Will State, Feds Pay for 60-Month Benefits?

Used with permission of subscription-only MIRS

MIRS April 9, 2012

If the courts throw out the new 60-month welfare benefits cap for disabled recipients, will the state be on the hook for the costs?

Department of Human Services (DHS) Director Maura CORRIGAN told MIRS in March that the answer is yes, but the Michigan League for Human Services (MLHS) isn’t convinced.

“Federal money is available and can be spent on those families if they were to be put back on cash assistance,” said MLHS Communications Director Judy PUTNAM.

The State Budget Office confirmed that there is a projected surplus in federal Temporary Assistance to Needy Families (TANF) dollars — $100 million in Fiscal Year (FY) ’12 and $30 million FY ’13. In theory, that could possibly pay for some or all of what it would cost to extend exemptions for disabled people past the 60-month welfare limit.

Genesee County Circuit Court Judge Geoffrey NEITHERCUT ruled threw out DHS’ 60-month limit last week, but the case is being appealed.

Corrigan said if the Legislature wanted to agree with the ruling and extend cash assistance to this particular population, there would need to be some money attached (See “DHS To Appeal Judge Ruling On 60-Month Limits,” 3/28/2012).

DHS Director for Financial Services Susan KANGAS explained that what looks like a surplus of TANF funds is actually a mix of carryover funds and contingencies — smaller amounts of funding given to the state above its $775 million block grant. The contingencies aren’t expected to last, and neither is the number that looks like a surplus.

“The carryforward at some point here, very shortly, disappears. It’s gone,” said DHS spokesman Dave AKERLY.

By FY ’14, the expectation is that that number will look more like a deficit.

But MLHS senior policy analyst Joanne BUMP said the numbers showing right now should be enough to cover the people who are disabled or otherwise unable to participate in the Jobs, Education and Training (JET) program and are currently being cut off under a newly-enforced 60-month welfare limit.

“What’s important is that the surplus is available with more than enough money to cover these families. And that the federal government does not have a law that requires these families to be kicked off after 60 months,” said Bump.

What the federal government does require is that no more than 20 percent of a state’s welfare population getting federal money have been on the welfare rolls for more than 60 months. DHS spokesperson Colleen ROSSO told MIRS this fall that the state was closer than evercbefore to breaking the line and going above 20 percent, meaning the state would have to pay for any overrun (See “Car Portion of AssetcTest Revoked,” 11/2/2012).

In any case, there’s a lot of uncertainty about federal funding.

“From our standpoint that $100 million that you’re talking about for this year . . . is not a surplus . . . it is not something to be counted on in the future. And so it is not something to base policy on in any way shape or form,” said Akerly, who noted the department was being prudent for the future.

But Bump said that the policy isn’t based on dollar amounts.

“If the state decides not to fund this, I think it should be an honest statement that that’s their political decision, not because of a lack of funds,” said Bump.