CHAPTER 6
WHO RECEIVES BENEFITS?

AN OVERVIEW OF WELFARE PROGRAM PARTICIPATION

With few exceptions, the demand for welfare assistance increased sharply in the 1990s. Nonetheless, one-third of the poor received no benefits in 2000. Several reasons explain why more than 33 percent of those living below the poverty line did not receive the assistance available to them. Some were ineligible because they had such assets as a car or a savings account that brought them above permitted limits. Others did not know they were eligible for benefits, while some knew they were eligible but chose not to accept benefits or thought the effort was not worth the amount of benefits they would receive.

How Many People Receive Benefits?

The U.S. Bureau of the Census reported that in 2001 about 70.3 million people, or 25 percent of the total U.S. population, lived in households that received some form of means-tested assistance—assistance based on earning below a certain amount. (See Table 6.1.) This number is considerably higher than the 53.2 million people, or 21 percent of the population, who received assistance in 1990.

In 2001 approximately 32.9 million people were living below the poverty level. There are various governmental measures of poverty, including poverty thresholds and poverty guidelines. The 2001 poverty guideline for a family unit of two was $11,610; for a family unit of four, the guideline was $17,650. Of those living in poverty, 22.2 million, or 67.5 percent, were receiving some form of means-tested aid. (See Table 6.2.)

About 17.7 million persons, 6.3 percent of the total populace, lived in households that received food stamps in 2001. (See Table 6.1.) Of the people who lived below the poverty level, 33.6 percent lived in households that received food stamps in 2001. (See Table 6.2.)

In 2001 Medicaid covered about 50.4 million people; about 17.9 percent of the population lived in households where at least one person was covered by Medicaid. (See Table 6.1.)

What Type of Households Receive Assistance?

Certain types of households were more likely than others to receive means-tested assistance. Poor families with children under eighteen years of age were most likely to receive government assistance. In 2001, 84.5 percent of all poor families with children under six years of age and 89 percent of poor families headed by a single mother with children under six years of age received assistance. In unrelated subfamilies (two or more people living in the same household who are related to each other but are not related to the householder), 75 percent of poor children aged six to seventeen received assistance. (See Table 6.2.)

Information on the age, gender, racial and ethnic background, and family status of welfare participants in 2001 is available from the Current Population Survey, a joint project of the U.S. Bureau of Labor Statistics and the U.S. Bureau of the Census.

Gender of Welfare Recipients

In 2001 slightly more females (26.5 percent) than males (23.4 percent) lived in a household that received means-tested assistance, or welfare benefits of any kind. About 38.1 million females received program assistance during 2001, compared to 32.1 million males. (See Table 6.1.) Among those living below the poverty level, 12.9 million females (69.4 percent of females) received benefits during some part of the year, compared to 9.3 million males (65 percent of males). (See Table 6.2.)

One reason for the larger percentage of females receiving assistance is that women are more likely to live in a family without a spouse present. Another reason is that, as reported by numerous government and private

studies, women, on average, earn approximately 76 percent of what men earn (2001 figure). Age may also play a role in the higher number of women in poverty; there are far more elderly women then men.

Racial and Ethnic Characteristics of Welfare Recipients

The U.S. Census Bureau reported that in 2000, 15.2 percent of white non-Hispanics, 44 percent of African-Americans, and 48.5 percent of persons of Hispanic origin (persons of Hispanic origin can be of any race) lived in households receiving some form of means-tested assistance. Among those with incomes below the poverty line, 53.1 percent of white non-Hispanics, 80.8 percent of African-Americans, and 77.9 percent of Hispanics received benefits.

Age of Welfare Recipients

More than one-third (37.5 percent) of children under eighteen years old received assistance at some time during 2001. Approximately one out of six people aged sixty-five or over (17.9 percent) received assistance. (See Table 6.1.)

Family Relationships of Welfare Recipients

Only 19.2 percent of those living in families headed by married couples received assistance in 2001. By contrast,

55.6 percent of individuals in female-headed families with no spouse present received benefits. The highest rate of assistance was provided to families headed by women with children under the age of six (72 percent). (See Table 6.1.)

USE OVER A PERIOD OF TIME

The Survey of Income and Program Participation (SIPP), conducted periodically by the U.S. Census Bureau, is a longitudinal (over a period of time) survey of the same households that measures changes in their economic activity. Among the many areas covered in the 1996–1999 survey, the bureau studied the use of major means-tested programs: Aid to Families with Dependent Children (AFDC), General Assistance, Supplemental Security Income (SSI), Medicaid, Food Stamps, and housing assistance. In "Dynamics of Economic Well-Being: Program Participation, 1996 to 1999: Who Gets Assistance?" (Current Population Reports, January 2004), the Census Bureau released information on the characteristics of recipients of means-tested programs and the length of time for which they received benefits between 1996 and 1999.

Education Levels of Welfare Recipients

The SIPP found a strong correlation between a low level of education and receipt of welfare benefits. (See Table 6.3.) Adults who did not graduate from high school received benefits for the greatest median duration of time.

• Those who did not finish high school—7.3 months
• Those who were high school graduates—5.9 months
• Those with one or more years of college—3.9 months

Employment Status of Welfare Recipients

More than one-quarter (26 percent) of the unemployed and almost one-fifth (20.1 percent) of those individuals not in the labor force received welfare assistance in an average month in 1999. However, only 3.8 percent of full-time employees and 10 percent of part-time workers received these benefits that year. (See Table 6.4.) In addition to receiving means-tested benefits, unemployed workers may also be eligible for unemployment compensation. In 2002, as reported by the Bureau of Labor, Division of Actuarial Services, only 44 percent of those covered by unemployment insurance were receiving unemployment compensation in an average month.

Duration of Program Spells

The length of time people received assistance, referred to as a "spell," differed by program. The average number of months for receiving any means-tested assistance between January 1996 and December 1999 was seven months. The spell length for AFDC/general assistance (5.6 months) was shorter than that for food stamps (5.9 months) and Medicaid (7.5 months). The spell length for SSI was longest (11.2 months). (See Figure 6.1.) People in families maintained by a female householder had longer spells (7.6 months) than married-couple families (5.7 months). (See Table 6.3.)

SURVEY OF PROGRAM DYNAMICS FOR EVALUATING WELFARE REFORM

Data from the 1996–1999 SIPP survey are being used as a baseline to examine the impact of welfare reform. The 1996 welfare reform act (PRWORA) directed the U.S. Census Bureau to examine changes following the elimination of

the AFDC program and its replacement with Temporary Assistance for Needy Families (TANF). During a six-year period (1996 through 2001) the Census Bureau interviewed a sample of households that participated in the SIPP surveys from 1992 to 1994. Once tabulation is complete, these surveys will provide information on the effect of the new law on the demographic and socioeconomic characteristics of persons participating in public assistance programs. Changes in the composition and characteristics of AFDC/TANF recipients over time are examined in Chapter 10.

OVERLAPPING SERVICES

Not surprisingly, poor individuals who receive one form of social welfare assistance are likely to qualify for and receive others. For example, during 2002, 37.6 percent of those receiving TANF also received housing assistance, 62.3 percent received free or reduced-price school meals, 80.8 percent received food stamps, and almost all (99.6 percent) were on Medicaid. Similarly, among SSI recipients, 40.2 percent received food stamps, 17.7 percent received free or reduced-price school meals, 22.9 percent lived in public or subsidized rental housing, and 96.4 percent were on Medicaid. About 18.2 percent of those receiving Social Security and 17.8 percent of people receiving Medicare were also on Medicaid. (See Table 6.5.)

At the same time, among households receiving food stamps, 16.2 percent received TANF, 30.2 percent received SSI, 30.5 percent received Social Security, and 26 percent were on Medicare. (The figures do not add up to 100 percent because some people received more than one benefit.) About 10.8 percent of those receiving WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) also received TANF benefits. (See Table 6.6.)

Between 1984 and 2002 the percentage of AFDC/TANF and SSI households who received other benefits fluctuated, but, generally, the coverage for most non-veteran benefit programs increased then declined following the passage of PRWORA in 1996. The percentage of households receiving both AFDC/TANF and food stamps declined (from 87.2 percent in 1995 to 80.8 percent in 2002). The percentage receiving both SSI and food stamps also declined over this period, from 50 percent to 40.2 percent. (See Table 6.7.)