Federal Low-Income Programs: Multiple Programs Target Diverse Populations and Needs
Released: 2015-08-31T00:00:00

Letter

Background

Program Overview

The programs discussed in this report are very diverse. The various programs we discuss were created at different times, to serve different populations, and in response to different policy issues (see box on next page). Programs also vary greatly in terms of how they are structured and funded. In addition, programs are administered through a varying combination of federal, state, and local agencies, and sometimes private organizations. Some programs require state or local agencies to contribute a share of nonfederal funds, while others are entirely federally- funded. Federal funding structures for low-income programs also vary. For instance, programs may be funded through program authorization acts (mandatory spending) or through appropriations acts (discretionary spending). Spending for these programs may be indefinite (in that there is no pre-determined ceiling and federal payments will be made for all eligible recipients for eligible expenses) or definite (in that the law limits the amount of federal spending). Tax expenditures—such as tax credits, deductions, or exclusions—are generally measured as the estimated reduction in tax revenue and are generally considered separately from other federal spending, with the exception of some refundable tax credits in which credit in excess of tax liability results in a cash refund.

Examples of Low-Income Programs Established over Time 1930s- Great Depression and the New Deal: Major social insurance programs (not discussed in this report) were created to protect workers against old age and unemployment. Assisted housing programs, such as public housing, also started during this time. 1960s- The War on Poverty: Various programs were created aimed at educating low-income children, youth, and adults to help address the causes of poverty (e.g., Head Start, Job Corps, aid to help low-income students in elementary and secondary schools). The Food Stamp Program (now known as the Supplemental Nutrition Assistance Program (SNAP)), which had been a pilot program, was made permanent. Medicare (another social insurance program) and Medicaid were also established. 1970s- Welfare reform proposed, EITC created: Due to rising caseloads of recipients of Aid to Families with Dependent Children (AFDC), which provided cash assistance to low-income families, reform was proposed, but did not occur. However, major changes to other programs occurred. Aid to low-income individuals who were aged, blind, or had a disability evolved into a federally-run program: Supplemental Security Income. Section 8 rental housing assistance was established, as was the Earned Income Tax Credit (EITC). 1980s- Tax reform and promotion of work: EITC and Medicaid were expanded. The Tax Reform Act of 1986 removed federal income taxes for many of the working poor, and the Family Support Act of 1988 was passed to encourage work among AFDC recipients. 1990s- Decentralization and welfare reform: AFDC was replaced with Temporary Assistance for Needy Families (TANF), a block grant to states that emphasizes work and time-limited cash assistance and gives states wide discretion on how to use TANF funds, including for various noncash services. 2000s- Great Recession, federal stimulus, healthcare reform: In response to the recession, the American Recovery and Reinvestment Act of 2009 expanded federal spending for low-income aid, particularly for SNAP and Medicaid. The Patient Protection and Affordable Care Act expanded Medicaid eligibility (although a Supreme Court decision subsequently made Medicaid expansion an option for states) as well as established new refundable tax credits for lower-income households to subsidize their purchase of private health insurance on health insurance exchanges.

Poverty Measurement

The official measure used today to provide information on how many people are “in poverty” in the United States was developed in the 1960s, based on the cost of food at that time. The official poverty thresholds— the income thresholds by which households are considered to be in poverty depending on their size—are updated annually by Census to reflect current prices. HHS uses the official poverty thresholds to update the “federal poverty guidelines” each year, which are the basis for determining financial eligibility or funding distribution for certain low- income programs.

The official poverty measure has not changed substantially since it was developed, and concerns about its inadequacies resulted in efforts to develop a new measure starting in 1990. For instance, the threshold for the official poverty measure (the income level that is used to determine who is “in poverty” each year) is based on three times the cost of food and does not take into account the cost of other basic necessities, such as shelter and utilities. Additionally, in determining a household’s income, the official measure considers cash income, but does not include additions to income based on the value of noncash assistance (e.g., food assistance) or reductions based on other necessary living expenses (e.g., medical expenses or taxes paid). A panel on poverty was established by the National Academy of Sciences and, later, an interagency technical working group suggested ways a new poverty measure could address some of these concerns. Based on these suggestions, Census, with support from the Bureau of Labor Statistics, developed the SPM in 2010.

Each year since, Census has released annual poverty statistics on the SPM along with the official measure. The SPM did not replace the official measure, which is still used for determining federal poverty guidelines that could affect eligibility for some programs. Instead, the SPM is primarily used as a research measure, designed to provide information on economic need at the aggregate level, nationally or within subpopulations or areas.

The SPM differs from the official measure in various ways. In defining a family unit that shares resources, in addition to related individuals, the SPM household includes unrelated children cared for by the family (such as foster care children) and cohabiting unmarried partners (see table 1).The SPM also defines the threshold of need differently from the official measure.

Also, in determining if a family has sufficient resources to meet necessary living expenses, it looks more holistically at a family’s resources and expenses (see fig. 1). Individuals or families whose household incomes are below 100 percent of the SPM threshold are considered to be in poverty based on current levels of need.

About 80 Programs Provide an Array of Supports for Low- Income Individuals and Households

Over $700 Billion in Federal Obligations in Fiscal Year 2013 Was Concentrated in Large Programs Aimed at Meeting Basic Needs

We identified 82 federal programs, including several tax expenditures, that target low-income individuals, families, and communities to help them meet basic needs or provide other assistance. For 78 of these programs, fiscal year 2013 federal obligations totaled about $742 billion. This amount includes federal obligations for two tax expenditures: the ACTC and the refundable portion of the EITC.expenditures that assisted people with low income, plus the nonrefundable portion of the EITC, totaled an estimated $14 billion in reduced federal tax revenues for fiscal year 2013.

Four additional tax These programs include those sometimes referred to as “public assistance” programs or “means-tested” programs, but are broader and more diverse than those terms imply. For instance, while many of the programs, often referred to as public assistance or means-tested programs, help people with low incomes meet basic needs (income support, health care, food, housing, or utilities), some of the programs in this report provide other types of services, such as child care, services for children in foster care, or support services for older individuals. Other programs provide education assistance or employment and training support with the goal of helping disadvantaged individuals better independently support themselves. (See app. II for information from our survey on each program’s purpose and benefit or service provided.)

Federal obligations for these low-income programs were concentrated in a few large programs (see fig. 2). Medicaid accounted for 39 percent of the fiscal year 2013 federal obligations for the programs we reviewed,followed by SNAP, the refundable portion of the EITC, and SSI. In total, these four programs comprised almost two-thirds (65 percent) of federal low-income obligations in fiscal year 2013 or about $480 billion. For some programs, states or other entities also contribute funding, which means billions more in nonfederal funds are spent on such programs. For example, state expenditures for Medicaid were $194 billion in fiscal year 2013, accounting for around 40 percent of total Medicaid expenditures. For TANF, state expenditures totaled almost $15 billion in fiscal year 2013, accounting for about 47 percent of total expenditures for the program.

Social insurance programs, including Social Security Old-Age and Survivors Insurance (Social Security) and Medicare, are not included in the programs we reviewed because they are not targeted solely to those with low-income. These programs are generally financed by contributions from workers and employers, and eligibility for benefits is determined, at least in part, on the basis of an individual’s work history. These programs are intended to more universally protect workers from lost wages and related benefits due to retirement, disability, or a temporary period of unemployment. Some of these programs are very large. For example, in fiscal year 2013, Social Security alone totaled $674 billion in obligations, which is equal to about 90 percent of the total in obligations for the 78 low-income programs (see fig. 3).

The 10 largest low-income programs in terms of federal obligations accounted for about $600 billion in fiscal year 2013 (82 percent of obligations for 78 low-income programs) and served millions of people (see table 2). However, according to our survey, while these 10—and most of the other 72 programs—collect some information on numbers served, programs varied in how they track this information, making it difficult to compare information across programs or to know precisely how many people are helped overall. (In the next section, we provide an estimate of the overall number of recipients in selected programs.) As also shown in table 2, agencies reported the number served using different units (such as individuals, households, or tax returns) and a variety of time periods (annual, monthly; fiscal, calendar, school year; cumulative or point-in-time) for each program. See appendix III for information on federal obligations, number served, and time periods for all 82 programs.

In addition to the $742 billion in obligations reported in our survey, in fiscal year 2013, the federal government incurred $14 billion in reduced tax revenues for the nonrefundable portion of the EITC and four other tax expenditures, according to estimates from the Department of the Treasury (Treasury) (see table 3). These selected tax expenditures directly or indirectly serve low-income people. For instance, the EITC goes directly to low-income people by lowering their taxes based on individual tax returns filed. The Low-Income Housing Tax Credit, on the other hand, goes to housing developers who provide a certain portion of housing units for low-income people.

Most Programs Target Specific Low-Income Populations, Including the Elderly, People with Disabilities, Children and Their Families, and a Range of Other Groups

Target Populations

Based on our analysis of agency responses, most low-income programs target specific sub-populations and do not serve low-income people generally. Eligibility for a benefit or service can be based on being part of a target population. Broad population groups targeted by these programs include children or families with children, the elderly, people with some earnings, and students. Programs may target multiple groups, according to our survey. For example, the Child and Adult Care Food Program supports the provision of free or reduced-priced meals and snacks to low-income children and low-income chronically impaired and elderly adults, who are in nonresidential group care settings, such as day care homes or institutions. In addition, a number of low-income programs target narrower population groups, based on agency survey responses, such as veterans, disadvantaged youth, people who are homeless, Native Americans, migrants, refugees, or rural communities. These tend to be smaller programs in terms of dollars, according to our survey. (See table 4.)

Although these programs serve many different populations, relatively few target groups account for a large portion of the spending. For example, almost two-thirds of the federal expenditures for Medicaid for fiscal year 2012, the most recent detailed data available, went to people with disabilities (42 percent) and elderly individuals (21 percent), according to HHS administrative data. Additionally, a recent CRS report examined spending amounts for the 10 largest low-income programs in fiscal year 2011 (the most recent available information at the time for analysis on target groups). CRS reported that federal spending for these 10 in 2011 was $623 billion and accounted for over 80 percent of spending for low- income programs that year. According to CRS analysis, which estimated spending across target groups primarily using program data, people with disabilities received almost a third of this amount, or $208 billion (primarily from Medicaid and SSI). Working families with children received the next largest share, about $170 billion, with the refundable tax credits accounting for a large portion. The elderly received $96 billion, with a large contribution from Medicaid and the low-income Medicare subsidy for prescription drugs. Less than 12 percent of the spending in fiscal year 2011 for the 10 largest programs went to low-income adults who were not working, elderly, or had a disability, according to CRS.

Financial Eligibility Criteria

federal poverty guidelines (gross income minus certain exclusions and deductions, such as certain child care expenses) determine eligibility, although the income limits varied greatly among the programs and sometimes within a program. For example, to be eligible for the Community Service Employment for Older Americans program, individuals must be unemployed, age 55 or older, and have incomes no higher than 125 percent of the federal poverty guidelines. Within a program, different populations may have different limits. For instance, SNAP generally requires eligible households to have gross income no higher than 130 percent of the federal poverty guidelines, but households with members who are elderly or have a disability may have higher income limits. account) < $2,000 (for most households) In general, households must meet all three tests to be eligible for SNAP. However, the specific financial eligibility criteria may vary, depending on the circumstances. For example, some households with a member who is elderly or has a disability are subject to different requirements.

Nine programs used area median income to determine eligibility. The measure is based on specified percentages of median family incomes for states and metropolitan and nonmetropolitan areas within states. For example, in the Department of Housing and Urban Development’s (HUD) Section 8 Housing Choice Vouchers program, eligible families generally must have incomes no higher than 50 percent of area median income, and 75 percent of newly available vouchers each year must go to families with incomes no higher than 30 percent of area median income. In fiscal year 2013, according to information from HUD, the median family income for states for a family of four ranged from $48,300 (Mississippi) to $88,400 (Maryland) with variation between metropolitan and nonmetropolitan areas within states.

Seven programs used specific dollar amounts as a threshold to determine eligibility. For example, in general, individuals receiving SSI in 2013 had to have monthly incomes no higher than $1,505 if their countable income was only from wages, and $730 if their countable income was not from wages. The two refundable tax credits are based, in part, on earned income and adjusted gross income. For example, in tax year 2013 working families with children that had annual incomes below $37,870 to $51,567—depending on filing status and the number of dependent children—may have been eligible for the EITC. Also, childless people with earnings that had incomes below $14,340 ($19,680 for a married couple) could have received a small EITC benefit. Depending on the program, income thresholds may be adjusted annually, for inflation or other factors.

Three educational programs used a needs analysis to determine eligibility: Federal Pell Grants, Federal Work Study, and Federal Supplemental Educational Opportunity Grants. This analysis calculates the amount a family can be expected to contribute toward a student’s college costs and uses that amount to determine the student’s eligibility for aid. According to budget information from the Department of (Education), about three-fourths of Pell Grant recipients in the 2012-2013 school year had annual incomes below $30,000.

Seven programs allow states or localities to determine financial eligibility criteria for individuals or households, generally within certain federal limits. For instance, federal law requires that families receiving cash assistance funded by the TANF block grant must have a minor child; however, states determine financial eligibility criteria and benefit amounts, and there is a large amount of variation among states.

Three programs determined financial eligibility for individuals or households in other ways not captured above, according to agency survey responses. Specifically, for the Transitional Cash and Medical Services to Refugees, eligible participants include adult refugees, asylees, and other specified groups, who meet the income and asset tests for TANF or Medicaid, but who are not categorically eligible for those programs. The tax exclusion of cash public assistance benefits is dependent on the receipt of aid from public cash assistance programs. The Work Opportunity Tax Credit provides a tax credit to employers who hire people from certain specified disadvantaged groups, including certain recipients of SNAP, SSI, and TANF, among others.

HHS publishes a compilation of state TANF policies and updates it each year. See HHS, Welfare Rules Databook: State TANF Policies as of July 2013, OPRE Report 2014-52 (Washington, D.C.: September 2014).

Thirty-three programs target assistance to low-income communities, groups, or other entities, rather than individuals or households, based on agency survey responses.

Twenty-five of these programs targeted or prioritized services to low- income groups, generally based on a measure of low-income. However, these programs may also serve people more broadly and not only those who are low-income. For example, funds for the Education for the Disadvantaged – Grants to Local Educational Agencies (Title I, Part A) program are allocated to school attendance areas and schools based on the number of children from low-income families. Depending on the percentage of low-income students in a school, schools funded by this program may serve all students, or must focus services on low-achieving students in the school.

Eight programs that do not have a measure of low or limited income are included as low-income programs because they targeted special populations who tend to be disproportionately low-income or are presumed to be low-income (e.g., Native Americans or homeless individuals and families). (See app. IV for information on all programs by type of financial eligibility.)

Among all of the programs identified, 11 provide for automatic eligibility (also referred to as categorical eligibility), according to our survey. Although specific eligibility requirements may vary, some programs allow automatic eligibility for people who have already qualified for another, specified income-tested program, or if they are a member of a specified target population. (See table 5 for a summary of our survey results.) In prior work, we have looked at automatic eligibility and similar provisions for programs, including SNAP, WIC, and the school meals programs.

For example, in 2012 we looked at the prevalence of households receiving SNAP under expanded automatic eligibility rules, called “broad- based categorical eligibility.” Under these rules, states can allow households receiving noncash services funded by TANF (such as a toll- free number or brochure) to be automatically eligible for SNAP. States that adopt a broad-based categorical eligibility policy may increase limits on household income to up to 200 percent of federal poverty guidelines, and remove limits on assets for these households. In that report, we found that a relatively small percentage of households in 2010 were eligible for SNAP under broad-based categorical eligibility that would not have otherwise been eligible (under 3 percent). We also found that these households’ incomes were modestly higher (around 150 percent of federal poverty guidelines, instead of 130 percent).

In addition to eligibility requirements related to income or target population, some programs impose work requirements (participants must be engaged in work or work-related activity in order to receive benefits or services) or time limits (program participation is limited to a specified period of time), although most do not, according to our analysis of agency survey responses. For three programs—TANF, SNAP, and Transitional Cash and Medical Assistance for Refugees—agencies reported both work requirements and time limits for at least a portion of program recipients, as follows:

TANF requires states to engage a certain percentage of families with a work-eligible individual receiving cash assistance in specified work- related activities (such as job search and job readiness assistance) or face potential financial penalties. In general, TANF also limits federally-funded assistance for families with an adult member to 5 years. States may extend families beyond this 60-month period for reasons of hardship for up to 20 percent of their caseloads.

Unless otherwise exempt, SNAP requires participants who are mentally and physically able to work and between the ages of 16 and 59 to work at least 30 hours per week, register for work, or participate in an employment and training program if assigned by the state SNAP agency. Additionally, able-bodied adults between the ages of 18 and 49 without dependents are limited to 3 months of SNAP benefits in a 36-month period, unless they work or participate in a work program for at least 20 hours per week. A large portion of SNAP participants are not, however, subject to these requirements. Many participants are exempt from the program’s work requirements because of age or disability. Also, the Department of Agriculture (USDA) has granted waivers to many states from the 3-month time limit in recent years due to low numbers of available jobs.

Cash assistance under the Transitional Cash and Medical Services for Refugees Program is conditioned on the refugee registering with an employment agency or service, participating in available job training services, and accepting appropriate offers of employment. Both cash assistance and medical assistance are limited to 8 months, although other types of assistance for refugees may be available for a longer period of time, as described below.

For prior work on refugees’ employment outcomes, see GAO, Refugee Assistance: Little Is Known about the Effectiveness of Different Approaches for Improving Refugees’ Employment Outcomes, GAO-11-369 (Washington, D.C.: March 31, 2011).

For the purposes of this analysis, we excluded a few programs in which the agency responded that the program had a work requirement, but the program purpose or the program benefit or service was to provide some sort of employment opportunity, such as Federal Work Study. Our purpose was to include programs that in effect required a recipient to work or prepare for work in exchange for benefits or services not directly linked to work, such as food assistance, housing assistance, or supplemental income.

Service Employment for Older Americans) specify a maximum length of time for receipt of assistance. Under two housing programs, there are time limits for providing temporary shelter (Homeless Assistance Grants and Housing Opportunities for Persons with AIDS). Also, refugees may receive various services, such as social adjustment services or citizenship and naturalization services, for up to 5 years under the Social Services and Targeted Assistance for Refugees Program.

Federal, State, and Local Agencies Administer These Programs Through a Complex System That Can Be Inefficient and Difficult to Oversee

As a whole, the administration of these programs is complex and involves many different agencies and entities at the federal, state, and local levels. Thirteen federal agencies administer the 82 programs, with three-quarters of them overseen by HHS, HUD, Education, and USDA. A relatively small number of programs are entirely or mostly federally run (that is, these programs are direct benefits provided by federal agencies or are tax expenditures administered through the federal income tax system). These include some of the largest programs, such as SSI, the refundable tax credits, and Federal Pell Grants. For many other programs, various state and local agencies, and in some cases private entities, are involved in program administration and the provision of benefits and services. Additionally, at least 12 different congressional committees are responsible for program oversight.

Based on this report and a review of our prior work, we identified several issues that pose difficulties for administering and overseeing this complex system of programs as well as efforts to address them. These issues are based on our prior reviews of specific low-income program areas and on our broader government-wide work. More specifically: In a 2011 testimony, we summarized our work that found the array of human services programs was too fragmented and overly complex— for clients to navigate, for program operators to administer efficiently, and for program managers and policymakers to assess program performance.longstanding challenges, such as simplifying and streamlining policies We identified potential approaches to address these and processes across programs, improving technology,fostering innovation and evaluation to improve services and reduce costs.

In our government-wide work on fragmentation, overlap, and duplication, we have recommended that certain agencies responsible for low-income program areas take actions, such as increased collaboration with other agencies and additional study, to help minimize administrative inefficiencies among multiple programs. Some of these recommendations have been addressed. See the box on page 36 for more information on our open recommendations in relevant areas.

In our work on the role of evaluation in federal programs, we found that evaluations can help program administrators and policymakers understand what programs and practices are working and how to improve the use of scarce resources, yet federal agencies often do not evaluate their programs. For this report, we reviewed the efforts of federal agencies responsible for five of the largest programs— SNAP, SSI, TANF, EITC, and the Section 8 Housing Choice Vouchers program—to conduct or sponsor recent evaluations regarding participant outcomes. We found that for the four spending programs, agencies were engaged in recent evaluation efforts that focused on participant outcomes, including employment and self-sufficiency, food security, and family outcomes. Unlike the four spending programs we examined, Treasury officials said the agency does not conduct program evaluations related to program or policy outcomes on the EITC or any other tax expenditure. (See app. V.) In our previous reports on tax expenditures, we concluded that because tax expenditures are not evaluated for performance, it is difficult to evaluate their costs and benefits and the extent to which they meet intended policy goals. We have recommended that the Office of Management and Budget (OMB) set up a performance evaluation framework for tax expenditures. This recommendation has not been addressed.

In a 2014 report assessing aspects of the GPRA Modernization Act of 2010, we concluded that the act’s requirement for OMB to publish on a central website a list (inventory) of all federal programs along with related budget and performance information would be useful for better government management. Such information could help decision makers determine the scope of the federal government’s involvement, investment, and performance in a particular area, as well as provide critical information that could be used to better address crosscutting issues, among other purposes. We recommended that OMB take several actions to improve the existing program inventory information to make it more useful for decision makers, such as including tax expenditures in the inventory and directing agencies to collaborate when defining and identifying programs that contribute to a common outcome. OMB generally agreed with most of these recommendations, but has not yet addressed them.

GAO is statutorily mandated to identify and report annually to Congress on federal programs, agencies, offices, and initiatives—either within departments or government-wide—that have duplicative goals or activities. "Fragmentation" refers to those circumstances in which more than one federal agency (or more than one organization within an agency) is involved in the same broad area of national need and there may be opportunities to improve how the government delivers these services. "Overlap" occurs when multiple agencies or programs have similar goals, engage in similar activities or strategies to achieve them, or target similar beneficiaries. "Duplication" occurs when two or more agencies or programs are engaged in the same activities or provide the same services to the same beneficiaries.

In recent years, GAO has identified fragmentation, overlap, and duplication among some of the low-income programs reviewed in this report. See below for the areas identified, the focus of recommendations, and whether the recommended actions have been completely, partially, or not addressed. We also include the year the program area was first identified by GAO for fragmentation, overlap, or duplication. This information was last updated March 6, 2015.

Training, Employment, and Education: Early Learning and Child Care Greater coordination efforts across early learning and child care programs could mitigate the effects of program fragmentation, simplify children’s access to these services, collect the data necessary to coordinate operation of these programs, and identify and minimize any unwarranted overlap and potential duplication. Identified 2012; addressed Training, Employment, and Education: Employment and Training Programs Providing information on colocating services and consolidating administrative structures could promote efficiencies. Identified 2011; addressed Social Services: Domestic Food Assistance Multiple actions could reduce administrative overlap among domestic food assistance programs. Identified 2011; partially addressed Social Services: Housing Assistance Examining the benefits and costs of housing programs and tax expenditures that address the same or similar populations or areas, and potentially consolidating them, could help mitigate overlap and fragmentation and decrease costs. Identified 2012; not addressed or consolidated.

Social Services: Homelessness Programs: Better coordination of federal homelessness programs could minimize fragmentation and overlap. Identified 2011; addressed.

Based on the SPM, About One-Sixth of the U.S. Population Lived in Poverty in 2013, When Considering Certain Government Benefits and Living Expenses

SPM Provides Information on the Economic Well- Being of the U.S. Population by Taking into Account Certain Government Assistance and Living Expenses and Other Factors

In 2013, 48.7 million people in the United States (15.5 percent of the population) lived in poverty according to the SPM, based on our analysis of Census data (see fig. 4). These people lived in households with incomes below the SPM poverty threshold, which measures whether they have sufficient resources to meet their basic needs, after taking into account government benefits and necessary expenses. The SPM threshold in 2013 for two adults and two children ranged from $21,397 to $25,639, depending on their housing situation, according to Census.

In 2013, the SPM poverty rate was slightly higher than the official measure’s poverty rate of almost 15 percent. Compared with the official measure, the SPM showed more people with incomes in the 50 to 199 percent range and fewer people with incomes in the lowest and highest groups (see fig. 5). Various factors account for the differences in distribution. For instance, unlike the official measure, SPM includes the value of certain noncash benefits and tax credits, which would increase household income. On the other hand, the SPM subtracts necessary living expenses, such as taxes paid, medical costs, or work expenses, which would reduce household income. The SPM also includes cohabitors (unmarried partners), who could affect income by bringing additional earnings and expenses into the household. Moreover, the poverty thresholds used by each measure—the income level necessary to avoid poverty—are different, so the same household could be considered below poverty under the SPM and above poverty under the official measure. Also, while Census data show that both measures had similar trends over time—with overall poverty rates falling slightly from —the poverty rates of sub-populations varied more. For 2010 to 2013example, under the SPM children had a lower rate of poverty and elderly individuals had a higher rate in 2013, compared to the official measure.

Our analysis provides a point-in-time perspective and does not depict variation in people’s economic circumstances during the year or over multiple years, which may move households in and out of poverty. For instance, we looked at annual income and expenses for 2013, but household incomes may have fluctuated within that year. A 2014 Census report estimated that from 2009 through 2011, almost one-third of the population experienced poverty (based on the official measure) for at least 2 months; however, over 40 percent of these periods of poverty ended within 4 months. Additionally, poverty rates in 2013 may reflect some of the longer-term effects of the recent recession; more current data could reflect improved economic conditions.

Poverty rates also vary among the states. For example, the SPM poverty rate ranged from a low of 8.7 percent (Iowa) to a high of 23.4 percent (California), using a 3-year average over 2011, 2012, and 2013 (see fig. 6).

In 2013, Many Types of Households Experienced Poverty Based on the SPM, Including 10 Million People in Married Families with Children

Individuals below the SPM poverty threshold lived in a variety of types of households, according to our analysis of household types using Census data (see fig. 7). We found that the highest rates of poverty (SPM) were among single parent households (30 percent) and households headed by However, the largest numbers of a person with a disability (29 percent).people below the SPM poverty line were in other types of households. About half were in households without children (14.3 million), or married households with children (10.4 million). This is in part because these two groups are the largest among the overall population.

For this analysis, we categorized households into six mutually-exclusive types, as follows.

Headed by elderly persons: Households (with or without children) headed by a person who is 65 or over, regardless of whether he or she has a disability. The head of household may live alone, with a spouse, or with a cohabiting partner.

Headed by persons with disabilities: Households (with or without children) headed by a person under 65 with a disability. The head of household may live alone, with a spouse, or with a cohabiting partner. We used a Census Bureau definition of disability, which includes any serious difficulty hearing, seeing, concentrating/remembering/making decisions, walking/climbing stairs, dressing/bathing, or doing errands alone.

Without children: Households without children headed by a person under 65 without a disability. The head of household may live alone, with a spouse, or with a cohabiting partner.

Married with children: Households with at least one child headed by a married person under 65 who does not have a disability.

Cohabiting with children: Households with at least one child headed by an unmarried person under 65 who has a cohabiting partner and does not have a disability.

Single parent: Households with at least one child headed by an unmarried person under 65 who does not have a disability or a cohabiting partner.

Households headed by a person who is elderly or has a disability may have children, but are not counted as a household with children for this analysis. According to our estimates, 7.2 percent (+/-0.5) of all children in the United States in 2013 were in these two household types. We relied on the U.S. Census Bureau’s Current Population Survey, Annual Social and Economic Supplement data to determine whether a household fell into a particular category. Because program definitions and eligibility requirements vary, these categories may not be used to determine eligibility for programs.

Most people in poverty (SPM) lived in households with at least some earnings. About 31 million people, or almost two-thirds of those with incomes below the SPM threshold, were in households with earnings— defined as having at least one member who earned any income at some point during the year. Another 19 percent were in households without earnings in which the household head was elderly or had a disability. Of the remaining 19 percent without earnings, about half were in childless households.

Poverty rates were much higher for those who did not work or worked less during the year. Figure 8 shows that among households headed by someone who was not elderly and did not have a disability, households without earnings experienced much higher poverty rates than those with earnings (62 percent versus 12 percent). Also, over one-third of those without earnings had incomes below 50 percent of the SPM threshold.

Our data do not distinguish the amount of time people worked. However, Census analysis of SPM data for people aged 18 to 64 who worked at least 1 week in 2013 shows that the poverty rate (SPM) among people who worked full-time year round was 5.4 percent (nearly 5.5 million people), but was 19.6 percent (nearly 8.9 million people) among those who worked less than that amount of time.

Program Recipients’ Income Levels and Household Characteristics Reflected Differences in Program Purpose and Design

An Estimated One-Third of the U.S. Population Received a Low-Income Benefit at Some Time in 2012

An estimated 106 million people, or about one-third of the U.S. population, received benefits from at least one of eight selected federal low-income programs at some point during 2012 (see fig. 9). This is based on our analyses of the most recent TRIM3 microsimulation data for these programs: ACTC, EITC, housing assistance, LIHEAP, SNAP, SSI, TANF cash assistance, and WIC.perspective from national survey data, which often underreport the The results provide a different number of low-income program recipients.allow for unduplicated counts of the total number of people receiving aid from more than one program, which is often not possible when using data from individual programs. Some programs’ administrative data (e.g., federal agency data we reviewed for SNAP, TANF, and WIC) include the number of people served each month, but do not track an unduplicated count of recipients for the year. The data for low-income programs also count recipients in different ways (e.g., individuals, households, families, tax filing units), making it difficult to compare receipt of assistance consistently across multiple programs. For many of these reasons, the results of our analysis in this section will differ from program information based on administrative data.

Program Recipients Were Often in Households with Children and Households with Earnings

Almost two-thirds of the recipients of the eight programs combined were in households with children, including married, cohabiting, and single parent households (see table 6). These households also received 58 percent of the nearly $241 billion in benefits provided by these eight An programs combined in 2012, according to our TRIM3 analysis.estimated 81 percent of recipients lived in households with at least some annual earnings and received an estimated two-thirds of the combined benefit spending.

Selected Programs Reduced Poverty for Millions in 2012, Based on Estimates Using the SPM

In total, an estimated 25.4 million people moved above the SPM poverty threshold due to combined benefits from the eight programs. An additional 13.4 million who did not cross over the SPM threshold moved out of the lowest income group (below 50 percent of poverty). Moreover, 10 million who were already above the SPM threshold moved to a higher income group (e.g., moved from 100 to 149 percent of poverty to 150 to 199 percent of poverty). To obtain these estimates, we subtracted the value of these benefits from beneficiaries’ incomes and recalculated their incomes as a percent of the SPM threshold. Overall, fewer people were in the lowest income groups (those below poverty) when the value of benefits from the eight programs was included (see fig. 10).

Program effects varied by household type as well (see fig. 11). The largest numbers of people avoiding poverty based on the SPM because of selected federal benefits were in households with married parents (9.2 million) or single parents (7.9 million). Over one-third of program recipients living in single parent households were kept out of poverty by the combined benefits of the eight selected programs.

SNAP and EITC Moved the Most People above Poverty; However, All Selected Programs Had a Majority of Recipients with Incomes above the SPM Threshold after Accounting for Benefits

Each of the eight programs lifted a number of recipients above the SPM threshold, ranging from 340,000 (LIHEAP) to nearly 8.7 million (SNAP) (see fig. 12). Variation in programs’ effects on reducing poverty was due to a combination of factors, including the number of recipients in each program and value of each benefit. For instance, SNAP and EITC served the most people in 2012 and, accordingly, had large effects on moving people out of poverty among our eight programs. Housing assistance, on the other hand, served many fewer people but provided a higher dollar amount of benefits than most other programs, moving almost 37 percent of all housing recipients that year out of poverty.

Our estimates are consistent with Census analyses using the SPM to measure the effects of program benefits on poverty. Census found that refundable tax credits (EITC and ACTC combined, along with other refundable federal and state tax credits) and SNAP had the largest effect on reducing poverty for the population in 2012. Of the different age groups (children, adults, and the elderly), Census found that children benefited the most from low-income programs, particularly from the refundable tax credits. Census also looked at the effects of several social insurance programs and reported that Social Security had, by far, the biggest effect on reducing poverty for the population—more than any low- income program—especially among the elderly.

While each of the programs’ benefits moved some individuals above the SPM threshold, the income status of each programs’ recipients’ still varied from 50 percent below poverty to more than twice the SPM poverty threshold after taking into account the program’s benefits and other benefits received (see fig. 13). Figure 13 shows that, for example, 62 percent of individuals who were eligible for and received SNAP benefits for at least one month in 2012 had annual incomes above the SPM threshold, after including the value of SNAP and other benefits received, which may have included other low-income benefits such as TANF or the EITC as well as other benefits such as Social Security or unemployment insurance. Some variation among the programs in terms of recipients’ incomes as a percentage of the SPM reflects differences in program targeting and design. For instance, the tax credits, ACTC and EITC had larger percentages of recipients above the SPM threshold (82 percent and 75 percent, respectively), as would be expected since these credits are designed to phase out gradually over higher levels of earned income. Under the EITC, for example, certain married families with two qualifying children may have had nearly $50,000 in earned income in 2013 before they became completely ineligible for the credit. A majority of ACTC and EITC recipients also lived in households with two adults (married or cohabiting) and children, as we will discuss later. In contrast, TANF cash assistance had the smallest percentage of people above the SPM poverty threshold among our selected programs (57 percent). Generally, TANF recipients must have very low incomes to qualify for benefits. In addition, the amount of aid from TANF programs tends to be relatively small, although TANF recipients often receive assistance from other programs, particularly SNAP.TANF recipients lived in single parent households and did not have income from another individual for support.

Research Suggests Selected Programs Have Generally Encouraged Labor Force Participation and Had Mixed Effects on Hours Worked

The receipt of benefits from means-tested low-income programs (i.e., those with financial eligibility tests for individuals or families) may affect an individual’s willingness to seek and accept employment in two key ways. One is the decision on whether or not to work, called the labor force participation decision. The second, which applies to those who have decided to work, is on the number of hours to work. For many people, the decision on whether to work depends on the incomes available under each alternative, including income or assistance from means-tested benefits. The decision of how many hours to work may be influenced by the extent to which an increase in earnings (through more hours worked or a higher wage) is offset by higher taxes and reduced benefits. Whether moving from not working to working or from fewer to more hours worked, the combined effect of taxes and the reduction in means-tested benefits as earnings increase is called the worker’s effective marginal tax rate, referred to as the marginal tax rate in this report.

A Hypothetical Example of How Marginal Tax Rates Can Reduce Benefits When Earnings Increase If a single parent with three children living in Wisconsin in 2000 who was earning $6.25 an hour received a raise to $9.25 an hour, based on 2,000 hours of work a year, her earnings would increase by $6,000. If she received SNAP benefits, those benefits would be reduced by $81 a month due to her earnings increase. If she received housing assistance, this assistance would be reduced by $177 a month. She would also owe an extra $38 a month in payroll taxes and if she worked full- time for the year, lose $1,848 (or $154 a month) due to reduced EITC benefits. As a result, out of her $500 a month raise, she would keep $50--a nearly 90 percent marginal tax rate on the earnings gain. If her earnings continue to rise, her marginal tax rates will fall greatly, as SNAP and EITC benefits will phase out entirely. With no remaining benefits to reduce, her marginal tax rate will depend solely on income and payroll taxes. earnings, these programs’ benefits made work more financially rewarding (in terms of earnings plus benefits), in comparison to the benefits available to those who do not work. The EITC, in particular, has increased incentives for people with children to join the labor force, based on our review of studies.

Many factors are taken into consideration in calculating SNAP benefits, including earnings, assets, household size, age, and others. However, the basic benefit reduction rate is 24 percent, based on a reduction in the benefit equal to 30 percent of net income, mitigated by a 20 percent earned income deduction. ranging from 27 percent to over 100 percent, depending on the state of residence. (The average marginal tax rate among states was about 50 percent.) That is, if the parent lived in Nevada, he or she would lose 27 cents of each dollar in increased earnings; if he or she lived in Connecticut, the parent would actually have fewer total resources for each dollar in increased earnings due to the loss of benefits. The study’s authors noted that marginal tax rates vary greatly among states due to, among other things, differences in state tax systems and state rules for TANF and SNAP.

CBO, Effective Marginal Tax Rates for Low- and Moderate-Income Workers, Publication No. 4149 (Washington, D.C.: November 2012). or ACTC. CBO had similar findings looking at a different set of programs using 2010 Census CPS data. Of households that received assistance from Medicaid or Children’s Health Insurance Program (CHIP), SNAP, TANF, or housing assistance, the majority participated in one program, most commonly Medicaid/CHIP or SNAP, and few participated in more than two programs.

While studies we reviewed showed that some benefit recipients may face relatively high marginal tax rates, available research suggests these rates do not strongly affect people’s actual behavior regarding how many hours they decide to work. Ideally, an analysis should consider all the programs in which an individual participates. A 2011 review of research found that the aggregate behavioral impact on people’s incentive to work from multiple means-tested programs was very small. A more recent review of studies in 2015 concluded that “it is very hard to find large labor supply reductions for any major transfer program.”

Eissa and Hoynes, “Behavioral Responses to Taxes;” and T. Hungerford and R. Thiess, The Earned Income Tax Credit. studies we reviewed, though for some groups the effects may be large. Changes in marginal tax rates associated with reduction in TANF benefits based on increased earnings were found to have little effect on either labor force participation or hours of work, according to studies we reviewed. On the other hand, receipt of housing assistance may create work disincentives, although available research is limited. One study looking at the Section 8 Housing Choice Vouchers program found that, based on a sample of program participants and nonparticipants in Chicago, the program had a negative effect on labor force participation and earnings (possibly due to reduction in hours worked for some recipients), but a positive effect on supporting incomes. In other words, people may work more without a housing benefit but their overall incomes are higher with the benefit. Another study of recipients in Wisconsin found that housing vouchers had little effect on labor force participation and a negative effect on earnings, which faded over time. Medicaid could also create work disincentives, since a modest pay increase could result in a total loss of benefits for those near the program’s income threshold.However, other programs or policies could offset potential work disincentives. For example, an increase in earnings in a new job may also be accompanied by employer-provided group health insurance, and children may lose eligibility for Medicaid but gain eligibility under CHIP. As noted, we did not review the literature on work incentives related to health insurance programs. In addition, although, we did not review the literature on the effect of child care subsidies on work incentives for this report, we have looked at this in prior work. Specifically, in a 2010 report, we found that research has linked access to child care subsidies to increases in the likelihood of low-income mothers’ employment. In that report, experts we consulted suggested that when child care prices increase (such as when a parent loses a child care subsidy), mothers may change their work hours or shift to lower-cost providers, for example, rather than exiting the labor force altogether, although other research has shown that child care problems contribute to job loss and returns to welfare for low-wage workers.

While high marginal tax rates occur, people may not respond to them for various reasons. For instance, for a worker to change behavior, he or she must be aware of the marginal tax rates and the income levels at which they apply. However, these rates can be difficult for the lay person to understand and calculate, especially when multiple programs and tax provisions are involved. As discussed, high marginal tax rates are the result of interactions among programs and the tax system and vary greatly depending on the specific benefit or combination of benefits received, individual situation, and state of residence. These interactions are not transparent. Studies that have focused on interviews with low- income households indicate they often do not understand marginal tax rates associated with increased earnings or how these may affect their benefits. This may be particularly relevant with the EITC because of a long time lag between a change in work and the receipt of the tax refund at tax time. Additionally, a worker is not necessarily able to control the number of hours he or she works in response to different marginal tax rates, given constraints in work schedules or other factors such as child care. Research indicates that low-wage workers have less discretion and control over their work schedules than higher-wage workers, and that this is particularly true for those working part-time or in temporary positions.

Further, reacting to high marginal tax rates that apply over narrow income ranges would not necessarily make sense for a worker over the long term. If a worker expects to have continual pay increases over his or her lifetime he or she would not necessarily decide to reduce his or her work hours because of high marginal tax rates that would attenuate as earnings grew beyond the effective income range of those rates.

Behavioral effects can be difficult to isolate from other factors, and not all effects are observable. For example, not all labor supply behavior can be found in data. A worker who knowingly faces a high marginal tax rate for additional hours may seek earnings in the underground economy. Additionally, program provisions are not the only factors that may affect labor supply. The overall state of the labor market is central, in terms of the availability of employment opportunities and pay.

Research also shows that inherent policy trade-offs exist for means- tested benefit programs attempting to meet multiple objectives. Work incentives and disincentives in means-tested benefit programs are intrinsically linked. When benefits are available to those who work or when benefits are tied to work (such as with the EITC), working becomes more attractive as people’s total incomes in benefits and earnings are higher than they would be without work. However, benefits are reduced and ultimately phased out as earnings rise, creating potential work disincentives. To lessen the role of work disincentives and avoid abrupt benefit cutoffs (known as cliff effects), benefits can be phased out more slowly (i.e., resulting in lower marginal tax rates). Yet a slower phase-out of benefits means increased program costs. Program costs could be contained if benefits are reduced for those with the lowest income; however, another common policy goal is to maintain adequate assistance for the least fortunate. In short, research shows that to limit program costs, it is necessary to either reduce benefits (by reducing the number of people eligible or the benefit amount) or phase benefits out more rapidly. These trade-offs pertain to assistance provided by any level of government—federal, state, or local.

Agency Comments and Our Evaluation

We provided a full draft of this report for comment to the Departments of Agriculture, Health and Human Services, Housing and Urban Development, Treasury, and the Social Security Administration. We provided relevant sections of the draft report to eight other federal agencies that administer programs included in this report as well as Census for technical comments. Most agencies that we sent the full draft or excerpts of the draft provided technical comments, which we incorporated as appropriate.

USDA, HHS, Treasury, and SSA did not have additional comments; HUD provided written comments, reproduced in appendix VI. In its comments, HUD discussed the usefulness of the SPM in assessing economic conditions and people’s level of need, but stated concerns that information in this report may be interpreted erroneously, particularly because the SPM is a relatively new concept. Specifically, HUD noted that readers may interpret information we presented on program recipients’ incomes as a percentage of the SPM as evidence that programs are not targeting people in need, when, as we describe in the report, these income levels include the value of certain federal, state, and local assistance that a household receives, as well as account for various household expenses. As we explain in the report, the SPM provides information on a household’s resources—including assistance from certain government programs—to meet basic needs, and is not a measure used to determine program eligibility. HUD also noted differences in terms of recipient household types between our estimates of housing assistance using TRIM3 and HUD’s estimates using HUD program data, due to the fact that TRIM3 estimates can include recipients of housing assistance from other federal, state or local agencies. Based on HUD’s comments, we took steps to clarify the information we present on our estimates of program recipients’ incomes as a percentage of the SPM and on our estimates of recipients of housing assistance using TRIM3, and addressed other comments from HUD, as appropriate.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees, Secretaries of Agriculture, Health and Human Services, Housing and Urban Development, and Treasury; the Commissioner of the Social Security Administration; other federal agencies that administer programs included in this report, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staffs have any questions concerning this report, please contact me at (202) 512-7215 or brownke@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VII.

Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to examine: (1) what federal programs (including tax expenditures) are targeted to low-income individuals; (2) what are the number and selected household characteristics of people in poverty based on the Supplemental Poverty Measure (SPM); (3) what are the incomes (as a percent of the SPM) and household characteristics of people receiving benefits from selected programs; and (4) what is known about how selected low-income programs affect work incentives? To address the objectives of this request, we used a variety of methods. Specifically, we: reviewed relevant federal laws, regulations, and agency guidance; and interviewed agency officials; collected information on 82 federal low-income programs by surveying 13 federal agencies that administer these programs; analyzed 2013 data from Census Bureau’s (Census) Current Population Survey (CPS) to describe low-income households; analyzed 2012 data, the most recent available, from the Transfer Income Model, version 3 (TRIM3) microsimulation model maintained by the Urban Institute to describe recipients of eight large federal low- income programs; and conducted an economic literature review on work incentives and disincentives related to assistance from selected federal low-income programs.

We conducted our work between April 2014 and July 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Federal Programs for Low-Income Individuals

To address our first question, we identified federal programs, including tax expenditures, that (1) used a measure of low or limited income to determine eligibility, priority for assistance, or to target resources, or (2) have target populations that are disproportionately poor or have program purposes that presume that participants will be low-income. This included programs that targeted individuals, families, and communities. Due to their small size, we excluded programs less than $100 million in federal obligations or reduced tax revenue in fiscal year 2013. These criteria were developed by the Congressional Research Service (CRS), which has maintained a list of low-income programs for many years. To identify programs in its current list, CRS officials told us that they took various steps, including searching the Catalog of Federal Domestic Assistance for relevant programs. We augmented CRS’s list by asking relevant agencies to suggest program additions or deletions consistent with the criteria, consulting with CRS and program area experts within GAO, and adding relevant tax expenditures. We consulted with internal subject matter experts and the Department of the Treasury (Treasury) to identify relevant tax expenditures. We included tax expenditures that base an individual’s eligibility on a measure of low or limited income, or that indirectly benefit low-income individuals (for example, the Low-Income Housing Tax Credit, which allows developers and owners of qualified low- income housing projects to claim a tax credit for construction or rehabilitation costs). We excluded tax expenditures which indirectly benefit low-income individuals based on income measures for a geographic area. We also excluded tax expenditures for which the average reduction in revenue for the past 5 years was less than $100 million.

To collect program information, we sent a questionnaire (or survey) on each program to the federal agencies responsible for administering it that included questions on federal obligations, numbers served, the program purpose, type of benefit or service, eligibility requirements, and other topics. To ensure that questions were understandable and that we collected the desired information, we pre-tested the survey with two federal agencies, and asked a third agency to review it. We revised it based on agencies’ feedback. We sent the survey to agencies in September 2014 and, ultimately, obtained a 100 percent response rate. We did not independently verify the legal accuracy of the information provided by the agencies, such as program purposes, eligibility requirements, or benefits or services provided.

Because this was not a sample survey, there are no sampling errors. To minimize other types of errors, commonly referred to as nonsampling errors, and to enhance data quality, we employed recognized survey design practices in the development of the questionnaire and in the collection, processing, and analysis of the survey data. For instance, as previously mentioned, we pretested the questionnaire with federal officials to minimize errors arising from differences in how questions might be interpreted and to improve the likelihood that variation in responses across agencies are attributable to substantive differences between programs rather than aspects of the data collection process. We further reviewed the survey to ensure the ordering of survey sections was appropriate and that the questions within each section were clearly stated and easy to comprehend. To reduce nonresponse, another source of nonsampling error, we sent out e-mail reminder messages to encourage officials to complete the survey. We reviewed the data for missing or ambiguous responses and followed up with agency officials when necessary to clarify their responses. In some cases, we also checked other sources, such as the Office of Management and Budget’s Appendix, Budget for the U.S. Government, Fiscal Year 2015, to confirm information was generally consistent and reliable. On the basis of our application of recognized survey design practices and follow-up procedures, we determined that the data were of sufficient quality for our purposes.

Number and Household Characteristics of People in Poverty

To answer our second question, we analyzed data from the Census’ Current Population Survey (CPS) for 2013 (calendar year), the most recent year available. Specifically, we used the public use and replicate weight files from the March 2014 CPS Annual Social and Economic Supplement, which covers 2013, to obtain demographic information about respondents and their households and calculate standard errors of our estimates. We merged this information with the Census’ SPM Research Data file for 2013, which contains microdata derived from the CPS that allows users to calculate SPM rates. Because the CPS uses a household-based data collection, its data do not include individuals living outside of a household residence, such as homeless people or those living in institutional group quarters (e.g., correctional facilities, nursing homes). As many individuals in these groups may be low-income, estimates of the size of the low-income population in this report are likely to be undercounts of the low-income population in the United States.

To determine the number of people in poverty according to the SPM, we first calculated each household’s income as a percent of the relevant SPM poverty threshold. To define a household, we followed the Census definition of an “SPM Resource Unit,” which includes related individuals living together, plus unrelated children who are living with the family (such as foster children) and any cohabitors (i.e., unmarried partners) and their children. An SPM unit could consist of a single individual. Census defines a household’s SPM resources—which we call its income—to include its cash income plus the value of certain noncash benefits minus estimated expenses related to work, child support, taxes, and medical care. Each household’s SPM threshold represents the amount of income it should have available to sufficiently pay for food, housing, clothing, and utilities, plus 20 percent more for miscellaneous necessary expenses. The Bureau of Labor Statistics derives SPM thresholds from actual expenditures on these items averaged over the previous five years. Thresholds are set at the amount that approximately two-thirds of households spent or exceeded and vary by household size, homeownership, and geographic location.

To describe the number of people with household incomes above and below the SPM poverty threshold, we categorized individuals into five income groups based on their household’s income as a percent of its SPM threshold: household resources less than 50 percent of its SPM threshold; household resources from 50 percent to less than 100 percent of its household resources from 100 percent to less than 150 percent of its household resources from 150 percent to less than 200 percent of its household resources 200 percent of its SPM threshold or greater.

The first two income groups are considered to be in poverty according to the SPM, and the latter three groups are considered to be above the poverty line.

We calculated each individual’s income group according to the official poverty measure in a similar fashion, except that we used their family income rather than their SPM unit income. Census’ official poverty statistics use the family—defined as related individuals living together— as the unit of measurement and do not include children under the age of 15 who are living with nonrelatives, such as foster children. We also followed Census procedures to define family income to include its cash income only, and we used official poverty thresholds, which vary by size of family and age of family members, but not by geographic location or homeownership.

For this analysis, we categorized households into six mutually-exclusive types, as follows:

Headed by elderly persons: Households (with or without children) headed by a person who is 65 or over, regardless of whether he or she has a disability. The head of household may live alone, with a spouse, or with a cohabiting partner.

Headed by persons with disabilities: Households (with or without children) headed by a person under 65 with a disability. The head of household may live alone, with a spouse, or with a cohabiting partner. We used a Census Bureau definition of disability, which includes any serious difficulty hearing, seeing, concentrating/remembering/making decisions, walking/climbing stairs, dressing/bathing, or doing errands alone.

Without children: Households without children headed by a person under 65 without a disability. The head of household may live alone, with a spouse, or with a cohabiting partner.

Married with children: Households with at least one child headed by a married person under 65 who does not have a disability.

Cohabiting with children: Households with at least one child headed by an unmarried person under 65 who has a cohabiting partner and does not have a disability.

Single parent: Households with at least one child headed by an unmarried person under 65 who does not have a disability or a cohabiting partner.

For each of the datasets we used in this analysis (CPS, its Annual Social and Economic Supplement, and the SPM Research file), we conducted a data reliability assessment of selected variables including those used in our analysis. We reviewed technical documentation and related publications and websites with information about the data and spoke with Census officials knowledgeable about these datasets to review our plans for analyses, as well as to resolve any questions about the data and any known limitations. We also conducted electronic testing, as applicable, to check for logical consistency, missing data, and consistency with data reported in technical documentation. We determined that the variables that we used from the data we reviewed were reliable for the purposes of this report.

Throughout this report, when we present estimates from survey data, we also present the applicable margins of error (i.e., the maximum half-width of the 95 percent confidence interval around the estimate). In some cases, the confidence intervals around our estimates are asymmetrical; however, we present the maximum half-width for simplicity and for a consistent and conservative representation of the sampling error associated with our estimates.

Estimating the Number and Characteristics of Selected Programs’ Recipients

To address our third question, we used data for calendar year 2012 on recipients of selected programs from the Transfer Income Model, version 3—a microsimulation model known as TRIM3. TRIM3 is developed and maintained by staff at the Urban Institute with funding primarily from the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. The TRIM3 model simulates major governmental tax, transfer, and health programs using data from the CPS, which contains detailed information on the demographic characteristics and economic circumstances of U.S. households, including their benefits from many federal programs. However, CPS data substantially underreports the receipt of these benefits. For example, Urban Institute staff found that CPS data captured about 61 percent of Temporary Assistance for Needy Families (TANF) benefits received in 2012 and about 57 percent of Supplemental Nutrition Assistance Program (SNAP) benefits, when comparing CPS data with program administrative data (data collected by agencies used to administer the program). TRIM3 corrects for this undercounting by creating new variables for each survey respondent indicating their program eligibility, amount of benefits received, and tax liability, following the same steps that a caseworker would use to determine eligibility, as explained below.

We studied eight of the low-income programs that TRIM3 modeled for calendar year 2012, the most recent year that data were available. In addition to being included in the TRIM3 model, selected programs were generally large and covered a range of basic needs.the programs we selected, along with the program unit that TRIM3 used to calculate benefits and caveats about interpreting the data.

Economic Literature Review

To address our fourth question, we conducted an economic literature review on whether receipt of assistance from selected programs, including EITC, SNAP, TANF, and the Section 8 Housing Choice Voucher program, affects recipients’ incentive to work. We conducted a literature search of various databases for peer-reviewed journal articles, and other publications to identify relevant studies that were published in recent years (2009 through 2014) and also reviewed some studies that were published earlier. We also inquired with agency officials for relevant studies and reviewed policy and research organization websites. Additionally, we reviewed citations of other relevant work discussed in studies. In describing findings from the literature, we included studies that were determined to be methodologically sound. Based on our review of studies, we identified reasonable conclusions about likely work incentives related to selected low-income programs. We did not do an exhaustive review of the literature on this topic.

Appendix II: Information Provided by Agencies on Program Purpose and Type of Benefit or Service for Low-Income Programs

Program purpose

To assist eligible parents with dependent children whose tax liability is not sufficient to receive the full benefit of the regular nonrefundable Child Tax Credit.

Refundable tax credit.

To offset the burden of taxes, including Social Security taxes; provide an incentive to work; and provide income support to low-income families.

Tax credit to reduce the amount of income taxes owed; an eligible worker may receive the credit regardless of whether taxes are owed (i.e., the credit is refundable).

To allow exclusion of public assistance benefits from taxable income.

Cash assistance.

To provide a minimum income for aged, blind or disabled individuals who have very limited income and assets.

Cash assistance. The basic federal SSI benefit is the same for all beneficiaries nationwide (reduced by any countable income). States may supplement the federal benefit.

To accomplish one or more of the following: (1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of- wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two-parent families.

Noncash services, including child care, work activities, child welfare services, and various social services directed toward the statutory goals of family formation and reduced nonmarital pregnancies. Cash assistance benefit levels are defined by the individual states.

To enable nonresidential day care institutions to integrate a nutritious food service with organized care services for enrolled children and adults.

Breakfasts, lunches, suppers and snacks that meet minimum federal nutrition standards.

To improve the health of low-income elderly persons at least 60 years of age by supplementing their diets with nutritious Department of Agriculture (USDA) Foods, which are distributed through public and nonprofit private local agencies such as food banks and community action organizations.

Food packages and nutrition education.

To provide USDA foods to low-income households living on or near Indian reservations.

Income eligible households receive a supplemental monthly food package and nutrition education.

To provide free fresh fruits and vegetables to elementary school children. The goal is to create healthier school environments by providing healthier food choices.

Selected schools receive reimbursement for the cost of making free fresh fruits and vegetables available to students during the school day.

Program purpose To safeguard the health and well-being of the nation’s children and to encourage the domestic consumption of nutritious agricultural commodities and other food.

Benefit or service provided Lunches that meet minimum federal nutrition standards and are served free or at reduced price by participating public and private elementary and secondary schools and residential child care institutions.

To improve diets of needy persons living in Puerto Rico. Nutrition assistance benefits. Benefits are provided through electronic benefit transfers, and at least 75% must be used for food purchases.

To reduce hunger and food insecurity, promote socialization, and promote the health and well-being of older individuals and delay adverse health conditions through access to nutrition and other disease prevention and health promotion services.

Meals served in congregate settings, home- delivered meals, and related nutrition services (nutrition screening, education and assessment and counseling).

To promote learning readiness and healthy eating behaviors through provision of nutritious breakfasts.

Breakfasts that meet minimum federal nutrition standards and are served free or at reduced price by participating public and private elementary and secondary schools and residential child care institutions.

To provide supplemental food and nutrition education to eligible women and children to serve as an adjunct to good health care during critical times of development, to prevent the occurrence of health problems, including drug abuse, and improve the health status of beneficiaries.

Food assistance (provided through cash value vouchers or electronic benefit transfer card for the purchase of specifically prescribed food packages), nutrition risk screening, and related services (e.g., nutrition education and breastfeeding support, medical care referral).

To help children in low-income areas get necessary nutrition during the summer months when they are out of school.

Meals and snacks.

To alleviate hunger and malnutrition and permit low- income households to obtain a more nutritious diet by increasing their food purchasing power.

Benefits are provided through an electronic benefit transfer card to purchase food from authorized retailers. Allotments are determined on the basis of a low-cost model diet plan.

To supplement the diets of low-income Americans, including elderly people, by providing them with emergency food and nutrition assistance at no cost.

Food commodities that are distributed to local feeding programs and the administrative costs necessary to store and transport the commodities.

To provide low-income, uninsured, and underserved women access to timely breast and cervical cancer screening and diagnostic services.

Clinical breast examinations, mammograms, Pap tests, pelvic examinations, diagnostic testing, and referrals to treatment. No fees for services may be charged for women with incomes below 100% of federal poverty guidelines.

Program purpose To provide comprehensive, culturally competent, quality primary health care services to medically underserved communities and vulnerable populations.

Benefit or service provided Primary and additional health care services defined in statute, delivered by community health centers, migrant health centers, health centers for the homeless, and health centers for residents of public housing.

To assist individuals to determine freely the number and spacing of their children through the provision of education, counseling, and medical services.

A broad range of family planning methods and services. Family planning services include clinical family planning and related preventive health services; information, education and counseling related to family planning; and referral services.

To elevate the health status of the Indian population to a level at parity with the general U.S. population.

Hospital, medical, and dental care, behavioral health, environmental health and sanitation services as well as outpatient services and the services of mobile clinics and public health nurses, and preventive care, including immunizations and health examinations of special groups, such as school children.

To improve the health of all mothers and children consistent with applicable health status goals and national health objectives established by the Secretary of Health and Human Services (HHS).

Preventive and primary health care services (excluding inpatient services with some exceptions) for women, infants, and children, including children with special health care needs.

To provide medical assistance to qualifying individuals, and to provide rehabilitation and other services to help such families and individuals achieve independence and self-care.

Federal law provides two primary medical benefit packages for state Medicaid programs: traditional benefits and alternative benefit plans (ABPs).

To provide necessary hospital care and medical services to eligible veterans.

Standardized medical benefits package including preventive services; primary care, specialty care, prescription drugs, comprehensive rehabilitative services, mental health services; and emergency care in VA facilities and in non-VA facilities by contract or as authorized by 38 U.S.C. §§ 1728 or 1725.

To address the unmet care and treatment needs of persons living with HIV/AIDS who are uninsured or underinsured, and therefore are unable to pay for HIV/AIDS health care and vital health-related supportive services.

Benefits include a wide range of medical and supportive services to help persons living with HIV/AIDS who are uninsured or underinsured.

To provide health coverage to uninsured, low-income children in an effective and efficient manner that is coordinated with other sources of health benefits coverage for children.

Benefits vary by state, but all benefits provide health coverage to uninsured, low- income children.

Program purpose To provide for the effective resettlement of refugees and to assist them to achieve economic self-sufficiency as quickly as possible.

Benefit or service provided Cash payments to eligible individuals that are at least equal to the payment rate to a family of the same size under the state’s Temporary Assistance for Needy Families (TANF) program; and medical benefits, through payments to doctors, hospitals and pharmacists. Those eligible for Supplemental Security Income (SSI) may receive refugee cash assistance while their SSI applications are pending.

To provide low-income seniors and people with disabilities with comprehensive prescription drug benefits.

Prescription drug coverage with reduced premiums, copayments and other out of- pocket expenses.

To transform neighborhoods of poverty into viable mixed- income neighborhoods with access to economic activities by revitalizing severely distressed public and assisted housing and investing and leveraging investments in well-functioning services, effective schools, and education programs, public assets, public transportation, and improved access to jobs.

Funds to rehabilitate or replace distressed public and assisted housing; provide supportive services for residents, such as those focused on self-sufficiency, health, safety, and education; and support community improvements, such as environmental, retail, or transit improvements.

To develop viable urban communities by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low to moderate income.

Assistance with the acquisition of real property, relocation and demolition, rehabilitation of residential and nonresidential structures, construction of public facilities and improvements, public services within certain limits, activities related to energy conservation and renewable energy resources, and assistance to nonprofit entities and to profit- motivated businesses to carry out economic development and job creation/retention activities.

To increase the number of families served with decent, safe, sanitary and affordable housing and expand the long-term supply of affordable housing; and to strengthen the ability of states and local governments to provide for housing needs.

Assistance with the real estate development and construction activities to increase the supply of affordable housing.

Promote the goal of ending homelessness; provide funding for nonprofits, states, and local governments to quickly re-house the homeless; promote use of mainstream programs and optimize self-sufficiency among those experiencing homelessness.

Transitional housing for homeless individuals and families, permanent housing for disabled homeless individuals, and supportive services. Renovation, rehabilitation, or conversion of buildings into homeless shelters, services such as employment counseling, health care and education, assistance with rent or utility payments to prevent homelessness.

Program purpose To devise long-term comprehensive strategies for meeting the housing needs of persons with AIDS.

Benefit or service provided Housing assistance and related supportive services; real estate and construction assistance; project- or tenant-based rental assistance; short-term rent, mortgage, and utility payments to prevent homelessness; supportive services such as health services, drug and alcohol abuse treatment, day care, nutritional services, and aid in gaining access to other public benefits. (1) To promote quality, affordable housing on Indian reservations and areas; (2) to ensure access to private mortgage markets for Indian tribes; (3) to coordinate activities to provide housing for Indian tribes; (4) to plan for and integrate infrastructure resources with housing development for tribes; and (5) to promote the development of private capital markets in Indian country.

Housing development, assistance to housing developed under the former Indian Housing Program, housing services to eligible individuals and families, crime prevention and safety, and model activities that provide creative approaches to solving affordable housing problems.

To allow developers and owners of qualified low-income housing projects to claim a tax credit for construction or rehabilitation costs.

Tax credit to reduce amount of taxes owed.

To provide cost-effective, decent, safe and affordable rental housing for eligible low-income families, the elderly, and persons with disabilities.

Subsidized publicly-owned rental housing units. In general, assisted households pay 30 percent of their income for rent.

To allow holders of rental housing bonds to exclude interest from taxable income.

Tax exclusion to reduce amount of taxes owed.

To reduce the rent paid by low-income households in eligible units financed under certain Rural Housing Service programs.

Rental subsidies for low-income tenants provided through payments to eligible property owners; payments make up the difference between the tenant’s rental payment to the owner and the approved rent for the unit.

To provide very low-income families with decent, safe and affordable housing in the private market.

Tenant-based vouchers that can be used to help recipients afford privately-owned rental housing. In general, recipients pay 30 percent of their “adjusted” income for rent, with the Department of Housing and Urban Development (HUD) providing a subsidy for the difference up to a maximum limit based on local Fair Market Rents.

To provide very low-income families with decent, safe and affordable housing in the private market.

Rent subsidies tied to units in privately- owned multifamily housing properties. In general, tenants pay 30 percent of their adjusted income for rent, with HUD providing a subsidy for the remaining amount up to the contract rent level.

To allow persons with disabilities to live as independently as possible in the community by increasing the supply of rental housing with the availability of supportive services.

Financial assistance for development of supportive housing for persons with disabilities, and rent subsidies for eligible tenants.

Program purpose To help expand the supply of affordable housing with supportive services for the elderly.

Benefit or service provided Financial assistance for development of supportive housing for the elderly, and rent subsidies for eligible tenants.

To provide basic human amenities, alleviate health hazards, and promote the orderly growth of the nation’s rural areas by meeting the need for new and improved rural water and waste disposal facilities.

Long-term low-interest loans and grants to support the construction, repair, improvement or expansion of rural water facilities.

To assist low-income households, particularly those with the lowest incomes, that pay a high proportion of their income for home energy, primarily in meeting their immediate home energy needs.

Assistance to households in paying their heating and cooling costs, crisis intervention, home weatherization, and services (such as counseling) to help reduce energy costs.

To increase the energy efficiency of homes owned or occupied by low-income persons to reduce their total residential energy costs, and improve their health and safety.

Computerized energy audits and diagnostic equipment to determine the most energy- efficient measures for each individual home; labor and materials necessary to install such energy-efficient measures.

To facilitate the timely placement of children whose special needs (which may include age, membership in a large sibling group or a racial/ethnic minority group, physical or mental disabilities or other circumstances as determined by the state) would otherwise make it difficult to place them with adoptive families.

One-time nonrecurring payments to assist with the costs of adopting a special needs child (e.g., adoption fees, court costs, attorney fees) and ongoing monthly payments to adoptive families; administrative and child placement services intended to promote child safety, permanency and well-being.

To strengthen and improve the programs and activities carried out under Title V; to improve coordination of services for at-risk communities; to identify and provide comprehensive services for families who reside in at-risk communities.

Home visiting services during pregnancy and to parents with young children up to age five.

To help current and former foster youth achieve self- sufficiency.

Educational assistance, vocational training, employment services, life skills training, mentoring, preventive health activities, counseling, and (subject to certain limitations) room and board.

To develop child care programs that best suit the needs of children and parents in each state, to empower working parents to make their own decisions on the child care that best suits their family’s needs, to provide consumer education to help parents make informed decisions, to provide child care to parents trying to achieve independence from public assistance, and to help states implement their child care regulatory standards.

Subsidized child care services that may include center-based care, group home care, family care, and care provided in the child’s own home. States also use a portion of funds for quality improvement activities, such as professional development and training, and quality rating and improvement systems.

Program purpose To enforce the support obligations owed by noncustodial parents to their children and the spouse (and former spouse) with whom such children are living through locating noncustodial parents, establishing paternity, obtaining child and spousal support, and assuring that assistance in obtaining support will be available to all children who request such assistance.

Benefit or service provided Noncustodial parent location, paternity establishment, establishment of child support orders, review and modification of child support orders, collection of child support payments, distribution of child support payments, and establishment and enforcement of medical support.

To reduce poverty, revitalize low-income communities, and empower low-income individuals and families in rural and urban areas to become fully self-sufficient.

A wide range of activities may be supported to help low-income individuals and families become self-sufficient; address the needs of youth in low-income communities; and effectively use and coordinate with related programs.

To provide shelter, food, and supportive services for homeless individuals nationwide.

Mass shelter, mass feeding, food distribution through food pantries and food banks, one-month utility payments to prevent service cutoff, one-month rent/mortgage payments to prevent evictions or help people leaving shelters to establish stable living conditions.

To provide temporary out-of-home care for children who cannot safely remain in their own homes, until the children may be safely returned home; placed permanently with adoptive families, in a legal guardianship, or with a fit and willing relative; or placed in another planned permanent living arrangement.

Payments to foster care providers to cover the costs of children’s maintenance (e.g., room and board, clothing and supplies, liability insurance, certain travel expenses); and support for administrative and child placement services intended to promote safety and permanency for children and well-being for children and their families.

To promote school readiness by enhancing the social and cognitive development of children through the provision of educational, health, nutritional, social and other services to children and their families; and (for Early Head Start) to promote healthy prenatal outcomes, enhance the development of infants and toddlers, and promote healthy family functioning.

Comprehensive child development services, including educational, dental, medical, nutritional, and social services to children and their families. Services may be center based, home-based, or a combination, and may be full- or part-day or full- or part-year.

To provide financial assistance for needy American Indians who live on or near reservations; to support tribal programs to reduce substance abuse and alcoholism; to promote stability and security of American Indian tribes and families; and to improve Indian housing for low- income Indians.

Assistance in processing welfare applications, foster care assistance services, operation of emergency shelters and similar services; cash payments to meet basic needs; counseling and family assistance services, protective day care, after-school care; and renovations, repairs, or additions to existing homes.

To provide equal access to the justice system for individuals who seek redress of grievances and to provide high quality legal assistance to those would be otherwise unable to afford legal counsel.

Legal services in civil cases.

Program purpose To provide multifaceted systems of support services for family caregivers and grandparents or older individuals who are relative caregivers.

Benefit or service provided Assistance to caregivers in gaining access to services; individual counseling, support groups, and caregiver training in the areas of health, nutrition, and financial literacy; and supplemental services, on a limited basis, to complement the care provided by caregivers.

To secure and maintain maximum independence and dignity in a home environment for older individuals capable of self-care with appropriate supportive services, to remove individual and social barriers to economic and personal independence for older individuals, and to provide a continuum of care for older individuals.

A large variety of services including health, mental health, education, transportation, housing, legal, abuse prevention, employment, and counseling for older individuals.

Social Services Block Grants To promote economic self-sufficiency; prevent abuse or neglect of children; refer individuals into institutional care only when appropriate.

Variety of social services for children, families, the aged, the mentally retarded, the blind, the emotionally disturbed, the physically disabled, and alcoholics and drug addicts.

To enable eligible low-income individuals over age 55 to become self-sufficient through placement in community service positions and job training.

Part-time temporary community service jobs that pay at least minimum wage, job-related training, and supportive services that are necessary to enable an individual to participate in the program.

Foster Grandparent Program To provide opportunities for older low-income people to have a positive impact on the lives of children in need.

Volunteer service (between 15 and 40 hours weekly), with hourly stipend, providing services to children with special or exceptional needs or with conditions or circumstances that limit their academic, social or economic development.

To assist eligible youth who need and can benefit from an intensive program, operated in a group setting in residential and nonresidential centers, to become more responsible, employable, and productive citizens.

Education and vocational training, including advanced career training; work experience; recreational activities; physical rehabilitation and development; job placement and counseling; and child care.

To provide for the effective resettlement of refugees and to assist them to achieve economic self-sufficiency as quickly as possible.

Employability and other services that address participants’ barriers to employment such as social adjustment services, interpretation and translation services, day care for children, citizenship and naturalization services. Services are designed to enable refugees to obtain jobs within 1 year of becoming enrolled.

To assist eligible individuals in finding and qualifying for meaningful employment, and to help employers find the skilled workers they need to compete and succeed in business.

Services range from career counseling, job training, and supportive services such as transportation and child care.

Program purpose To improve educational and skill competencies of youth and develop connections to employers, mentoring opportunities with adults, training opportunities, supportive services, incentives for recognition and achievement, and leadership opportunities.

Benefit or service provided Strategies to complete secondary school, alternative secondary school services, summer employment, work experience, occupational skill training, leadership development opportunities, supportive services, adult mentoring, follow-up services, and comprehensive guidance and counseling.

To increase job opportunities for specified groups of disadvantaged individuals.

Reduces the net cost to employers of hiring individuals who belong to specified groups.

To create community learning centers that provide academic enrichment opportunities during non-school hours (i.e., before school, after school, or during summer sessions) to help students meet academic achievement standards, particularly for children who attend high- poverty and low-performing schools. Also offers families of participating students opportunities for literacy and related educational development. .

Academic enrichment programs including math, science, arts, music, recreational, technology, and entrepreneurial education programs; activities for limited-English- proficient students; promoting parental involvement and family literacy; drug and violence prevention programs; counseling and character education programs.

To assist adults to become literate and obtain the knowledge and skills necessary for employment and economic self-sufficiency; to assist adults who are parents to obtain the education and skills necessary to become full partners in the educational development of their children, and that lead to sustainable improvements in their family’s economic opportunities; to assist adults in completing a secondary school education and in making the transition to postsecondary education and training; and to assist immigrants and other English language learners in improving their English reading, writing, speaking, and comprehension skills and mathematics skills, and in acquiring an understanding of the American system of government, individual freedom, and the responsibilities of citizenship.

Adult education and literacy activities, including adult education, literacy, workplace adult education and literacy activities, family literacy activities, English language acquisition activities, integrated English literacy and civics education, workforce preparation activities, and integrated education and training.

To ensure that all children have a fair, equal and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging state academic achievement standards and state academic assessments.

Additional academic support and learning opportunities for students in prekindergarten through grade 12 that attend schools with high numbers or high percentages of children from low-income families to help low-achieving children master challenging curricula and meet state standards in core academic subjects.

To promote access to postsecondary education for low- income students.

Need-based grants (size of grant is capped by law) to eligible students at participating institutions of higher education.

To promote access to postsecondary education for low- income undergraduate students.

Grants to help students with the costs of postsecondary education.

Program purpose To motivate and assist students from disadvantaged backgrounds through outreach and support programs designed to help them move through the academic pipeline from middle school to post baccalaureate programs.

Benefit or service provided Academic instruction; personal, academic and career counseling; tutoring; exposure to cultural events and academic programs; stipends; and grant aid.

To assist students in financing the costs of postsecondary education.

Federally subsidized part-time employment for students.

To assist low-income students attain a secondary school diploma or equivalent and prepare for and succeed in postsecondary education.

Special teacher training and early intervention services; e.g., counseling, mentoring, academic support, outreach, and supportive services designed to better promote high school graduation. Also college scholarships and other financial assistance needed for students served to be able to attend an institution of higher education.

To assist institutions of higher education that serve high percentages of low-income and minority students in improving their management, fiscal operations, and educational quality, to ensure access and equal educational opportunity for low-income and minority students.

Possible activities are broad and depend on the specific program. They may include, but are not limited to, assistance in planning; administrative management; development of academic programs; equipment and facilities assistance; staff development and tutoring.

To increase student achievement through improving teacher and principal quality and increasing the number of highly qualified teachers, principals and assistant principals in classrooms and schools.

State and local activities include professional development, support for educator evaluation systems, provision of recruitment and retention bonuses to highly qualified teachers, and other means of improving teacher quality. At the school district level, also hiring highly qualified teachers to reduce class size.

To provide comprehensive education programs and services for American Indians and Alaska Natives; to provide quality education opportunities from early childhood through life in accordance with the tribes’ needs for educational, cultural and economic wellbeing in keeping with the wide diversity of Indian tribes and Alaska Native villages as distinct cultural and governmental entities.

Preschool, elementary, secondary, postsecondary and adult education at BIE- funded institutions, public schools, and postsecondary institutions; financial assistance for postsecondary education at accredited institutions.

To support local educational agencies in their efforts to reform elementary school and secondary school programs that serve Indian students in order to ensure that such programs: (1) are based on challenging state academic content and student academic achievement standards that are used for all students; and (2) are designed to assist Indian students in meeting those standards.

Grant funds supplement the regular school program, and support comprehensive programs to meet the culturally related academic needs of Indian children. Funds support such activities as after-school programs, early childhood education, tutoring, and dropout prevention.

Program purpose To improve the content knowledge of teachers and the performance of students in the areas of mathematics and science.

Benefit or service provided Enhanced professional development of math and science teachers, promotion of strong teaching skills, and summer workshops or institutes.

To address the unique needs of rural school districts that frequently lack the personnel and resources needed to compete effectively for federal competitive grants, and receive formula grant allocations in amounts too small to be effective in meeting their intended purposes.

A wide range of services to improve rural education through enhanced services for children, teacher training, and academic programs, including for limited English proficient children.

To help ensure that migratory children are afforded the same educational quality, opportunities, and assistance as other students.

Supplemental education and support services, tutoring, summer and extended- day instructional services, language development services, career education services and counseling; and other services.

Appendix III: Information Provided by Agencies on Federal Obligations (Fiscal Year 2013) and Number Served for Low-Income Programs (Time Periods Vary)

Appendix III: Information Provided by Agencies on Federal Obligations (Fiscal Year 2013) and Number Served for Low- Income Programs (Time Periods Vary)

Program (type of assistance) Medicaid (health care)

Fiscal year 2013 obligations (in millions)

Number served Average of 57.4 million individuals (including 27.9 million children) per month; total of 72.8 million individuals were enrolled during the year (including 35 million children).

Average monthly based on fiscal year 2013 $57,513 27.9 million tax returns claimed the EITC (of these, 24.3 million had a credit that exceeded their tax liability)

Cumulative total for calendar year 2012 $56,486 9.1 million individuals who received at least 1 payment during the year, not including those who only receive a state supplementary payment.

Single point-in-time (August 2014)

Average of 3.5 million individuals receiving cash assistance per month (caseload average without state supplemental funds)

Single point in time (March 2013)

Fiscal year 2013 obligations (in millions)

Average number of individuals served at any time during this time period-July 2013 to October 2014.

Average monthly for fiscal year 2013a (preliminary data)

Cumulative total for fiscal year 2013 $3,255 Approximately 6.4 million households Cumulative total for fiscal year 2013 (preliminary data)

Fiscal year 2013 obligations (in millions)

Cumulative total for fiscal year 2013 Cumulative total for 2012- 2013 school year $919 5,100 multifamily rental units developed or rehabbed per year, with 463,000 total from the program inception (1992). Affordability terms are generally for 20 years.

Single point in time for fiscal year 2014-Sept. 2014 Cumulative total for fiscal year 2013 $779 Agency does not track annual number (not all for low- income)

Cumulative total for program year 2012 (July 1, 2012-June 30, 2013)

Fiscal year 2013 obligations (in millions)

Cumulative total for fiscal year 2013 Cumulative total for program year (July 1, 2013-June 30, 2014)

Single point in time fiscal year 2013 (March 2013)

New enrollees in fiscal year 2013 plus those who enrolled in previous years and received services at any point in fiscal year 2013.

Cumulative total for 2012 school year (not all for low- income)

Fiscal year 2013 obligations (in millions)

Time Period for number served (vary based on information provided by agencies) n/a (not all for low- income)

Cumulative total for calendar year 2012 Average number of approved certifications for fiscal year 2012 and fiscal year 2013.

The Additional Child Tax Credit is the refundable portion of the Child Tax Credit. No federal spending in obligations. No federal spending in obligations for the tax credit. However, in fiscal year 2013, the Department of Labor provided about $18 million in grants to states to process certification requests for the Work Opportunity Tax Credit, according to the agency.

Appendix IV: List of Programs Based on Types of Income Eligibility or Targeting

Based on our analysis of agency responses to our survey, 49 of the 82 federal low-income programs we identified include income or financial eligibility requirements for potential recipients at the individual, household, or related level (see table 8). Thirty-three programs do not assess income eligibility at the individual (or related) level. Instead these programs allocate resources based on a measure of financial need, but offer services more broadly; give priority to those who are low-income; or serve a group that is presumed low-income or which tends to be disproportionately low-income. The table is not meant to be a comprehensive list of program eligibility criteria. For example, for certain programs, agencies reported that states have some flexibility to set specific financial eligibility criteria. Any such state-determined criteria are not shown in this table. The table also does not show any information provided on automatic or categorical eligibility. Additionally, agencies reported that some programs use other criteria, such as age, to determine eligibility in addition to income or financial requirements, which are not included in this table. If an agency reported that a program used more than one type of income eligibility criteria, we counted it only in one category.

Appendix V: Federal Agencies’ Evaluation Efforts for Five Selected Programs

We collected descriptive information on the recent efforts of federal agencies to evaluate five selected programs: the Earned Income Tax Credit (EITC), Section 8 Housing Choice Vouchers (Section 8 Vouchers), Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), and Temporary Assistance for Needy Families (TANF). We selected these programs because they are financially large programs, meet basic needs through different types of assistance, and vary in how benefits are administered. We focused on impact evaluations conducted or sponsored by the respective agencies, published in 2010 or later, that were related to participant outcomes (excluding, for example, those related to program processes, operations, or integrity). In addition to evaluations, we looked at other recent research conducted or sponsored by the respective agencies that provided information on program participants. For each program, we also looked at performance measures, focusing on those related to participant outcomes. In addition, we reviewed agency information available online (e.g., evaluations, research, and annual performance reports) and conducted semi-structured interviews with knowledgeable agency officials. Federal administering agencies are: the Department of the Treasury (Treasury) for EITC, the Department of Housing and Urban Development (HUD) for Section 8 Vouchers, the Department of Agriculture (USDA) for SNAP, Social Security Administration (SSA) for SSI, and Department of Health of Human Services (HHS) for TANF.

Evaluations

Four of the five agencies conducted or sponsored recent evaluations related to participant outcomes for their respective selected programs. Evaluations focused on a range of subjects, including employment practices and self-sufficiency (TANF, SSI, Section 8 Vouchers), food security and healthy food consumption (SNAP), and family outcomes (Section 8 Vouchers), among others (see table 9; see table 10 at the end of this section for full names of evaluations). Unlike the four spending programs we examined, the Department of the Treasury (Treasury) does not conduct program evaluations related to program outcomes on the EITC or any other tax expenditure. In our prior work, we have recommended that the Office of Management and Budget (OMB) set up a performance evaluation framework for tax expenditures, which represent a substantial federal commitment. However, Treasury staff are aware of and contribute to the academic research on participant outcomes related to the EITC, such as on work, poverty, and household income.

Agencies administering Section 8 Vouchers, SNAP, SSI and TANF generally did not evaluate their respective programs as a whole, with the exception of USDA’s evaluation of SNAP’s effect on food security and food spending. Instead, these agencies typically evaluated different practices within the program, often experimenting with new and innovative practices. For example, the SNAP Healthy Incentives Pilot Evaluation was aimed at testing new types of financial incentives designed to make fruits and vegetables more affordable for SNAP participants. Another example is TANF’s Pathways to Advance Career Education evaluation, which is currently testing promising strategies for increasing employment and self-sufficiency among low-income families. Many evaluations across the four programs were also conducted to study the effects of the program on particular sub-populations of participants. For example, SSA’s Youth Transition Demonstration tested strategies designed to help youth with disabilities who were receiving SSI to transition to economic self-sufficiency as adults, while USDA had evaluations looking at food security among the elderly and working poor populations.

For each of the four programs, the agencies conducted evaluations for a variety of reasons. Some of the programs’ evaluations were required by law. For example, HUD was required by law to conduct the Moving to Opportunity for Fair Housing demonstration program evaluation, which presented the long-term impacts of moving people, including Section 8 Voucher recipients, from high-poverty neighborhoods in large inner cities Other evaluations we reviewed were to lower-poverty neighborhoods.determined by the agencies, often in line with a larger evaluation plan or strategy aimed at supporting certain agency goals, according to officials from the HHS, USDA, and HUD. For example, USDA’s evaluations on education programs to promote healthier eating for low-income children, women, and seniors was based on USDA’s goals, according to officials.

Officials told us findings from evaluations have helped inform program design and administration at the federal and state level. For example, based on findings from the Ticket to Work and Self-Sufficiency Evaluations, SSA officials said the agency changed the program’s design to incentivize service providers to serve disability beneficiaries who are more difficult to employ. Agency officials told us they frequently share findings and best practices with state agencies administering the programs to inform their program or policy decisions. For example, USDA officials stated that the SNAP Education and Evaluation studies have helped several states develop their own SNAP education programs. Agencies disseminated findings to administrators and other interested parties through various channels, including research clearinghouses, journals, conferences, and agency websites. Officials from these four agencies told us that evaluation findings also helped them determine financial decisions, such as resource allocation, or to provide support for budget requests to Congress.

Agencies faced a number of challenges with regards to their evaluation efforts, including financial, methodological, and administrative limitations. Agency officials informed us that large-scale, multi-year evaluations are resource intensive, and limited or short-term funding can make it difficult to perform these evaluations, particularly for program wide research. Officials from USDA informed us that it is helpful when money is designated by law for specific evaluations, as was the case with the Healthy Incentives Pilot, which was designated funding in the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill). According to officials, methodological challenges can also limit their evaluation efforts. For example, SNAP and SSI benefits generally must be provided to eligible applicants, which makes it difficult to establish a control group. Under TANF, states generally design and administer their own programs, making it difficult to assess the program more broadly. Furthermore, HHS officials informed us that state and local TANF administrators are not required to participate in evaluations. Therefore, it can be difficult to persuade them to participate because of the burden of additional work and costs that evaluations may create for them. We recently found that the structure of TANF can present challenges for HHS to conduct evaluations and how this may leave TANF recipients without access to promising approaches for employment.

Other Related Research

Agencies administering SNAP, SSI, TANF, and Section 8 Vouchers also sponsored other recent research—that were not impact evaluation studies—that informed their understanding of program participants, including when participants receive benefits from other similar programs. Some research we reviewed provides information on participants, such as their demographic characteristics and economic circumstances. For example, USDA conducted research on the characteristics and circumstances of SNAP participants with zero income by using Census’ Survey and Income Program Participation (SIPP) data to conduct cross- sectional and longitudinal analysis that would not have been possible with USDA administrative data alone. Other studies provided information on participants’ or potential participants’ experiences with the programs, such as need for assistance or reasons for participating, leaving, or returning to the program (Section 8 Vouchers, SNAP, SSI, TANF). Agency research also identified experiences and challenges that participants faced outside of the program, such as crime (Section 8 Vouchers), education (Section 8 Vouchers, SSI), and health issues (SSI). Agencies also conducted cross-program research, which included examining the extent to which program participants received other benefits, such as HHS’s annual Indicators of Welfare Dependence reports, which analyze statistics indicating and predicting welfare dependence among TANF, SNAP, and SSI recipients.work across programs to conduct research regarding large cross-cutting goals, such as interagency research related to ending or preventing homelessness.

Performance Measures

The four selected direct spending programs also track program performance measures, including those related to participant outcomes as well as performance measures related to administrative performance. Examples of outcome focused performance measures include those related to employment (TANF, SSI, Section 8 Vouchers), food security (SNAP), and the level of poor housing situations (Section 8 Vouchers). Measures focused on administrative performance include those related to payment accuracy (SSI, SNAP), participation rates (TANF), and utilization rates (Section 8 Vouchers).

Selected GAO Reports on Program Evaluation Program Evaluation: Some Agencies Reported that Networking, Hiring, and Involving Program Staff Help Build Capacity, GAO-15-25 (Washington, D.C.: November 13, 2014).

Program Evaluation: Strategies to Facilitate Agencies' Use of Evaluation in Program Management and Policy Making, GAO-13-570 (Washington, D.C.: June 26, 2013).

Performance Measurement and Evaluation: Definitions and Relationships (Supersedes GAO-05-739SP), GAO-11-646SP (Washington, D.C.: May 2, 2011).

Program Evaluation: Experienced Agencies Follow a Similar Model for Prioritizing Research, GAO-11-176 (Washington, D.C.: July 14, 2011).

Program Evaluation: A Variety of Rigorous Methods Can Help Identify Effective Interventions, GAO-10-30 (Washington, D.C.: November 23, 2009).

Program Evaluation: An Evaluation Culture and Collaborative Partnerships Help Build Agency Capacity, GAO-03-454 (Washington, D.C.: May 2, 2003).

Selected GAO Reports Related to Selected Programs TANF: Action Is Needed to Better Promote Employment-Focused Approaches, GAO-15-31 (Washington, D.C.: November 19, 2014).

Rental Housing Assistance: HUD Data on Self-Sufficiency Programs Should Be Improved, GAO-13-581 (Washington, D.C.: July 9, 2013).

Moving to Work Demonstration: Improved Information and Monitoring Could Enhance Program Assessment, GAO-13-724T (Washington, D.C.: June 26, 2013).

TANF Potential Options to Improve Performance and Oversight, GAO-13-431 (Washington, D.C.: May 15, 2013).

Tax Expenditures: Background and Evaluation Criteria and Questions GAO-13-167SP (Washington, D.C.: November 29, 2012).

Social Security Disability: Participation in the Ticket to Work Program Has Increased, but More Oversight Needed, GAO-11-828T (Washington, D.C.: September 23, 2011).

Domestic Food Assistance: Complex System Benefits Millions, but Additional Efforts Could Address Potential Inefficiency and Overlap among Smaller Programs, GAO-10-346 (Washington, D.C.: April 15, 2010).

Government Performance and Accountability: Tax Expenditures Represent a Substantial Federal Commitment and Need to Be Reexamined, GAO-05-690 (Washington, D.C.: September 23, 2005).

Section 8 Housing Choice Vouchers Evaluation of the Family Self-Sufficiency Program: Prospective Study http://www.huduser.org/portal/publications/FamilySelfSufficiency.pdf Family Options Study http://www.huduser.org/portal/family_options_study.html Moving to Opportunity for Fair Housing Demonstration Program - Final Impacts Evaluation http://www.huduser.org/portal/publications/pubasst/MTOFHD.html Rent Reform Demonstration http://www.mdrc.org/project/rent-reform-demonstration#overview Supplemental Nutrition Assistance Program (SNAP)

Reaching Underserved Elderly and Working Poor SNAP Evaluation http://www.fns.usda.gov/reaching-underserved-elderly-and-working-poor-snap-evaluation-findings-fiscal-year-2009-pilo ts SNAP Education and Evaluation Study http://www.fns.usda.gov/snap-education-and-evaluation-study-wave-i-final-report Supplemental Security Income (SSI)

Improving Access to Benefits for Persons with Disabilities Who Were Experiencing Homelessness: An Evaluation of the Benefits Entitlement Services Team Demonstration Project http://www.ssa.gov/policy/docs/ssb/v74n4/v74n4p45.html Promoting Readiness of Minors in SSI (PROMISE)- Evaluation Design Report http://www.ssa.gov/disabilityresearch/promise.htm TANF/SSI Disability Transition Project, http://www.acf.hhs.gov/programs/opre/research/project/tanf/ssi-disability-transition-project Ticket to Work Evaluations http://www.ssa.gov/disabilityresearch/twe_reports.htm Youth Transition Demonstration Evaluation http://www.ssa.gov/disabilityresearch/youth.htm Youth Transitioning Out of Foster Care: An Evaluation of a Supplemental Security Income Policy Change http://www.ssa.gov/policy/docs/ssb/v73n3/v73n3p53.html Temporary Assistance for Needy Families (TANF)

Employment Retention and Advancement Project http://www.ssa.gov/policy/docs/ssb/v73n3/v73n3p53.html.

Time Period of Evaluation(s) Name and Website of Evaluations 2013-2018*

Job Search Assistance (JSA) Strategies http://www.acf.hhs.gov/programs/opre/research/project/job-search-assistance-evaluation Pathways to Advance Career Education (PACE) http://www.acf.hhs.gov/programs/opre/research/project/innovative-strategies-for-increasing-self-sufficiency Subsidized and Transitional Employment Demonstration (STED) http://www.acf.hhs.gov/programs/opre/research/project/job-search-assistance-evaluation TANF/SSI Disability Transition Project (listed above under SSI)

Appendix VI: Comments from the Department of Housing and Urban Development

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Gale Harris (Assistant Director), Theresa Lo (Analyst-in-Charge), Matthew Hunter, Brittni Milam, Rhiannon Patterson, Max Sawicky, Rosemary Torres Lerma made significant contributions to this report. Also contributing significantly to this report were Chuck Bausell, James Bennett, Ted Burik, David Chrisinger, Sarah Cornetto, and Kirsten Lauber.