Need-Tested Benefits: Estimated Eligibility and Benefit Receipt by Families and Individuals

Summary

Need-tested benefits have received increased attention from policymakers in recent years, as spending levels for these programs remain elevated well into the economic expansion that followed the 2007-2009 recession. While information is available on the number of people who receive benefits from individual programs, it is more challenging to examine how these programs interact and the cumulative benefits families receive from them. Case studies based on hypothetical families often show how much in benefits a family may potentially receive from multiple programs under federal and state policies. However, these case studies assume families receive all the benefits they are eligible for and receive them all year. This is often not true.

This report examines estimated benefit receipt by families from nine major need-tested benefit programs in 2012. The nine programs are the Supplemental Nutrition Assistance Program (SNAP); the Earned Income Tax Credit (EITC); Supplemental Security Income (SSI); subsidized housing assistance; the Additional Child Tax Credit (ACTC); the special supplemental nutrition program for Women, Infants, and Children (WIC); Temporary Assistance for Needy Families (TANF) cash assistance; the Child Care and Development Fund (CCDF); and the Low-Income Home Energy Assistance Program (LIHEAP). The estimates are derived from a combination of information from a Census Bureau household survey and a model that estimates program eligibility and participation based on information from that survey.

An estimated 135 million persons, 4 in 10 persons in the noninstitutionalized population, were eligible for benefits from at least one of these programs in 2012. However, not all persons eligible for need-tested benefits actually received them. Among the programs examined in this report, an estimated 70% of eligible families actually received SNAP and 65% of eligible families received WIC in 2012. However, the estimated rate of benefit receipt among eligible persons was 28% for TANF cash assistance, 22% for LIHEAP, 18% for subsidized housing, and 17% for CCDF (based on eligible children).

An estimated 106 million persons (1 in 3 persons in the population) actually received benefits from one of these programs in 2012. Benefits were concentrated among people in families with children and families with an individual with disabilities with those two groups accounting for an estimated 78% of total benefit dollars from the selected programs. Many families that received need-tested benefits had characteristics not typically associated with economic disadvantage; a substantial portion of families that received aid had pre-welfare incomes above the poverty line in 2012. Among families with children in 2012, an estimated 45% of those who had a worker and 38% with at least one adult working full-time all year received at least one need-tested benefit.

The estimated median annual benefit amount from the nine programs in 2012 was $3,300 (i.e., half the families that received benefits received less than $3,300 and half received more). About 40% of families that received need-tested aid did so from only one of the nine selected programs.

Some families received relatively large amounts of need-tested aid. In 2012, an estimated 25% of families that received benefits from one or more of the selected programs received a total of $9,027 or more. These families accounted for two-thirds of all spending for these programs in 2012. Families with children who received $9,027 or more had characteristics indicative of a more disadvantaged population: working less than full-time all year, lacking a high school diploma, being in a family headed by a single woman, being of a racial/ethnic minority (other than Asian-American), and being in a large family.