Iowa's Limited Benefit Plan

Authors:

Thomas M. Fraker

Lucia A. Nixon

Jan L. Losby

Carol S. Prindle

John F. Else

Submitted to: Iowa Department of Human Services Division of Economic Assistance Hoover State Office Building Des Moines, IA 50319 Welfare Reform Waiver Coordinator: Ann M. Wiebers U.S. Dept. of Health and Human Services Office of Asst. Secretary for Planning and Evaluation Hubert H. Humphrey Bldg., Rm. 404E 200 Independence Ave., S.W. Washington, DC 20201 Project Officer: Kelleen S. Kaye

Prime Contractor: Mathematica Policy Research, Inc. 600 Maryland Avenue, S.W., Suite 550 Washington, D.C. 20024 Project Director: Thomas M. Fraker Subcontractor: Institute for Social and Economic Development 1901 Broadway, Suite 313 Iowa City, IA 52240 Subcontract Director: John F. Else

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Acknowledgments

The Study of Iowa's Limited Benefit Plan was made possible by financial support generously provided by the following organizations:

• The Annie E. Casey Foundation
• The Ewing Marion Kauffman Foundation
• The Charles Stewart Mott Foundation
• The Northwest Area Foundation
• The Administration for Children and Families, U.S. Department of Health and Human Services
• The Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services

Ann Wiebers of the Iowa Department of Human Services handled many administrative aspects of the study, arranged for us to have access to data from state administrative systems, and responded to our numerous questions concerning Iowa's welfare system. Kelleen Kaye and her colleagues at the Office of the Assistant Secretary for Planning and Evaluation provided valuable comments on the instrument for the study's survey of welfare clients whose cash assistance was terminated and on the research design for the analysis of the flow of cases through the Limited Benefit Plan.

At MPR, Rita Stapulonis and Martha Kovac were the director and deputy director, respectively, of the telephone phase of the client survey. Mark Brinkley and Jill Corcoran provided programming and research assistance in the analysis of data from the survey and from state administrative records.

At ISED, Thomas Martin contributed to the study design and reviewed analysis plans and preliminary findings. Leigh Ann Jero assisted with the training of field interviewers for the client survey. Todd Schuldt, Lara Moore, and Connie Millson provided data entry, programming, and research assistance in the analysis of data from the survey and from case studies of families participating in the Limited Benefit Plan.

We thank all of the above organizations and individuals for their important contributions to the Study of Iowa's Limited Benefit Plan and to this report. We also thank the Iowa families that participated in the client survey and the case studies. Without their cooperation, this study would not have been possible.

Executive Summary

Acting under federal waivers authorized by Section 1115 of the Social Security Act and Section 17(b) of the Food Stamp Act, Iowa implemented a comprehensive package of welfare reforms on October 1, 1993. These reforms replaced Aid to Families with Dependent Children with the Family Investment Program (FIP) and made complementary changes in the Food Stamp Program. The reforms encourage and require welfare recipients to take steps toward self-sufficiency. These steps, which are specified in the Family Investment Agreement (FIA), may include participating in education programs, engaging in job search and job readiness activities, and obtaining employment. The reforms stop short of requiring FIP participants to achieve self-sufficiency; however, it is expected that by following the required steps most of them will eventually leave cash assistance.

The Limited Benefit Plan (LBP) is an alternative assistance program for FIP participants. Adult members of FIP cases who are able-bodied and are not caring for infants are required to develop and carry out FIAs under the auspices of the PROMISE JOBS program, which provides employment and training services to welfare recipients in Iowa. If those individuals do not comply with this requirement, they and their associated FIP cases are assigned to the LBP. These assignments are most often perceived as sanctions for failing to develop and carry out an FIA, but some reflect the wishes of the individuals. LBP assignments may be canceled if the individuals come into compliance with the FIA requirement or, less frequently, on appeal. The original LBP provided three months of cash benefits at the same level as under FIP, followed by three months of reduced cash benefits, and then six months of no cash benefits. The initial period of level benefits was eliminated in February 1996, resulting in a modified LBP that provides three months of reduced benefits, followed by six months of no cash benefits. LBP cases may reapply to FIP at the end of the period of no cash benefits, but those who do so are again subject to the FIA requirement.

This report presents findings from a study of the original LBP conducted by Mathematica Policy Research and the Institute for Social and Economic Development for the Iowa Department of Human Services (DHS). The data analyzed in this study are from DHS records on over 4,200 cases assigned to the LBP during six months in 1994 and 1995, a survey of 137 cases whose cash benefits had been terminated under the rules of the LBP, and case studies of 12 LBP families. The findings provide a comprehensive picture of LBP cases--who they are, why they are on the LBP, how the loss of cash benefits affects their financial status and family functioning in the short run, and what they are doing to cope.

ORIGIN OF THE STUDY

April 1994 was the first month in which FIP cases were assigned to the LBP. October 1994 marked month 7 of the LBP for the cases in this cohort whose assignments had not been canceled--the beginning of their six-month period of no cash benefits. Between October 1994 and June 1996, an average of 180 LBP cases per month entered the first month of no cash benefits. This represents one-half of one percent of the average monthly FIP caseload (35,000 cases) during this period.

Under contract with DHS, the Iowa Department of Public Health visits LBP families shortly before and after their cash benefits are terminated. The primary purpose of these visits is to inquire into the well-being of the families and, if necessary, to refer them to service providers. The secondary purpose is to provide DHS with data on LBP families as they make the transition to no cash benefits. However, only about 40 percent of the visits are successfully completed, thus limiting the research potential of the data. (DHS is taking steps to improve the quality of the data from the visits.) By mid-1995, DHS perceived a need for more systematic and comprehensive data on LBP families whose cash benefits have been terminated--data on the characteristics of those families, why they were assigned to the LBP, and how they are faring in the temporary absence of cash benefits.

At about the same time, organizations with a national perspective on welfare policy, including foundations and major out-of-state newspapers, became aware that Iowa was terminating cash benefits for some welfare cases. Their interest in this new policy was sparked by the then-active debate on federal welfare reform and, more specifically, by the issues of time-limited cash benefits and work requirements that were central to that debate. Despite the temporary nature of the LBP benefit termination and its restriction to PROMISE JOBS-mandatory cases, these organizations saw Iowa's experience as an indication of how welfare recipients might be affected by the sudden loss of cash benefits, as would occur under broader time limits. They also viewed the LBP as a prototype sanction policy that other states might adopt to draw more welfare recipients into employment and training activities.

Interest in or concern about the LBP prompted the following four foundations and two U.S. government agencies to provide funding for this study:

• Annie E. Casey Foundation
• Ewing Marion Kauffman Foundation
• Charles Stewart Mott Foundation
• Northwest Area Foundation
• Administration for Children and Families,U.S. Department of Health and Human Services
• Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.

RESEARCH OBJECTIVES AND DATA SOURCES

The objective of the LBP Study is to improve the understanding of FIP cases that have been assigned to the LBP, thus helping policymakers in Iowa and around the nation to make well-informed decisions about modifying or adopting the plan. This broad objective encompasses three specific objectives:

1. Document the Flow of Cases Through the LBP. The study's first objective is to document the administrative reasons for the assignment of FIP cases to the LBP, describe the characteristics of those cases, document the welfare benefits that they receive during and after their time on the plan, and describe their perspectives on their own entry into the LBP. This objective is achieved through the analysis of data from DHS administrative records and from a survey of LBP clients.
2. Describe the Experiences of LBP Families. This second objective constitutes the core of the study. It is to describe changes in the financial status of LBP families following their loss of cash benefits, their employment during the six-month period of no cash benefits, their coping strategies during that period, and their perceptions of the LBP. Data from the survey of LBP clients are used to achieve this objective.
3. Tell the Personal Stories of LBP Families. The study's final objective is to present the personal stories of diverse LBP families regarding their entry into the LBP, interactions with PROMISE JOBS staff, changes in family functioning after the loss of cash benefits, and how they are coping with that loss. Case-study interviews with LBP clients provide the basis for achieving this objective.

Data from three sources are used to address these research objectives:

1. Administrative Records. DHS administrative records on 4,224 FIP cases assigned to the original 12-month LBP between November 1994 and April 1995 provide case-specific data on demographics, monthly benefit amounts, and LBP administrative actions. Fifteen months of data are available for each case following its assignment to the LBP.
2. Client Survey. A survey of LBP cases that received cash benefits in month six of the LBP but not in month seven is the source of information on the changes in family composition and finances that accompany the termination of cash benefits, and on client perspectives on the LBP. Efforts were made to interview all 162 families in 19 eastern and central Iowa counties that entered month seven of the LBP between November 1995 and January 1996. Structured interviews were completed with 137 (85 percent) of the sampled families during LBP months eight through twelve.
3. Case-study Interviews. Semi-structured case-study interviews with 12 families that had earlier participated in the LBP client survey provide in-depth information on their experiences with the loss of cash benefits.

FINDINGS IN BRIEF

Most assignments to the LBP result from FIP cases not developing and signing FIAs, rather than abandoning signed FIAs. Slightly more than half of these assignments are subsequently canceled, thus allowing the cases to return to FIP before the scheduled end of the LBP. The characteristics of cases whose LBP assignments have been canceled suggest that they are somewhat more disadvantaged than those whose assignments have not been canceled. Fifty-seven percent of the cases with canceled assignments receive cash benefits in the third month after the scheduled ending date of the LBP. In contrast, only 19 percent of cases that remain on the LBP for the full period receive cash benefits in the third month after the ending date.

There are distinct gainers and losers among LBP cases whose cash benefits have been terminated. About half of these cases are employed during the months immediately after cash benefits end, but the other half are not. Forty percent experience an increase in monthly income when cash benefits end, with the average increase being $496. On the other hand, 49 percent experience a drop in income, the average decrease being $384. Thus, the termination of cash benefits appears to act as a catalyst for some families to move toward self-sufficiency, while it removes an important financial safety net for others, resulting in a decline in their economic well-being. Even for the latter group, however, there is little systematic evidence of extreme economic distress, such as homelessness and the separation of children from their parents. Such distress might be apparent if the period of no cash benefits were longer than six months, such as under general time limits on welfare receipt.

Government programs other than FIP remain important sources of support for LBP families whose cash benefits have been terminated. For example, about two-thirds of these families continue to receive Food Stamps and Medicaid during the period of no cash benefits. Food Stamp benefit levels increase moderately with the termination of cash assistance, thus partially offsetting the loss. In contrast, the assistance offered by private, nonprofit organizations is used infrequently by these families. Thus, the LBP does not appear to shift the burden of dependency from the public sector to the private, nonprofit sector. However, this study reveals strong evidence that extended family, friends, and neighbors provide important emotional and material support to LBP families whose cash assistance has temporarily ceased. Case-study interviews with these families indicate that this support does not always endure, implying that these families might be more reliant on private, nonprofit social service providers if the LBP period of no cash benefits were longer than six months.

DISCUSSION

The LBP Study provides policy makers with valuable information regarding sanctions for nonworking welfare cases. The study is less relevant to the policy issues surrounding general time limits, such as the lifetime limit on the receipt of cash benefits mandated by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. While the termination of cash benefits is a feature common to both the LBP and general time limits, two other features of the LBP suggest that the effects of benefit termination would be different under the LBP than under general time limits on welfare receipt. First, the LBP applies only to those families that are capable of participating in training and employment, and some of those families voluntarily enter the LBP after determining that their need for assistance is temporary. Second the termination of cash benefits is limited to six months under the LBP, whereas it is permanent under general time limits.

This study shows that families assigned to the LBP frequently leave welfare and increase their incomes. Two-thirds of families whose assignments to the LBP are never canceled leave cash assistance before its scheduled termination. Presumably, these families either enter the LBP with the intention of leaving early, or are induced to leave by the reduction and imminent termination of benefits. Their early exit suggests that they are departing to financially viable situations. Further, among the families with never-canceled LBP assignments that do not leave the plan early, forty percent achieve higher incomes after the termination of cash assistance.

However, half of families with never-canceled LBP assignments experience reductions in income following benefit termination and present special policy concerns. To make it through the period of no cash benefits, many of these families rely on private support networks of extended family and friends. In states where these types of networks may be weaker than in Iowa, such familes might experience greater deprivation and could be expected to rely more on community service organizations for assistance. This might also occur if the period of no cash benefits were longer than six months, as these networks may wither over time.

This study also shows that lack of knowledge of program rules is widespread among LBP cases and is a factor in their assignment to the plan. Seventy percent of cases that fail to make required appointments with PROMISE JOBS attribute this failure to their inadequate understanding of program rules. Also, many are unaware that PROMISE JOBS can assist in resolving child care and transportation problems that pose barriers to participation in program activities.

It is clear from this study that, while many welfare families respond positively to the LBP, others do not. The following features of the LBP help to avoid extreme deprivation among the latter cases:

The LBP design includes a reconciliation period. During the reconciliation period, cases that were assigned to the LBP before signing an FIA may reconsider the actions or inactions that resulted in their assignment to the LBP and undertake alternate actions that bring them into compliance with program rules.

The period of no cash benefits is of limited duration. Six months without cash benefits is long enough to induce many cases to obtain employment or other means of support, yet short enough to permit cases that fail to respond more positively to get by with support from family and friends until they can reapply to FIP (and, presumably, participate in PROMISE JOBS).

Noncash assistance continues during the period of no cash benefits. Food Stamps, Medicaid, and other types of noncash assistance constitute a safety net for FIP cases that fail to respond positively to the LBP.

In the absence of safeguards such as these, an otherwise similar policy could result in the termination of cash assistance for many welfare cases that are actually willing to comply with program rules. In addition, the incidence of extreme deprivation among the cases whose benefits are terminated might be unacceptably high.

I. INTRODUCTION TO THE STUDY OF IOWA'S LIMITED BENEFIT PLAN

In August 1993, the U.S. Department of Health and Human Services and U.S. Department of Agriculture approved Iowa's request for waivers of certain federal regulations governing the Aid to Families with Dependent Children (AFDC) program and the Food Stamp Program. Acting under these waivers, the state implemented its welfare reform program, known as the Family Investment Program (FIP), on October 1, 1993. The reforms embedded in FIP are numerous and comprehensive. They encourage and require welfare applicants and recipients to take specific steps toward self-sufficiency. These steps may include participating in job search or training activities, obtaining employment, and accumulating assets. The reform program stops short of actually requiring welfare recipients to achieve self-sufficiency.⁽¹⁾ Nonetheless, there is an implicit expectation that by following the required steps most of them will eventually leave cash assistance.

Several key provisions of FIP illustrate the emphasis in Iowa's welfare reform on movement toward self-sufficiency. To encourage employment, as well as the formation and preservation of two-parent families, FIP removes the 100-hour cap that the former AFDC program imposed on the number of hours per month that a parent could work for pay while the family remained eligible for cash assistance. To further encourage employment, a greater percentage of earnings is disregarded in determining eligibility and benefits under FIP than under AFDC. To encourage asset accumulation, the amount of assets that an eligible family may hold is higher under FIP than under AFDC, and interest and dividend income are excluded from the determination of FIP eligibility. To ease the financial burden of fully exiting from cash assistance, FIP offers former welfare recipients who obtain employment two years of child care assistance, rather than the one year that was available under AFDC. To promote planning for the future and positive steps toward self-sufficiency, FIP requires welfare recipients who are capable of working to develop plans for achieving self-sufficiency and to participate in the PROMISE JOBS employment and training program. Recipients who do not meet these requirements are assigned to the Limited Benefit Plan (LBP), a short-term alternative assistance program under which cash benefits are reduced and then terminated. The LBP provision of FIP is the subject of this study.

This chapter introduces the PROMISE JOBS employment and training program; briefly describes the LBP and its function within PROMISE JOBS; and discusses the origin, purpose, and methodology of the LBP Study.

A. PROMISE JOBS

Since 1989, welfare recipients in Iowa have been required to participate in the PROMISE JOBS (Promoting Independence and Self-Sufficiency Through Employment, Job Opportunities, and Basic Skills) program. PROMISE JOBS implements the Job Opportunities and Basic Skills (JOBS) program in Iowa, as mandated by the federal Family Support Act of 1988. It is designed to increase the availability of employment and training opportunities for welfare recipients. The requirement for welfare recipients to participate in PROMISE JOBS has been strengthened under FIP; fewer welfare recipients are now exempt from the participation requirement, and the consequences of unauthorized nonparticipation are more immediate and severe than under the former AFDC program.

Generally, all adult participants in FIP are required to participate in PROMISE JOBS. Exemptions from this requirement are granted for five classes of FIP clients:

1. A person who is the parent or relative of a child under six months of age and who personally provides care for that child (no more than one such exemption per case)⁽²⁾
2. A person who is working 30 or more hours per week in unsubsidized employment at the time of the initial determination of PROMISE JOBS exemption status
3. A person who is under age 16 and not a parent
4. A person who is disabled according to the Americans with Disabilities Act and is consequently unable to participate in PROMISE JOBS
5. A person who is age 16 to 19, is not a parent, and attends school full time

Given these exemptions, the expectation is that FIP clients who are mandatory participants in PROMISE JOBS have the time and ability to benefit from the employment and training services provided.

B. The Limited Benefit Plan

The LBP is a short-term alternative assistance program introduced under Iowa's welfare reform program. In the LBP, a case's cash benefits are reduced and then terminated for a fixed period of time after which the case can reapply for benefits. FIP recipients are usually assigned to the LBP as a result of not meeting FIP requirements relating to PROMISE JOBS participation.

Under FIP, able-bodied adults who are not caring for infants and are not working 30 or more hours per week at the time of FIP application are required to develop, sign, and carry out a contract called the Family Investment Agreement, or FIA, under the auspices of the PROMISE JOBS program. The FIA specifies the steps that will be taken to achieve self-sufficiency and a date by which this goal will be achieved; this date can be revised if life circumstances change. Failure to develop, sign, or follow through with the FIA results in assignment to the LBP. Welfare clients or applicants may also volunteer for assignment to the LBP. Heads of families who believe that their need for assistance is temporary or who prefer to avoid dealing with PROMISE JOBS may be especially inclined to volunteer for assignment. Opportunities to return to FIP through cancellation of an LBP assignment are strictly limited for all LBP assignments.

Although it is the individual who is assigned to the LBP, the FIP case to which he or she belongs is greatly affected by the assignment; most notably, the entire case's cash assistance is reduced and then terminated as a result of the LBP assignment.⁽³⁾ Under the former AFDC program, the consequences for nonparticipation in PROMISE JOBS were less severe than in the LBP and applied to fewer welfare recipients. The new policies reflect the philosophy behind welfare reform in Iowa that the choices individuals make have real consequences that may affect the entire family.

As originally designed and implemented, the LBP was a twelve-month plan. It provided cases with three months of cash assistance at the same level as under FIP, three months of reduced cash assistance,⁽⁴⁾ and six months of ineligibility for cash assistance. After twelve months, LBP participants could reapply for cash assistance. Throughout the full twelve-month period, LBP participants could continue to qualify for and receive Medicaid and Food Stamps as long as they met the eligibility requirements for these programs. However, they could not receive the Transitional Child Care assistance or Transitional Medicaid that were (and are) provided to former FIP clients whose eligibility for cash assistance has ended as a consequence of increased income from employment. As part of the LBP, registered nurses or social workers employed by local public health agencies would attempt to conduct two "well-being" visits with LBP families to inquire about the children, to ask parents whether they need information about their rights and responsibilities, and to provide referrals to community agencies.

A redesigned LBP, eliminating the initial three months of level benefits, was implemented in February 1996. The redesigned LBP is a nine-month plan, which provides reduced cash assistance during the first three months, followed by six months of ineligibility for cash assistance. In redesigning the LBP, a policy for second or subsequent LBPs was also implemented. Specifically, any second or subsequent LBP is a six-month plan in which benefits are canceled immediately for the entire case with no reconsideration option. Most other provisions of the redesigned LBP are unchanged from the original LBP design. Results presented in this report pertain to cases whose experiences with the LBP occurred under the original design.

C. Origin of the LBP Study

PROMISE JOBS began assigning welfare clients to the LBP approximately half a year after the implementation of FIP. The first assignment was made in April 1994. Approximately 700 clients per month were assigned to the LBP in the remainder of 1994 and in 1995. Beginning in October 1994 and continuing through 1995, approximately 150 to 175 active cases per month reached the seventh month of the LBP, when all cash assistance was terminated. The magnitude of these flows were such that the Iowa Department of Human Services (DHS), which administers FIP and the LBP, perceived a need to know more about the cases in the LBP: What are their characteristics? Why were they assigned to the LBP? How are they faring without cash assistance? However, DHS's existing contract for a broad evaluation of its welfare reform program included no provision for a focused study of the LBP.

By the spring of 1995, the national press had become aware that Iowa was terminating cash assistance for some welfare cases. Interest by the national press in this process and in the affected cases was heightened by the then-active debate on federal welfare reform and, more specifically, by the issues of time-limited cash benefits and work requirements that were central to that debate. Despite the temporary nature of the LBP's benefit termination and its restriction to PROMISE JOBS-mandatory cases that do not meet employment and training requirements, these organizations saw Iowa's experience as an indication of how welfare recipients might be affected by the sudden loss of cash benefits, as would occur under broader time limits. Reporters from The Wall Street Journal and The Los Angeles Times inquired as to whether the evaluation of welfare reform in Iowa had produced information on LBP cases whose cash assistance had been terminated. They were told that it had not. Finding little information on LBP cases whose cash assistance had ceased, reporters from The New York Times and The Chicago Tribune visited Iowa and, with considerable difficulty, located and interviewed several such cases. These efforts by the national press to gather information on the LBP and the affected welfare cases made DHS aware that interest in the LBP extended well beyond Iowa's borders.

In light of its own need for information on the LBP and strong national interest in the program, DHS was receptive to a proposal submitted by its welfare reform evaluation contractors--Mathematica Policy Research, Inc. (MPR) and the Institute for Social and Economic Development (ISED)--for a focused, systematic study of the LBP. DHS, MPR, and ISED presented the proposal to several potential sources of funding for the study. These organizations responded enthusiastically to the proposal. Four foundations and two federal government agencies provided financial support for the study, which began in October 1995. The sponsors of the LBP Study are:

• The Annie E. Casey Foundation
• The Ewing Marion Kauffman Foundation
• The Charles Stewart Mott Foundation
• The Northwest Area Foundation
• The Administration for Children and Families, U.S. Department of Health and Human Services
• The Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services

D. Research Objectives and Methodologies

At the most general level, the objectives of the LBP Study are to improve our understanding of the characteristics of FIP cases that are assigned to the LBP, why they are assigned, and how they fare when their benefits are terminated. Achieving these objectives requires rigorous, empirically based descriptions of LBP processes and cases. However, purely quantitative evidence cannot fully describe the LBP. Qualitative information is necessary to convey a more intimate picture of the families affected by the LBP. Therefore, this study uses both quantitative and qualitative information to describe the LBP and the cases assigned to it.

At a more specific level, the LBP Study has three sets of objectives, each of which is addressed through a different research methodology. The first set of objectives for the study is to describe the flow of FIP cases through the LBP. This includes documenting the routes by which FIP cases enter and exit the LBP, describing the characteristics of all cases assigned to the LBP and of subsets of cases who pass through certain components of the program, and documenting the cash assistance and Food Stamps received by LBP cases during and immediately after their time in the LBP. To accomplish this set of objectives, we conducted descriptive quantitative analyses of data from DHS administrative files. These administrative files provide a relatively small amount of information on case characteristics and program outcomes for a relatively large number of LBP cases (more than 4,000).

The second set of objectives for the study is to describe the experiences of families that lose cash assistance under the LBP, focusing on the changes in status surrounding the loss of cash assistance, income sources and employment during the six-month period of no cash benefits, coping strategies during that period, and perceptions of the LBP. These objectives constitute the core of this study. A survey specially designed for this study (the LBP Survey) provides a relatively large amount of information on these topics for a relatively small number of families (137) whose cash assistance ended in their seventh month on the LBP. We conducted descriptive quantitative analyses of the LBP Survey data to develop a comprehensive picture of these LBP families.

The study's third and final set of objectives is to present the personal stories of a small, purposefully selected, group of LBP families about how they came to be assigned to the LBP, their interactions with program administrators, how their lives changed following the cessation of cash assistance, and how they are coping with those changes. Structured individual follow-up discussions with 12 families who participated in the LBP Survey provide the information necessary to achieve this set of objectives. We present this information in the form of a narrative analysis.

E. The Structure of this Report

This report is organized around the three sets of objectives of the LBP Study and their associated research methodologies. The next chapter is an overview of welfare reform in Iowa, giving special attention to the LBP and PROMISE JOBS. It provides the programmatic context necessary to understand the findings from the three component analyses. Chapter III describes the characteristics of LBP cases and their flow through the program. This description is based on analyses of DHS program data. Chapter IV introduces the LBP Survey of 137 families whose cash assistance had ended in their seventh month on the LBP. Chapters V and VI present findings from descriptive empirical analyses of the survey data. The former describes the status of LBP cases before and after their cash assistance ended; the latter describes their programmatic experiences while on FIP and the LBP. Chapter VII gives the personal stories of a small number of families who were assigned to the LBP, describing their efforts to adapt to life without cash assistance. Chapter VIII summarizes the findings from the LBP Study and presents the conclusions that we have drawn from them.

Return to Contents

1. As we discuss in more detail below, welfare recipients who are capable of working are required to develop plans for achieving self-sufficiency, including a date by which they will meet this goal; however, this date can be amended if life circumstances change.

2. As of November 1, 1996, this exemption was changed to a child under 3 months of age.

3. Because the LBP has major implications for the FIP case to which an assigned individual belongs, this report uses the phrase assigned to the LBP to refer to either an individual or the FIP case to which that individual belongs.

II. THE STRUCTURE AND EVOLUTION OF WELFARE REFORM IN IOWA

This chapter presents key elements in the structure of Iowa's Family Investment Program (FIP). It does this by describing the steps that clients take in entering FIP and proceeding through the PROMISE JOBS employment and training program, giving particular attention to how certain FIP clients might enter the LBP. It also discusses changes in policies related to FIP and the LBP since the implementation of welfare reform.

A. FIP, PROMISE JOBS, and the LBP

The reforms to Iowa's welfare system that are embodied in FIP emphasize the provision of employment and training services to welfare clients in order to help them become employed and move toward self-sufficiency. To facilitate this transition, DHS works closely with the Department of Employment Services (DES) and the Department of Economic Development (DED), which jointly operate the PROMISE JOBS program.⁽¹⁾ This program is staffed by workers from DES and from the Job Training Partnership Act (JTPA) agency in DED. DES workers focus on employment and JTPA workers focus on education and training.

Assignment to the LBP is primarily a consequence of not complying with FIP requirements for participation in PROMISE JOBS. In order to understand how and when FIP clients enter the LBP, it is necessary to understand how clients proceed from DHS to PROMISE JOBS, and through the employment and training services. Figure II.1 shows that the process begins when a potential client applies for FIP and goes through an intake interview at DHS. Those who are determined to be both eligible for FIP and mandatory participants in PROMISE JOBS are referred to the latter program. At PROMISE JOBS, clients attend an orientation meeting where the employment and training program is explained. They then go through an assessment which determines their aptitude, career interests, and barriers to employment. The next step is to work with a PROMISE JOBS caseworker to develop and sign an FIA, which is an individualized employment and training plan. At this point, clients begin the various employment and training activities offered by PROMISE JOBS. FIP clients who do not comply with PROMISE JOBS requirements are assigned to the LBP.

1. Determination of FIP Eligibility and Referral to PROMISE JOBS

DHS determines the eligibility of applicants for cash assistance, which is provided through FIP, and reviews the eligibility of ongoing FIP clients. After eligibility has been determined, FIP clients whose participation in PROMISE JOBS is mandatory are notified that they must contact PROMISE JOBS to schedule an orientation. Under the old AFDC program, welfare recipients were notified regarding the date and time that they were to report for orientation, but under FIP it is the client's responsibility to schedule an orientation appointment with PROMISE JOBS. After FIP clients are notified of their mandatory status by a letter from DHS, they have ten days to call PROMISE JOBS and set up an appointment.

2. PROMISE JOBS Orientation and Assessment

Clients who go to PROMISE JOBS first attend an orientation meeting and complete an initial assessment. These may occur on the same day. Orientation is typically a group, rather than an individual, activity. Staff members from JTPA and DES, sometimes accompanied by a representative of DHS, describe the PROMISE JOBS participation requirements and the benefits of participation. Topics covered include program components (for example, job search and postsecondary education), the FIA, and the LBP. Immediately following the orientation, FIP clients complete self-assessment forms. They then meet individually with staff members to discuss their goals and barriers to employment, and to receive their assignments to specific PROMISE JOBS workers.

Clients who have no prohibitive barriers to further PROMISE JOBS participation but are unlikely to immediately secure employment generally go through further assessment at a later date. This consists of exercises such as literacy and aptitude testing, self-esteem building, interest assessment, and goal setting. This additional assessment may take place before or after the FIA is written, but it usually takes place before that activity, so that the results can be used in developing the FIA.

3. The Family Investment Agreement

All FIP clients who are mandatory participants in PROMISE JOBS are required to work with their case workers to develop and sign an FIA. The FIA specifies the client's plan for becoming self-sufficient in a specified amount of time. The FIA includes intermediate goals and the activities in which the client will participate to reach those goals as well as the ultimate goal, self-sufficiency. The FIA also includes time frames for activities and for achieving goals.

The FIA is a contract between a FIP client and the state; both parties are responsible for fulfilling its terms. While the FIP client agrees to follow the FIA, the state agrees to assist the client by providing services (such as job training) and financial assistance with child care and transportation costs.

FIP clients who are cooperating with PROMISE JOBS may modify their FIAs at any time if their life circumstances change. Allowable FIA modifications include (1) an extension of a deadline for completing of an activity or achieving of a goal, (2) a change in activities, and (3) a change in goals. The ability to modify the FIA makes it possible for clients and for PROMISE JOBS to respond to altered circumstances or the emergence of new barriers to employment. It also allows clients to try one type of activity (for example, college) and then change to another (such as employment) if the first activity does not work out as planned.

4. PROMISE JOBS Components

After signing an FIA, FIP clients begin to participate in PROMISE JOBS components, as shown in the middle of Figure II.1. These fall into three categories:

Education components include:

• Adult Basic Education (ABE), English as a second language (ESL), high school completion, and general equivalency diploma (GED)
• Postsecondary education, vocational training, and entrepreneurial training

Employment components include:⁽²⁾

• Work Experience Program (WEP) and unpaid community service (UCS)
• Job-readiness skills (called job club)
• Job search
• Monitored employment (unsubsidized)

Social and supportive services components include:

• Parenting classes
• Family development services
• Other counseling, such as referrals for mental health or substance abuse counseling

Clients who do not have a high school degree are encouraged to enter high school completion or GED programs or to return to high school (if they are of high-school age). Those who need tutoring in basic skills before they can start one of these programs may enter ABE. Those whose native language is not English and need help with their English language skills may enter the ESL program. Teenage parents without high school degrees are required to participate in one or the other of these programs. Clients who desire and are approved for more advanced education or vocational training typically attend classes at a local community college or state or private baccalaureate institution.

WEP and UCS are designed primarily for clients who have little or no work history or who want to gain experience to enter a new career. Clients in WEP and UCS work as volunteers, generally in not-for-profit organizations or government offices. The difference between WEP and UCS is that WEP placement is arranged by PROMISE JOBS, while UCS placement is arranged by the client.

Clients' first step toward paid employment is often attending job club, where resume writing, job search techniques, interviewing skills, and basic work habits are taught. They then move to the job search component, where they receive information about current job openings and are required to apply for a specified number of jobs each week. There are three types of job search: group job search (for those who go through job club), individual job search, and self-directed job search. The latter two types of job search are less structured than the former. Clients typically progress from more to less structured job search, but those with good job search skills and a high likelihood of moving rapidly into employment may proceed directly into the less structured job search components. Clients who obtain jobs are placed in monitored employment, which is an initial period of employment during which wages and job participation are monitored by PROMISE JOBS.

Some employed FIP recipients are eligible for the Work Transition Period (WTP), which is a four-month period during which clients receive both the full FIP check and their earnings.⁽³⁾ After the WTP, the FIP check is reduced in relation to earnings, but the substantial earnings disregards under the state's welfare reform allow many employed clients to continue to receive some cash benefits.

5. Assignment to the LBP

FIP clients may volunteer for assignment to the LBP or, more commonly, they may be assigned to the LBP as a consequence of not participating in PROMISE JOBS. Whether the assignment is voluntary or involuntary is of no administrative significance.⁽⁴⁾ Administratively, what is important is the timing of assignment to the LBP relative to the signing of an FIA. There are important differences between a pre-FIA LBP and a post-FIA LBP that relate to the client's rights to reconsideration of the LBP assignment.

If a FIP client does not make an appointment with PROMISE JOBS for orientation and assessment, or if the client makes an appointment but fails to attend and does not contact the worker to reschedule the meeting, then the client is assigned to the LBP. Alternatively, if the client complies by attending orientation and assessment, but fails to develop and sign an FIA, the client is also assigned to the LBP. In either case, the LBP is referred to as a pre-FIA LBP because the LBP assignment is made before the FIA is written. This kind of LBP is less severe than a post-FIA LBP because the client has two opportunities to reconsider cooperating with PROMISE JOBS, thus resulting in an immediate resumption of full FIP benefits. ⁽⁵⁾ Reconsideration may occur during the first 45 days of the LBP and during the fifth and sixth months of the LBP.

If a FIP client signs an FIA but never shows up for the required activities--that is, job club, volunteer work experience, postsecondary education, and so forth--or if the client otherwise fails to follow through with the FIA plans, he or she is also assigned to the LBP. This is referred to as a post-FIA LBP. Clients who "abandon" their FIAs in these ways have no reconsideration opportunities.

The LBP assignment process is less involved for pre-FIA LBPs than for post-FIA LBPs. The pre-FIA LBP is administratively quite simple and can be implemented directly by PROMISE JOBS staff, who have

access to the necessary computer screens.⁽⁶⁾ A pre-FIA LBP assignment is implemented by PROMISE JOBS only after the caseworker has sent a client two notices warning of the pending assignment to the LBP. A post-FIA LBP is more difficult to implement. The PROMISE JOBS caseworker again must send a client two notices warning of the pending LBP assignment. However, for these LBPs, the caseworker's supervisor must also send a notice. If no reply to these notices is received, PROMISE JOBS sends the LBP assignment request to the DHS central office in Des Moines, where it is reviewed by a specially designated staff member for post-FIA LBP assignments. This review protects clients and their families by ensuring consistent application of post-FIA LBP policies.

B. Policy Changes in FIP and the LBP

There have been a number of changes in FIP and the LBP since the implementation of welfare reform in October 1993. Several of the changes have affected the activities that can be included in FIAs and pursued with assistance from PROMISE JOBS. One such change is a restriction on access to financial assistance for postsecondary education that was caused by budget concerns; this restriction led to an increased emphasis on employment in FIP. Another change is the expansion of access to existing PROMISE JOBS components and the introduction of several new components. In addition, changes in the LBP have occurred through a formal redesign of the plan as well as informal evolution in the administration of the plan. A change outside of FIP, but with bearing on FIP clients, is the rationing of access to certain state-administered child care assistance.

1. Focus on Employment

As designed, FIP balances the emphasis on employment and education/training ("human investment") as routes to self-sufficiency. However, as implemented, the program stresses employment. The most notable manifestation of this shift in focus from education/training to employment is the existence of a waiting list for PROMISE JOBS assistance with postsecondary education. This waiting list for financial assistance with tuition, child care, and transportation costs was established only 15 days after the October 1, 1993, implementation of FIP.⁽⁷⁾ In 1994, PROMISE JOBS administrators authorized a total of 5,000 postsecondary classroom education slots for FIP participants. No additional slots were authorized in 1995, but 750 new slots were authorized in 1996.

FIP clients whose FIAs reflect their desire to pursue postsecondary education put their names on the waiting list for PROMISE JOBS assistance. While on the waiting list, they may pursue higher education on their own by applying for a Pell Grant and paying for any remaining tuition, child care, and transportation expenses out of their own resources. To satisfy PROMISE JOBS participation requirements, those on the waiting list must choose another activity until education slots become available, unless they are able to pursue postsecondary education on their own.

2. Changes in PROMISE JOBS Components

The tightly limited access to postsecondary education through PROMISE JOBS increased the demand for alternative training activities. The state responded to this in two ways in the spring and summer of 1996. First, it raised and then eliminated ceilings on enrollments in WEP and UCS. Second, it implemented a new PROMISE JOBS component, On-the-Job Training, and shortly thereafter eliminated the ceiling on enrollment in that component. In addition, the state responded to the pent-up demand for postsecondary education by allowing FIP participants to fulfill the PROMISE JOBS participation requirements through a combination of part-time education and part-time employment. This change makes it more feasible for clients to pursue postsecondary education without funding through PROMISE JOBS.

3. Formal Redesign of the LBP

The February 1996 implementation of the redesigned LBP was an important change in Iowa's welfare policy. It did not affect the LBP clients who are the basis for this study because they had entered the LBP under the old rules, which continued to apply to them. Nevertheless, understanding the LBP redesign is critical to understanding the evolution of Iowa's welfare policy.

Before the redesign, DHS and PROMISE JOBS caseworkers had reported to their supervisors that the LBP was complex, difficult to explain and understand, and often not taken seriously by clients until their benefits were reduced. Clients were confused because they were notified of their assignments to the LBP, but their cash grants were not reduced until three months later, after many had forgotten the notification or the reason for the action. Consequently, lawmakers changed the LBP. FIP recipients who entered the LBP after January 31, 1996, are subject to the rules of the redesigned LBP.

The redesigned LBP more clearly and immediately reinforces the notion that there are consequences for noncompliance with PROMISE JOBS participation requirements. Under the redesigned LBP, cash benefits are reduced immediately--rather than after three months--and are terminated following these three months of reduced benefits. For the first three months, the family receives cash benefits based only on the children in the family; the noncooperating adults are excluded from the benefit calculation. After this three-month period, cash benefits are terminated and the family remains ineligible for cash benefits for six months. The entire three-month period of reduced FIP benefits is a reconsideration period for those assigned to the LBP prior to signing an FIA. As under the old LBP, there are no reconsideration rights for those assigned to the LBP after signing an FIA.

The design changes in the LBP also acknowledge that some FIP recipients may enter the LBP more than once. Under the redesign, if a client enters the LBP, returns to FIP, and then re-enters the LBP, there is no period of reduced cash benefits, the client is immediately ineligible for cash benefits for a period of six months, and there is no reconsideration period. This design applies to all second and subsequent LBP assignments. The goal of this policy is to send a stronger message to those who have already been through the LBP that receipt of cash assistance is contingent on participation in PROMISE JOBS.

4. Informal Evolution of the LBP

The LBP has also evolved in less formal ways. Initially, caseworkers were instructed to present the LBP as an alternative to FIP for clients who expected to need only temporary assistance. The caseworkers informed the DHS central office that they were not comfortable advising these clients to select the LBP. Their discomfort stemmed from the recognition that these clients' expected needs for temporary assistance were frequently not realized. The result of this was a shift away from advising these clients to select the LBP. However, this evolution in the administration of the LBP has not addressed the risk associated with those clients who expect to need only temporary assistance and who enter the LBP without communicating with their caseworkers.

5. Rationing of Access to Child Care

The State Child Care Assistance Program, which is separate from FIP, is funded by the federal Child Care and Development Block Grant and by state appropriations. Historically, FIP clients who are on the waiting list for PROMISE JOBS postsecondary education assistance and are using alternative financing to attend college have relied on the State Child Care Assistance Program to help defray the child care component of college costs. Access to assistance through this program was rationed beginning in July 1995. The rationing initially took the form of a waiting list and subsequently took the form of more restrictive eligibility criteria. Rationing makes it more difficult for many FIP clients to obtain assistance with child care expenses, thereby increasing the cost of attending college for those without PROMISE JOBS postsecondary education assistance.

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1. In July 1996, the Department of Employment Services and parts of the Department of Economic Development were combined to form a new department called Iowa Workforce Development.

2. An On-the-Job-Training component was added July 1, 1996.

3. FIP applicants and participants who start new employment (or self-employment) may receive up to four months of full FIP benefits if: (1) they had less than $1,200 in gross earnings in the 12 months before the month in which the new employment began; (2) they report the new employment in a timely manner; and (3) the new employment begins after the date of application.

4. DHS views all assignments to the LBP as voluntary; in particular, entry into the LBP is viewed as a "choice" based on either actions or inactions of the client.

5. Under the redesigned LBP implemented in February 1996, the pre-FIA LBP provides only one opportunity to reconsider; this is during the three months of reduced benefits.

6. Occasionally a more complex pre-FIA LBP assignment will require technical assistance by the DHS central office. Examples of cases requiring technical assistance are (1) cases for which the computer system (IABC) cannot determine which persons on cash assistance should be in an LBP and (2) cases that need to have a partial or individual LBP entered.

III. THE FLOW OF CASES THROUGH THE LBP

One of the three main components of the LBP Study is an analysis of the flow of cases through the LBP. This analysis, which we refer to as the flow analysis, has four research objectives: (1) to document reasons for assignment to the LBP, (2) to describe the characteristics of cases assigned to the LBP, (3) to describe paths out of the LBP, and (4) to document the receipt of FIP and Food Stamp benefits over time by cases assigned to the LBP.

The flow analysis relies exclusively on administrative, or program, data from the Iowa DHS. In particular, data from several LBP and FIP program files are used to measure various aspects of the LBP assignment, individual and case characteristics, and the receipt of FIP and Food Stamp benefits. The sample for the analysis consists of all cases with first assignments to the LBP starting in the six month period from November 1994 through April 1995.

A. Data Sources

The flow analysis is based on three administrative data files. The core data file is the LBP Master File, Iowa's administrative file on LBP assignments. This is supplemented with data from the Iowa Automated Benefit Calculation (IABC) System Case Master File and the IABC Individual Master File, which provide case- and individual-level data on welfare clients and applicants.

1. LBP Master File

The LBP Master File is a cumulative data file that contains information on each assignment ever made to the LBP. The file is structured by assignment, with one record per individual per assignment to the LBP. For each assignment, the file provides key program information pertaining to the LBP. Four data elements in this file are of particular interest in the flow analysis: the reason for assignment, the starting date of the assignment, the reason for cancellation, and the date of cancellation. The file also includes the name and state identification number of the individual assigned to the LBP and the IABC case number of his or her case. These identification numbers act as direct links to data in the IABC Case Master and Individual Master Files.

2. IABC Case Master File

The IABC Case Master File is a monthly data file that provides current and historical information on each family that is participating in, or has applied for, FIP.⁽¹⁾ This file is organized by welfare benefit unit, or case, with one record per case. The file includes the IABC case number and name of the case-name person (the person in whose name the benefit check is issued). These identifiers provide links to data in the LBP Master File and the IABC Individual Master File.

For the flow analysis, the Case Master File provides data on FIP and Food Stamp receipt by cases assigned to the LBP. In particular, the file provides monthly FIP and Food Stamp benefit histories for the period surrounding the LBP assignment.

3. IABC Individual Master File

The IABC Individual Master File is a monthly data file that provides information on each individual belonging to a case included in the Case Master File. The file includes the individual's state identification number and the IABC case number of his or her case. These identifiers provide links to data in the LBP Master File.

For the flow analysis, the Individual Master File provides measures of demographic characteristics of the individual assigned to the LBP. These include the age, race/ethnicity, gender, marital status, and education of the individual assigned to the LBP. In addition, it provides information on several case-level characteristics, including the number of persons, the number of children in the case, and the age of the youngest case member; these are measured by aggregating the data over individuals in the same case.

B. Sample for the Flow Analysis

The sample for the flow analysis is defined primarily by the starting date of the LBP assignment. In particular, the sample consists of each case with a first assignment to the LBP starting between November 1994 and April 1995 inclusive. The following discussion covers several issues in the sample design.

1. Sample Window

The flow analysis centers on cases with LBP assignments starting during a certain time period, or sample window. Our choice of the length and timing of this sample window was guided by three considerations. First, we wanted a window long enough to yield a sample that would be large enough to support subgroup analyses, such as a comparison of characteristics across cases that took different paths through the LBP. Second, we wanted a window short enough to make the data collection process efficient and economical given our objective to extract: (1) monthly case benefit histories for the 12-month LBP term and several months after this term from the IABC Case Master File, and (2) demographic characteristics measured near the starting date of the LBP from the IABC Individual Master File. The longer the window, the more versions of these files must be accessed to obtain these data. Third, we faced calendar constraints on the first and last months of the window. In particular, we wanted the first month to be late enough in LBP operation that the program and its data systems were fully implemented for the earliest assignments in our sample. At the other end, we wanted the last month to be early enough in time that we could follow each case for the full 12-month LBP period and three subsequent months.

Taking these factors into account, we selected a six-month sample window beginning in November 1994 and ending in April 1995. This window allowed us to obtain data from just the June 1995 and March 1996 versions of the Case Master File.⁽²⁾ It also allowed us to use only two versions of the Individual Master File (December 1994 and March 1995) to obtain data within one month of the LBP starting date.

2. Unit of Analysis

The primary unit of analysis for the flow analysis is the case, or welfare benefit unit. Although assignments to the LBP are made for an individual, the LBP assignment affects the entire case to which that individual belongs, as cash assistance to the case is reduced and then terminated.⁽³⁾ In light of this, we have structured the flow analysis around the case, reporting on the analysis in terms of cases assigned to the LBP, or LBP cases.

To obtain a unique observation per case in the sample for the flow analysis, it was necessary to address the possibility of multiple assignments to the LBP. Multiple assignments can happen for two reasons: (1) repeat assignments, in which a case is reassigned to the LBP after the initial assignment has ended, and (2) concurrent assignments, in which two individuals in a given case, such as a husband and wife, are assigned to the LBP at the same time. We eliminated multiple records per case as follows. First, we restricted our sample to initial assignments to the LBP; that is, we included only cases having an LBP assignment in the sample window and having no LBP assignment prior to that one.⁽⁴⁾ This eliminated multiple observations arising from repeat assignments. Second, to eliminate multiple observations arising from concurrent assignments, we selected the single record associated with the case-name person.⁽⁵⁾

3. Resulting Sample

Table III.1 presents the sample for the flow analysis. The total number of LBP cases in the sample is 4,224. As mentioned above, the sample includes one observation per case for each case with a first assignment to the LBP starting in the six-month period from November 1994 through April 1995.⁽⁶⁾ During this period, an average of 704 assignments started each month, with a low of 551 in December 1994 and a high of 841 in February 1995.

The 4,224 first assignments to the LBP made during the six-month sample window represent approximately 22 percent of LBP assignments made in the twenty-seven month period from April 1994 (the first month of LBP assignments) through May 1996. The average number of cases starting the LBP per month from April 1994 through May 1996 was approximately 644. This is 60 cases fewer than the average in the six-month sample window of November 1994 through April 1995. This lower average reflects a reduction over time in the number of cases assigned to the LBP that parallels an overall reduction over time in the FIP caseload.

C. Reasons for Assignment to the LBP

Table III.2 presents reasons for assignment to the LBP. Nearly all LBP assignments are the result of failure to take the steps necessary to develop and sign an FIA, as opposed to failure to fulfill requirements once an FIA has been signed. Pre-FIA assignments, that is, assignments made before an FIA has been signed, account for 97 percent of LBP assignments.

Among the specific, administrative reasons for assignment to the LBP, the most common is failure to keep the required appointment with PROMISE JOBS.⁽⁷⁾ Approximately 58 percent of LBP assignments are made for this reason. Another 31 percent of LBP assignments are made because of failure to arrange the required PROMISE JOBS appointment in the first place. Thus, a total of 89 percent of LBP assignments result from failure either to make or to keep the required PROMISE JOBS appointment.⁽⁸⁾ This represents a high level of noncompliance in the initial stages of the process of developing and signing an FIA. In comparison, only 8 percent of assignments result from noncompliance after individuals attend the PROMISE JOBS appointment but have not yet signed an FIA.

D. Characteristics of LBP Cases and Individuals

Table III.3 presents descriptive statistics on the characteristics of LBP cases and individuals. There is roughly an equal proportion of cases with one, two, and three or more children, respectively:

33 percent include one child, 31 percent include two children, and 36 percent include three or more children. In approximately 71 percent of cases, the youngest person is a child between the ages of 0 and 5 years; in 45 percent of cases, the youngest member is less than 3 years old; and in 26 percent of cases, the youngest member is 3 to 5 years old. Approximately half of the cases reside in a metropolitan area.⁽⁹⁾

In the month immediately prior to the starting date of the LBP assignment, LBP cases received an average of $343 in FIP cash benefits and $206 in Food Stamp benefits. Approximately 8 percent of LBP cases received no FIP benefit in that month, indicating that these cases exited from FIP between the time of their assignment to the LBP and the starting date of the LBP. ⁽¹⁰⁾

The individuals assigned to the LBP are predominantly white, unmarried females. Over 70 percent are currently unmarried: approximately 52 percent have never been married, and another 20 percent have previously been married (currently divorced, separated, or widowed). Just over half have completed at least a high school education. The average age of individuals assigned to the LBP is 28.5 years, and approximately 9 percent are teenagers.

E. Paths Through the LBP

Cases can take several paths following their assignment to the LBP. One important path is cancellation of the LBP assignment, which enables the case to return to FIP immediately.⁽¹¹⁾ Here, we describe the frequency of LBP cancellation and the distribution of LBP cancellations by reason for and timing of cancellation. We also describe the paths taken by cases whose LBP assignments are never canceled. These include the full 12-month LBP and two types of early exit from cash assistance.

1. Cancellation of the LBP

As shown in Table III.4, slightly more than half of the assignments (53 percent) are canceled at some point. In Table III.5, we focus on the LBP assignments that are canceled. The primary reason for cancellation is signing an FIA. In total, nearly 80 percent of LBP assignments are canceled for this reason.

The remaining cancellations are primarily the result of corrections, appeals, or other administrative actions.⁽¹²⁾

Just over one-quarter (26 percent) of cancellations occur before the LBP takes effect, and essentially all of these cancellations are because the client reconsiders and signs an FIA. Another 55 percent of assignments are canceled by the signing of an FIA during one of the two reconsideration periods once the LBP is in progress. Approximately 30 percent of assignments are canceled in the first FIA reconsideration period, which is the first 45 days of the LBP, while approximately 25 percent are canceled in the second FIA reconsideration period, which is the fifth and six months of the LBP.

2. Never-Canceled LBP Assignments

Forty-seven percent of LBP assignments are never-canceled and are thus subject to the full LBP term, including the six-month period of ineligibility for cash assistance during months 7-12. To describe the paths taken by these cases, we examined their monthly receipt of FIP benefits. Table III.6 displays the number and percentage of these cases that exhibit several distinct paths through the LBP. Approximately 64 percent of never-canceled LBP cases exhibit a pattern of FIP benefit receipt that suggests an exit from cash assistance before the six-month period FIP ineligibility, we refer to this as an early exit. We identified two early exit paths: (1) approximately two-fifths of early exits occur before the starting date of the LBP,⁽¹³⁾ and (2) approximately three-fifths occur after the LBP starting date but before the point of benefit termination.⁽¹⁴⁾ The remaining 36 percent of never-canceled LBP cases exhibit a third path. Their pattern of benefit receipt is consistent with the full 12-month LBP term. In particular, these cases receive cash benefits during the first six months of the LBP but do not receive them in the second six months of the LBP, the FIP ineligibility period.⁽¹⁵⁾

F. Characteristics by Path Through the LBP

The groups of LBP cases that take different paths through the LBP following assignment differ by case- and individual-level characteristics. Here, we compare canceled LBP cases with never-canceled LBP cases. Also, among never-canceled LBP cases, we compare cases that exit early--meaning that they stop receiving cash assistance prior to benefit termination under the LBP--to those that do not exit early, remaining on the LBP for the full term.

1. Characteristics By LBP Cancellation Status

There are no large differences between the characteristics of the 53 percent of LBP cases whose assignments to the LBP are canceled, enabling them to return to FIP, and the 47 percent whose assignments are never-canceled (Table III.7).⁽¹⁶⁾ However, there is a pattern in the differences that do exist. On average, the cases and individuals with canceled LBP assignments appear to be somewhat more disadvantaged than those with never-canceled assignments. In particular, cases with canceled LBP assignments tend to have slightly more people, more children, and younger children than cases with never-canceled assignments. They also tend to receive higher FIP and Food Stamp benefits in the month prior to the beginning of their LBP assignment.

In terms of the specific individuals who are assigned to the LBP on these cases, those with canceled assignments are more likely than those with never-canceled assignments to be female, nonwhite, unmarried, and not to have completed high school; they are also younger. These differences in case- and individual-level characteristics, although small, suggest that cancellation of the LBP assignment, which enables the case to return to FIP, is somewhat more common among families that are more likely to have a relatively high need for cash assistance, which may be related to a relatively weak attachment to the labor force. We suspect that this need for assistance motivates these families to take the steps required to cancel the LBP assignment so that they can return to FIP.

2. Characteristics by Early Exit Status

Among cases with never-canceled LBP assignments, one distinct path is early exit, by which we mean exit from cash assistance prior to the termination of benefits under the LBP (month 7). Here, we examine how the 64 percent of never-canceled LBP cases that exit early differ from those that do not exit early (those that have benefit patterns consistent with 12 months on the LBP). Table III.8 presents summary statistics on the characteristics of these two groups of never-canceled LBP cases.⁽¹⁷⁾

Here again, there are no large differences between the two groups of interest, but there is some evidence of a pattern in the differences that do exist. The never-canceled LBP cases that exit early appear to be somewhat less disadvantaged than those that do not exit early. On average, the never-canceled cases that exit early tend to have slightly fewer people overall and fewer children, and to receive lower FIP and Food Stamp benefits in the month prior to the beginning of their LBP assignment than those that do not exit early. The individuals specifically assigned to the LBP on the never-canceled cases that exit early are somewhat more likely than those on cases that do not exit early to be male, white, married, and to have completed high school; they are also slightly older.⁽¹⁸⁾

G. Monthly Patterns of FIP Benefit Receipt During and After the LBP

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

1. Monthly Patterns of FIP Receipt

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

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

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

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

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

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

H. Characteristics by Return to FIP

There are no large differences between the characteristics of the approximately 20 percent of never-canceled cases that return to FIP in the three months after the end of the LBP period and the approximately 80 percent that do not return to FIP in these months (Table III.11).⁽²²⁾ However, there is a pattern in the differences that do exist, and this pattern is similar to the pattern of differences between canceled and never-canceled LBP cases. Recall that canceled LBP cases on average appear to be somewhat more disadvantaged than never-canceled cases. Similarly, never-canceled LBP cases that return to FIP after the 12-month LBP appear to be somewhat more disadvantaged than never-canceled LBP cases that do not return to FIP. In particular, the cases that return have slightly more people and more children, and they receive higher FIP and Food Stamp benefits in the month prior to the beginning of the LBP assignment than cases that do not return. In addition, the specific individuals assigned to the LBP on never-canceled LBP cases that return to FIP are somewhat more likely than those on cases that do not return to be female, nonwhite, unmarried, and to have completed high school; they are also younger. Taken together, Tables III.7 and III.11 suggest that individuals from less advantaged demographic groups (unmarried, females, nonwhites, less educated) with larger households and more young children are somewhat more likely than those from more advantaged groups to return to FIP after being assigned to the LBP--either through cancellation of the LBP assignment or after completing the LBP term.

I. Monthly Patterns of Food Stamp Receipt and Benefit Levels

In this section, we describe monthly patterns of Food Stamp benefit receipt and benefit levels over time for cases assigned to the LBP.

1. Monthly Patterns of Food Stamp Receipt

Table III.12 shows the monthly pattern of Food Stamp benefit receipt for all cases assigned to the LBP and for the two groups defined by whether the LBP was ever canceled. The patterns in receipt of Food Stamp benefits are broadly consistent with the patterns in receipt of FIP benefits shown in Table III.9. In each month, cases with canceled LBP assignments are more likely than cases with never-canceled assignments to receive Food Stamp benefits. From month to month, there are also smaller declines in the percentage of cases that receive Food Stamps for cases with canceled LBP assignments than for cases with never-canceled assignments.

While never-canceled LBP cases are not eligible for any FIP cash benefits during months 7-12 of the LBP, there is no such restriction on their receipt of Food Stamps. When eligibility for FIP ends in LBP month 7 for never-canceled cases, the incidence of Food Stamp receipt in this group declines slightly, from 45 percent to 42 percent. During the six-month period of ineligibility for FIP benefits, the percentage of never-canceled LBP cases that receive Food Stamps declines gradually from 42 percent to 35 percent. The lack of increased participation in the Food Stamp program among never-canceled cases when they are ineligible for FIP is consistent with the hypothesis that these cases are relatively less disadvantaged. In the first three months of renewed eligibility for FIP following the LBP, receipt of Food Stamps by never-canceled cases remains constant at approximately 35 percent.

2. Food Stamp Benefit Levels and the Safety Net Hypothesis

Food Stamp benefits may provide a safety net, or cushion, for families when their FIP benefits are reduced and subsequently terminated under the LBP. That is, the Food Stamp benefit level may increase, and as a result may offset some of the decline in household economic resources caused by the loss of FIP benefits. While any such increase in Food Stamp income moderates the household's decline in resources, it also dilutes the incentive effects of the LBP.

Since the potential Food Stamp safety net is most relevant to those cases that experience both the reduction and termination of FIP benefits, we focus the present analysis on the subset of LBP cases that experience these two events--these are the never-canceled LBP cases that exhibit a pattern of FIP receipt consistent with the full 12-month LBP term (full-term LBP cases). To determine whether Food Stamp benefits provide a safety net for full-term LBP cases when FIP benefits are reduced and terminated, we examine the average Food Stamp benefit received on a month-by-month basis. We do this in two ways: (1) for the subset of full-term cases receiving Food Stamps in the current month for LBP months 1-12, and (2) for the subset of full-term cases receiving Food Stamps in all twelve months of the LBP. The results are presented in Table III.13.

There is evidence that Food Stamps provide a small safety net. In particular, there are increases in Food Stamp benefit levels for full-term LBP cases when their FIP cash benefits are reduced and terminated, but these increases are modest. For current month Food Stamp recipients, the average Food

Stamp benefit in months 1-3 of the LBP, when FIP benefits are level, is approximately $247. Then, when FIP benefits are reduced in month 4, the average Food Stamp benefit of current month recipients increases by $21 (9 percent) and remains at this higher level during the three months of reduced benefits (months 4-6). Finally, when FIP benefits are terminated in month 7, the average Food Stamp benefit increases by $25 (9 percent), from $271 in month 6 to $296 in month 7. Throughout the FIP ineligibility period (months 7-12), Food Stamp benefits of full-term LBP cases remain consistently higher than in the earlier months of the LBP, although they tend to decline slightly over time.

One potential critique of the above findings is that the observed increases in Food Stamp benefits among current month recipients over the course of the LBP could to some extent be driven by changes in the composition of Food Stamp recipients. In particular, if less needy cases leave the Food Stamp program over time, the remaining Food Stamp recipients would have higher average benefits aside from any safety net effect. The fact that the increases in Food Stamp benefits so closely match the timing of the FIP reduction and termination under the LBP leads us to believe compositional changes are unlikely to be driving the results. To confirm this, we examine average Food Stamp benefits for the restricted sample of full-term LBP cases that received Food Stamps in all twelve months of the LBP. Since the composition of this sample does not change over time, we can gauge whether compositional changes are driving the increases in Food Stamp benefits observed for current month Food Stamps recipients. It appears that they are not. As shown in the last column of Table III.13, the pattern of Food Stamp benefits is the same for twelve-month recipients as for the current month recipients. In particular, benefits are relatively level in months 1-3, increase $29 (11 percent) in month 4 when FIP benefits are reduced, remain level in months 4-6, increase $32 (11 percent) in month 7 when FIP benefits are terminated, and remain higher (though decline slightly) throughout the FIP ineligibility period. Hence, we conclude that Food Stamps provide a modest safety net for some LBP cases.

J. Summary of Findings

The flow analysis uses administrative data from the Iowa DHS to examine reasons for assignment to the LBP, characteristics of LBP cases, paths out of the LBP, and the receipt of FIP and Food Stamp benefits by LBP cases. Several major findings emerge from this analysis:

• Nearly all LBP assignments are made because the client fails to take the steps necessary to develop and sign an FIA. Most often the client fails to make or keep the required PROMISE JOBS appointment.
• Slightly more than half of LBP assignments are canceled. The vast majority of cancellations occur because the client reconsiders and signs an FIA.
• Most cases with never-canceled LBP assignments exit early--that is, they stop receiving FIP cash assistance before they reach the six-month FIP ineligibility period of the LBP.
• On average, cases with canceled LBP assignments tend to be more disadvantaged than cases with never-canceled LBP assignments; however, the differences between the groups are not large.
• Relatively few cases exposed to the full LBP term return to FIP within three months of regaining eligibility for cash assistance. On average, cases that do return to FIP tend to be more disadvantaged than those that do not return, although the differences between the groups are not large.
• Although eligibility for Food Stamps is retained when cash benefits are reduced and terminated under the LBP, participation in Food Stamps decreases at these points, with relatively larger decreases among never-canceled LBP cases.
• When FIP cash benefits are reduced and subsequently terminated for cases continuing in the LBP, Food Stamp benefits increase modestly for those receiving Food Stamps. This suggests that Food Stamps provide a small safety net for some LBP cases.

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1. The file also includes information on families that are not in the FIP program but are participating in, or have applied for, Food Stamps or Medicaid. This analysis is restricted to families in the FIP program.

2. A small amount of additional case-level data was obtained from the June 1996 Case Master File, which became available late in the study.

3. In 98 percent of LBP assignments during the sample period, the assignment covered all members of the individual's case.

4. There were 112 LBP assignments in the sample window that were not first assignments to the LBP. Exclusion of these cases brought our sample size down from 4,374 to 4,262.

5. There were 30 cases with multiple records per case with the same starting date in the sample window. Exclusion of these cases brought our sample size from 4,262 to 4,232.

6. Eight observations were excluded due to missing data on key variables of interest. This brought our sample size from 4,232 to 4,224.

7. As mentioned in Chapters 1 and 2, some cases volunteer for assignment to the LBP. The administrative reason for assignment coded for such cases depends on the stage in the FIA process at which they volunteer for the LBP.

8. Even accounting for some voluntary assignments, these findings may suggest that the PROMISE JOBS appointment is the major hurdle in signing the FIA and, in turn, that efforts to facilitate these appointments would be very effective in increasing compliance with the FIA requirement. These results are consistent with the LBP Survey data, which suggests that there is some confusion or lack of understanding about the requirement that the welfare client arrange and attend PROMISE JOBS appointment. They are also consistent with finding that some welfare clients (20 percent of LBP Survey respondents) voluntarily enter the LBP; it is likely that these individuals make an intentional decision not to arrange or keep the PROMISE JOBS appointment.

9. This is defined as residing in a county designated as a Metropolitan Statistical Area (MSA). An MSA must include one city with 50,000 or more inhabitants or a Census Bureau-defined urbanized area of at least 50,000 inhabitants and a total metropolitan population of at least 100,000.

10. There is typically a lag between the date that the LBP assignment is made and the date it takes effect (the starting date).

11. A case whose LBP assignment is not canceled may return to FIP only following the completion of the full term of the LBP (12 months).

12. A small number of observations (52) have no cancellation code in the LBP Master File, but show evidence of cancellation in that they receive FIP benefits in at least two of the months of the FIP ineligibility period of the LBP.

13. In particular, these cases have stopped receiving FIP benefits by the first month of their scheduled LBP assignment and do not receive FIP during the first six months of that assignment.

14. One possible explanation for an early exit from FIP is that the household has raised its income through employment following assignment to the LBP. However, we have no data on earnings for these households and can only speculate as to the role of employment in the early exits.

15. More specifically, these cases have either (1) continuous receipt of FIP benefits during months 1-6 of the LBP and no FIP benefits during months 7-12, or (2) sporadic receipt of FIP benefits during months 1-6 of the LBP and no FIP benefits during months 7-12, as long as there are two months of continuous receipt of FIP benefits preceding the period of no benefits.

16. In Appendix Table A.1, we present the expanded set of characteristics that are in Table III.3 for the two subgroups analyzed here.

17. In Appendix Table A.2, we present the expanded set of characteristics that are in Table III.3 for the two subgroups analyzed here.

18. These differences are consistent with our earlier suggestion that early exits may be correlated with an increase in employment and earnings (see footnote 12). Specifically, the characteristics of those that exit early, relative to those that do not, are suggestive of higher labor force participation and attachment; however, since we have no data on earnings for these households we can only speculate on this issue.

19. Table III.9 presents results for FIP benefit receipt in individual months of the LBP without reference to other months. This differs from the analysis of paths through the LBP for never-canceled cases (Table III.6), which focuses on patterns in benefit receipt across months.

20. In addition, some of these cases are: (1) canceled LBP cases, and (2) other never-canceled LBP cases that have benefit receipt that is generally consistent with 12 months on the LBP but includes some sporadic receipt in months 1-6, including none in month 1.

21. This implies that 28 percent are not receiving FIP as of month 1. This is slightly higher than the percent of never-canceled LBP cases (26 percent) that are classified as exhibiting an early exit before the LBP starts (Table III.6). This can be explained by the fact that a small number of the never-canceled LBP cases that are classified as having FIP benefit receipt consistent with the 12-month LBP do not actually receive FIP benefits in month 1 of the LBP (this is explained further in the notes to Table III.6).

IV. THE SURVEY OF CASES WHOSE CASH ASSISTANCE WAS TERMINATED

Chapter I identified three sets of objectives for the LBP Study. The second set of objectives represents the core of the study--that is, to describe the experiences of cases that lose cash assistance under the LBP and document their status shortly before and after the loss of cash assistance. DHS administrative files provide little information relevant to these objectives. The measures in these files are limited in both their content and timing; they provide only a small amount of information on client characteristics and no information on client perceptions or on the transitions that they may experience with the termination of cash assistance. To address these limitations, MPR and ISED designed and fielded a survey of welfare recipients who had had their FIP benefits terminated in month seven of the LBP and were in midst of the LBP's six-month FIP ineligibility period. This chapter describes the survey methodology, and the next two chapters present empirical findings from the survey.

A. Sampling Frame

The sampling frame for the LBP Survey consisted of individuals in active welfare cases in three PROMISE JOBS service delivery areas (SDAs) in central and eastern Iowa who, in November or December of 1995, or in January of 1996, entered month seven of their initial assignment to the LBP. These SDAs were selected to minimize the cost of field interviews, which ISED coordinated out of its Iowa City headquarters office in eastern Iowa. They accounted for 54 percent of all individuals statewide who entered month seven of the LBP during the sampling period.⁽¹⁾

Two exclusionary criteria were applied to the sampling frame on the basis of administrative data. First, individuals in cases that did not receive cash assistance in LBP month six or that did receive cash assistance in month seven were excluded from the final sample. This resulted in a survey sample that included only individuals in cases that received cash assistance in LBP month six but not in month seven. Second, when two or more individuals from the same case were present in the sampling frame, only the case-name person was selected into the sample. All 172 individuals in the sampling frame who satisfied these two criteria were selected into the survey sample.

B. Survey Methodology

The LBP Survey was a mixed-mode survey. Initial efforts were made to complete an interview by telephone; if this was unsuccessful, then an in-person interview was attempted. The telephone phase of the survey began in early February 1996 and continued until the end of March 1996. The in-person phase began in mid-March and lasted for one month. All interviews were completed during the respondents' six-month FIP ineligibility period of the LBP. More specifically, the interviews were completed during LBP months eight through twelve, with most (92 percent) being completed during LBP months nine through eleven.

A letter was sent to the last known address of each sampled individual explaining the survey, encouraging participation, and offering a $50 incentive payment to survey participants. The letter instructed the individual to call MPR's toll-free number to complete an interview or to schedule an interview for a convenient time. MPR attempted to telephone those sampled individuals who did not call the 800 number. Contact was attempted without regard for whether the sampled individual had moved either within or outside of the state.⁽²⁾ These methods yielded a high telephone interview completion rate.

When an interview could not be completed via telephone, responsibility for interviewing the sampled individual was transferred to ISED, which attempted to contact and interview the individual in person. ISED used on-call survey field staff in each of the three PROMISE JOBS SDAs to conduct the in-person interviews.

Sample members who were successfully contacted and who agreed to participate in the survey were administered a brief sequence of screener questions to confirm that the FIP case to which the individual belonged had experienced the expected pattern of cash assistance (positive in LBP month six; zero in month seven). Individuals who indicated that this pattern of cash assistance did not apply to their cases were deemed ineligible for the remainder of the interview if they also reported having received cash assistance in the survey month. Ten of the 172 sampled individuals were excluded from the full interview for this reason. Thus, the sample eligible to be interviewed consisted of 162 individuals and their associated FIP cases.

C. Survey Response Rate and Representativeness

Of the 162 sampled individuals who were eligible to be interviewed, interviews were actually completed with 137 people, or 85 percent (Table IV.1). All of these respondents confirmed that they had received cash assistance in LBP month six but not in month seven. Most of the interviews were completed by telephone (121 interviews) rather than in person (16 interviews). Interview completion times ranged from 25 to 117 minutes, with a mean completion time of 44 minutes. Interviews could not be completed with 25 sampled individuals for the following reasons:

• Thirteen individuals could not be located.
• Seven individuals could be located but could not be contacted.
• Three individuals were contacted but refused to participate in the survey.
• Two individuals began, but did not complete, the interview.

Data on a limited number of characteristics of all sampled individuals (both survey respondents and nonrespondents) and their associated FIP cases were available in DHS administrative files. These data are used in Table IV.1 to profile the 162 survey-eligible individuals and the subset of 137 survey respondents. Survey respondents are somewhat more likely to be male and somewhat less likely to be minorities than all survey-eligible individuals. For the other five selected individual and case characteristics (marital status, case size, cash benefit amount in LBP month six, birth year of respondent, and birth year of youngest child in case), there are no notable differences between the survey respondents and the broader group of survey eligibles.

The high survey response rate and the relatively small differences between the survey respondents and all survey-eligible individuals suggest that the LBP Survey results reliably represent the experiences of all individuals and their associated FIP cases in SDAs 9, 10, and 11 that entered LBP month seven in late 1995 and early 1996. The principal limitation of the survey data derives from the small number of persons who were eligible for the survey, implying that descriptive statistics generated from the data may have large confidence intervals.

D. Characteristics of Survey Respondents

The LBP Survey collected data on a broader range of characteristics than is available in DHS administrative files. Table IV.2, which displays individual-level characteristics as reported by the survey respondents, shows that the typical respondent to the LBP Survey was:

• Female (88 percent)
• Twenty to thirty-nine years old (85 percent)
• White (84 percent)
• Not married and not living with a partner (69 percent)
• A high school graduate or had obtained a GED (68 percent)
• Healthy enough to work or attend school (88 percent)
• Not a user of alcohol or drugs or, if a user, reported no problems resulting from use (92 percent)

E. Content of the Interview

The LBP survey instrument was designed to elicit the perceptions of respondents about how they came to be assigned to the LBP, the changes in their lives that coincided with the end of cash assistance, and their experiences coping without cash assistance. In responding to specific questions, survey participants were instructed to refer to one or more periods: the period leading up to the assignment to the LBP and continuing through the first six months of the LBP, the final month of cash assistance (LBP month six), the period following the termination of cash assistance and continuing to the date of the interview, and the interview month. For example, respondents reported on their experiences with FIP, PROMISE JOBS, and the LBP during the period leading up to assignment to the LBP and continuing for the first six months of the LBP. They reported on their household composition, housing arrangements, and economic status in LBP month six and in the interview month. For the period following the termination of cash assistance up to the date of the interview, they reported on the jobs that they held and on the assistance that they received from family, friends, and community organizations.

F. The Presentation of Survey Findings

Findings from the LBP Survey are presented in the next two chapters. Chapter V presents findings on the status of respondents in LBP month six, in the interview month, and in the intervening period. Outcomes discussed include household composition, housing arrangements, employment, economic status, and assistance received from family, friends, and community organizations. Chapter VI presents findings on survey respondents' experiences in FIP, PROMISE JOBS, and the LBP. Reasons for entry into the LBP and the preparation of the FIA are the focus of the chapter.

V. THE STATUS OF LBP CASES BEFORE AND AFTER BENEFIT TERMINATION

This chapter presents findings from the LBP Survey regarding the status of LBP cases shortly before and shortly after the termination of cash benefits. Specifically, we consider the status of cases in the month prior to benefit termination and several months later in the interview month. All interviews were conducted during the LBP's six-month FIP ineligibility period, with 92 percent in LBP months nine through eleven, or two to four months after the first month of no cash benefits. Using descriptive analytic techniques, we examined the demographic and socioeconomic status of cases at these two points in time (the month prior to benefit termination and the interview month) in terms of household composition, housing situation, income, employment, government assistance, and support from family, friends, and community organizations.

A. Household Size and Composition

One might expect the termination of welfare benefits to lead to changes in household composition, particularly in the form of families moving in with relatives or parents sending their children to live with relatives. The data obtained in the LBP Survey, however, provide little evidence of this during the FIP ineligibility period.

As shown in Table V.1, the average number of household members in the month prior to benefit termination was approximately four. The most common household size (31 percent of households) was three persons. However, large households were also quite common. Approximately 15 percent of households had five members, and another 16 percent had six or more members.

Nearly all of the households (98 percent) included one or more of the survey respondent's children. The average number of children was two. Approximately 89 percent of the households contained one to three of the respondent's children. In one-third of the households, at least one child of the respondent under the age of 3 years was present, and in just over one-half of the households at least one child of the respondent between the ages of 3 and 5 years was present. As shown in Table V.2, approximately 32 percent of the respondents lived with a spouse or partner in the month before benefit termination, and 12 percent lived with their parent(s) in that month.

Table V.2 also shows that there was relatively little change in the composition of LBP households between the last month of cash assistance (month 6) and the interview month. There is little to no evidence that respondents were separated from their children or that they moved in with their parents or other relatives following the termination of cash assistance.⁽¹⁾ We do, however, observe a small increase in the proportion of respondents living with a spouse.

Consistent with the lack of change in household composition, there was relatively little change in the size of households following benefit termination. As shown in Table V.3, approximately two-thirds of the respondents reported no change in household size, and nearly nine of ten reported no change in the number of children. Where household size did change, it more often became larger rather than smaller. The most common change was an increase of one person, which occurred in 12 percent of surveyed households.

B. Housing

We analyzed the housing situations of LBP cases and how they changed after cash benefits were terminated, in terms of housing quality, arrangements, and assistance. As shown in Table V.4, approximately 30 percent of survey respondents moved between the last month of cash assistance and the interview month. These moves include both improvements and reductions in housing quality: while nearly half moved to housing of higher quality, about one-fifth moved to housing of lower quality. This pattern of "gainers" and "losers" among LBP families following benefit termination--that is, one set of families that experienced an improvement and another set that experienced a decline--reappears in the analysis of household income in Section C of this chapter.

Table V.5 presents our findings on housing arrangements and assistance. Both before and after benefit termination, the majority of survey respondents lived in rental housing. Approximately two-thirds lived in rental housing in the month before benefit termination, while less than 10 percent owned their homes. The next most common housing arrangement was living with a relative. Survey respondents reported very little reliance on shelters before or after benefit termination.

There were only small shifts in the housing arrangements of LBP families following benefit termination. Contrary to our expectation that loss of benefits might lead families to move in with relatives, the percentage of respondents living with relatives decreased. However, there is some evidence of an increase in shared housing following benefit termination, as the percentage of families that reported living with friends increased from 4 to 8 percent.

In the month prior to benefit termination, approximately 16 percent of respondents lived in public housing and 26 percent received rental assistance. Following benefit termination, the percentage of respondents living in public housing increased slightly, but the share of households that received rental assistance decreased. This decrease parallels reductions in the receipt of other forms of government assistance, as discussed in Section E of this chapter.

C. Household Income

The analysis of household income before and after cash assistance was terminated under the LBP is based on total household monthly income as reported by LBP survey respondents. Total income is defined as income for all household members from all sources (including FIP, Food Stamps, other assistance, and earnings). Table V.6 presents the mean value and distribution of monthly income in LBP month 6 and in the month preceding the interview, which we refer to as the pre-interview month. Average total household income in the pre-interview month was just under $750. This was $13 higher than in LBP month 6, the last month of cash assistance. Thus, although cash assistance was terminated, households in fact had slightly higher total income, on average, several months later. However, this net increase was not uniformly distributed across households. Rather, there were clear gainers and losers, as evidenced by increases in both the upper and lower tails of the income distribution. Between the last month of cash assistance benefits and the pre-interview month, households shifted into income categories below $500 and above $1000, while they shifted out of categories between $500 and $1000. More households shifted into the lower tail of the income distribution than into the upper tail.

Table V.7 provides additional evidence of the polarization in the income of LBP households after benefit termination. Approximately 40 percent of LBP cases reported a net increase in income between the last month of receiving cash assistance and the pre-interview month, and nearly 50 percent reported a net decrease in income over this period. Also, there were relatively large changes in income in both directions. In households with increases, average income rose by $496, from $600 in the last month of cash assistance to $1096 in the pre-interview month. In households with decreases, average income fell by $384, from $884 to $500. Due to the difference in the magnitude of these offsetting changes, the average net change in income was positive, despite the fact that more households reported a decrease in income than reported an increase in income.

D. Employment

The employment experience of LBP participants after the termination of benefits was analyzed in terms of the number of jobs held and job characteristics, such as hours worked and fringe benefits. Table V.8 documents the total number of jobs held during this period. Just under half (47 percent) of the survey respondents were not employed in any job since the last month of cash benefits (LBP month 6). Approximately 40 percent of respondents were employed in one job since the last month of cash benefits, and approximately 11 percent were employed in a total of two jobs during this period.⁽²⁾

Table V.9 focuses on the characteristics of the most recent job held by survey respondents who were employed since the last month of cash benefits. There is evidence of both full-time and part-time employment. Approximately one-fourth of those who were employed reported working less than 20 hours per week on the most recent job, while about 38 percent reported working 40 or more hours per week. On average, respondents worked 31 hours per week on the most recent job and earned $170 per week on that job. With respect to fringe benefits, 36 percent of those who were employed reported that health insurance was available on their most recent job, but only 11 percent actually received health insurance from their employer. Of those who had health insurance available but did not actually receive it, about two out of five did not enroll in the plan due to its cost. Paid sick leave and paid vacation were each available on about 30 percent of the most recent jobs held by survey respondents since the last month of cash benefits.

E. Government Assistance and Child Support

LBP families' receipt of government assistance other than FIP benefits and their receipt of child support is analyzed in terms of the incidence of receipt and the amount received. The extent to which receipt of other assistance changed coincident with the termination of FIP cash benefits varies by type of assistance.

1. Government Assistance

In the month prior to the termination of FIP cash benefits, 96 percent of the LBP families received Medicaid, 88 percent received Food Stamps, and 28 percent received WIC benefits (Table V.10). General Assistance and SSI, of contrast, were received by only 4 to 6 percent of surveyed cases.

Coincident with the termination in FIP benefits, the percentage of cases that received Medicaid and Food Stamps declined quite dramatically. Between LBP month 6 and the interview month, the share of respondents that received Medicaid fell 29 percentage points (to 66 percent), and the share that received Food Stamps fell 25 percentage points (to 64 percent). Given that the LBP does not directly affect eligibility for Medicaid or Food Stamps, there must be other reasons for these declines. One possibility is that some families mistakenly think that they automatically lose their eligibility for Medicaid and Food Stamps when they lose their eligibility for FIP. Other families may know that their eligibility for Medicaid and Food Stamps is not affected by the LBP but decide that participation in these programs is not worthwhile once they are ineligible for FIP. It is also possible that some actually become ineligible for Medicaid and/or Food Stamps due to increased income from employment or other sources after the loss of FIP cash benefits.⁽³⁾

To analyze dollar amounts of government assistance, we first examined average amounts among all survey respondents--including those who reported zero dollars of a given type of assistance--and then examined average levels among the subset of respondents that received assistance in both months, that is, those who reported positive dollar amounts of a given type of assistance in LBP month 6 and in the pre-interview month. Among all survey respondents, there was a net decrease in average Food Stamp benefits and General Assistance, and a net increase in average SSI. The largest change was for Food Stamps: the average amount of Food Stamp benefits was approximately $65 less in the pre-interview month than in LBP month 6. Among recipients (those cases receiving the particular type of assistance in both months), average Food Stamp benefits increased, but only slightly, rising from $271 to $275. Average SSI among recipients also increased moderately, rising from $460 to $469. No respondents received General Assistance in both months.

2. Child Support

Ten percent of survey respondents reported receipt of child support payments in the month prior to termination of cash assistance, and 19 percent reported receipt of child support in the pre-interview month.⁽⁴⁾ Among all respondents, average monthly child support income increased by $24 between these two months, from $7 to $31. Among respondents that received child support in both months, the average amount received increased by $89, from $78 to $167. We must be cautious, however, in interpreting this result due to the treatment of child support under FIP. Specifically, when a household receives FIP benefits--as in month 6 of the LBP--only the first $50 of child support paid by the noncustodial parent is distributed to the family, while any amount above $50 is withheld by the state to offset FIP outlays; in contrast, when a household does not receive FIP benefits, the full child support payment is distributed to the family. Hence, some or all of the increase in child support payments reported by survey respondents (between LBP month 6 and the pre-interview month) may stem from the increase in the portion of the payment that is distributed to the family rather than a change in the noncustodial parent's payment amount.

F. Support from Family and Friends

Table V.11 documents changes in the level of support provided by family, friends, and neighbors following benefit termination. Slightly more than half of the survey respondents (56 percent) reported the same level of support from family, friends, and neighbors before and after their cash assistance was terminated. Of the respondents that experienced a change in support, a larger share reported increases in support than decreases in support. However, since we do not know the magnitude of these increases or decreases, we must be cautious in drawing any conclusions about the net change in the amount of support received.

As shown in Table V.12, parents were the most often cited source of support. Approximately 65 percent of survey respondents reported support from parents following benefit termination; after parents, friends were the next most common source of support, cited by 47 percent of respondents. Between 30 and 40 percent of respondents reported support from a spouse or partner and/or other relatives, and 14 percent reported support from neighbors.

Emotional support was the most common type of support received from relatives, friends, or neighbors. Money was the next most common type of support received from relatives (parents, spouse or partner, other relatives), and child care was the next most common type of support received from friends and neighbors. Relatives provided more kinds of support to respondents than did friends or neighbors. For example, seven different types of support from parents were reported by at least 20 percent of those receiving support from parents, while only two different types of support from friends were reported by at least 20 percent of those receiving support from friends.

G. Support from Community Organizations

LBP Survey respondents were asked about support they received from four types of community organizations after the termination of FIP benefits: food banks, emergency shelters, crisis centers, and soup kitchens. Table V.13 displays the percentage of respondents that had sought assistance from each of these after their cash benefits were terminated.⁽⁵⁾ Food banks were by far the most important of these community organizations as a source of assistance for survey respondents in the period following the termination of cash benefits. Approximately one quarter of respondents relied on a food bank in this period. Less than 4 percent of respondents relied on an emergency shelter. Even fewer relied on a crisis center or a soup kitchen. About 70 percent of LBP cases did not rely on any of these four types of community assistance during the period of no cash benefits.

H. Summary of Findings

In this chapter, we examined the status of LBP cases in the month before benefit termination, in the interview month, and the changes status between these two points in time. In reviewing the findings, it is important to recall that the changes we observe are short-term changes. Also, benefit termination under the LBP is restricted to PROMISE JOBS-mandatory cases that do not meet employment and training requirements; these cases are not representative of the FIP caseload as a whole.

The major findings that emerge from this chapter are as follows:

• There was relatively little change in household composition and housing arrangements associated with the termination of cash benefits for LBP cases.
• Following the termination of benefits, there were clear gainers and losers in terms of overall economic status, as measured by total household income. On average, total household income increased by $13; however, more households experienced a decrease in income than an increase in income.
• Approximately half of the respondents were employed after benefits were terminated, but only about 10 percent of those employed received health insurance on their most recent job.

Family, friends, and neighbors were important sources of support for LBP cases in the months following benefit termination. Emotional support was the most common type of support provided, though financial support was also commonly provided by family members.

1. While there was not widespread incidence of children moving out following benefit termination, one or more of the respondent's children was sent to live elsewhere in a few instances (Table V.2 and Table V.3). The 12 case studies included several families in which children moved out. These findings are discussed in Chapter 7.

2. These jobs may have been held concurrently or consecutively.

3. While eligibility for regular Medicaid is not directly affected by the LBP, cases in the LBP are not eligible for the Transitional Medicaid that is provided to former FIP recipients whose eligibility for cash assistance has ended as a result of increased income from employment.

4. The case studies, discussed in Chapter VII, suggest that some LBP parents more actively pursued child support from the noncustodial parent following the termination of cash assistance.

VI. EXPERIENCES WITH THE LIMITED BENEFIT PLAN

This chapter presents findings from the LBP Survey regarding how families came to be on the LBP and their experiences while on the LBP. These findings are based on descriptive analysis of survey data and quotes from survey respondents' replies to open-ended questions. The chapter highlights five issues relating to the LBP experience: (1) PROMISE JOBS requirements, particularly the FIA, (2) entering the LBP, (3) experiences after entering the LBP, (4) personal plans for leaving welfare, and (5) the loss of FIP benefits. It also presents messages from survey respondents to state politicians regarding the LBP.

A. Meeting PROMISE JOBS Requirements

As part of welfare reform in Iowa, FIP clients who are mandatory participants in PROMISE JOBS are required to develop, sign, and carry out an FIA.⁽¹⁾

Clients are also required to contact PROMISE JOBS to arrange an appointment to initiate this process. Those who fail to arrange or keep the PROMISE JOBS appointment, to develop and sign an FIA, or to carry out the FIA are assigned to the LBP. Here, we describe the extent to which LBP Survey respondents met these requirements and their understanding of the consequences of failure to meet them.

1. Appointment with PROMISE JOBS

More than half of the respondents (57 percent) reported that they had arranged and kept the required appointment with PROMISE JOBS (Table VI.1). The rest did not meet this requirement. About 26 percent said that they had arranged the appointment but did not keep it, and 17 percent said they did not even arrange the appointment.⁽²⁾

Of those who did not arrange the PROMISE JOBS appointment, most respondents cited lack of understanding of program requirements as the reason (70 percent). Some individuals who were employed or looking for a job did not understand that they still had to participate in PROMISE JOBS. One respondent said, "I was working full-time. I thought that was enough." Other reasons cited by at least 10 percent of those who had not arranged the appointment were transportation problems (17 percent), child care problems (13 percent), and health problems (13 percent).

Of those who arranged the PROMISE JOBS appointment but did not keep it, the most common reason for not keeping the appointment was transportation problems (31 percent). Other reasons included personal or health problems (28 percent), problems with child care (22 percent), and work or school schedules (14 percent). One respondent, whose fiancé died soon after she had scheduled an appointment with PROMISE JOBS, commented, "I was in a severe depression. I couldn't even leave my house."

2. Signing the Family Investment Agreement (FIA)

Approximately 56 percent of LBP Survey respondents reported that they fulfilled the requirement of signing an FIA (Table VI.2); 19 percent reported that they had not signed one, and 25 percent were uncertain.⁽³⁾ Of the respondents who said they had not signed an FIA, 50 percent said that the reason for this was that they had never been given an FIA to sign. Another common reason respondents gave for not signing an FIA was that they did not know anything about the FIA (39 percent). Twenty-three percent reporting that they did not sign an FIA because they were employed, which suggests that they misunderstood the FIA requirement.

Respondents who either did not sign an FIA or did not know whether they had signed an FIA were asked about their understanding of the consequences of not signing an FIA. When asked simply whether they understood what would happen if they did not sign an FIA, 38 percent said that they did understand. When asked to describe what they understood those consequences to be, 37 percent said that FIP benefits would end. However, some (8 percent) said they thought FIP benefits would continue. One respondent said, "I thought I could meet with my worker [even after I didn't sign my FIA]. I thought I'd keep getting my checks." Others reported that their caseworkers did not tell them about the consequences of not signing an FIA (23 percent), or that they had no understanding about the consequences at all (47 percent).

3. Goals and Activities of the FIA

The FIA is developed through a process in which the welfare client and the PROMISE JOBS caseworker meet to specify the goals and activities to be included in the plan. Most survey respondents who signed an FIA indicated some degree of ownership of the activities included in their FIA (Table VI.3). Nearly half of those who signed an FIA reported that they had selected the activities themselves, and 16 percent said they had mutually selected them with their caseworker.

Employment was the most common FIA goal. Almost 70 percent of respondents who had signed an FIA reported this as a goal. Education and economic self-sufficiency were also quite common goals: 46 percent of those who had signed an FIA had completing an educational degree as a goal, and 38 percent had achieving self-sufficiency as a goal. A considerably smaller share identified specific short-term goals, such as finding a child care provider, paying off debts, volunteering, or acquiring legal assistance.

The FIA must also include specific activities for achieving the larger goals of the plan. Job Club or other job search activities were included as activities by 39 percent of the respondents who had signed an FIA. Educational activities were also common. Thirty-six percent of respondents with an FIA included enrollment in postsecondary education in their FIA, and 30 percent included completing high school or a GED. Other FIA activities included volunteering, finding a child care provider, and acquiring an automobile.

4. Satisfaction with the FIA and Understanding of Terms

Most respondents who reported signing an FIA were satisfied with its content (results not shown) and understood the consequences of failure to follow through with the FIA (Table VI.3). The most common reason given for not being satisfied with the FIA was limited ownership. One parent said, "My worker told me to write that I was going to get a job, but I wanted to go to school." Some dissatisfaction also stemmed from a lack of understanding. One respondent explained, "I didn't know what I was signing. They gave me a paper and [I was] told to sign it." However, overall there was a high degree of understanding of the FIA reported by survey respondents. Approximately 91 percent of respondents who had signed an FIA said they knew what would happen if they did not follow through on the goals and activities specified in their FIA.

5. Barriers to Achieving Goals of the FIA

Many of the LBP Survey respondents who had signed an FIA reported barriers to achieving the goals of their FIA.⁽⁴⁾ In total, 73 percent of survey respondents who had signed an FIA reported one or more barriers that prevented them from fulfilling it (Table VI.4). The three most frequently reported barriers were (1) a serious personal or health issue (30 percent), (2) lack of transportation (28 percent), and (3) lack of child care (20 percent). One respondent explained, "I keep looking for work, but I can't find anything that pays enough so I can afford a babysitter."

Of the survey respondents who reported that barriers had interfered with their fulfillment of their FIA, approximately one-third had not discussed these barriers with their caseworker. Some of these respondents said they did not talk to their caseworker because they thought the caseworker would consider the issue unimportant, because they were embarrassed, or because they considered the problem to be a private issue (results not shown). Of those who did inform their caseworkers about the barriers, just over two-thirds reported that their caseworker had not helped them resolve the barriers (Table VI.4). Of those who did receive help from their caseworker, the assistance usually took the form of advice or information.

6. Modification of the FIA

Modification of the FIA was rare. Only 11 percent of the respondents who had signed an FIA said that they had subsequently attempted to modify it (Table VI.4). Half of them wanted to change the goals or activities in their FIA; the other half wanted to extend the time line for fulfilling their FIA. The motivation for seeking to modify the FIA was typically a change in the respondent's health status or the inability of the respondent to fulfill the requirements of the original FIA (results not shown). For example, one respondent said, "I couldn't stay in school full-time. There were problems at home, and I wanted to go to school part-time." Three of the eight respondents who had attempted to modify their FIA reported that they were successful.

B. Entering the LBP

The LBP Survey included several items designed to measure respondents' perceptions of how and why they came to be on the LBP. Approximately 78 percent of respondents reported that they had been assigned to the LBP, 20 percent reported that they had voluntarily entered the LBP, and 2 percent did not remember why they entered (Table VI.5).

1. Events Leading Up to Assignment to the LBP

Among the respondents who said they were assigned to the LBP, the dominant reason they gave for the assignment was noncompliance with PROMISE JOBS; this was cited by 71 percent of those assigned to the LBP. Respondents most often described their noncompliance in terms of missing PROMISE JOBS appointments or generally "not cooperating" with PROMISE JOBS. Some explained that they were working full-time and could not miss work to meet with their caseworkers. One respondent said, "I guess I missed too many appointments and then I got a letter saying that I was on the LBP."

Fifteen percent of those assigned to the LBP reported that problems with their caseworkers or paperwork had precipitated their assignment. An even smaller share (8 percent) cited problems with transportation or child care arrangements as barriers to meeting PROMISE JOBS requirements, which thus led to their assignment. Finally, approximately 20 percent said that they felt they had no choice about being assigned to the LBP, suggesting that they did not fully understand the policies or the reason for the DHS action.

2. Reasons for Voluntarily Entering the LBP

Of the 20 percent of survey respondents who reported that they voluntarily entered the LBP, most indicated that they did so because they were "tired" of the public assistance system and wanted to be free of the hassles associated with it (results not shown). One respondent remarked, "I wanted to be in control. I knew I could get a job, so I just didn't sign my FIA." Another said, "I was ready to be off welfare. I wanted to be a good role model for my kids." Some reported that they thought the LBP was the only program available to them in Iowa. One of these respondents said, "I didn't know I had a choice. I picked it because I thought it was part of the new program where everyone [receiving FIP benefits] was on the LBP."

C. Experiences on the LBP

This section describes two distinct aspects of survey respondents' experience after they entered the LBP: (1) efforts they made to comply with PROMISE JOBS requirements and (2) well-being visits by local public health officials.

1. Efforts to Comply with PROMISE JOBS

The LBP in effect at the time of this survey provided clients who entered the LBP prior to signing an FIA with two opportunities to reconsider and begin complying with PROMISE JOBS requirements after entering the LBP: (1) during the first 45 days of the LBP and (2) during the fifth and six months of the LBP. As shown in Table VI.6, roughly two-thirds of survey respondents did not attempt to work with PROMISE JOBS after entering the LBP. The other one-third of respondents who reported that they tried to work with PROMISE JOBS after entering the LBP were asked about the outcome of that effort. Forty-four percent of the respondents who had contacted PROMISE JOBS reported that they were told to "wait out the LBP." One respondent said: "I called my worker and she told me to get a job. She couldn't help me." Another respondent said, "My worker told me to call back in six months," presumably referring to the end of the FIP ineligibility period. Other common outcomes were the scheduling of an appointment with PROMISE JOBS (37 percent) and being told to attend required PROMISE JOBS activities (24 percent).

2. Well-Being Visits

One component of the LBP is a "well-being" visit. These visits are conducted by registered nurses or social workers in local public health agencies through a contractual agreement involving those agencies, the Iowa Department of Public Health, and DHS. The purpose of the visit is to inquire about the status of children, to ask parents whether they require information regarding their rights and responsibilities, and to provide referrals to community agencies. Attempts are made to contact all LBP families to conduct a well-being visit in the family's home or by telephone in the fifth month of the LBP and again in the seventh month, if the family is still on the LBP. Despite the intent to visit all families, internal DHS analysis indicates that visits are completed for only approximately 40 percent of families.⁽⁵⁾ Reasons for this low completion rate include inability to contact the families and refusal of the (voluntary) visit by contacted families.⁽⁶⁾

LBP Survey respondents were asked about the well-being visits. Fifty-four percent reported that a well-being visit was conducted either in their home or by telephone (Table VI.7). Most of those who were visited reported that the nurse or social worker spoke only to the respondent during the visit (78 percent). In terms of the content of the visit, 34 percent of those who were visited reported that the nurse inquired about the children, and 31 percent reported that they were given information regarding their rights and responsibilities. The average length of a well-being visit was approximately 15 minutes.

D. Personal Plans for Leaving Welfare

The LBP Survey asked respondents about personal plans, other than the FIA, that they had for leaving welfare prior to the termination of cash assistance. As shown in Table VI.8, about 61 percent of respondents indicated that they had such a plan. The most common type of plan identified by these respondents was finding employment (70 percent); it is possible, of course, that this was also an FIA goal of those who had an FIA. Of those with a personal plan, 38 percent had planned to find a job and had succeeded, while 32 percent had planned to find a job and had not succeeded.

After employment, education was the next most common personal plan for leaving welfare (26 percent). Nearly 17 percent of those with a personal plan had planned to attend college. About half of these respondents had succeeded in doing so, while the other half had not succeeded either due to lack of tuition assistance or a change in their health status.

E. The Termination of FIP Cash Benefits

The termination of FIP cash benefits affected LBP families in a variety of ways. The analysis of the effects of terminated benefits is based on responses to a series of open-ended survey questions, which asked respondents to describe the overall impact of the loss of FIP benefits, the difficulties and successes they had following benefit termination, and their plans for meeting their financial needs in the next two months.

1. Overall Effect of the Loss of FIP Benefits

The overall effect of the loss of FIP benefits varied widely. Negative effects were most commonly reported, but nearly 24 percent of respondents reported positive effects, and 14 percent reported that their lives had not been affected one way or the other (Table VI.9).

The most common effect of the loss of FIP cash benefits was chronic worrying, which was reported by 52 percent of respondents. According to one parent, "I worry all the time. Every month it gets harder and harder trying to make ends meet."⁽⁷⁾ Forty-four percent of respondents cited financial problems as an effect of the loss of FIP benefits. Many of these individuals worried about paying their rent and feared the possibility of being evicted from their homes. One parent explained, "I don't know what will happen next month [about paying the rent]. I've asked all of my friends and family for money." Another theme was insufficient resources to purchase groceries. One parent stated, "We have Food Stamps, but that isn't enough to feed two growing teenagers." Some respondents commented that they were unable to provide clothes or shoes for their children, or to pay for automobile expenses such as gas, registration, and insurance.

About one quarter of respondents reported that the loss of cash benefits had positive effects, particularly in the form of increased independence and self-esteem. Some had become more independent through employment or increased earnings. One respondent said, "I really like working. I like being able to provide for my family. It is better for my kids that they see me working." Others experienced an increase in their self-esteem as a result of no longer relying on welfare and the consequent removal of the stigma associated with welfare receipt. One respondent remarked, "It was hard being on welfare. Neighbors and people at stores look down on you. Now, I don't feel so ashamed."

2. Difficulties After Losing Cash Assistance

The two greatest difficulties facing families following the termination of FIP cash benefits were meeting household expenditures and providing for children. Over half of the respondents reported that meeting household expenditures--rent, bills, car expenses, food, clothes--was one of their greatest difficulties (Table VI.9). One respondent said, "It's hard to pay my bills on time. I only pay some [bills] each month." Another explained, "I try to borrow enough money from my friend every month to make sure the bills are covered. It's a lot of stress."

After household expenditures, providing for children was the next most common difficulty. This was cited by nearly 40 percent of survey respondents. One parent said, "My son wants to join the school band, but I don't have the money for that." Another parent explained, "I don't have enough [money] to buy gym shoes for my two kids." Smaller shares of respondents reported that some of their greatest difficulties after benefit termination were securing child care and transportation (9 percent), the loss of health insurance (8 percent), obtaining employment (6 percent), and loss of independence (2 percent).

Nearly one-fifth of the respondents commented that they had not experienced any difficulties since losing FIP cash benefits. One of these respondents said, "Things really haven't changed. I'm working now, so I'm doing OK."

3. Successes After Losing Cash Assistance

The two greatest successes of respondents after losing their FIP cash benefits were greater personal independence and keeping families intact. Over half of the respondents (Table VI.9) reported increased personal independence and self-sufficiency as one of their greatest successes. Some noted an increased sense of accomplishment and pride because they were "making it on their own" without government assistance. One respondent said:

Things are going OK. It makes me feel good about myself to work and earn money rather than getting money for nothing. I have a sense of accomplishment now. I'm more independent. I'm out doing something for my family. I hope I'll keep working or get a better job.

After increased independence, the success that respondents most commonly reported was keeping their families intact in the face of adversity (20 percent). One respondent said, "At least we are together as a family." Another said, "My kids are still with me." Still another noted, "My husband and I are staying together. We made it through this."

While many families did experience successes after their FIP benefits were terminated, 42 percent of survey respondents stated that they had experienced no successes during this time. One said, "It's been really hard. There hasn't been one good thing." Another remarked, "I can't think of any successes. We're just doing the best we can to get by." Comparing this to the number of respondents that reported no difficulties following benefit termination, we find that reporting no successes was more than twice as common as reporting no difficulties.

4. Plans for Meeting Short-Run Financial Needs

Respondents' plans for meeting financial needs in the next two months without FIP cash benefits most often took the form of employment, their partner's employment, or child support payments. Employment was by far the dominant strategy (Table VI.10), cited by nearly 70 percent of respondents.⁽⁸⁾ Those who were unemployed intended to find employment; those who were employed intended either to remain at their current jobs or to find new jobs providing higher wages and benefits. One respondent explained, "I'll keep working. Everything will be fine if I don't lose my job." Another parent noted, "I'm working now, but I need to work more hours to get full [fringe] benefits. After another six months, I'm up for a raise, too."

After their own employment, respondents most often cited increased income through their partner's employment or through regular child support payments as part of their plan (21 percent). Only a few respondents identified government assistance as the means to achieving financial stability over the next two months. Seven percent stated that their plan was to reapply for FIP benefits,⁽⁹⁾ and one percent planned to apply for SSI.

F. Messages for State Politicians

When asked what they would like to tell state politicians about their experience with the LBP, respondents most often commented on the importance of FIP benefits to their families, highlighting how benefits are helpful and how difficult it is to make personal changes without these benefits (TableVI.11). One respondent noted, "When I got FIP, I paid my rent right away. I always paid that bill first. Now, I never know how I am going to pay it." Another stated:

I was doing everything right. I was working full-time and going to school 15 hours a week. Things were getting better, but I still needed the [FIP] check to get by. It doesn't make sense to me that people like me are punished for trying to improve and other people who don't do anything still keep their check.

After the importance of FIP benefits, respondents most frequently wanted to tell politicians that LBP needed to be a more transitional program--that the current program was too harsh. Twenty-seven percent of respondents expressed this concern.

There was also evidence that respondents wanted better information about the LBP and the requirements. Approximately 12 percent of respondents wanted to tell politicians that the FIA and LBP needed to be explained more thoroughly. One respondent remarked, "I didn't know that I could change my FIA after I signed it. If I had known that, I would have done it. I thought that once I had one, that was it." In addition, 13 percent wanted to convey that they found contradictions in the welfare program's goals and rules. One parent said, "I was told to go to school, but there was not any assistance for child care or transportation."

On a positive note, approximately 16 percent of respondents wanted to tell politicians that the LBP was a good program, saying that it pushed them to be more independent. These individuals noted that they were employed and had not faced hardships as a result of the loss of cash benefits. They reported that the LBP was "working out just the way they had planned it."

G. Summary of Findings

A number of key findings emerge from this chapter's analysis of the LBP experiences of survey respondents:

• Most respondents who had failed to meet PROMISE JOBS requirements said that they did not understand those requirements. Seventy percent of those who had not arranged the required PROMISE JOBS appointment said that they did not understand this requirement. Sixty-two percent of those who had not signed the FIA said either that they did not know about the FIA or that they did not sign one because they were employed. Sixty-two percent of those who either had not signed the FIA or were uncertain whether they had signed the FIA said that they did not understand what would happen if they did not sign the FIA.
• Employment was the most common FIA goal. Education and self-sufficiency were the second and third most common goals, respectively.
• Nearly all of those who had signed an FIA said they understood the terms of the agreement. Specifically, they said they understood what would happen if they failed to carry out the goals and activities specified in the FIA.
• Many respondents who had signed an FIA reported barriers that prevented them from fulfilling the agreement. The most common barriers were health or personal problems, transportation, and child care.
• Most respondents said they had been assigned to the LBP because they failed to comply with PROMISE JOBS requirements. However, about one-fifth said that they had voluntarily entered the LBP.
• Most individuals had plans for leaving welfare, other than the FIA, prior to the termination of cash assistance. Most often this plan was to obtain employment. About half who planned to obtain employment succeeded.
• There was considerable variation in the effect of the loss of FIP cash benefits. Some respondents reported hardship in the form of emotional stress (chronic worrying) and financial problems. Others reported positive effects in the form of increased independence, self-sufficiency, and self-esteem. On the whole, negative effects were experienced somewhat more frequently than positive ones.

1. The Family Investment Agreement (FIA) specifies the clients' plan for becoming self-sufficient in a specified amount of time. For more detail on the FIA, refer to Chapter II, Section A.3 of this report.

2. Administrative data from Iowa DHS provides a very different picture. For the LBP Survey respondents, administrative records suggest that only 18 percent arranged and kept the appointment, while 61 percent arranged but did not keep the appointment, and 22 percent did not arrange the appointment. These differences may suggest that respondents are unclear about specific program participation requirements and the importance of the PROMISE JOBS appointment.

3. For the LBP Survey respondents, administrative records suggest that fewer signed the FIA (26 percent compared with the survey results of 56 percent).

4. This finding is not surprising since most of these individuals signed the FIA before entering the LBP (rather than during a reconsideration period, see Section C.1 of this chapter) and, presumably, if they had faced no barriers to fulfilling their FIA they would not have entered the LBP.

5. January 1997 Well-Being Visit Report, Iowa Department of Public Health, March 5, 1997.

6. DHS recently asked local public health staff to restructure the well-being visit process so as to improve the quality of the data.

7. In Table VI.9, the percentages allowing for multiple responses are reported in the first column. The second column shows whether the item was mentioned first by the survey participants. For example, "chronic worrying" was the first response for 47 percent of the survey participants.

8. In Table VI.11, the percentages allowing for multiple responses are reported in the first column. The second column shows whether the item was mentioned first by the survey participant. For example, "respondent's employment" was mentioned first by 67 percent of the survey respondents.

VII. CASE STUDIES OF LBP FAMILIES: PARENTS TELL THEIR STORIES

The LBP Survey produced information on how families that have been assigned to the LBP are affected by the loss of cash benefits. Quantitative data from a highly structured survey cannot, however, capture the nuances and richness of the experiences of these families. Consequently, the study design included less structured, in-depth interviews with the LBP Survey respondent in each of 12 purposefully selected families so that these parents could tell their stories in their own words. The goal of the case studies was to understand more fully how these parents came to be on the LBP and how they coped with the loss of benefits. We wanted to know how these parents made decisions; what strategies they chose for responding to their situations; how they accessed the resources of family, friends, churches, and social service agencies; what effects the LBP had on them and their children; and what efforts they made to obtain, retain, or improve their employment situations.

This chapter has five sections: Section A describes the methodology of the case studies. Section B presents six family vignettes, two from each of three "coping" categories. Section C highlights three common themes among the 12 case-study families: (1) meeting basic needs; (2) changes in dependence; and (3) linkages with noncustodial parents. Section D examines the entry of these families into the LBP and their plans to reapply for FIP benefits. Section E summarizes the major findings from the case studies.

A. The Case-Study Methodology

We used a purposive sampling process to select families for the case studies; consequently, findings from the case studies cannot be generalized to the entire LBP population. Our objective for the sampling process was to select families with a broad range of experiences. The first step was to classify the LBP Survey respondents into three categories according to the survey interviewers' subjective assessments of their overall level of coping with the loss of cash assistance: (1) coping adequately; (2) struggling but coping; (3) in trouble, having great difficulty. An item in the survey instrument required the interviewer to classify each respondent into one of these categories following the interview. Based on the interviewers' assessments, 31 respondents were in category one, 63 were in category two, and 43 were in category three.

The next step in the sampling process was to identify survey respondents in each of the three coping categories who would be most likely to provide quality information for the case studies. To make this determination, we used a second item in the LBP Survey instrument that required the interviewer to rate each respondent along several dimensions related to data quality following the interview. For each of the respondents, we computed a composite quality rating based on the interviewer's assessment of her (all of the respondents were women) understanding of the questions, her accuracy of responses, her interest in the survey, and overall quality of the data she provided. We then selected the 10 respondents in each coping category (a total of 30) with the highest composite ratings as the potential subjects of the case studies.

We sought to conduct case-study interviews with 4 persons in each of the 3 coping categories, for a total of 12 interviews. Letters were sent to the 30 selected LBP Survey respondents, outlining the purpose of the case-study interview, offering a $50 payment for completing the interview, and asking interested persons either to fill out and return the enclosed response card or to call ISED's toll-free telephone number. We first attempted to interview persons who had responded by mail or by telephone, and then turned to the remaining persons in the group of 30 as necessary until we reached our goal for completed interviews.

Interviews lasting 60 to 90 minutes were conducted during May and June of 1996 in the homes of the participating parents and their families. These interviews occurred either shortly before, during, or shortly after the twelth month on the LBP for these families. A simple protocol consisting of eight general topics provided a structure for the interviews, which were tape recorded and then transcribed.

Based on the in-depth information provided during the interviews, we reclassified the survey respondents (parents) interviewed for the case studies into the three coping categories described above. Specifically, this reclassification was based on a comprehensive assessment of the parent's sense of hopefulness for the future, the parent's ability to meet her family's basic needs for food, shelter, and clothing, and the overall stability of her family's situation. The correspondence between the LBP Survey interviewer's initial classification and our final classification is high, but several of the 12 respondents did have different initial and final classifications.⁽¹⁾ The case-study subjects in the three final coping categories can be characterized as follows:

• Category One--Coping Adequately Without Benefits. Parents in this highest coping category are characterized by self-confidence, ability to plan, a sense of hope, and an orientation toward the future. The case-study interviews show that they have stable housing arrangements and incomes, as well as strong support from family and friends. These parents are committed to being independent from public assistance. They voluntarily entered the LBP and are focusing on achieving independence rather than on returning to FIP.
• Category Two--Struggling But Coping. Parents in this middle coping category are less self-confident, less hopeful, and have less sense of control over their futures than parents in category one. These parents are having greater difficulties meeting the basic needs of their families. Both their incomes and housing arrangements are more fragile. Some parents in this group also voluntarily entered the LBP, but they tend to be more ambivalent about returning to FIP than those in category one. They often have strong support from family or friends that enables them to cope without FIP. This suggests not so much a move to independence as a shift in dependency--from public assistance to family and friends.
• Category Three--In Trouble, Having Great Difficulty. Parents in this lowest coping category are even less self-confident, less hopeful, and have less of a sense of control over their futures than parents in category two. Most were assigned to the LBP because they failed to participate in PROMISE JOBS. Their housing arrangements and incomes tend to be unstable. They struggle to meet the daily needs of their families, sometimes to the point where it is necessary for their children to live with others. They seem overwhelmed and in some cases immobilized by the task of surviving without FIP benefits. These parents typically plan to return to FIP and therefore focus more on fulfilling the PROMISE JOBS participation requirements than on achieving independence.

B. Family Vignettes

To enrich the reader's understanding of the findings presented in the preceding chapters, we have prepared vignettes to convey the experiences of the parents we interviewed in 6 of the 12 case-study families--two from each of the three coping categories described above--and her family. Names have been changed to avoid identifying the interviewees. These vignettes give faces to the quantitative findings from the analyses of the administrative and survey data. They remind us that this study is about individuals and families whose lives are affected by welfare policies.

1. Category One: Coping Adequately Without Benefits

The two parents selected from the first coping category voluntarily entered the LBP. Both have stable sources of income, one through full-time employment and the other through her partner's employment. Both have financial support from partners or former partners. Both are pleased to be independent of the welfare system. Even though both of them are past their six-month period of ineligibility for cash assistance, neither has reapplied for FIP benefits.

a. Sarah

Sarah is 32 years old, has never been married, and has three children, ages 15, 9, and 8. She will complete her Associate's degree at the local community college in approximately six months and is "tired of being on public assistance." While Sarah was receiving FIP benefits, she voluntarily entered the LBP because it seemed appropriate for her. She had a full-time job in the accounting department of an express mail firm, with the option of a complete package of fringe benefits after six months of employment. Sarah thought the job was going to be permanent. The company downsized soon after she had signed up for the LBP, and she lost her job. However, Sarah was able to find a full-time, temporary job in the data entry department of another express mail firm. She hopes that she will be retained on that job for more than six months, at which time she would be eligible for fringe benefits.

The greatest impact of the LBP on Sarah's family was a change in residence and a resulting change in household composition. After selecting the LBP, Sarah moved to a smaller apartment with a lower rent in order to reduce her household expenditures. Because this new apartment had fewer bedrooms, Sarah's oldest daughter moved in with her father, who lives in the same town and had been making regular child support payments. Sarah has talked with her daughter about the situation and describes her daughter as an "angel who never complains." This daughter visits on weekends, but Sarah would like for her to permanently rejoin Sarah and her other children. To make this possible, Sarah plans to move into a larger apartment within the next three months.

Sarah does not plan to return to public assistance. She wants to stay in control of her family and her finances. The most pressing issue she now faces is the uncertainty about whether she will be able to retain her current job long enough to secure fringe benefits. However, Sarah has already started looking for another job in case her current job does not work out. She believes that her prospects for finding a good job will be enhanced when she receives her associate's degree in six months.

We have classified Sarah in category one because she has stabilized her employment and housing situations, is meeting the daily needs of her family, and has a positive attitude about her personal goals and her family's future.

b. Karen

Karen is 24 years old, has never been married, and has two children, ages 6 and 2. She is a high school graduate. Karen lives with Steve, the father of her younger child, who financially supports her and both of her children. Because Karen knew that signing an FIA would require her to go to work, she told her PROMISE JOBS caseworker that she wanted the LBP. Karen and Steve had determined that, given her limited employment experience (minimum-wage jobs at fast-food restaurants), she could not earn enough to pay for child care. They decided that it would be better for their family for Karen to stay at home and care for the children. According to Karen, "Why pay someone else to watch my kids when that is what I want to do?" Additionally, Karen was tired of working with PROMISE JOBS and wanted to stop checking in with her caseworker every month.

Since going on the LBP, Karen's life has not changed significantly. Steve continues to pay all of the household bills--rent, electricity, telephone, groceries, cleaning supplies, and clothes--which has been their financial arrangement for the past three years.⁽²⁾ Steve currently has two jobs, so he is able to support the family. Consequently, the primary effect of the loss of cash benefits on Karen and her family is that there is less money to spend on videos and special treats for the children.

Karen has two long-term plans--to buy a home and to go to college. She is more aggressively pursuing the former goal. She and Steve currently live in an apartment in a high-crime area. They would like to move to a safer neighborhood and own a home with a large yard. They have pursued this goal through recent contacts with real estate agents. After her youngest child is in school, Karen would like to study photography at a community college and eventually work in a photographer's studio.

We have classified Karen in category one because she has a stable housing arrangement, a secure source of income through her partner, and a strong positive outlook for the future. Although the loss of FIP cash benefits increased her dependency on Steve, Karen's attitude is positive because she has continued to meet the needs of her family.

2. Category Two Struggling but Coping

The two parents selected from the second coping category voluntarily entered the LBP. Although they had perceived themselves as ready to become self-sufficient, both are now struggling to meet the basic needs of their families. Familial support has been critical to the limited success that they have achieved.

a. Jean

Jean is 27 years old, has never been married, and has a daughter, age 4. She holds two part-time jobs and has completed one and a half years of college toward an associate's degree in computer hardware repair. While receiving FIP benefits, Jean told her PROMISE JOBS caseworker that she wanted the LBP. She said she was "tired of being broke all of the time on welfare" and thought that she could do better on her own.

Jean attributes her ability to attend college while working to the concrete support provided by her parents. Her mother cares for Jean's daughter when Jean is at work or in class. Her father has hired Jean on an on-call basis in his business. Jean struggles financially from month to month, but she knows that her parents are there for her--providing child care, emotional encouragement, and financial support.

Jean's housing situation is a constant concern. Her parents gave her space on their property to relocate a condemned mobile home that she purchased for $500. The front door is broken, the windows cannot be closed, and the interior has been damaged by water. Nonetheless, she lives in this mobile home and is repairing it herself.

Jean's greatest frustration is the failure of her daughter's father to make child support payments. She has struggled to receive child support ever since the child was born. However, since entering the LBP, Jean has pursued the payments more vigorously in order to reduce the financial strain on her parents. Although she has worked with the DHS Child Support Recovery Unit and the Legal Services Corporation to secure the court-ordered child support, her ex-partner has never made any payments.

Jean is determined to obtain an associate's degree and, if she is able to receive more financial aid, she would like to continue her education and obtain a bachelor's degree. However, she worries that she may not be able secure a better job with those degrees in the small town where she lives. She does not plan to reapply for FIP cash benefits, but it is not clear whether she will be able to maintain that resolve.

We have classified Jean in category two for several reasons. Her housing situation is substandard and, with the loss of FIP cash benefits, her dependence shifted from the state to her parents. Nevertheless, Jean has a positive attitude and is investing in her future by repairing her mobile home and attending college. However, she is currently unable to leave her family support system and she is concerned that her education may not pay off in the form of a good job.

b. Lisa

Lisa is 30 years old and has two children, ages 13 and 11. She is separated from her husband, Dan. Lisa has an associate's degree in nursing. While receiving FIP benefits, Lisa voluntarily entered the LBP because she firmly believed she could find a job. However, she did not find a job right away, so the months without cash benefits were difficult. Lisa currently works 20 hours a week at a nursing home and still struggles to feed her family, often relying on her brother for help in purchasing groceries. Having secured financial aid on her own through a Pell Grant, Lisa is attending college full-time in pursuit of a bachelor's degree in nursing. She expects to graduate in approximately six months.

When Lisa's FIP benefits ended, she was unable to pay her mortgage, so she decided to reunite with Dan in an effort to work things out. They had been separated for 18 months. He was employed in a different community when they decided to reunite but was able to find employment in Lisa's community. However, he lost that job soon after joining Lisa. After three months, they separated again and Dan returned to his former job, but he continues to pay the mortgage and plans to do so until Lisa graduates. Upon graduation, Lisa is guaranteed a job with higher pay and better benefits at the nursing home where she currently works. She does not plan to reapply for FIP cash benefits.

Lisa fits into category two for several reasons. She struggles a great deal to meet the daily needs of her family and is very reliant on financial support from her estranged husband and her brother. Thus, at least for the present, her dependency has shifted from public assistance to her extended family. Despite her current struggles, Lisa maintains a positive attitude and continues to invest in her future.

3. Category Three: In Trouble, Having Great Difficulty

Both of the parents selected from the third coping category had been assigned to the LBP because they had failed to comply with PROMISE JOBS requirements. One of them believed that she was not required to sign an FIA because she was employed; the other signed an FIA but was unable to fulfill it. Both suffered major family disruptions following assignment to the LBP; one sent her children to live with her mother, and the other lived in a shelter for four months.

a. Beth

Beth is 35 years old, divorced, and has three children, ages 14, 13, and 10. She has completed one year of college. Beth is on the LBP because she did not sign an FIA. She thought that she was exempt from signing an FIA because she was employed. Soon after being notified of her LBP assignment, Beth injured her back and lost her job. She said that she tried to contact PROMISE JOBS to work out an understanding after she lost her job, but by the time she did this, it was too late--the reconsideration period for pre-FIA LBPs had passed.

Beth's children have been living with her mother during the LBP's six-month period of ineligibility for FIP cash benefits. The children's grandmother is housing, feeding, and caring for them while Beth looks for work. Despite living in the same town as her mother, it is hard for Beth to visit her children because she relies on public transportation. This separation from her children has caused Beth to suffer from severe depression.

Beth also relies on her friends and community organizations for food and other forms of assistance. In her seventh month on the LBP, Beth was given a bus pass that made it possible for her to look for work and visit her children. She has strong ties to her church and periodically obtains food and household items from its food pantry. She also relies on other food pantries, but they only allow a person to get food once a month.

Beth cannot find permanent work, but she has been able to earn money by cleaning and painting houses. She plans to reapply for FIP cash benefits as soon as she is eligible. At the time of the case-study interview, Beth had already gone to PROMISE JOBS for an initial appointment.

We have classified Beth in category three because she has been unable to care for her children during her period of ineligibility for cash assistance. She has also been depressed. Rather than investing in her future, she is focusing her attention on returning to the welfare system as soon as possible.

b. Terry

Terry is 26 years old, has never been married, and has two children, ages 10 and 6. She has completed one year of college. Terry has an alcohol abuse problem. In an effort to deal with that problem, she entered a residential treatment facility. While in the treatment program, Terry was unable to continue to pursue her FIA goal of finishing her two-year college program. She could have met with her PROMISE JOBS caseworker to renegotiate the terms of her FIA, but chose not to because she was pessimistic about the outcome. After a state-level DHS review of her case, Terry was assigned to the LBP.

During four of the six months without cash benefits, Terry and her children lived in a shelter. This was a very difficult time for her. The shelter did not seem safe, and it provided little privacy. Terry has no family or friends in her community, but she does attend church and has started to connect with other church members. The church helped her leave the shelter by referring her to a housing agency, which assisted her in finding an apartment and paid a portion of the security deposit.

Terry also found it difficult to obtain enough food and clothing during the period without cash benefits. In addition to receiving and using food stamps, Terry frequently went to local food pantries and government commodity distribution sites. She occasionally borrowed food from other residents at the shelter. Terry frequented the local Goodwill and Salvation Army stores in an effort to acquire clothes for her two children. Members of her church also gave her family clothes.

Currently, Terry works 35 hours a week in a temporary position at a day care center. She hopes that the position will become full-time so that she can receive health benefits. This is unlikely, however, since the center seeks to minimize its cost of fringe benefits by avoiding full-time positions. Terry enjoys working and being a positive role model for her children. Although proud of her financial independence from the state, she is waiting to see how her job develops before deciding whether to reapply for FIP cash benefits.

We have classified Terry in category three because her family's food, shelter, and clothing situations were very precarious during the period of FIP ineligibility. She was highly dependent on community organizations to meet those basic needs. Although Terry now has a job, her employment situation does not appear to be stable. She has a positive attitude but is very uncertain about her family's future.

C. Cross-Cutting Themes in the Lives of the Case-Study Families

The preceding vignettes demonstrate that each family confronts a unique set of problems upon the termination of its FIP cash assistance and responds with a unique set of coping strategies. However, certain themes do cut across the lives of all or most of the subject families. This section highlights three such themes: (1) meeting basic needs, (2) shifting dependency from public assistance to family and friends, and (3) linkages with noncustodial parents. Our development of these themes is based on information provided by all 12 of the case-study subjects, not just the 6 that were highlighted in the vignettes.

1. Meeting Basic Needs

Most, but not all, of the case-study families responded to the loss of cash assistance by adjusting their expectations about and strategies for meeting basic needs. The need for food is perhaps most fundamental. Many of the case-study families adjusted their strategies for obtaining food upon the termination of their cash assistance. More than in the past, they economized by purchasing bulk quantities of food, in addition to relying on Food Stamps, gratefully accepting gifts of groceries from relatives, participating in the government commodity distribution program, and visiting food pantries. One case-study parent commented:

Now I buy food differently. One week I might buy a case of canned vegetables and then the next week I will get a meat order. It is different how I shop and how we eat. We eat stuff bought in bulk to last more days. Also, when the kids were in school, they were on the free breakfast and lunch program. Now, in the summer, it's even harder to get by.

Another parent reported:

We go to the food bank once each month. We would like to go more. But there is a rule about not going more than once each month. We try to go in the middle of the month so it feels we are doing our best for the first two weeks when we use our food stamps. But, it is hard.

Other parents mentioned that they had gone to churches, food pantries, and government commodity distribution sites to obtain food during the six-month period of ineligibility for cash assistance. Many of these organizations strictly limit the amount or frequency of assistance.

The case-study parents are also struggling to pay bills on time, and they have taken two main approaches to doing this. One approach is to pay bills in the order of the importance of the service or product, with the rent bill typically being paid first. Some parents paid their rent out of their employment earnings, while others relied on financial support (for example, mortgage payment by an estranged spouse) or in-kind support (for example, provision of space for a mobile home by parents) from friends or family, or bartered with landlords to reduce their rent in return for their cleaning vacant apartments. A second approach is to pay a small set of absolutely necessary bills each month (such as rent, electricity, and water) and then to alternate from month to month which bills of secondary importance are paid. Of course, a downside to this strategy is that access to a service or product that falls into the latter category may be lost due to lapses in payment. One case-study family lost its telephone service for this reason.

FIP cash benefits were terminated shortly before Christmas for many of the case-study families, making it difficult for parents to give presents to their children, as they had before going on the LBP. This was hard on both the children and the parents. One parent stated, "I could not afford any new toys for my boys. I felt bad about it. We went over to my brother's house for Christmas dinner and he had some gifts for my kids. That was a great surprise for the boys."

For two of the case-study families, the loss of cash benefits had little effect on their strategies for meeting basic needs. These families had greater economic resources than the others. In one family, the parent's partner paid all of the bills; in the other, the parent had secured full-time employment and was earning more each month than the amount of her former FIP cash benefits. For these two families, the loss of cash benefits affected the frequency with which the family bought special items for the children and engaged in leisure activities.

2. Shifting Dependency from Public Assistance to Family and Friends

Extended family members and friends played key roles in helping many of the case-study families cope with the loss of FIP cash benefits. They provided emotional support, financial assistance, and in-kind assistance, such as groceries and child care. In some cases, this support was so extensive that the family can be characterized as having shifted its dependency from public assistance to extended family members and friends.

The case-study parents who received assistance from extended family members and friends expressed varying levels of comfort in asking others for help, but they requested assistance because they put the needs of their children over their own embarrassment, loss of independence, lower self-esteem, and sense of guilt. One parent expressed the essence of this dilemma: "Well, I had to depend on other people to pay my bills, instead of me paying them myself. It is really hard trying to ask somebody for money. I did it because I had to. I had no choice. I am thankful that I have friends like that." As one parent noted, "I would do anything for my kids." Another parent said, "It does not matter how I feel about moving in with my folks. It is the best thing for my kids right now."

Many parents who relied on others for assistance expressed their sense of guilt at having imposed financial and other burdens on their family and friends. One parent said:

We lived with my mother for about four months. That was really hard. She is on Social Security and does not have a lot of money anyway. It was hard to ask her for help. I knew that she would say "yes," but I knew she could not afford it. We had no choice. I had been to the shelter already, and it was not safe there.

Another parent told us, "My friends will help me until I get on FIP again. My friends will help with groceries or help watch the kids if I need to go to a job interview." Nonetheless, she noted that this ongoing support had strained their friendship. "My friends told me that they cannot continue helping like this. They cannot afford it."

Case-study parents also struggled with the idea of returning to live in their parents' homes after being out on their own. They believed that it was a step backward for them emotionally. As one case-study parent said, "I had to go back and be under the same roof as my parents. I had to live by their rules again. I have a different way of parenting than they did when I was growing up, so there was a lot of stress at the beginning." Most of the case-study parents were willing to make these sacrifices when they expected them to be short-term. One explained, "I really appreciated their help and I knew I would be finding my own place. So, I just did the best I could."

A few case-study parents did not rely on extended family members or friends for support, choosing instead to manage on their own. They considered the loss of benefits a private issue, and the necessary adjustments were made within the immediate family. One such parent said, "I did it all on my own. I really did not want to go to anyone for help."

3. Linkages with Noncustodial Parents

All of the case-study parents commented on the roles of noncustodial parents in the lives of their families. Most reported that their LBP status had not affected the frequency or type of contact they had with their former partners. Three of the noncustodial parents had been and remained fairly active in the lives of their children, helping out financially or providing child care and transportation. Four of the case-study parents indicated that they began to pursue child support more earnestly following the termination of FIP cash benefits. This entailed working with the DHS Child Support Recovery Unit and, in some cases, with the Legal Services Corporation of Iowa.

Irregular or nonexistent child support payments are the norm among the case-study families, creating strain for many custodial parents. For example, irregular child support payments were a major source of disagreement between one case-study parent and her former husband. She told us that she was at the mercy of her former husband to make his court-ordered payments and had little control over the situation. Other parents made similar observations.

Some of the case-study parents remarked that their only tie to the fathers of their children was through the fathers' health insurance. These parents indicated that their children were covered under the noncustodial fathers' employer-provided health insurance policies. This coverage was greatly valued by these parents, especially those whose children had health problems that required expensive treatment. For example, one case-study parent had an asthmatic child who also suffered from allergies. The $165 monthly cost of medication and a breathing machine to treat those ailments was covered by the noncustodial father's health insurance policy.

D. Decisions Regarding Welfare Participation

Entry into the LBP was a critical transition for the case-study families that led directly to the termination of their FIP cash assistance. As these families approached the end of their six-month period of ineligibility for cash assistance, they faced another key transition--would they reapply for FIP assistance or try to carry on without public assistance? This section examines their decisions regarding entry into the LBP and reapplication for FIP benefits.

1. Entry Into the LBP

Case-study parents described two different means by which they entered the LBP. Parents in five of the families told us that they voluntarily entered the LBP, while parents in the remaining seven families said that they were assigned to it as a consequence of noncompliance with PROMISE JOBS participation requirements. The case-study parents' attitudes are correlated with the means by which they entered the LBP. Parents who voluntarily entered the LBP have a sense of control over their lives and are hopeful about the future, while parents who were assigned to the LBP have less of a sense of control and are less optimistic.

The five parents who indicated that they had voluntarily entered the LBP all appeared to be committed to their choice not to rely on public assistance. They and their families struggled to make adjustments when FIP cash assistance ended, but their efforts were facilitated by support from extended family members and friends and by their expectation of a better future. These parents are characterized by self-confidence and the ability to plan for the future. One of these parents told us, "I chose to be on the LBP because I was tired of being on welfare. I was tired of waiting once a month for a check. I felt like DHS was trying to control me instead of helping me." Another parent who selected the LBP said, "I have a plan to finish school and go to work as a computer hardware technician. I do not ever want to return to FIP."

The attitude of the seven parents who indicated that they had been assigned to the LBP was different from the attitude of those who voluntarily entered it. The attitude of those who had been assigned to the LBP is characterized primarily by an absence of a sense of control over one's life. One of these seven parents told us that she was placed on the LBP because "PROMISE JOBS felt that I did not cooperate." She continued, "I was working, so I was doing what I was suppose to do according to my FIA. I called my worker several times to see why I was being cut off and he said, 'It was their [PROMISE JOBS's] mistake, but they could not do anything now.' " Several other parents in this group noted that they had wanted to attend college but had been told by their PROMISE JOBS caseworkers that there was not any money for college. Consequently, they concluded that they really had no choice but to sign their FIAs and identify employment as their goal. Another parent, who was assigned to the LBP due to her partner's noncompliance with PROMISE JOBS participation requirements, said, "I did everything right, but [my partner] did not. So, I was punished for what he did. I cannot control him."

2. Reapplying for FIP Cash Benefits

The case-study parents also differed sharply from one another in their thoughts about reapplying for FIP cash benefits. The dominant factors influencing their thoughts about this important step were the adequacy and stability of their current income and their feelings about being dependent on the public welfare system. Four of the 12 case-study parents did not plan to reapply for FIP cash benefits, 5 had started the reapplication process prior to their interviews, and 3 were uncertain whether they would reapply.

a. Not Reapplying

The four parents who were not intending to reapply for FIP benefits had all voluntarily entered the LBP and had either secured employment, stabilized their relationships with partners who were supporting them, or had decided that they did not want to deal with the system anymore. One of these parents, who appreciated the stability and frequency of her paychecks, told us, "I like knowing how much I can bring in each month. I am paid every two weeks, so it is not as long from one paycheck to the next [compared with the monthly FIP check]." Another parent focused on the advantages of being independent of the welfare system, saying, "I like being in control of what is coming into the house [income]. When I was on FIP, it was up to DHS to decide how much they think we need. Now, it is up to me." The income-stability and independence motivations to remain off of FIP are apparent in the comment of yet another parent in this group, "It is better being employed. We have more money now. The kids get more things now. My income is steady, and it is just a lot more than it was before when I was on FIP. I have more freedom, I have more money."

b. Reapplying

The five case-study parents who were reapplying for FIP cash benefits had all been assigned to the LBP. In general, their employment and income were inadequate and unstable. For them, the LBP was something that they were waiting out; that is, their goal was to survive the six months of no cash assistance and then return to FIP as soon as possible. As one of these parents said, "We have been getting by, but I am waiting for next week when I can reapply for benefits. I already have an appointment. I think we will qualify. After that things will be back on track." Another told us, "I'm just trying to get back on FIP again and trying to find odd jobs to pay my bills in the meantime."

c. Uncertain About Reapplying

The remaining three case-study parents had not yet decided whether to reapply for FIP cash benefits when we interviewed them. One of these parents had voluntarily entered the LBP, and other two had been assigned to it. These parents were trying to secure employment, and if they were successful, they would not reapply for FIP assistance. If they were unsuccessful, they saw no alternative to reapplying. One of these parents told us, "I lost my job because of a misunderstanding with my boss. I am trying to meet with him to talk about it. I hope I can get my job back. If I do, we will be all right [without FIP cash benefits]."

E. Summary of Findings

The information from the case-study interviews with 12 LBP parents yields three major findings concerning basic needs, family support, and return to welfare:

1. The most pressing issue facing these parents was meeting their families' basic food and housing needs. To obtain enough food, they adjusted their shopping patterns so as to purchase more bulk quantities of food. Food stamp benefits were very important to them as was food provided by friends and relatives, churches, food pantries, and the government commodity distribution program. To ensure adequate housing, they gave top priority to the payment of the rent, followed by the electricity and water bills. In extreme cases, parents who felt that they could not meet the basic food and shelter needs of their children sent them to live with extended family members.
2. These parents frequently relied on extended family members and friends for emotional, financial, and in-kind support. In some cases, this support was so extensive that it may be appropriate to regard the families as having shifted their dependency from public assistance to family and friends. These informal assistance networks appeared to be more critical to their success in coping with the loss of FIP cash benefits than assistance available through churches, food pantries, and other community service organizations. However, reliance on family and friends has significant drawbacks: people feel guilty about imposing a financial burden on loved-ones; they lose self-esteem and the freedom to live their lives without intense scrutiny by others; and this form of assistance may be subject to informal time limits.
3. . These parents varied in their degree of confidence about the future and their ability to remain off welfare. The parents who had weathered the FIP ineligibility period through their own employment or the employment of a partner with whom they had a stable relationship displayed healthy levels of self-confidence and were optimistic about their prospects for living without public assistance. The parents who had been unable to establish a stable source of income during the period of FIP ineligibility doubted their ability to continue without welfare and were planning to reapply for FIP benefits.

The case-study findings summarized here, and presented in more detail in preceding sections of this chapter, describe only the 12 parents and their families purposefully selected and interviewed for the case studies. Hence, while the case studies clearly enrich our understanding of the effects of the loss of cash benefits, they cannot be generalized to either the LBP Survey population or to the larger LBP population.

1. Two families changed from category one to category two; one family changed from category two to category three; and one family changed from category three to category two. Hence, after the final classification, there were two families in category one, six families in category two, and four families in category three.

VIII. CONCLUSION

The analyses in the LBP Study have described the flow of cases through the LBP, the circumstances surrounding assignment to the LBP, the short-run changes experienced by LBP families following the termination of cash assistance, and their efforts to cope without cash assistance during the six-month FIP ineligibility period. These analyses have relied on data from three sources: (1) DHS administrative data on approximately 4,200 LBP cases, (2) a survey of 137 families whose cash assistance was terminated under the LBP, and (3) case studies of 12 such families. This chapter summarizes key findings from the LBP Study and draws conclusions regarding the nature of the program and its impact on families. It remains for the reader to draw his or her own conclusions regarding the implications of the study findings for reforms to the LBP or other broader changes in welfare policy.

Almost all assignments to the LBP are made because a member of a FIP case who is not exempt from the requirement to participate in employment and training activities fails to make or keep an appointment with PROMISE JOBS. Very few assignments are made because an individual who developed and signed an FIA fails to make a good faith effort to carry out the terms of the agreement. Regulations provide for two reconsideration periods for most LBP assignments, during which an individual may decide to participate in PROMISE JOBS and sign an FIA. If the individual does this, his or her assignment to the LBP is canceled. An assignment to the LBP may also be canceled to correct an administrative error or in response to an appeal. In total, slightly more than half of the assignments to the LBP are canceled before cash assistance is scheduled to end.

In addition to the cases that have their LBP assignment canceled and those that remain on the LBP until their FIP benefits are terminated, there are cases that stop receiving FIP benefits early. In particular, two-thirds of cases whose assignments to the LBP are never canceled stop receiving FIP benefits before the scheduled termination of cash assistance. Presumably, such cases either enter the LBP with the intention of needing cash assistance only temporarily, or they are induced to leave FIP by the initial reduction and imminent termination of benefits. Their early exit suggests that they are departing to financially viable situations.

Among LBP cases whose cash assistance actually is terminated, there are distinct gainers and losers. That is, some people recover from the loss of cash assistance and achieve a degree of economic success, while others do not recover, falling to a lower economic status. For example, half of the individuals whose cash assistance is terminated under the LBP are employed during the immediately succeeding months, but the other half are not. About 40 percent of LBP cases experience a net increase in total monthly income following the termination of cash assistance, with the average increase being $496. On the other hand, a larger proportion of cases, about 49 percent, experience a net decrease in total monthly income following the termination of cash assistance, with the average decrease being $384. Among the 30 percent of LBP cases that moved following the termination of cash assistance, just under half experienced an improvement in housing quality, while about one-fifth experienced a decline in housing quality. These patterns in employment, income, and housing changes suggest that the termination of cash assistance may serve as a catalyst for some families to move toward self-sufficiency, while for other families it amounts to a loss of an important financial safety net and a decline in economic status. Even among families who improve their situation, the degree of success may be modest, as evidenced by the fact that only 1 of every 10 individuals in LBP families who has a job following the termination of cash assistance receives health insurance through that job.

While this study has shown that the termination of cash assistance lowers the economic status of a substantial proportion of LBP families, it provides virtually no systematic evidence of extreme economic distress. In particular, the LBP Survey provides very little evidence that the affected families live on the streets or use emergency shelters in the months during which they are ineligible for cash assistance. The survey also provides little evidence that children are separated from their parents or that affected families move into the homes of friends or relatives in order to secure affordable housing during these months.

Although the termination of cash assistance under the LBP removes an important safety net, this study has found that a number of other public and private safety nets remain. These alternatives, however, may not be available to all needy families. The Food Stamp and Medicaid programs are the most important remaining public safety nets; these programs remain available to qualified LBP cases during the FIP ineligibility period, and many families continue in these programs. This study has shown that Food Stamp benefit levels increase modestly to replace some of the purchasing power that is lost by families whose cash assistance is terminated under the LBP. These families make surprisingly little use of the safety net programs provided by private-nonprofit organizations, with the use of food pantries being a notable exception to this pattern. Thus, there is little evidence from this study that the LBP has shifted the burden of dependency from the public sector to private-nonprofit social service providers. In contrast, there is strong evidence that networks of extended family members, friends, and neighbors provide an important safety net to LBP families. These networks provide emotional support as well as money, child care, and other types of material support. As shown by the LBP Survey and the case studies, these types of private support often increase following the termination of cash assistance and may be critical to a family's success in halting or reversing its economic decline. However, the case studies suggest that assistance from family, friends, and neighbors may be subject to informal time limits, implying that reliance on private-nonprofit social service providers might be greater if the period of ineligibility for cash assistance were longer than six months.

In interpreting these results and drawing conclusions regarding the implications of these findings for broader welfare policy, it is important to remember that the LBP is not a time limit policy, such as the lifetime limit on the receipt of cash benefits mandated by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. While the termination of cash benefits is a feature common to both the LBP and general time limits, two other features of the LBP distinguish it from general time limits and suggest that the effects of benefit termination would be different under the LBP. First, the LBP is applied only to cases that are capable of participating in training and employment, and some of those cases voluntarily enter the LBP after determining that their need for cash assistance is temporary. Second, the termination of cash benefits is limited to six months under the LBP, whereas it is permanent under general time limits.

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