year, 56.1 million persons received Medicaid services, and in calendar year 2004, EITC payments went to an estimated 19.2 million tax filers. Census Bureau data indicate that 5.8 million families with children were poor in 2003 before receiving cash aid from TANF, General Assistance (GA), or the EITC, compared with 6.7 million in 1996 (the last full year of the pre-TANF welfare program). Among these families, the EITC was received by 43.8% of those with a female head, and by 67.8% of those with a male present (Figure 3). Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Contents Introduction ................................................................................................................................1 Trends in Spending .....................................................................................................................4 Annual Spending Data ..........................................................................................................4 Spending Trends by Level of Government.......................................................................6 Medical Benefits .............................................................................................................6 Means-Tested Share of Federal Budget............................................................................7 Refundable Income Tax Credits.......................................................................................7 Composition of Spending.......................................................................................................... 13 Noncitizen Eligibility for Major Federal Benefits ...................................................................... 14 Aid Received by Poor Families With Children .......................................................................... 15 Income Tests of the Benefit Programs ....................................................................................... 16 Medical Aid .............................................................................................................................. 26 1. Medicaid............................................................................................................................... 26 Funding Formula ................................................................................................................ 26 Eligibility Requirements ..................................................................................................... 27 Families, Pregnant Women, and Children ...................................................................... 28 Aged and Persons with Disabilities ............................................................................... 30 The Medically Needy.................................................................................................... 33 Individuals Qualifying Under Demonstration Waivers ................................................... 34 Aliens ........................................................................................................................... 34 Medicaid Purchase of COBRA Coverage ...................................................................... 34 Benefits .............................................................................................................................. 35 2. Medical Care For Veterans Without Service-Connected Disability ......................................... 36 Funding Formula ................................................................................................................ 36 Eligibility Requirements ..................................................................................................... 36 Benefit Levels..................................................................................................................... 37 3. State Children’s Health Insurance Program (SCHIP).............................................................. 38 Funding Formula ................................................................................................................ 38 Eligibility Requirements ..................................................................................................... 40 Benefit Levels..................................................................................................................... 41 4. Indian Health Services........................................................................................................... 44 Funding Formula ................................................................................................................ 44 Eligibility Requirements ..................................................................................................... 44 Benefit Levels..................................................................................................................... 44 5. Consolidated Health Centers ................................................................................................. 45 Funding Formula ................................................................................................................ 45 Eligibility Requirements ..................................................................................................... 45 Benefit Levels..................................................................................................................... 46 6. Maternal and Child Health Services Block Grant................................................................... 46 Funding Formula ................................................................................................................ 46 Eligibility Requirements ..................................................................................................... 47 Benefit Levels..................................................................................................................... 47 7. Title X Family Planning Services .......................................................................................... 48 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Funding Formula ................................................................................................................ 48 Eligibility Requirements ..................................................................................................... 48 Benefit Levels..................................................................................................................... 48 8. Medical Assistance to Refugees, Asylees, Other Humanitarian Cases .................................... 49 Funding Formula ................................................................................................................ 49 Eligibility Requirements ..................................................................................................... 49 Benefit Levels..................................................................................................................... 49 Cash Aid ................................................................................................................................... 50 9. Supplemental Security Income (SSI) ..................................................................................... 50 Funding Formula ................................................................................................................ 50 Eligibility Requirements ..................................................................................................... 50 Benefit Levels..................................................................................................................... 51 10. Earned Income Tax Credit (EITC) ....................................................................................... 53 Funding Formula ................................................................................................................ 53 Eligibility Requirements ..................................................................................................... 53 Benefit Levels..................................................................................................................... 54 11. Temporary Assistance for Needy Families (TANF) .............................................................. 56 Funding Formula ................................................................................................................ 56 Federal Funding ............................................................................................................ 56 State-Local Funding...................................................................................................... 57 Eligibility Requirements ..................................................................................................... 57 Basic Eligibility ............................................................................................................ 57 Ineligible Persons.......................................................................................................... 58 Work/conduct Requirements ......................................................................................... 58 Benefit Levels..................................................................................................................... 59 Cash Assistance ............................................................................................................ 59 Related Programs .......................................................................................................... 59 Other Benefits............................................................................................................... 59 12. Foster Care.......................................................................................................................... 60 Funding Formula ................................................................................................................ 60 Eligibility Requirements ..................................................................................................... 60 Benefit Levels..................................................................................................................... 61 13. Child Tax Credit.................................................................................................................. 61 Funding Formula ................................................................................................................ 61 Eligibility Requirements ..................................................................................................... 61 Benefit Levels..................................................................................................................... 62 14. Pensions for Needy Veterans, their Dependents, and Survivors ............................................ 62 Funding Formula ................................................................................................................ 62 Eligibility Requirements ..................................................................................................... 63 Benefits .............................................................................................................................. 63 15. Adoption Assistance ............................................................................................................ 64 Funding Formula ................................................................................................................ 64 Eligibility Requirements ..................................................................................................... 64 Benefit Levels..................................................................................................................... 64 16. Dependency and Indemnity Compensation (DIC) and Death Compensation for Parents of Veterans................................................................................................................. 65 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Funding Formula ................................................................................................................ 65 Eligibility Requirements ..................................................................................................... 65 Benefit Levels..................................................................................................................... 65 17. General Assistance to Indians .............................................................................................. 66 Funding Formula ................................................................................................................ 66 Eligibility Requirements ..................................................................................................... 66 Benefit Levels..................................................................................................................... 67 18. Cash Assistance to Refugees, Asylees, Other Humanitarian Cases ....................................... 68 Funding Formula ................................................................................................................ 68 Eligibility Requirements ..................................................................................................... 68 Benefit Levels..................................................................................................................... 69 Food Aid................................................................................................................................... 69 19. Food Stamps ....................................................................................................................... 69 Funding Formula ................................................................................................................ 69 Eligibility Requirements ..................................................................................................... 70 Income.......................................................................................................................... 70 Assets ........................................................................................................................... 71 Employment-Related Requirements .............................................................................. 72 Other Limitations .......................................................................................................... 72 Benefit Levels..................................................................................................................... 73 20. School Lunch Program (Free and Reduced-Price Components)............................................ 74 Funding Formula ................................................................................................................ 74 Eligibility Requirements ..................................................................................................... 74 Benefit Levels..................................................................................................................... 75 21. Special Supplemental Nutrition Program for Women, Infants, and Children (The WIC Program)................................................................................................................................ 76 Funding Formula ................................................................................................................ 76 Eligibility Requirements ..................................................................................................... 76 Benefit Levels..................................................................................................................... 77 22. Child and Adult Care Food Program (Lower-Income Components)...................................... 77 Funding Formula ................................................................................................................ 77 Eligibility Requirements ..................................................................................................... 78 Benefit Levels..................................................................................................................... 78 23. School Breakfast Program (Free and Reduced-Price Components)....................................... 79 Funding Formula ................................................................................................................ 79 Eligibility Requirements ..................................................................................................... 80 Benefit Levels..................................................................................................................... 80 24. Nutrition Program for the Elderly ........................................................................................ 81 Funding Formula ................................................................................................................ 81 Eligibility Requirements ..................................................................................................... 81 Benefit Levels..................................................................................................................... 82 25. The Emergency Food Assistance Program (TEFAP) ............................................................ 82 Funding Formula ................................................................................................................ 82 Eligibility Requirements ..................................................................................................... 83 Benefit Levels..................................................................................................................... 83 26. Summer Food Service Program ........................................................................................... 83 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Funding Formula ................................................................................................................ 83 Eligibility Requirements ..................................................................................................... 84 Benefit Levels..................................................................................................................... 84 27. Commodity Supplemental Food Program (CSFP)................................................................ 84 Funding Formula ................................................................................................................ 84 Eligibility Requirements ..................................................................................................... 85 Benefit Levels..................................................................................................................... 85 28. Food Distribution Program on Indian Reservations (FDPIR)................................................ 85 Funding Formula ................................................................................................................ 85 Eligibility Requirements ..................................................................................................... 86 Benefit Levels..................................................................................................................... 86 29. Farmers’ Market Nutrition Programs ................................................................................... 86 Funding Formula ................................................................................................................ 86 Eligibility Requirements ..................................................................................................... 87 Benefit Levels..................................................................................................................... 87 30. Special Milk Program (Free Segment) ................................................................................. 88 Funding Formula ................................................................................................................ 88 Eligibility Requirements ..................................................................................................... 88 Benefit Levels..................................................................................................................... 88 Housing Aid.............................................................................................................................. 89 31. Section 8 Low-Income Housing Assistance ......................................................................... 89 Funding Formula ................................................................................................................ 89 Eligibility Requirements ..................................................................................................... 89 Benefit Levels..................................................................................................................... 90 32. Low-Rent Public Housing ................................................................................................... 91 Funding Formula ................................................................................................................ 91 Eligibility Requirements ..................................................................................................... 91 Benefit Levels..................................................................................................................... 92 33. Rural Housing Loans (Section 502) ..................................................................................... 93 Funding Formula ................................................................................................................ 93 Eligibility Requirements ..................................................................................................... 93 Benefit Levels..................................................................................................................... 94 34. Home Investment Partnerships Program (HOME) ............................................................... 95 Funding Formula ................................................................................................................ 95 Eligibility Requirements ..................................................................................................... 95 Benefit Levels..................................................................................................................... 95 35. Housing For The Elderly and Persons With Disabilities ....................................................... 96 Funding Formula ................................................................................................................ 96 Eligibility Requirements ..................................................................................................... 96 Benefit Levels..................................................................................................................... 97 36. Rural Rental Assistance Payments (Section 521) ................................................................. 98 Funding Formula ................................................................................................................ 98 Eligibility Requirements ..................................................................................................... 98 Benefit Levels..................................................................................................................... 98 37. Section 236 Interest Reduction Payments ............................................................................ 99 Funding Formula ................................................................................................................ 99 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Eligibility Requirements ..................................................................................................... 99 Benefit Levels..................................................................................................................... 99 38. Housing Opportunities for People with AIDS Program (HOPWA) ..................................... 100 Funding Formula .............................................................................................................. 100 Eligibility Requirements ................................................................................................... 100 Benefit Levels................................................................................................................... 101 39. Rural Rental Housing Loans (Section 515) ........................................................................ 101 Funding Formula .............................................................................................................. 101 Eligibility Requirements ................................................................................................... 102 Benefit Levels................................................................................................................... 102 40. Rural Housing Repair Loans and Grants (Section 504) ...................................................... 103 Funding Formula .............................................................................................................. 103 Eligibility Requirements ................................................................................................... 103 Benefit Levels................................................................................................................... 103 41. Farm Labor Housing Loans (Section 514) and Grants (Section 516) .................................. 104 Funding Formula .............................................................................................................. 104 Eligibility Requirements ................................................................................................... 104 Benefit Levels................................................................................................................... 105 42. Section 101 Rent Supplements .......................................................................................... 105 Funding Formula .............................................................................................................. 105 Eligibility Requirements ................................................................................................... 105 Benefit Levels................................................................................................................... 106 43. Rural Housing Self-Help Technical Assistance Grants (Section 523) and Rural Housing Site Loans (Sections 523 and 524).......................................................................... 106 Funding Formula .............................................................................................................. 106 Eligibility Requirements ................................................................................................... 106 Benefit Levels................................................................................................................... 107 44. Indian Housing Improvement Grants ................................................................................. 108 Funding Formula .............................................................................................................. 108 Eligibility Requirements ................................................................................................... 108 Benefit Levels................................................................................................................... 108 45. Section 235 Homeownership Assistance for Low-Income Families.................................... 109 Funding Formula .............................................................................................................. 109 Eligibility Requirements ................................................................................................... 109 Benefit Levels................................................................................................................... 110 46. Rural Housing Preservation Grants (Section 533) .............................................................. 110 Funding Formula .............................................................................................................. 110 Eligibility Requirements ................................................................................................... 111 Benefit Levels................................................................................................................... 111 47. Homeownership and Opportunity for People Everywhere (HOPE) Programs..................... 112 Funding Formula .............................................................................................................. 112 Eligibility Requirements ................................................................................................... 112 Benefit Levels................................................................................................................... 113 Educational Assistance............................................................................................................ 113 48. Federal Pell Grants............................................................................................................ 113 Funding Formula .............................................................................................................. 113 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Eligibility Requirements ................................................................................................... 113 Benefit Levels................................................................................................................... 114 49. Head Start ......................................................................................................................... 115 Funding Formula .............................................................................................................. 115 Eligibility Requirements ................................................................................................... 115 Benefit Levels................................................................................................................... 116 50. Subsidized Federal Stafford and Stafford/Ford Loans......................................................... 116 Funding Formula .............................................................................................................. 116 Eligibility Requirements ................................................................................................... 116 Benefit Levels................................................................................................................... 117 51. Federal Work-Study Program ............................................................................................ 118 Funding Formula .............................................................................................................. 118 Eligibility Requirements ................................................................................................... 118 Benefit Levels................................................................................................................... 119 52. Federal TRIO Programs..................................................................................................... 119 Funding Formula .............................................................................................................. 119 Eligibility Requirements ................................................................................................... 119 Upward Bound............................................................................................................ 120 Student Support Services............................................................................................. 120 Talent Search .............................................................................................................. 120 Educational Opportunity Centers................................................................................. 120 Ronald E. McNair Postbaccalaureate Achievement...................................................... 120 Benefit Levels................................................................................................................... 121 53. Supplemental Educational Opportunity Grants .................................................................. 121 Funding Formula .............................................................................................................. 121 Eligibility Requirements ................................................................................................... 122 Benefit Levels................................................................................................................... 122 54. Title I Migrant Education Program .................................................................................... 122 Funding Formula .............................................................................................................. 122 Eligibility Requirements ................................................................................................... 123 Benefit Levels................................................................................................................... 123 55. Perkins Loans.................................................................................................................... 123 Funding Formula .............................................................................................................. 123 Eligibility Requirements ................................................................................................... 124 Benefit Levels................................................................................................................... 124 56. Leveraging Educational Assistance Partnerships (LEAP) ................................................... 124 Funding Formula .............................................................................................................. 124 Eligibility Requirements ................................................................................................... 125 Benefit Levels................................................................................................................... 125 57. Health Professions Student Loans and Scholarships ........................................................... 126 Funding Formula .............................................................................................................. 126 Eligibility Requirements ................................................................................................... 126 Loans.......................................................................................................................... 126 Scholarships................................................................................................................ 127 Loan Repayments ....................................................................................................... 127 Benefit Levels................................................................................................................... 127 Loans.......................................................................................................................... 127 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Loan Repayments ....................................................................................................... 128 Scholarships................................................................................................................ 128 58. Fellowships for Graduate and Professional Study .............................................................. 129 Funding Formula .............................................................................................................. 129 Eligibility Requirements ................................................................................................... 129 Javits Fellowships ....................................................................................................... 129 GAANN Fellowships .................................................................................................. 130 Thurgood Marshall Fellowships .................................................................................. 130 Benefit Levels................................................................................................................... 130 Javits Fellowships ....................................................................................................... 130 GAANN Fellowships .................................................................................................. 131 Thurgood Marshall Fellowships .................................................................................. 131 59. Migrant High School Equivalency Program (HEP) ............................................................ 131 Funding Formula .............................................................................................................. 131 Eligibility Requirement ..................................................................................................... 132 Benefit Levels................................................................................................................... 132 60. College Assistance Migrant Program (CAMP)................................................................... 132 Funding Formula .............................................................................................................. 132 Eligibility Requirements ................................................................................................... 132 Benefit Levels................................................................................................................... 133 61. Close Up Fellowships........................................................................................................ 133 Funding Formula and Eligibility Requirements ................................................................. 133 Ellender Fellowships................................................................................................... 133 Close Up Fellowships ................................................................................................. 133 Benefit Levels................................................................................................................... 134 62. D.C. School Choice Incentive Program.............................................................................. 134 Funding Formula .............................................................................................................. 134 Eligibility Requirements ................................................................................................... 134 Benefit Levels................................................................................................................... 135 Services .................................................................................................................................. 135 63. Child Care and Development Block Grant ......................................................................... 135 Funding Formula .............................................................................................................. 135 Discretionary Funds .................................................................................................... 135 Entitlement Funds ....................................................................................................... 136 Eligibility Requirements ................................................................................................... 136 Benefit Levels................................................................................................................... 137 64. TANF Services .................................................................................................................. 137 Funding Formula .............................................................................................................. 137 Eligibility Requirements ................................................................................................... 137 Benefit Levels................................................................................................................... 138 65. Social Services Block Grant (Title XX) ............................................................................. 138 Funding Formula .............................................................................................................. 138 Eligibility Requirements ................................................................................................... 139 Benefit Levels................................................................................................................... 139 66. TANF Child Care .............................................................................................................. 139 Funding Formula .............................................................................................................. 139 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Eligibility Requirements ................................................................................................... 139 Benefit Levels................................................................................................................... 140 67. Homeless Assistance Grants .............................................................................................. 140 Funding Formula .............................................................................................................. 140 Eligibility Requirements ................................................................................................... 141 Benefit Levels................................................................................................................... 141 68. Community Services Block Grant...................................................................................... 142 Funding Formula .............................................................................................................. 142 Eligibility Requirements ................................................................................................... 142 Benefit Levels................................................................................................................... 142 69. Legal Services (LSC) ........................................................................................................ 143 Funding Formula .............................................................................................................. 143 Eligibility Requirements ................................................................................................... 143 Benefit Levels................................................................................................................... 143 70. Social Services for Refugees, Asylees, Other Humanitarian Cases ..................................... 144 Funding Formula .............................................................................................................. 144 Eligibility Requirements ................................................................................................... 144 Benefit Levels................................................................................................................... 145 71. Emergency Food and Shelter Program............................................................................... 145 Funding Formula .............................................................................................................. 145 Eligibility Requirements ................................................................................................... 146 Benefit Levels................................................................................................................... 146 Jobs and Training Programs .................................................................................................... 146 72. TANF Work Activities ....................................................................................................... 146 Funding Formula .............................................................................................................. 146 Eligibility Requirements ................................................................................................... 146 Benefit Levels................................................................................................................... 147 73. Job Corps .......................................................................................................................... 147 Funding Formula .............................................................................................................. 147 Eligibility Requirements ................................................................................................... 147 Benefit Levels................................................................................................................... 148 74. Youth Activities................................................................................................................. 148 Funding Formula .............................................................................................................. 148 Eligibility Requirements ................................................................................................... 149 Benefit Levels................................................................................................................... 149 WIA Program of Youth Activities ................................................................................ 149 75. Adult Activities ................................................................................................................. 150 Funding Formula .............................................................................................................. 150 Eligibility Requirements ................................................................................................... 150 Benefit Levels................................................................................................................... 150 76. Senior Community Service Employment Program (SCSEP) .............................................. 151 Funding Formula .............................................................................................................. 151 Eligibility Requirements ................................................................................................... 151 Benefit Levels................................................................................................................... 152 77. Welfare-to-Work Grants .................................................................................................... 152 Funding Formula .............................................................................................................. 153 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Eligibility Requirements ................................................................................................... 153 Benefit Levels................................................................................................................... 154 78. Food Stamp Employment and Training Program................................................................ 154 Funding Formula .............................................................................................................. 154 Eligibility Requirements ................................................................................................... 155 Benefits ............................................................................................................................ 155 79. Foster Grandparents .......................................................................................................... 155 Funding Formula .............................................................................................................. 155 Eligibility Requirements ................................................................................................... 156 Benefit Levels................................................................................................................... 156 80. Senior Companions ........................................................................................................... 156 Funding Formula .............................................................................................................. 156 Eligibility Requirements ................................................................................................... 157 Benefit Levels................................................................................................................... 157 81. Targeted Assistance to Refugees, Asylees, Other Humanitarian Cases................................ 157 Funding Formula .............................................................................................................. 157 Eligibility Requirements ................................................................................................... 158 Benefit Levels................................................................................................................... 158 82. Native Employment Works Program.................................................................................. 158 Funding Formula .............................................................................................................. 158 Eligibility Requirements ................................................................................................... 159 Benefit Levels................................................................................................................... 159 Energy Assistance ................................................................................................................... 159 83. Low-Income Home Energy Assistance (LIHEAP) ............................................................. 159 Funding Formula .............................................................................................................. 159 Eligibility Requirements ................................................................................................... 160 Benefit Levels................................................................................................................... 161 84. Weatherization Assistance ................................................................................................. 161 Funding Formula .............................................................................................................. 161 Eligibility Requirements ................................................................................................... 162 Benefit Levels................................................................................................................... 162 Figures Figure 1. Expenditures for Income-Tested Benefits, FY1975-2004 ..............................................6 Figure 2. Composition of Income-Tested Benefits ..................................................................... 13 Figure 3. Cash and Noncash Benefits Received by Poor Families with Children, 2003 .............. 16 Tables Table 1. Expenditures of Major Needs-Tested Benefit Programs, by Form of Benefit and Level of Government, FY2002-FY2004 ...................................................................................3 Table 2. Total Expenditures for Need-Based Benefits, FY1968-FY2004 ......................................4 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968FY2004....................................................................................................................................8 Table 4. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY19682004 ........................................................................................................................................9 Table 5. Total Spending for Income-Tested Benefits by Form of Benefit, FY1968FY2004.................................................................................................................................. 11 Table 6. Spending Trends by Form of Benefits, FY1978-2004 ................................................... 13 Table 7. Income Eligibility Tests Used by Benefit Programs ...................................................... 17 Table 8. Bureau of the Census Poverty Thresholds for 2004 ...................................................... 23 Table 9. 2005 Federal Poverty Income Guidelines ..................................................................... 23 Table 10. Eligibility Levels for Free and Reduced Price Meals for the Period of July 1, 2005-June 30, 2006................................................................................................................ 24 Table 11. Lower Living Standard Income Level (LLSIL) for a Family of Four—Effective July 22, 2005 ......................................................................................................................... 25 Table 12. EITC Parameters for Tax Years 2003-2005................................................................. 55 Table 13. Food Stamp Income Limits ........................................................................................ 71 Table 14. Need-Based Benefits: Medical Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004 .............................................................................................. 163 Table 15. Need-Based Benefits: Cash Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004................................................................................................... 164 Table 16. Need-Based Benefits: Food Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004................................................................................................... 167 Table 17. Need-Based Benefits: Housing Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004 .............................................................................................. 169 Table 18. Need-Based Benefits: Education Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004 .............................................................................................. 171 Table 19. Need-Based Benefits: Services—Expenditures and Enrollment Data, by Program, FY2002-FY2004................................................................................................... 174 Table 20. Need-Based Benefits: Jobs and Training—Expenditures and Enrollment Data, by Program, FY2002-FY2004 .............................................................................................. 175 Table 21. Need-Based Benefits: Energy Aid—Expenditures and Enrollment Data, by Program, FY2002-FY2004................................................................................................... 176 Contacts Author Contact Information .................................................................................................... 178 Acknowledgments .................................................................................................................. 178 Congressional Research Service Cash and Noncash Benefits for Persons with Limited Income Introduction More than 80 benefit programs provide cash and noncash aid that is directed primarily to persons with limited income. These benefit programs cost approximately $583 billion in FY2004, a record high. This sum was up $34 billion (6.2%) from the previous peak of FY2003, and it equaled 5% of the gross domestic product (GDP). Federal funds provided 73.2% of the total. Higher medical spending accounted for $26 billion of the net increase in FY2004, and 55 cents out of every dollar spent on persons with limited income went for medical benefits. Federal lowincome spending represented 18.6% of the federal budget, with 9% attributed to medical assistance. See Table 1 for an FY2002-FY2004 summary. After adjustment for price inflation, 2004 spending on persons with limited income was up by approximately $21.5 billion (3.8%) from that of 2003, the previous peak. Real spending increases (2004 dollars) were dominated by medical assistance (up $19 billion). Other increases were in food benefits, $3.3 billion; cash aid, $2.4 billion; and housing, $0.6 billion. Spending in real terms dropped in the following areas: education benefits, by $2.3 billion; jobs and training, by $0.9 billion; services, by $0.6 billion; and energy aid by $0.2 billion. Spending for “human capital” programs (those providing education and employment and training activities) accounted for 6.2% of all dollars spent on persons with limited income (compared with 19.2% for cash assistance and 55.3% for medical aid). This report consists of a catalog of 84 need-based programs.1 For each program, the report provides the funding formula, eligibility requirements, and benefit levels. At the end of the report, Tables 14-21 provide expenditure data (federal and state/local) and recipient data for FY2002FY2004, program by program. One program is new to this series of reports: the D.C. School Choice Incentive Program. In addition, two programs have been dropped because of the difficulty of obtaining reliable current data: General Assistance (Medical Component) and General Assistance (Nonmedical Component); spending for these programs was only from state and local sources, rather than federal. Most of these programs base eligibility on individual, household, or family income, but some use group or area income tests (see Table 7), and a few offer help on the basis of presumed “need.” Most provide income “transfers.” That is, they transfer income in the form of cash, goods, or services to persons who make no payment and render no service in return. However, in the case of the job and training programs and some educational benefits, recipients must work or study for wages, training allowances, stipends, grants, or loans. Further, the TANF block grant program requires adults to commence work (defined by the state) after a period of enrollment, the Food Stamp program imposes work and training requirements, and public housing programs require recipients to engage in “self-sufficiency” activities or to perform community service. Finally, the Earned Income Tax Credit (EITC) is available only to workers. This report excludes income maintenance programs that are not income-tested, including social insurance and many veterans’ benefits, and all but two tax-transfer programs. Thus, it excludes Social Security cash benefits, unemployment compensation, and Medicare. Outlays for the Old1 The number of programs in this report is somewhat arbitrary. For example, the Temporary Assistance for Needy Families (TANF) program is listed under cash, services, child care, and work activities, but could also be viewed as a single program. Congressional Research Service 1 Cash and Noncash Benefits for Persons with Limited Income Age, Survivors, and Disability Insurance programs (Social Security cash benefit programs) in FY2004 totaled $502 billion, financed primarily from payroll tax collections. The report also excludes payments, even though financed with general revenues, that may be regarded as “deferred compensation,” such as veterans’ housing benefits and medical care for veterans with a service-connected disability. The report includes two tax-transfer programs, the EITC for low-income workers with children and the child tax credit. The EITC reduces the taxes of working families with gross income below specified limits and makes direct payments (“refunds”) to those whose income is below the tax threshold or whose tax liability is smaller than their credit. Before the 2001 tax law, the child tax credit was refundable only to some taxpayers with three or more children, but it now is refundable (up to certain limits) for those with earnings above $10,000. This report treats the direct payment component of these credits, but not the reduction in tax liability, as a welfare expenditure. Other tax benefits are excluded from the report because they are not refundable (make no direct payments). Further, in most cases they impose no income test for eligibility. Examples of these other tax benefits are the deductibility of mortgage interest and property taxes on owner-occupied homes (equivalent to outlays of $61.4 billion and $18.7 billion, respectively, in 2004). These tax transfers increase families’ disposable income by reducing their tax liability, and are known as “tax expenditures.” (The standard deduction and personal exemption in the income tax code also decrease families’ taxable income.) Congressional Research Service 2 Table 1. Expenditures of Major Needs-Tested Benefit Programs, by Form of Benefit and Level of Government, FY2002-FY2004 (in millions of current dollars) Federal expenditures FY2002 FY2003 State-local expenditures FY2004 FY2002 FY2003 Total expenditures FY2004 FY2002 FY2003 FY2004 Medical care 164,123 178,978 194,816 114,241 117,525 127,768 278,364 296,503 322,584 Cash aid 82,311 90,657 93,965 16,516 16,520 18,084 98,827 107,177 112,049 Food benefits 36,994 41,138 45,460 2,497 2,680 2,662 39,491 43,818 48,122 Housing aid 34,607 37,449 38,881 6 5 1 34,613 37,454 38,882 Education 24,754 29,062 27,435 1,701 1,734 1,760 26,455 30,796 29,195 Services 17,283 18,767 18,271 4,973 4,510 4,946 22,256 23,277 23,217 Jobs/training 7,179 6,646 6,131 934 1,045 876 8,113 7,691 7,007 Energy aid 2,003 2,254 2,118 122 122 141 2,125 2,376 2,259 $369,254 $404,951 $427,077 $140,990 $144,141 $156,238 $510,244 $549,092 $583,315 Total Source: Table prepared by the Congressional Research Service (CRS). Note: Program data on which this table is based are found in the summary tables (Tables 14-21) at the back of the report. CRS-3 Cash and Noncash Benefits for Persons with Limited Income Trends in Spending Annual Spending Data Total expenditures on cash and noncash programs for low-income persons multiplied many times between 1968 and 2004 (Table 2). Even after allowance for price inflation, spending more than sextupled, rising 557% during the 36 years, a period when the U.S. population rose by an estimated 46%.2 Measured in constant 2004 dollars,3 the annual rate of growth in spending over the whole period was 5.4%. However, the growth pattern was uneven. Real spending almost tripled in the first 10 years, declined in some years (1979, 1982, 1996, and 1997), and in the last seven years rose at an annual rate of 3.7%. Total per capita spending for low-income programs grew in real terms (constant FY2004 dollars) from $422 in FY1968 to a peak of $1,986 in FY2004. Table 2.Total Expenditures for Need-Based Benefits, FY1968-FY2004 (in millions of dollars) Total spending Fiscal year Federal current dollars State-local current dollars Current dollars Constant dollars (2004) 1968 11,406 4,710 16,116 88,793 1973 27,294 10,054 37,348 163,449 1975 40,208 14,753 54,961 198,846 1976 50,506 16,990 67,496 228,027 1977 56,187 18,892 75,079 235,801 1978 64,432 20,151 84,583 248,190 1979 71,336 21,304 92,640 246,383 1980 81,403 24,633 106,036 248,270 1981 89,408 29,045 118,453 249,690 1982 90,543 31,706 122,249 239,986 1983 95,495 33,982 129,477 245,547 1984 100,837 36,191 137,028 249,596 1985 107,267 38,230 145,497 255,617 1986 109,476 40,811 150,287 257,694 1987 115,608 43,364 158,972 265,042 1988 126,098 46,580 172,678 276,462 2 Based on the resident U.S. population. Current dollars were translated into FY2004 constant value dollars by use of the Consumer Price Index (CPI) for all urban consumers. 3 Congressional Research Service 4 Cash and Noncash Benefits for Persons with Limited Income Total spending Fiscal year Federal current dollars State-local current dollars Current dollars Constant dollars (2004) 1989 136,254 51,587 187,841 287,087 1990 153,673 61,065 214,738 312,619 1991 180,494 73,933 254,427 352,587 1992 211,121 88,146 299,267 402,565 1993 227,325 88,683 316,008 412,597 1994 250,405 102,421 352,826 448,888 1995 262,905 108,210 371,115 459,244 1996 268,823 107,213 376,036 452,673 1997 274,980 110,312 385,292 451,796 1998 280,965 114,554 395,519 456,351 1999 291,798 117,389 409,187 463,196 2000 305,659 122,897 428,556 470,217 2001 342,877 133,986 476,863 506,870 2002 369,254 140,990 510,244 534,343 2003 404,951 144,141 549,092 561,846 2004 427,077 156,238 583,315 583,315 Source: Table prepared by the Congressional Research Service (CRS). FY1968 and FY1973 data are from Income Security for Americans: Recommendations of the Public Welfare Study. Report of the Subcommittee on Fiscal Policy of the Joint Economic Committee. December 5, 1974. Table 4, p. 28 of Joint Economic Committee study (the 1968 federal total has been increased by $54 million to correct a typographical error in that table, and the 1973 federal total has been increased by $101 million to include Title X family planning, previously omitted from this report series). Data for FY1975-FY2001 are from previous editions of this report (revised to incorporate public housing capital fund costs, to account for new estimates of some program outlays, and to provide historical data for some newly added programs). Data for FY2002-FY2004 are from Table 1 of this report. Figure 1 shows the course of expenditures for income-tested benefits from FY1975-FY2004. The upper line shows total real spending (federal and state-local spending); the bottom line shows state-local spending alone; the space between represents federal spending. Throughout this period federal expenditures accounted for more than 70% of the total. The federal share rose above 76% in 1978-1980, then began a general decline. In the 1995-2004 decade it averaged 71.9%, reaching a peak of 73.7% in FY2003 and dropping slightly to 73.2% in FY2004. Congressional Research Service 5 Cash and Noncash Benefits for Persons with Limited Income Figure 1. Expenditures for Income-Tested Benefits, FY1975-2004 (in millions of constant 2004 dollars) Source: Figure prepared by the Congressional Research Service. Spending Trends by Level of Government Tables 3, 4, and 5 present 1968-2004 spending on low-income programs in constant 2004 dollars, by form of benefit; Table 3 displays federal spending; Table 4, corresponding state-local data; and Table 5, total low-income spending amounts. Measured in constant 2004 dollars, federal spending for income-tested benefits climbed from $63 billion in FY1968 to $427 billion in FY2004, an increase of 580%. State-local spending (constant dollars) rose from $26 billion to $156 billion during the same period, an increase of 502%. Total spending on means-tested programs increased from $89 billion to $583 billion in these years, an increase of 557%. Cash aid was the leading form of federal means-tested assistance until 1980, when it was overtaken by medical benefits. Two years later, in 1982, federal spending declined for all forms of aid except subsidized housing, in which case outlays reflected earlier commitments, and education benefits. However, beginning in 1983, real federal spending for low-income programs climbed steadily before declining in FY1996 and FY1997. Federal spending set successive new record highs during FY1998-FY2004. State-local spending rose in all years after 1979, except for 1993, 1996, and 2003. Medical Benefits Since 1979, medical spending has accounted for more than 50 cents of every low-income program dollar spent by state-local governments. In 1989, the share climbed to 60%; in 1997 it exceeded 70%, and starting in 2002, spending on medical benefits has topped 80% of all statelocal spending on means-tested programs. Medical assistance has accounted for a much smaller— but growing—share of federal expenditures for low-income programs: about 25% until the mid1980s, above 30% in the 1990s, and an average of 43% from 2000-2003, with an increase to nearly 46% in 2004. Congressional Research Service 6 Cash and Noncash Benefits for Persons with Limited Income Means-Tested Share of Federal Budget As a component of the federal budget, spending on means-tested programs for persons with limited income averaged 13% from 1975-1979, dropped to 12% in the 1980s, and since 1994 has equaled or exceeded 17% each year. In 2001 it rose above 18%, and in 2004 was 18.6%. Refundable Income Tax Credits The earned income tax credit has become the nation’s largest program of income-tested cash benefits for families with children. In FY2004, the U.S. Treasury paid out $34 billion in refundable earned income tax credits (chiefly for earners with children) and $9 billion in child tax credits. The total was almost 25% larger than federal SSI payments for the aged, blind, and disabled ($35 billion), and was more than five and a half times as much as cash assistance from federal TANF dollars ($6.5 billion). (TANF expenditures for work activities, child care, and other services exceeded TANF cash aid.) Congressional Research Service 7 Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2004 (in millions of constant FY2004 dollars) Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1968 15,102 27,752 4,920 4,314 4,738 3,906 2,110 0 62,843 1973 29,142 37,527 16,871 16,525 7,969 4,039 7,374 0 119,449 1975 34,678 46,089 23,296 18,383 7,887 7,775 7,363 0 145,470 1976 36,976 50,409 26,105 19,804 12,480 15,561 9,199 95 170,628 1977 41,394 49,300 24,359 22,343 10,920 17,032 10,170 948 176,467 1978 42,741 47,086 24,968 22,914 11,934 28,462 10,156 801 189,061 1979 43,646 45,032 27,598 25,593 12,795 24,644 9,715 699 189,723 1980 45,420 44,435 30,646 25,675 11,449 20,194 8,745 4,030 190,595 1981 46,908 44,182 33,071 25,993 10,091 15,843 8,143 4,235 188,465 1982 45,230 42,354 30,770 26,205 15,283 7,831 6,091 3,981 177,744 1983 44,707 42,482 34,318 26,823 14,077 8,547 6,266 3,880 181,102 1984 45,253 43,321 34,091 26,450 14,592 9,794 6,264 3,909 183,674 1985 48,981 43,018 34,016 28,665 16,718 6,843 6,239 3,972 188,452 1986 51,053 45,144 32,822 25,662 17,241 6,217 5,813 3,764 187,716 1987 58,593 45,780 33,166 23,314 16,285 6,305 6,014 3,286 192,744 1988 61,835 48,533 32,366 25,197 17,847 6,001 7,187 2,920 201,886 1989 64,814 50,685 31,843 26,668 19,080 5,831 6,833 2,490 208,244 1990 73,120 53,057 34,752 28,690 20,033 5,787 5,946 2,335 223,720 1991 86,545 58,581 38,810 29,798 20,597 6,082 7,215 2,503 250,130 1992 105,838 65,531 44,138 33,316 18,297 6,750 7,857 2,267 283,994 1993 111,048 69,657 45,404 36,143 18,688 6,229 7,635 2,003 296,808 1994 119,196 80,658 45,944 35,841 18,622 6,184 9,697 2,439 318,581 1995 125,496 84,053 45,544 36,368 18,732 5,725 7,440 1,981 325,337 CRS-8 Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1996 125,105 84,280 44,747 37,031 18,566 4,863 7,598 1,419 323,610 1997 126,392 84,250 41,488 37,106 19,359 4,451 7,825 1,574 322,444 1998 127,970 84,162 38,283 35,992 19,597 4,818 11,905 1,450 324,178 1999 135,470 84,179 36,901 33,609 19,562 5,408 13,703 1,482 330,312 2000 143,144 82,262 35,092 33,636 16,388 7,013 15,666 2,171 335,373 2001 154,205 87,798 35,265 34,088 25,936 7,417 17,608 2,135 364,453 2002 171,875 86,199 38,741 36,241 25,923 7,518 18,099 2,098 386,694 2003 183,135 92,763 42,094 38,319 29,737 6,800 19,203 2,306 414,357 2004 194,816 93,965 45,460 38,881 27,435 6,131 18,271 2,118 427,077 Source: Table prepared by the Congressional Research Service. Rows may not add to totals shown because of rounding. Table 4. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY1968-2004 (in millions of constant FY2004 dollars) Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1968 11,355 13,719 n.a. n.a. n.a. 237 639 0 25,950 1973 18,228 23,182 n.a. n.a. n.a. 245 2,346 0 44,000 1975 23,918 24,425 2,022 n.a. 517 141 2,352 0 53,376 1976 26,365 25,912 2,139 n.a. 527 132 2,324 n.a. 57,399 1977 27,918 25,675 2,553 n.a. 581 179 2,428 n.a. 59,334 1978 28,641 24,654 2,562 n.a. 695 185 2,391 n.a. 59,129 1979 29,617 22,803 1,051 n.a. 668 207 2,314 n.a. 56,660 1980 30,906 22,819 1,070 n.a. 670 190 2,021 n.a. 57,675 1981 32,947 23,181 1,223 n.a. 616 177 3,082 n.a. 61,225 1982 34,464 21,932 1,411 n.a. 528 147 3,730 29 62,242 1983 35,811 22,397 1,485 n.a. 573 150 3,983 47 64,445 CRS-9 Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1984 37,397 22,563 1,730 n.a. 550 142 3,461 78 65,922 1985 37,878 23,103 1,808 n.a. 798 142 3,382 54 67,164 1986 39,554 24,215 1,891 n.a. 849 125 3,258 86 69,978 1987 41,025 24,708 1,946 n.a. 852 118 3,301 347 72,297 1988 43,476 24,645 1,824 n.a. 871 115 3,362 283 74,576 1989 47,400 25,201 1,776 n.a. 833 148 3,210 275 78,843 1990 53,277 25,928 1,798 n.a. 916 389 6,411 181 88,899 1991 65,755 26,817 1,818 n.a. 758 608 6,544 157 102,457 1992 76,909 28,393 1,941 3,094 826 640 6,651 118 118,571 1993 75,665 28,008 2,045 1,737 1,000 734 6,509 93 115,789 1994 86,201 29,163 2,252 2,055 1,149 832 8,557 98 130,306 1995 90,603 29,297 2,265 2,877 1,182 1,004 6,580 100 133,907 1996 89,092 27,018 2,311 2,960 1,150 775 5,669 88 129,063 1997 91,784 24,899 2,315 2,880 1,203 209 5,989 75 129,353 1998 95,426 21,491 2,236 3,009 1,312 825 7,782 91 132,173 1999 98,906 21,778 2,304 n.a. 1,347 989 7,462 96 132,883 2000 103,589 21,322 2,375 558 1,505 1,257 4,143 93 134,844 2001 111,176 20,453 2,459 797 1,719 1,299 4,390 125 142,417 2002 119,637 17,296 2,615 7 1,781 978 5,208 128 147,649 2003 120,255 16,904 2,742 5 1,774 1,069 4,615 125 147,489 2004 127,768 18,084 2,662 1 1,760 876 4,946 141 156,238 Source: Table prepared by the Congressional Research Service. Rows may not add to totals shown because of rounding. Note: n.a.: Not available. CRS-10 Table 5.Total Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2004 (in millions of constant FY2004 dollars) Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1968 26,457 41,471 4,920 4,314 4,738 4,143 2,749 0 88,793 1973 47,370 60,709 16,871 16,525 7,969 4,284 9,720 0 163,449 1975 58,596 70,514 25,318 18,383 8,404 7,916 9,714 0 198,846 1976 63,341 76,321 28,243 19,804 13,007 15,693 11,524 95 228,027 1977 69,312 74,975 26,913 22,343 11,501 17,211 12,597 948 235,801 1978 71,382 71,740 27,529 22,914 12,629 28,647 12,547 801 248,190 1979 73,263 67,835 28,649 25,593 13,463 24,851 12,029 699 246,383 1980 76,326 67,254 31,716 25,675 12,119 20,384 10,766 4,030 248,270 1981 79,855 67,363 34,294 25,993 10,706 16,020 11,225 4,235 249,690 1982 79,694 64,285 32,181 26,205 15,811 7,978 9,821 4,011 239,986 1983 80,518 64,880 35,803 26,823 14,650 8,697 10,248 3,928 245,547 1984 82,650 65,883 35,821 26,450 15,142 9,936 9,725 3,987 249,596 1985 86,859 66,121 35,824 28,665 17,516 6,985 9,621 4,027 255,617 1986 90,607 69,359 34,714 25,662 18,090 6,343 9,071 3,849 257,694 1987 99,618 70,488 35,112 23,314 17,137 6,424 9,315 3,633 265,042 1988 105,311 73,178 34,190 25,197 18,718 6,116 10,549 3,204 276,462 1989 112,215 75,886 33,619 26,668 19,913 5,979 10,043 2,765 287,087 1990 126,397 78,985 36,550 28,690 20,949 6,176 12,357 2,516 312,619 1991 152,300 85,398 40,628 29,798 21,355 6,691 13,758 2,659 352,587 1992 182,747 93,924 46,079 36,410 19,123 7,390 14,508 2,385 402,565 1993 186,714 97,664 47,449 37,880 19,688 6,963 14,144 2,096 412,597 1994 205,397 109,821 48,196 37,896 19,771 7,017 18,254 2,537 448,888 1995 216,098 113,350 47,808 39,245 19,913 6,728 14,019 2,081 459,244 1996 214,198 111,298 47,058 39,992 19,716 5,639 13,267 1,507 452,673 CRS-11 Fiscal year Medical benefits Cash aid Food benefits Housing benefits Education benefits Jobs/training Services Energy aid Total 1997 218,175 109,149 43,803 39,986 20,562 4,660 13,813 1,649 451,796 1998 223,397 105,652 40,519 39,001 20,909 5,643 19,687 1,541 456,351 1999 234,376 105,958 39,204 33,609 20,909 6,397 21,165 1,578 463,196 2000 246,732 103,585 37,468 34,195 17,893 8,271 19,809 2,265 470,217 2001 265,381 108,250 37,723 34,885 27,655 8,716 21,998 2,261 506,870 2002 291,511 103,495 41,356 36,248 27,704 8,496 23,307 2,225 534,343 2003 303,390 109,666 44,836 38,324 31,511 7,870 23,818 2,431 561,846 2004 322,584 112,049 48,122 38,882 29,195 7,007 23,217 2,259 583,315 Source: Table prepared by the Congressional Research Service (CRS). Rows may not add to totals shown because of rounding. CRS-12 Cash and Noncash Benefits for Persons with Limited Income Composition of Spending The dramatic change since 1978 in the composition of total spending for income-tested benefits is shown in Figure 2 and in Table 6. In FY1978, spending for cash relief and medical aid was nearly equal. Each accounted for 29% of total welfare spending covered by this report. Thereafter, spending for medical benefits rapidly overtook cash aid, reaching 50% in FY1999 and topping 55% in 2004. Figure 2. Composition of Income-Tested Benefits (in billions of constant 2004 dollars) FY2004 FY1978 Jobs/ training 11.5% Services 5.1% Education 5.0% Medical aid 28.8% Education 5.1% Services 4.0% Energy aid 0.4% Jobs/ training 1.2% Energy aid 0.3% Housing 6.7% Housing 9.2% Medical aid 55.3% Food aid 8.2% Food aid 11.1% Cash 19.2% Cash 28.9% Source: Figure prepared by the Congressional Research Service. Table 6. Spending Trends by Form of Benefits, FY1978-2004 (in billions of constant 2004 dollars) FY1978 FY1988 FY1992 FY1996 FY2000 FY2002 FY2004 Medical aid 71.4 105.3 182.7 214.2 246.7 291.5 322.6 Cash 71.7 73.2 93.9 111.3 103.6 103.5 112.0 Food aid 27.5 34.2 46.1 47.1 37.5 41.4 48.1 Housing 22.9 25.2 36.4 40.0 34.2 36.2 38.9 Education 12.6 18.7 19.1 19.7 17.9 27.7 29.2 Jobs/training 28.6 6.1 7.4 5.6 8.3 8.5 7.0 Services 12.5 10.5 14.5 13.3 19.8 23.3 23.2 Energy aid 0.8 3.2 2.4 1.5 2.3 2.2 2.3 $248.2 $276.5 $402.6 $452.7 $470.2 $534.3 $583.3 Total Source: Table prepared by the Congressional Research Service. Congressional Research Service 13 Cash and Noncash Benefits for Persons with Limited Income Noncitizen Eligibility for Major Federal Benefits Depending on the program, the eligibility of noncitizens for major federal means-tested benefit programs—food stamps, Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), Medicaid, and Section 8 housing assistance—varies with their immigration status, work history, date of entry, date of enrollment in a benefit program, age, and length of legal residence. The basic outline of current noncitizen eligibility rules was established by the 1996 welfare reform law (P.L. 104-193), although prior laws for these programs had contained some limits on participation by noncitizens (typically barring temporary or illegal residents). This law sharply restricted welfare eligibility for noncitizens, although the limits it put in place have since been eased (in 1997, 1998, and 2002). The basic rules now are as follows. 4 • Nonimmigrants (those admitted temporarily for a limited purpose such as students, visitors, and temporary workers) are ineligible for all major benefits, as are unauthorized (“illegal”) aliens who are in the U.S. in violation of immigration law and for whom no legal relief or recognition has been extended. • Legal permanent residents with a substantial (generally, 10-year) work history documented by Social Security and those with a military connection (legally present active duty military personnel, honorably discharged veterans, and their immediate families) are eligible for all major benefits. 4 • In the case of food stamps, legal permanent residents without a substantial work history are eligible after five years lawful residence following entry. However, this five-year ineligibility period does not apply to (1) persons lawfully resident in the U.S. as of August 22, 1996 (the date of enactment of the welfare reform law), and age 65+ at the time, (2) persons receiving government disability benefits, and (3) children under age 18. • In the case of SSI, legal permanent residents without a substantial work history are eligible only if they are (1) persons who were receiving SSI benefits as of August 22, 1996, or (2) individuals lawfully resident in the U.S. as of August 22, 1996, who are now disabled. [Note: Pre-1996 SSI law barred eligibility for those with temporary or illegal status.] • In the case of TANF, legal permanent residents without a substantial work history are (1) eligible, at state option, if lawfully resident in the U.S. as of August 22, 1996, and (2) for post-August-1996 entrants, eligible, at state option, five years after entry. • In the case of Medicaid, eligibility rules for legal permanent residents without a substantial work history are the same as for TANF, except that coverage is required for SSI recipients. • In the case of Section 8 housing assistance, legal permanent residents are eligible (with no time, work history, or age restrictions), as are noncitizens who were receiving benefits as of August 22, 1996. [Note: Pre-1996 housing law barred eligibility for those with temporary or illegal status.] In housing programs, legal permanent residents are eligible without regard to work history or military connection. Congressional Research Service 14 Cash and Noncash Benefits for Persons with Limited Income • In humanitarian cases—asylees, refugees, Cuban/Haitian entrants, parolees and conditional entrants, victims of abuse (battery or cruelty by a family member), victims of trafficking in persons, and certain persons with similar status— individuals are (1) eligible for food stamps after entry or grant of status as an asylee, refugee, Cuban/Haitian entrant, or other humanitarian category, (2) eligible for SSI if they were SSI recipients as of August 22, 1996, or for seven years after entry or grant of status, (3) eligible for TANF for five years after entry or grant of status, and then eligible at state option, (4) eligible for Medicaid for seven years after entry or grant of status, and then eligible at state option, and (5) eligible for Section 8 housing assistance (with no time limits).5 Aid Received by Poor Families With Children The Census Bureau reports that 7.6 million families (including 5.8 million with children) in 2003 had total pre-tax money income—after counting any cash from the programs of TANF, Supplemental Security Income (SSI), and General Assistance (GA)—that was below their poverty threshold.6 The Bureau found that the money income poverty rate among related children in families was 17.2%, the highest since 1998 (18.3%). Overall, 35.9 million persons were classified as poor on the basis of 2003 pre-tax money income (compared with 31.1 million in 2000, the year preceding the most recent economic recession). Of these persons, 68.0% were in households that received means-tested aid from at least one of eight programs (TANF, SSI, GA, school lunch, food stamps, Medicaid, subsidized housing, lowincome home energy assistance). By race and ethnicity, the following percentages of poor persons were in households that received pre-tax aid from one or more of the eight programs: nonHispanic whites, 55.2%; blacks, 80.9%; and persons of Hispanic origin, 80.3%. Figure 3 depicts income-tested aid provided to families with children who were poor before receiving any cash aid from TANF, GA, or the EITC. In 2003, these families totaled 6.1 million (compared with 5.1 million in 2000): 3.7 million with a female householder and 2.4 million with a male householder (chiefly two-parent families). These numbers, based on CRS estimates, include unrelated subfamilies (the Bureau excludes these subfamilies from its “family” counts). As the chart shows, all but 9.3% of the female-headed families and 12.0% of the male-present families whose pre-tax, pre-welfare money income fell short of the poverty threshold received means-tested aid. For male-present families, the EITC, which goes only to persons with earnings, was the dominant form of aid. In all, 67.8% of male-present families who were poor before transfers received the EITC (compared with 75.2% in 2000); for 23.8% the EITC was the only aid. Among female-headed families who were poor before transfers, 43.8% received the EITC (compared with 59.6% in 2000); for 10.4% the EITC was the only aid. Various combinations of cash assistance (TANF, GA, EITC) and noncash aid—food stamps, housing subsidies, Medicaid, 5 This description of Section 8 rules for humanitarian cases assumes, as appears to be the practice of Public Housing Agencies, that the noncitizen rules laid out under the 1996 welfare reform act apply—despite potentially conflicting law (for some limited noncitizen categories) contained in Section 214 of the Housing and Community Development Act of 1980. 6 U.S. Bureau of the Census, Poverty in the United States: 2003. Current Population Reports, Series P-60, No. 226, Aug. 2004, and unpublished table available at http://pubdb3.census.gov/macro/032004/pov/new04_100_01.htm. Congressional Research Service 15 Cash and Noncash Benefits for Persons with Limited Income or coverage under the State Children’s Health Insurance Program (SCHIP)—went to 27.1% of female-headed families and to 9.2% of male-present families.7 Figure 3. Cash and Noncash Benefits Received by Poor Families with Children, 2003 Source: Chart based on CRS analysis of March 2004 Current Population Survey data. Notes: Cash welfare benefits shown are: Temporary Assistance to Needy Families (TANF) and General Assistance (GA). Noncash benefits shown are: Food Stamps, Medicaid, State Children’s Health Insurance Program (S-CHIP), and Housing Assistance. Poor = poor before receiving cash welfare. Income Tests of the Benefit Programs More than 90% of the programs in this report have an explicit test of income. The others base eligibility on area of residence, enrollment in another means-tested program, or other factors that presume need. The explicit income tests are of five kinds: income ceiling related to (1) one of the federal government’s official poverty measures (federal poverty income guidelines or Census Bureau poverty thresholds); (2) state or area median income; (3) the lower living standard income level of the Bureau of Labor Statistics; (4) an absolute dollar standard; (5) a level deemed to indicate “need.” Table 7 classifies the programs in this report by type of income test. Tables 8-11 present, respectively, Census Bureau poverty thresholds for 2004, federal poverty income guidelines for 2005, income eligibility limits for subsidized meals (July 2005-July 2006), and lower living standard income levels, effective in July 2005. 7 These combinations are shown in Figure 3 slices of the pie charts, labeled as (1) EITC and (other) cash benefits, (2) TANF or GA, food stamps, and Medicaid or SCHIP; (3) TANF or GA, food stamps, and Medicaid or SCHIP and housing assistance; and (4) other combinations of cash and noncash aid. Congressional Research Service 16 Table 7. Income Eligibility Tests Used by Benefit Programs Limit related to: Program Official poverty measure Lower living income level State/area median income Dollar amount Income deemed needy Area of residence Enrollment/ eligibility for other program Other Medical Benefits 1. Medicaid Xa Xb 2. Veterans’ medical care (no service disability) 3. SCHIP Xc X Xd X Xe 4. Indian health services X 5. Consolidated health centers Xf 6. Maternal and child health services Xh 7. Title X family planning Xf Xg Xg 8. Medical aid for refugees, asylees, others Xb Cash aid 9. SSI Xi 10. EITC (refunds) X Xj 11. TANF Xb 12. Foster care Xb Xc Xb Xc,k 13. Child tax credit X 14. Veterans’ pensions X 15. Adoption assistance Xk 16. DIC (veterans’ parents) X 17. General assistance to Indians Xb 18. Cash aid—refugees, asylees, others Xb CRS-17 Limit related to: Program Official poverty measure Lower living income level State/area median income Dollar amount Income deemed needy Area of residence Enrollment/ eligibility for other program Other Food benefits 19. Food stamps X Xl 20. School lunch (free/reduced price) X Xm 21. WIC X Xn 22. Child and adult care food program X 23. School breakfast (free/reduced price) X Xm 24. Nutrition program for the elderly Xo 25. The emergency food assistance program 26. Summer food service Xb X 27. Commodity supplemental food X 28. Food distribution for Indians X X 29. Farmers’ market nutrition programs X 30. Special milk (free) X X Housing benefits 31. Section 8 low-income housing aid X 32. Public housing X 33. Rural housing loans (Section 502) X 34. HOME X 35. Housing for special groups (aged/disabled) X 36. Rural rental assistance (Section 521) X 37. Section 236 interest reduction payments X 38. Housing for people with AIDS X CRS-18 X Limit related to: Program Official poverty measure Lower living income level State/area median income 39. Rural rental housing loans (Section 515) X 40. Rural housing repair loans and grants (Section 504) X 41. Farm labor housing loans and grants (sections 514 and 516) Dollar amount Income deemed needy Area of residence Enrollment/ eligibility for other program Other X 42. Section 101 rent supplements X 43. Rural self-help grants and site loans (sections 523 and 524) X 44. Indian housing improvement grants X X 45. Section 235 homeownership X 46. Rural housing preservation grants (Section 533) X 47. HOPE X X Education 48. Pell grants 49. Head Start Xp X 50. Stafford and Stafford/Ford loans Xp 51. Federal work-study Xp 52. TRIO programs 53. Supplemental educational opportunity grants X Xp 54 Chapter 1 migrant education Xq 55. Perkins loans Xp 56. Leveraging educational assistance (LEAP) Xb CRS-19 Limit related to: Program Official poverty measure 57. Health professions student loans and scholarships Xr Lower living income level State/area median income Dollar amount Income deemed needy Area of residence Enrollment/ eligibility for other program Other Xs 58. Fellowships for graduate/professional study Xp 59. Migrant high school equivalency Xt 60. College assistance migrant program Xt 61. Close Up fellowships 62. D.C. school choice incentives Xu X Xcc Services 63. Child care and development block grant Xv Xw 64. TANF services (other than child care) X Xb 65. Social services (Title XX) Xx Xb 66. TANF child care Xb X X 67. Homeless assistance Xy 68. Community services block grant X 69. Legal services X 70. Social services for refugees, asylees, others Xb 71. Emergency food and shelter Xy Jobs and training 72. TANF work activities X 73. Job Corps Xz Xz X 74. Youth training Xz Xz X 75. Adult training CRS-20 Xaa Limit related to: Program 76. Senior community service employment Official poverty measure Lower living income level State/area median income Dollar amount Income deemed needy Area of residence X Enrollment/ eligibility for other program Other X 77. Welfare-to-work X 78. Food stamp employment/training X 79. Foster grandparents X 80. Senior companions X 81. Targeted aid for refugees, asylees, others Xb 82. Native employment works Xb X Energy aid 83. Low-income home energy assistance Xbb 84. Weatherization assistance X X X X X Note: Short titles and abbreviations are used in this table. See the table of contents for full titles. a. States must extend Medicaid to certain persons whose income is below the federal poverty income guideline (or a multiple of it) but who do not receive cash aid. These persons are pregnant women, children born after September 30, 1983, the aged, the blind, and the disabled. b. Need is decided by state, locality, Indian tribe (or Alaskan Native village). c. Eligible for Medicaid, foster care, and adoption assistance are persons who do not qualify for TANF cash assistance but who would be income-eligible for AFDC under the terms in effect on July 16, 1996 (with some modifications allowed for Medicaid) if that program had not been replaced by TANF. Also eligible for Medicaid in most states are persons eligible for SSI. d. Veterans receiving veterans’ pensions or eligible for Medicaid are automatically eligible for free VA medical care. e. If a state’s Medicaid limit for children is at or above 200% of the poverty guideline, it may give SCHIP to children whose family income is within 150% of the Medicaid limit (thus, up to 50% above the Medicaid limit). f. The law limits free care to those below the federal poverty income guidelines. g. All residents of the area served are eligible, but fees must be charged to the nonpoor. h. The stated purpose of the Maternal and Child Health (MCH) Services Block Grant law is to enable states to assure access to quality MCH services to mothers and children, particularly those with low income (or limited availability of health services). The law defines low income in terms of the federal poverty income guidelines. This block grant, which took effect in FY1981, includes funding for crippled children’s services. CRS-21 i. For basic federal SSI payment. j. States decide need for an optional state supplement to SSI. k. A blind or disabled child who is eligible for SSI also may be eligible for adoption assistance. l. Households composed wholly of recipients of SSI or GA or of recipients of TANF cash or services automatically meet food stamp assets and income tests but their benefits must be calculated by food stamp rules. m. Food stamp eligibility is accepted as documentation of eligibility for the free school lunch and free school breakfast programs. n. States may give automatic eligibility to public assistance recipients. o. The law requires preference for those with greatest economic or social need. p. Need is decided by a system known as the federal needs analysis methodology, which is set forth in Part F of Title IV of the Higher Education Act (HEA) as amended. q. There is no income test. Migratory children are presumed to be needy. r. For forgiveness of loans made to needy students who fail to complete studies. s. Need for loans is decided by the educational institution, by use of a needs analysis system approved by the Secretary of Education “in combination with other information” about the student’s finances. For all health professional scholarships and for loans to students of medicine and osteopathy, federal regulations define the required “exceptional financial need.” t. Regulations require the educational institution to determine that migratory students need the financial assistance provided. u. Law makes eligible middle school and secondary students who are “economically disadvantaged.” v. Federal income ceiling is 85% of state median for family of same size. w. Under the law, at least 70% of entitlement Child Care Development Fund (CCDF) assistance must be used for families receiving TANF, trying to leave welfare through work, or at risk of becoming eligible for TANF. x. Applies to families aided with TANF dollars transferred to Title XX (their income cannot exceed 200% of the federal poverty guidelines). y. Need is decided by agencies administering the benefits. z. The federal poverty income guideline is used if higher than 70% of the lower living standard income level of the Department of Labor. aa. The law requires preference for “low-income” persons if funds are limited. bb. States have the option of setting limits below outer federal ceilings (but cannot set a ceiling below 110% of the federal poverty income guideline). cc. Eligible students must be residents of the District of Columbia. A lottery is used if more eligible students apply than can be accommodated with available funding. CRS-22 Cash and Noncash Benefits for Persons with Limited Income Table 8. Bureau of the Census Poverty Thresholds for 2004 1 person (unrelated individual) $9,645 Under 65 years 9,827 65 years and over 9,060 2 persons 12,334 Householder under 65 years 12,714 Householder 65 years and over 11,430 3 persons 15,067 4 persons 19,307 5 persons 22,831 6 persons 25,788 7 persons 29,236 8 persons 32,641 9 persons or more 39,048 Source: U.S. Department of Commerce, Bureau of the Census (August 30, 2005). Table 9. 2005 Federal Poverty Income Guidelines Size of family unit Forty-eight contiguous states and D.C. Alaska Hawaii 1 $ 9,570 $11,950 $11,010 2 12,830 16,030 14,760 3 16,090 20,110 18,510 4 19,350 24,190 22,260 5 22,610 28,270 26,010 6 25,870 32,350 29,760 7 29,130 36,430 33,510 8 32,390 40,510 37,260 For each additional person, add 3,260 4,080 3,750 Source: Federal Register, vol. 70, no. 33, Feb. 18, 2005, p. 8374. Congressional Research Service 23 Cash and Noncash Benefits for Persons with Limited Income Table 10. Eligibility Levels for Free and Reduced Price Meals for the Period of July 1, 2005-June 30, 2006 Maximum annual income levels Family size Free meals: 130% federal poverty income guidelines Reduced price meals: 185% federal poverty income guidelines 48 contiguous United States, District of Columbia, Guam, and territories 1 $12,441 $17,705 2 16,679 23,736 3 20,917 29,767 4 25,155 35,798 5 29,393 41,829 6 33,631 47,860 7 37,869 53,891 8 42,107 59,922 Add for each additional member +4,328 +6,031 Alaska 1 $15,535 $22,108 2 20,839 29,656 3 26,143 37,204 4 31,447 44,752 5 36,751 52,300 6 42,055 59,848 7 47,359 67,396 8 52,663 74,944 Add for each additional member +5,304 +7,548 Hawaii 1 $14,313 $20,369 2 19,188 27,306 3 24,063 34,244 4 28,938 41,181 5 33,813 48,119 6 38,688 55,056 7 43,563 61,994 8 48,438 68,931 Add for each additional member +4,875 +6,938 Source: Federal Register, vol. 70, no. 52, Mar. 18, 2005, p. 13162. Congressional Research Service 24 Cash and Noncash Benefits for Persons with Limited Income Table 11. Lower Living Standard Income Level (LLSIL) for a Family of Four— Effective July 22, 2005 (For use in programs under the Workforce Investment Act and the Work Opportunity Tax Credit) Area 2005 adjusted LLSILa 70% of LLSILb Northeast Metropolitan $33,280 $23,680 Non-Metropolitan 32,320 22,620 Metropolitan 30,620 21,430 Non-Metropolitan 28,810 20,170 Metropolitan 28,980 20,290 Non-Metropolitan 27,560 19,290 Metropolitan 33,160 23,220 Non-Metropolitan 32,020 22,410 Metropolitan 40,840 28,590 Non-Metropolitan 40,180 28,130 Metropolitan 41,890 29,330 Non-Metropolitan 42,900 30,030 Anchorage, AK $40,840 $28,590 Atlanta, GA 28,770 20,140 Boston-Brockton-Nashua, MA/NH/ME 37,100 25,970 Chicago-Gary-Kenosha, IL/IN/WI 32,110 22,480 Cincinnati-Hamilton, OH/KY/IN 30,390 21,280 Cleveland-Akron, OH 31,580 22,110 Dallas-Ft Worth, TX 27,840 19,490 Denver-Boulder-Greeley, CO 32,050 22,440 Detroit-Ann Arbor-Flint, MI 30,000 21,000 Honolulu, HI 41,890 29,330 Houston-Galveston-Brazoria, TX 26,990 18,900 Kansas City, MO/KS 29,650 20,760 Los Angeles-Riverside-Orange County, CA 34,270 23,990 Milwaukee-Racine, WI 30,170 21,120 Minneapolis-St. Paul, MN 31,020 21,710 Midwest South West Alaska Hawaii/Guam Metropolitan Statistical Area (MSA) Congressional Research Service 25 Cash and Noncash Benefits for Persons with Limited Income Area 2005 adjusted LLSILa 70% of LLSILb New York-Northern New Jersey-Long Island 35,480 24,840 Philadelphia-Wilmington-Atlantic City, PA/DE/NJ 32,850 23,000 Pittsburgh, PA 36,190 25,330 St. Louis, MO-IL 29,510 20,660 San Diego, CA 37,310 26,120 San Francisco-Oakland-San Jose, CA 35,490 24,850 Seattle-Tacoma-Bremerton, WA 35,880 25,120 Washington-Baltimore, DC-MD-VA 35,600 24,920 Source: U.S. Department of Labor http://www.doleta.gov/llsil/. Notes: For LLSILs for other family sizes, see the Federal Register entry noted above. The LLSIL is used for several purposes under the Workforce Investment Act (WIA). WIA defines “low income individual” for eligibility purposes in terms of the LLSIL or the poverty line. For purposes of state formula allotments, it defines the terms “disadvantaged adult” or “disadvantaged youth” in terms of the LLSIL or the poverty line. a. To assess whether employment will lead to “self-sufficiency,” WIA sets 100% of the LLSIL as the minimum pay needed. b. WIA provides that the terms “low-income” person and “disadvantaged adult” may be defined as a member of a family that received total family income that, in relation to family size, does not exceed 70% of the LLSIL. Further, the Internal Revenue Code provides that the term “economically disadvantaged” may be defined as 70% of the LLSIL for purposes of the Work Opportunity Tax Credit (WOTC). Medical Aid 1. Medicaid8 Funding Formula The federal government shares in the cost of Medicaid services by means of a variable matching formula. The formula is inversely related to a state’s per capita income and is adjusted annually. The federal share of administrative costs generally is 50%, but can be as high as 100% for certain items. The federal share of a state’s medical vendor payments is called the federal medical assistance percentage (FMAP). 9 The FMAP is higher for states with lower per capita incomes and lower for states with higher per capita incomes. If a state’s per capita income is equal to the national average per capita income, its FMAP would be 55%. The law establishes a minimum FMAP of 50% and a maximum of 83%10 (though the highest rate in FY2005 was 77.08% for Mississippi). 8 Regulations governing Medicaid are found in 42 CFR Parts 430-456 (Oct. 2005). This program is No. 93.778 in the Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 1396 et seq. 9 For a more detailed discussion of the FMAP, see CRS Report RL32950, Medicaid: The Federal Medical Assistance Percentage (FMAP). 10 In FY2005, federal funds paid 50% of medical vendor payments in the 12 states with the highest per capita income (continued...) Congressional Research Service 26 Cash and Noncash Benefits for Persons with Limited Income Federal matching for the territories is set at 50%, but a dollar-amount ceiling also applies. The statutory formula for determining the FMAP follows. FMAP = 100% − state share (with a minimum of 50% and a maximum of 83%) State share = (state per capita income)2 x 45% (national per capita income)2 The percentages are based on the average per capita income of each state and the United States for the three most recent calendar years for which satisfactory data are available from the Department of Commerce. The law provides one exception to the FMAP for benefits. Family planning services (instruction in contraceptive methods and family planning supplies) are federally matched at a 90% rate. To provide fiscal relief to states, federal matching rates were changed temporarily by the Jobs and Growth Tax Relief Reconciliation Act (P.L. 108-27), which altered the rates for certain expenditures for the last two quarters of FY2003 and the first three quarters of FY2004. For these five quarters, the federal matching rate for each state was held harmless for declines from the prior fiscal year, and then was increased by 2.95 percentage points. A state was eligible for an increase in its FMAP for any of the specified quarters only if eligibility under Medicaid in effect for that quarter was no more restrictive than eligibility in effect on September 2, 2003. Federal Medicaid outlays totaled $146.6 billion in FY2002 and $161.0 billion in FY2003. During FY2002, the federal government financed about 57% of all Medicaid costs. During FY2003, the federal government financed about 58% of all Medicaid costs.11 Estimated federal outlays for Medicaid in FY2004 were $175.1 billion. Eligibility Requirements12 The requirements of federal law, coupled with the decisions of individual states in structuring their Medicaid programs, determine who is actually eligible for Medicaid in a given state. Some groups are mandatory, meaning all states must cover them; others are optional. In general, federal law places limitations on the categories of individuals who can be covered and establishes specific eligibility rules for groups within those broad categories. Traditionally, Medicaid eligibility was limited to the following categories: low-income families with dependent children (...continued) (California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Virginia, and Washington) and 70% or higher in the 10 states with the lowest per capita income (Alabama, Arkansas, Idaho, Louisiana, Mississippi, Montana, New Mexico, Oklahoma, Utah, and West Virginia). Effective in FY1998, a special provision of P.L. 105-33 raised the federal share of Medicaid costs in D.C. from 50% to 70%. 11 This increase in FY2003 is likely the result of the temporary increase in the federal medical assistance percentage (FMAP) enacted in May 2003 (P.L. 108-27). 12 Effective on July 1, 1997 (earlier in most states), P.L. 104-193 ended Aid to Families with Dependent Children (AFDC), a cash assistance program under which recipients were automatically eligible for Medicaid. The replacement block grant program of Temporary Assistance for Needy Families (TANF) does not entitle all TANF recipients to Medicaid coverage. However, those who meet the income, resource, and categorical eligibility criteria of the former AFDC program, as in effect in their state on July 16, 1996 (and subsequently modified, if applicable), are entitled to Medicaid. The description below summarizes Medicaid as it operated after AFDC was replaced by TANF. Congressional Research Service 27 Cash and Noncash Benefits for Persons with Limited Income (in which one parent was absent, incapacitated, or unemployed), low-income persons with disabilities, and low-income elderly. In addition, certain individuals with higher income, especially those facing large costs for medical care, were eligible as “medically needy.” Beginning in the 1980s, additional coverage groups were added to Medicaid for higher-income children and pregnant women. Most recently, states were given the option to provide Medicaid to other groups with specific characteristics, including certain women with breast or cervical cancer, uninsured individuals with tuberculosis, and additional working individuals with disabilities. More than 50 distinct population groups are identified in federal law. Contributing to the complexity of the Medicaid program are financial criteria. Medicaid is a means-tested entitlement program. To qualify, applicants’ income and resources13 must be within certain limits, most of which are determined by states, again within federal statutory parameters. States have flexibility in defining countable income and assets. Consequently, income and resource standards vary considerably among states, and different standards apply to different population groups within a state. In general, individuals in similar circumstances may be automatically eligible for coverage in one state, may be required to assume a certain portion of their medical expenses before they can obtain coverage in another state, and may not be eligible at all in a third state. Families, Pregnant Women, and Children Medicaid-eligible families, pregnant women, and children fall into two basic groups: those meeting AFDC standards as of July 16, 1996, and those qualifying under a series of targeted Medicaid expansions that began in the 1980s. AFDC-Related Groups Medicaid eligibility for AFDC-related groups was affected significantly by both the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193), which replaced the AFDC cash assistance program with the Temporary Assistance for Needy Families (TANF) block grant program, and the Balanced Budget Act of 1997 (BBA 97, P.L. 10533). Mandatory. Members of families that meet the eligibility requirements of the old AFDC programs in effect in their states on July 16, 1996 must be covered under Medicaid. States may modify their rules governing income and resource standards for such AFDC-related groups in three ways: (1) income standards may be reduced below those in effect in 1996, but they cannot be lower than those used on May 1, 1988; (2) income and resource standards may be increased for any period after 1996, but by no more than the percentage increase in the Consumer Price Index (CPI) for the same period; and (3) states may use less restrictive methods for counting income and resources than those in effect on July 16, 1996. States must provide Medicaid assistance for recipients of adoption assistance and foster care (who are under age 18) under Title IV-E of the Social Security Act. Transitional or extended benefits are available to families who lose Medicaid eligibility because of increased hours of employment, 13 Resources may include bank accounts and similar liquid assets, as well as real estate, automobiles, and other personal property for which the value may not exceed specified limits. Certain resources, such as an individual’s home, are excluded when determining eligibility. Congressional Research Service 28 Cash and Noncash Benefits for Persons with Limited Income increased earnings, loss of a time-limited earned income disregard, or increased child or spousal support payments.14 If the family loses Medicaid eligibility because of increased earnings or hours of employment, Medicaid coverage is extended for six to 12 months.15 (During the second six months, a premium can be imposed, the scope of benefits might be limited, or alternate delivery systems might be used.) If the family loses Medicaid because of increased child or spousal support, coverage is extended for four months. Children and pregnant women are exempt from TANF work requirements and retain their Medicaid eligibility. Optional. States are permitted to cover additional AFDC-related groups. States may provide Medicaid to former foster care recipients ages 18, 19 and 20, and may limit such coverage to those eligible for Title IV-E before turning 18. States may also extend Medicaid to children under age 21 in families whose income and resources are within AFDC standards (as of July 16, 1996), but who do not meet the definition of a dependent child (also known as Ribicoff children), and may limit this coverage to “reasonable” subgroups.16 Finally, states may deny Medicaid benefits to nonpregnant adults and heads of households who lose TANF benefits because of refusal to work. Poverty-Related Pregnant Women and Children Beginning in the mid-1980s, Congress gradually extended Medicaid coverage to groups of pregnant women and children who are defined in terms of family income and resources rather than in terms of their ties to cash welfare programs. Mandatory. States must cover pregnant women and children under age 6 with family incomes below 133% of the federal poverty income guidelines. (A state may impose a resource standard that is no more restrictive than that for SSI, in the case of pregnant women, or AFDC as of July 16, 1996, in the case of children.) Coverage for pregnant women is limited to services related to the pregnancy or complications of the pregnancy through 60 days postpartum. Children receive full Medicaid coverage. 14 For a more detailed discussion of transitional benefits, see CRS Report RL31698, Transitional Medical Assistance (TMA) Under Medicaid. 15 The requirement for six to 12 months of transitional Medicaid, which originally applied to families who lost AFDC eligibility because of work, was carried over in the 1996 TANF law. It has been extended beyond Sept. 30, 2002 by several laws, most recently by the Deficit Reduction Act of 2005 (P.L. 109-171), which extended it through calendar year 2006. If the provision authorizing 12-month TMA is not extended beyond Dec. 31, 2006, states will still be required to provide four months of TMA to families that lose Medicaid eligibility due to an increase in earned income, hours of employment, or child or spousal support. 16 These Ribicoff children, named for the former Senator who sponsored legislation authorizing this group, are individuals under age 21 who do not meet the dependency requirement, often because they do not live with their families. In the past, this eligibility pathway had been used for children residing in institutions or in state-based foster care or adoption assistance programs. But today, most of those children can qualify under other poverty-level eligibility pathways, since those pathways do not include a family dependency requirement. Ribicoff, as a result, has little meaning for most children under age 19. For children who are 19 or 20 or are inpatients in psychiatric facilities, on the other hand, Ribicoff may still be a valuable pathway to Medicaid. Older children cannot qualify under the other poverty-level groups because those pathways define eligible children to be under age 19. Institutionalized children who are in families with income that exceeds the poverty level ceilings also cannot qualify as poverty-level children because their parents’ income is deemed to be available to children under those pathways. Under Ribicoff, on the other hand, parental income is not considered to apply to children who do not reside in their parents’ homes. Congressional Research Service 29 Cash and Noncash Benefits for Persons with Limited Income States are also required to cover al [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL33340. Public record. Not legal advice.