Five Questions for Sheila Zedlewski

Sheila Zedlewski, director of Urban Institute's Income and Benefits Policy Center, is a national expert on income security and poverty, especially on eligibility and participation in work support programs. She has written numerous articles examining Food Stamp Program participation and the effects of work-support benefits on poverty.

Five Questions Archives

1. What does work support system mean?

We have a set of programs in the United States that augment the spending power of low-income working families with children. They include the Earned Income Tax Credit (EITC), child care subsidies, food stamps, and Medicaid. While never designed as a formal system, the programs taken together provide important supplements for parents with low-wage jobs who struggle to pay for housing, food, child care, and health care for their families with a low-wage job. Remember that not all low-wage families qualify for all of these benefits—eligibility rules and even the availability of benefits vary by program and state.

Housing assistance is not really part of the system because it is not an entitlement program. Subsidized and public housing goes to such very disadvantaged people as the elderly and the disabled and availability varies across the country. While some important initiatives use public housing as places to deliver services to low-income working families, it's only a very small piece of the work support system.

2. Why do some eligible low-income working families not participate in benefit programs?

I would say there are four major reasons why only 7 percent of working families with income below poverty actually receive all four work-supports. First, many don't know that the programs exist, or how to get the benefits. The second would be difficulties in accessing the programs. The complicated application forms require visits to a welfare office and include complex documentation and sometimes finger-imaging requirements. About two thirds of low-income working families access the EITC through a paid tax preparer, suggesting that low-income families need professionals to help them figure out how to apply for benefits.

The third reason would be what I call stigma. Many families are embarrassed to apply for government assistance. They don't want their friends or families to know that they are looking for help. There is also the desire to be independent of government assistance and to make it on their own.

The fourth reason is fear, and studies show that this mostly occurs among immigrant families who worry about reprisal for using government benefits. Some fear they will have to pay government back eventually, or they may feel that their citizenship applications and their status in this country is threatened.

3. Can states take steps to reach more families with supports?

Definitely. States administer all of these work support programs except the Earned Income Tax Credit, which is a federal tax refund. States have a lot of flexibility to design worker-friendly programs. Many states have simplified the application forms for food stamps and Medicaid. They can reduce the number of times a family has to go into a welfare office and apply for benefits. It used to be true that to keep your food stamps active for your family you had to come into the office every three months. Now it's more like every six months, or every 12 months in some states.

States can also reach out to families and educate them about these programs. While it would require more money for the states to administer the programs, they can provide translators in their offices to help families who speak little English. They can keep offices open outside of regular business hours and have child care available while families apply for benefits. They could provide a friendly pro-participation atmosphere—in other words, a very service-oriented atmosphere for families rather than a bureaucracy.

Some states have been innovative. Maine, for example, delivers food stamps and Medicaid together in a user-friendly environment and has increased participation in both programs. Florida and other states have simplified the renewal system for Medicaid so that more families retain benefits for longer periods. Nebraska automatically provides information about child care subsidies to families with children in its state health insurance program. Efforts like these begin to link these programs together and ease families' access to work supports.

4. Would a higher take-up rate for these programs make a difference for low-income families?

It should make a difference. We know that the Earned Income Tax Credit provides a substantial subsidy to earnings and, while most eligible families do participate, about 15 percent of qualifying families don't apply. Medicaid can help provide children with a regular source of care. Food stamps can provide up to $400 a month in extra income and food assistance. We're talking about real increments to bolster a low-wage family's income.

We know that children living in families with more income do better than families who are struggling, so more participation in these programs could enhance their lives.

5. What policies might boost program participation?

I can think of four new ideas for improving work supports. One of them would be coordination of all work-support programs. Right now, each program has its own peculiar eligibility rules and families really need professionals to figure out how to apply through these different channels. That really shouldn't be. The rules could be streamlined and coordinated so that they target the benefits sensibly

We should also look at asset tests. For some programs, these are still really strict. For instance, you can only have $2,000 in the bank to get food stamps, a law that hasn't changed in 20 years. While states can technically get around the test for some families that qualify for other benefit programs without asset tests, the test still dampens participation. An asset test runs counter to other policies geared toward increasing assets for working families as a cushion for bad times.

Other programs such as Medicaid have eliminated asset tests, focusing only on income for eligibility. Income would include income from assets, but not the assets themselves. The EITC does not have an asset test. I think we should modernize the other work support programs by either removing or liberalizing the assets test to encourage participation among families trying to save for a rainy day.

Third, I wonder whether we really could develop a formal network of community-based centers across the country that provide application assistance to low-income families. Places that families would not find threatening. They would have to be funded for the long haul, though, so families could always count on them. Families could visit such centers to learn about benefits and decide whether they want to apply.

This approach has been tried in some locales for some of the work-support programs, but not systematically. Maybe first we need to design some models and then see if we could copy them across the country. We know that families prefer to talk to community-based groups, especially people in the community who are like them, rather than government bureaucrats.

Finally, the more I look at how we subsidize child care, the more I think we need to step back and find a better system. Right now states don't have enough money for child care and they're rationing benefits. Some families might be eligible in a state one year and not eligible in the next. We really need to think about creating a system, especially for infants and pre schoolers, that would support all working families on a sliding fee basis and provide safe child care that encourages development. It would be expensive, but it might have huge benefits in the long run for children and their parents.