Need-Tested Benefit Receipt by Families and Individuals

Need-Tested Benefit Receipt by Families and Individuals

link to page 1 link to page 1

-
February 9, 2016
Need-Tested Benefit Receipt by Families and Individuals
Need-tested benefits have received increased attention from
Figure 1. Estimated Number of People Receiving
policy makers in recent years as federal spending levels
Selected Need-Tested Benefits in 2012
remain elevated well into the economic expansion that
followed the 2007-2009 recession. While information is
available on receipt of benefits from individual programs, it
is more challenging to examine the cumulative benefits
received by families from all programs and how these
benefits interact.
This In Focus summarizes information from CRS Report
R44327, Need-Tested Benefits: Estimated Eligibility and

Benefit Receipt by Families and Individuals. The report
Source: CRS estimates using data from the Census Bureau’s 2013
uses information from U.S. Census Bureau household
Annual Social and Economic Supplement to the Current Population
Survey, supplemented with estimates of program eligibility, receipt,
surveys, combined with a microsimulation computer model,
and benefits from the TRIM3 microsimulation model.
to estimate total benefits received from nine need-tested
programs. For a discussion of the estimating methods and
The 106 million individuals receiving need-tested benefits
their limitations, see that report.
resided in 42 million families. About 40% of these families
benefitted from only one of these programs (most typically,
Need-tested programs require an individual or family to
SNAP or a refundable tax credit); 60% received benefits
meet a test of low income and/or financial resources to
from multiple programs.
qualify for benefits. The nine need-tested programs
examined are: (1) The Supplemental Nutrition Assistance
What Types of Families Receive Need-
Program (SNAP, formerly called food stamps); (2) the
Tested Aid?
Earned Income Tax Credit (EITC); (3) Supplemental
The families most likely to receive need-tested benefits
Security Income (SSI); (4) housing assistance (public
were poor. However, not all poor families received benefits.
housing, Housing Choice Vouchers, and Section 8 project-
Conversely, not all families that received benefits were
based rental assistance); (5) the Additional Child Tax Credit
poor. In 2012, about 80% of families with pre-welfare
(ACTC); (6) the special supplemental nutrition program for
income (measuring income before need-tested benefits)
Women, Infants and Children (WIC); (7) cash assistance
below the poverty level received at least one need-tested
from the Temporary Assistance for Needy Families
benefit. In that year, 53.7% of families with income just
(TANF) block grant; (8) the Child Care and Development
over the poverty line (100% to 149% of poverty) received
Fund (CCDF); and the Low-Income Home Energy
need-tested aid. As income increased, receipt of need-tested
Assistance Program (LIHEAP).
benefits decreased. Poverty is measured based on annual
How Many Individuals Received Need-
income; a somewhat higher income family may have been
Tested Benefits?
in need for part of a year and received benefits.
An estimated 106 million persons (or one in three persons
Figure 2. Receipt of Need-Tested Benefits by Pre-
in the population) received benefits from at least one of
Welfare Income to Poverty Ratio, 2012
these need-tested programs in 2012. Figure 1 shows the
estimated number of individuals who received a selected
need-tested benefit in that year by program. The estimates
show the number of people who received benefits at any
time during the year (which differ from a monthly average
number of recipients often reported for these programs).
The program benefit received by the most people in 2012
was the EITC, followed by SNAP and the ACTC. Both the

EITC and ACTC are refundable tax credits that require a
Source: See Figure 1.
family to have earnings in order to benefit. The cash
assistance programs, SSI and TANF, aided fewer people
In addition, some programs explicitly aid only certain types
than the refundable tax credits and SNAP.
of families (e.g., families with children) or have their
benefits targeted to families of a certain type. In 2012,
benefits were concentrated among families that had an
individual with disabilities or children. For families with
https://crsreports.congress.gov

link to page 1 link to page 2 link to page 1

Need-Tested Benefit Receipt by Families and Individuals
children, the bulk of aid went to those with a working adult,
Figure 4. Total Benefit Amounts of Families that
with half the spending for such families coming from the
Received Need-Tested Benefits, 2012
two refundable tax credits (EITC and ACTC). Families
without an aged member, individual with disabilities, or
children received the smallest amount of benefits in total.
Figure 3. Total Need-Tested Benefit Amounts for
Selected Programs, by Family Category and Benefit
Type, 2012

Source: See Figure 1.
Conclusions and Implications

The one in three persons in the United States who received
Source: See Figure 1. Cash is TANF cash assistance and SSI. Tax
at least one of the selected need-tested benefits in 2012
credits are the ACTC and the EITC. Food assistance is SNAP and
represent a diverse group. Some are in populations
WIC. Housing assistance is Section 8 rental assistance, rent subsidies
traditionally associated with receipt of need-tested aid: the
in public housing, and LIHEAP.
aged, individuals with disabilities, and families with
How Much Do Families Typically Receive children without adult workers. However, programs to
in Benefits from All Programs?
support parental work were created and expanded over four
decades (1970s through 2000s), extending need-tested
In 2012, the median benefit received by families from all
benefits to families with children not often associated with
programs over the year was $3,300 (meaning half of all
economic disadvantage (families with full-time workers,
families that received benefits received less than that
married couples, or adults with a college degree).
amount and half received more). However, the median did
not represent a benefit amount received by a “typical”
Many families receive relatively small benefit amounts.
family. Figure 4 shows the “skewed” distribution of total
However, some do receive relatively large benefits (defined
benefits received by families: many families are at the low
as the “top 25%” in terms of benefit receipt). Those that
end of the distribution, with a smaller and decreasing
received relatively large benefits were more likely than
number of families as the total benefit increases. About 10
other recipient families to be families with an individual
million families (close to one fourth of all families that
with disabilities or families with children. Families with
received benefits) received a total benefit of less than
children with relatively large benefits were often large
$1,000. A characteristic of this skewed distribution is that
families or families with adults who had characteristics
the relatively small number of families that received large
often associated with economic disadvantage: having low
benefits accounted for a disproportionately large share of
educational attainment, being a single parent; being a
the total spending on the selected need-tested programs. In
racial/ethnic minority (other than Asian-American), and
2012, the 25% of families that received the largest total
working less than full-time all year.
benefit (of $9,027 per year or higher) accounted for 64% of
all spending.
Gene Falk, Specialist in Social Policy
The dollar amounts shown are the “face value” of benefits.
Alison Mitchell, Analyst in Health Care Financing
For benefits paid in noncash form (food, housing, and child
Karen E. Lynch, Specialist in Social Policy
care) that are not fungible for other purposes, a recipient
Maggie McCarty, Specialist in Housing Policy
might not value those benefits equal to their face value.
William R. Morton, Analyst in Income Security
Margot L. Crandall-Hollick, Analyst in Public Finance
IF10355

https://crsreports.congress.gov

Need-Tested Benefit Receipt by Families and Individuals

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10355 · VERSION 2 · NEW