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Income Support and Social Services for Low-Income People in Massachusetts

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Document date: December 01, 1997
Released online: December 01, 1997

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Note: This report is available in its entirety in the Portable Document Format (PDF).


About the Series

Assessing the New Federalism is a multi-year Urban Institute project designed to analyze the devolution of responsibility from the federal government to the states for health care, income security, employment and training programs, and social services. Researchers monitor program changes and fiscal developments, along with changes in family well-being. The project aims to provide timely nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.

Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's Web site. This paper is one in a series of reports on the case studies conducted in the 13 states, home to half of the nation's population. The 13 states are Alabama, California, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas, Washington, and Wisconsin. Two case studies were conducted in each state, one focusing on income support and social services, including employment and training programs, and the other on health programs. These 26 reports describe the policies and programs in place in the base year of this project, 1996. A second set of case studies to be prepared in 1998 or 1999 will describe how states reshape programs and policies in response to increased freedom to design social welfare and health programs to fit the needs of their low-income populations.

The income support and social services studies look at three broad areas. Basic income support for low-income families, which includes cash and near-cash programs such as Aid to Families with Dependent Children and Food Stamps, is one. The second area includes programs designed to lessen the dependence of families on government-funded income support, such as education and training programs, child care, and child support enforcement. Finally, the reports describe what might be called the last-recourse safety net, which includes child welfare, homeless programs, and other emergency services.

The health reports describe the entire context of health care provision for the low-income population. They cover Medicaid and similar programs, state policies regarding insurance, and the role of public hospitals and public health programs.

In a study of the effects of shifting responsibilities from the federal to state governments, one must start with an understanding of where states stand. States have made highly varied decisions about how to structure their programs. In addition, each state is working within its own context of private-sector choices and political attitudes toward the role of government. Future components of Assessing the New Federalism will include studies of the variation in policy choices made by different states.


Highlights of the Report

This report focuses on the baseline conditions of cash assistance and social services in the Commonwealth of Massachusetts, as the state embarks on the new welfare reforms specified in the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)—in particular, the replacement of Aid to Families with Dependent Children (AFDC) with Temporary Assistance to Needy Families (TANF).

State Overview

Massachusetts is a prosperous state, with higher incomes and lower rates of poverty and unemployment than the national average. It has the lowest mortality rate in the country for children ages 1 to 14 and the second lowest infant mortality rate. Its unmarried and teen birth rates are relatively low, even though a larger than average share of its families with children are single-parent families. The state is enjoying an unprecedented period of fiscal health, due to an improved economy, tax changes, a concerted effort to increase revenue through federal reimbursements, and spending cuts. In the 1990s the state has been governed by a Republican governor and a Democratic state legislature. Although this political divide can be contentious, it is universally agreed that the state's current fiscal health is due to strong bipartisan efforts. There is little substate decisionmaking in Massachusetts because of a weak county structure.

Setting the Policy Context

Massachusetts has historically had a strong commitment of support to its low-income families and has achieved a broader and deeper social safety net than many states. In recent years, the state's debate over welfare reform has led to a policy shift away from cash assistance toward funding programs aimed at facilitating the transition to work and self-sufficiency. Among the first and largest changes was the replacement of the state's General Relief with Emergency Aid to the Elderly, Disabled, and Children (EAEDC), which considerably tightened eligibility for cash assistance and ended the presumption that need alone was sufficient for benefit receipt. This was followed by a replacement of the Aid to Families with Dependent Children with the Transitional Aid to Families with Dependent Children (TAFDC) program.

Massachusetts's current human services spending accounts for 25 percent of the state's budget. The state's current approach to helping low-income families has three major facets. The first is a continuing strong commitment to basic health and nutritional services for infants and toddlers. It is, for example, the only state that fully funds the supplemental food program for Women, Infants, and Children (WIC). The second is education reform, with 1993 legislation establishing performance measures for individual students and allocating substantial funds to gradually equalize spending among school districts. The third is the ideological change from cash assistance to promotion of work.

Basic Income Support

In addition to the EAEDC, Massachusetts provides cash support to low-income families through a state supplement to the federal Supplemental Security Income (SSI) program and through TAFDC. TAFDC the largest of these programs, is a federal welfare reform waiver program that replaced AFDC and is the responsibility of the Department of Transitional Assistance (DTA). The primary income support available to low-income families in Massachusetts, TAFDC pays $540 a month on average to eligible families, compared to a U.S. average family welfare payment of $381.

Chapter 5 of the Massachusetts Laws of 1995 authorized the waiver application for TAFDC, implementation of which began late in 1995. Chapter 5 specifies numerous provisions to encourage work and increase personal responsibility, along with special provisions relating to teen mothers. The work provisions include a time limit on benefit receipt (no more than two out of every five years) and a work requirement (after 60 days). TAFDC is more generous than federal law in its exemption provisions. Only families in which the youngest child is school age, an estimated 20 percent of the caseload, face the time limit and the work requirement. Families in which the youngest child is between ages two and six, another 31 percent of the caseload, are exempt from the work requirement but not the time limits. Provisions to increase personal responsibility include a family benefit cap preventing coverage of children conceived while on welfare, a child immunization requirement, and a school attendance requirement. Teens under 18 must live at home and meet a schooling requirement if they have not graduated from high school or earned a GED.

Those subject to the work requirement have 60 days after applying for welfare to find a paid job or unpaid community service position that provides at least 20 hours a week of employment. Recipients can meet the 60-day requirement by working at a paid job, doing volunteer work at an approved site through the Community Service Program, working full time at a subsidized job through the Full Employment Program, or participating in Supported Work. Recipients not working in a subsidized or unsubsidized job within 60 days are assigned a Community Service Program position.

The transition from AFDC to TAFDC was relatively smooth, with the entire caseload brought into a local welfare office and evaluated in terms of the new rules within 10 months. Implementation of the work requirements and work activities was much more difficult. No additional funding was provided for the Community Service Program or the Full Employment Program. And DTA staff were expected to assume responsibility for them with little warning.

Programs that Promote Financial Independence

To help promote self-sufficiency, cash assistance often needs to be supplemented with employment and training, subsidized child care, child support collection efforts, and health insurance coverage. For employment and training and subsidized child care, Massachusetts makes sharp distinctions between welfare and nonwelfare working families.

Employment and Training Services

The current foundation for employment and training for the disadvantaged in Massachusetts is the One-Stop Career Center Initiative, spearheaded by the MassJobs Council. This concept rests on four principles—universality, integration of services, consumer participation in program design, and success measured by customer satisfaction. The model is built on competition. Initially, 16 Regional Employment Boards (REBs) competed for selection as a Career Center pilot site. The selected REBs then oversaw competition among potential program operators in their areas. Now that the Career Centers are operational, customers can choose to receive core services from any of the Centers in their administrative district.

Implementation of the One-Stop Career Centers began independently of and shortly after the welfare reform initiative. The two are extremely interdependent, however, with the Centers relying on funds from the DTA and the DTA relying on the Centers to provide job search and job placement assistance for welfare recipients. For this reason alone, their different approaches have created tensions that are difficult to resolve. In particular, the customer-centered approach of the Centers conflicts with the dictates of the welfare reform work requirement. And the competitively bid service model conflicts with the service co-location already implemented by several local welfare and/or employment offices. To address the concern of welfare staff that an additional office stop could be a major obstacle to a clientele whose work motivation may be low, the Career Center concept has been widened to encompass a variety of models. Career Center staff are also now colocated in welfare offices. The Center system still has problems, not least of which is lack of adequate preparation for the federal data reporting requirements (because the Center system was set up in the expectation of an employment and training block grant that would simplify recordkeeping). State staff express optimism that things will be satisfactorily resolved.

Child Care

The system of child care and early education in Massachusetts is decentralized, with responsibility distributed across three state departments—the DTA, the Department of Social Services (DSS), and the Department of Education (DOE)—each of which administers its own subsidized programs with different goals and target populations. The goal of the DTA is to get people from welfare to work, and it administers almost $100 million in child care funding a year through three types of slots. Access to subsidized child care is easy for TAFDC families, including up to three or four years (on a sliding fee scale) as they transition off cash assistance. The goal of DSS is to uphold the family structure and protect children. It manages $83 million in child care funding a year for low-income families and families with either developmentally disabled children, severely incapacitated parents, or parents in an education or training program. DOE emphasizes early development, including the state-funded prekindergarten program, Community Partnerships for Children (CPC).

An operational distinction has now developed in which TAFDC families receive child care asistance through a voucher system that is effectively seamless for the families, whereas the working poor receive contracted care through a confusing mix of alternatives and overall funding that has not increased since 1992. This problem has stimulated a structural reform proposal, which will be implemented starting in FY 1998, that is expected to create a simpler and more equitable system for all families by removing departmental and child care account distinctions.

Child Support

Massachusetts began to implement a centralized and automated child support system a decade ago, under the Office of Child Support Enforcement in the Department of Revenue. The Commonwealth now has new-hire reporting, revocation or denial of numerous licenses for nonpayment, and a successful in-hospital paternity establishment program—all of which served as models for the recent federal welfare reform legislation. The Commonwealth has also increased court efficiency by devoting time blocks exclusively to child support cases. This combination of initiatives has increased state collections by 45 percent between 1991 and 1996 and the families supported by collections by 65 percent over the same period.

Medicaid and Other Health Coverage

Massachusetts is a leader in providing public health coverage. Its Medicaid program covers 64 percent of the state population with incomes below 150 percent of poverty compared to a national average of 51 percent. It also covers all pregnant women and infants under 185 percent of poverty. Nearly 70 percent of Medicaid recipients are mandated into managed care programs. The state has also created MassHealth, under a Section 1115 waiver, which will cover all children up to age 18 in families with income below 133 percent of poverty and subsumes separate state programs covering working adults with disabilities and children with disabilities not covered by Medicaid. Children not covered by Medicaid or MassHealth are covered through a state-funded program. In addition, through its Healthy Start program, the state covers care for all pregnant women who are not Medicaid-eligible up to 200 percent of poverty. Finally, welfare recipients are currently eligible for 12 months of transitional Medicaid coverage, which the state is considering extending to three years.

Last Resort Safety Net Programs

Although one of the goals of devolution is to promote the well-being of children and families, it is important to consider what might happen to families for whom the new rules and programs do not work as designed. Child welfare and housing emergency services have existed for a long time to "pick up the pieces" when families cannot cope.

Child Welfare

The state DSS administers child welfare services through a central state office, 6 regional offices, and 26 area offices. It performs all intake, investigations, assessment, and permanency planning functions and, since 1990, has been conducting the majority of foster care recruitment activities and adoption services. Restructuring at the regional level over the early 1990s has increased direct service staff and decreased the staff-client ratio. Despite increasing numbers of substantiated cases since 1991, the overall caseload and the number of children in out-of-state placements have remained pretty constant. Since 1993, DSS has moved more toward protection and away from traditional family preservation, although it still serves a large proportion of children not in placement. In recent years, the primary focus of DSS has been on improving the quality of service provided to the children and families served by the agency. When the department's new information system, FamilyNet, becomes fully operational during 1998, it will be the most advanced State Automated Child Welfare Information System in the country.

Emergency Services and Housing

The state's framework for Emergency Assistance (EA) for children and families includes three major parts: homeless prevention services, shelter services, and services to teens. These are funded by a combination of state and federal matching funds through Title IV-A and locally provided services through the McKinney Act. Services to prevent families from becoming homeless have been de-emphasized in the state's EA program in the 1990s, with rent arrearage assistance the main remaining category. State and federal emergency dollars fund virtually all the emergency shelter facilities in Massachusetts, which are provided by nonprofit organizations under state contract. EA services are currently available to families with dependent children under age 21 and to pregnant women without dependent children subject to the same income requirements as TAFDC. There is no residency requirement, but clients can only receive EA services once in a 12-month period. For families not eligible for EA, there are few alternatives.

The Teen Living Program was initiated in 1995 under the chapter 5 legislation that created TAFDC. Designed to meet the needs of pregnant and parenting teens who cannot live at home for safety reasons, it is administered by DSS with funds from DTA. The program has been underutilized so far, which state administrators and advocates attributed to a misunderstanding of the new welfare rules that is keeping teens away from the welfare office entirely.

Implications of the New Federal Welfare Reform Legislation

Since Massachusetts had already designed and largely implemented a welfare reform initiative that parallels the federal welfare reform legislation of 1996, few issues have arisen and no structural changes loom as a result of that legislation. Indeed, as a pioneer in welfare reform, Massachusetts could provide early lessons for the direction of welfare reform in other states. The Commonwealth's TANF plan differs from federal legislation predominantly in the details of time-limited assistance and work requirements and the recipients that are exempted from these measures. The state's regulations on the speed with which recipients are subject to the time limits and the definition of "work" are more stringent than their federal counterparts. But these requirements apply to a smaller proportion of the caseload. Even with the more lenient exemption provisions, the state expects to meet the federal work participation requirements for the caseload as a whole, although staff were less confident about meeting the two-parent participation requirement. Since teen pregnancy has been and remains a high state priority, the state plans no additional actions as a result of the federal incentives to reduce the teen pregnancy rate.

As with most states, Massachusetts will get a considerable "windfall" from the new welfare block grant structure. Although there are competing demands for these funds, the state has committed itself to using them to fill gaps in the welfare system. The FY 1998 budget recommendation indicates that much of the windfall will be carried forward for use if caseloads rise, but some of the funds will also go to increase work support services such as child care. This is consistent with the recognized need to promote better integration between services for welfare and nonwelfare families in both the child care and the employment and training funding and program structures. The state will also use some of these funds to help immigrants who lose eligibility for a variety of federal benefits.

Note: This report is available in its entirety in the Portable Document Format (PDF).



Topics/Tags: | Employment | Governing | Poverty, Assets and Safety Net


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