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Public Assistance Benefits in North Carolina and DHHS Growth
Potential Benefit Eligibility for Five Household Scenarios and DHHS Expenditure Growth
Compared to Other Growth Rates Since 2000
March 25, 2013
Purpose and MethodsPurpose: To model potential public assistance benefit eligibility for five different household scenarios. The scenarios illustrate where disincentives for marginal increases in household wages exist due to the loss of public assistance benefits.
Methods: Developed five household scenarios: 1) single mother with two children, aged 1 and 42) married couple with two children, aged 1 and 43) married couple with two children, aged 5 and 84) single adult over 655) single adult under 65
Public assistance program eligibility and potential benefit amounts were calculated for each of the four household scenarios based on varying wages ranging from $0 to $100,000. The benefits calculated included: federal and state earned income tax credits, Work First (North Carolina 's Temporary Assistance for Needy Families program), the Food and Nutrition Services program, Women, Infants, and Children (WIC), school meal programs, housing choice vouchers (Section 8), child care subsidies, energy assistance, Medicaid, and Medicaid payment of Medicare Part B premiums for those age 65 and older.
Public assistance benefit programs that are not means tested were excluded from this analysis. For example, benefits under the Home and Community Care Block Grant were excluded.
2Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office
Interpretation of Potential Benefits Charts
• Each chart represents the benefits a household at a given income level is eligible to receive North Carolina, but not what a household actually receives.
• For several programs, obtaining and maintaining eligibility is based on additional factors beyond income.
• Participation in these programs generally requires an application.
• Coverage under the child care subsidy, Section 8 vouchers, energy assistance, and Medicaid payment of Medicare Part B is limited to available funds for each program. An individual may be eligible for these programs, but not receive benefits due to limited funds.
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office3
North Carolina Population Served by Public Assistance Programs
Public Assistance Program Number Served % of NC Population Served
Medicaid 1,580,198 16.20%
Food and Nutrition Services 1,452,425 14.89%
Section 8 Vouchers 130,363 1.34%
Child Care Subsidy 76,128 0.78%
Energy Assistance 68,445* 0.70%
Work First 44,530 0.46%
School Meal Programs** 638,934 44%Notes: Data in the table is based on the most recent available and dates vary. * Energy Assistance number served is households, not individuals. **School Meal Program number served is students receiving free or reduced priced lunches and % of NC population is based on average daily membership in public schools.
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office4
Federal and State Share of Total Program Costs
Public Assistance Program Federal% of Total Funding
State% of Total Funding
Medicaid 65.28% 34.72%
Food and Nutrition Services 100% 0%
Section 8 Vouchers 100%* 0%
Child Care Subsidy 80% 20%
Energy Assistance 100% 0%
Work First 100% 0%
WIC 100% 0%
School Meal Program** 64.85% 0.46%
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office5
Notes: County Departments of Social Services incur costs administering the programs.*Local Housing Authorities may receive funds from municipalities for Section 8. It varies greatly across the State, as there is no formula match required by the Federal government. **The remaining funding for the School Meal program comes from local sources (34.69%).
2013 Federal Poverty Levels for 48 Contiguous States
Persons in Household
100% Federal PovertyLevel
150% Federal PovertyLevel
200% FederalPovertyLevel
1 $11,490 $17,235 $22,980
2 15,510 23,265 31,020
3 19,530 29,295 39,060
4 23,550 35,325 47,100
5 27,570 41,355 55,140
6 31,590 47,385 63,180
7 35,610 53,415 71,220
8 39,630 59,445 79,260
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office6
Notes: Alaska and Hawaii guidelines differ
Source: The Federal Register, Notice by U.S. Department of Health and Human Services on January 24, 2013
Household Income and Potential BenefitsPotential benefits that a single mother with two children ages 1 and 4 could receive at
various wage levels in North Carolina
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office7FPL = Federal poverty level
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
Value of Ben
efits
+ Net In
come
Wages
Section 8 Voucher
Work First
Medicaid
Child Care Subsidy
WIC
Food and Nutrition Services
Federal and State EITC
Net Income After Taxes
100% FPL
150% FPL
200% FPL
Household Income and Potential BenefitsPotential benefits that a married couple with two children, ages 1 and 4 could receive at
various wage levels in North Carolina
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office8
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
Value of Ben
efits
+ Net In
come
Wages
Section 8 Voucher
Work First
Medicaid
Child Care Subsidy
WIC
Food and Nutrition Services
Federal and State EITC
Net Income After Taxes
FPL = Federal poverty level
100% FPL
150% FPL
200% FPL
Household Income and Potential Benefits
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office9
Potential benefits that a married couple with two children, ages 5 and 8 could receive at various wage levels in North Carolina
FPL = Federal poverty level
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
Value of Ben
efits
+ Net In
come
Wages
Section 8 Voucher
Work First
Medicaid
Child Care Subsidy
School Meal Programs
Food and Nutrition Services
Federal and State EITC
Net Income After Taxes
100% FPL
150% FPL
200% FPL
Household Income and Potential BenefitsPotential benefits that a single adult over 65 could receive
at various wage levels in North Carolina
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office10
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,0000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
Value of Ben
efits
+ Net In
come
Wages
Medicare Part B Premium
Energy Assistance
Section 8 Voucher
Medicaid
Food and Nutrition Services
Federal and State EITC
Net Income After Taxes
200%FPL150%
FPL100% FPL
FPL = Federal poverty level
Household Income and Potential BenefitsPotential benefits that a single adult under 65 could receive at
various wage levels in North Carolina
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,0000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
Value of Ben
efits
+ Net In
come
Wages
Section 8 Voucher
Food and Nutrition Services
Federal and State EITC
Net Income After Taxes
200%FPL150%
FPL
FPL = Federal poverty level
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office11
100% FPL
AssumptionsState and Federal Income Taxes: Assumed income is derived from wages and not other sources, such as dividends, interest, or capital gains. Assumed household claimed the standard deduction and took advantage of child tax credit where applicable and federal and state earned income tax credit. Excluded sales tax, property tax, and FICA taxes from all scenarios.
Work First: Assumed household has not exhausted the 60‐month federal time limit for receiving assistance and otherwise qualifies with all other eligibility requirements such as having no more than $3,000 in resources and working, in school, or a job training program. Assumed household is eligible and receiving the maximum benefit payment.
Medicaid: Assumed household met eligibility requirements either under the “Medicaid for Families & Children” group or the “Children under age 6” group. For over 65 household, assumes eligibility under the “Aged” group and that the individual is not living in a nursing facility or disabled. Applied average yearly payment for the benefit values: child payment of $2,796, adult payment of $4,059, and aged payment of $10,664. For child of age 8, included participation in NC Health Choice as part of “Medicaid” category. Annual benefit value of NC Health Choice was $2,268.
Child Care Subsidy: Assumed household meets all eligibility requirements beyond financial and can pay their share of the cost (9‐10% of gross monthly income). Assumed program has available funds. Applied median values for all North Carolina counties for a 5‐star facility (the highest subsidy amount) for infant‐toddler and 3‐5 year old care.
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office12
AssumptionsWIC: Assumed household meets all requirements to maintain eligibility and that children in the households receive the food package benefit. Applied the average monthly WIC benefit amount in North Carolina of $43.65.
Section 8: Determined eligibility based on the median value in NC of 30% of the area mean income (AMI). Applied the average monthly benefit payment in North Carolina of $458.
Food and Nutrition Services: Determined eligibility based on the gross income test. Assumed net income was 65% of gross income after deductions to determine the allotment amount.
Energy Assistance: Assumed that only the over 65 household receives the benefit because the program has limited funds and places priority on serving low‐income elderly in North Carolina. Assumed household did not exceed the income limit (below 110% of federal poverty.) Applied average yearly household assistance benefit of $202.
Medicare Part B Premium paid by Medicaid: Assumed the over 65 individual met eligibility requirements under the “Qualified Medicare Beneficiaries” group, which entitles them to payment of Medicare Part B premiums. Assumed that the individual is eligible for Social Security. Assumed household did not exceed the income limit (below 135% of federal poverty) and that the program had available funds. Applied average yearly benefit value of $1,258.
School Meal Programs: Assumed that child participated in the school breakfast and school lunch programs. Assumed that families qualifying for the reduced‐price meal were able to pay their share of the cost for each meal ($0.80 per day) and that the child had 100% attendance.
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office13
Tax Filing Data Related to Scenarios
• Using tax filing data, we can estimate what percentages of tax filers for each scenario might fall into differing income categories.
• Because it is tax data, income is measured differently (Adjusted Gross Income rather vs. wages).
• Additional limitations because tax categories are different than how the benefit scenarios are categorized. For example, a single tax filer could be under 65 or over 65. In addition, tax data does not include the age of children, but the age of a child impacts benefit eligibility.
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office14
Head of Household with Two Children
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office15
415
13,188
26,366
35,017
40,441
41,966
36,670
22,752
12,013
6,546
3,6131,949 1,292 645 361 301 188 103 73 41 31 110
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Percen
tage of Tax Filings in Category
Adjusted Gross IncomeNotes: Based on a total of 244,081 filings as head of household with two children taking the standard deduction. This scenario represents 5.1% of all tax filings.Source: Estimated 2013 returns from the BearingPoint North Carolina Individual Income Tax Model
or
Married Filing Jointly with Two Children
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office16
1,071
3,177
3,994
5,939
8,525
10,024
11,00410,264
9,248
8,500
7,121
6,093
4,9924,413
3,900
3,0132,714
2,1931,685
1,252 1,210
5,547
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Percen
tage of Tax Filings in Category
Adjusted Gross IncomeNotes: Based on a total of 115,879 filings as married filing jointly with two children taking the standard deduction. This scenario represents 2.4% of all tax filings.Source: Estimated 2013 returns from the BearingPoint North Carolina Individual Income Tax Model
Single with No Children
Prepared by Program Evaluation Division and Fiscal Research Division, Legislative Services Office17
8,133
73,001
87,49292,065
109,415104,055
94,502
77,240
58,874
46,291
32,372
22,34516,022
10,839 7,717 5,857 4,084 2,841 1,987 1,401 7143,156
0%
2%
4%
6%
8%
10%
12%
14%
Percen
tage of Tax Filings in Category
Adjusted Gross Income
Notes: Based on a total of 860,403 filings as single with no children taking the standard deduction. This scenario represents 18.1% of all tax filings.Source: Estimated 2013 returns from the BearingPoint North Carolina Individual Income Tax Model
or
Prepared by Program Evaluation Division, Legislative Services Office18
Data Sources:1. NC Office of State Controller, Comprehensive Annual Financial Reports (2012,2009), Changes in Fund Balances of Governmental Funds, Table 4, 2009 p.271. Table 4, 2012 pp. 258‐259.2. Constant 2000 dollar index for inflation. US Department of Labor, Bureau of Labor Statistics, Consumer Price Index Calculator.3. NC Population in Poverty. US Census, Historical Poverty Data—People, Table 21, Number of Poor and Poverty Rate by State.4. NC Personal Income. US Department of Commerce, Bureau of Economic Analysis, SA3 Personal Income Summary, North Carolina.
Increase in Constant Dollars from FY 2000
54.9%
3.6%
18.8%
45.9%
‐10%
0%
10%
20%
30%
40%
50%
60%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
DHHS Expenditures, Constant 2000Dollars
Total State GovernmentalExpenditures Excluding DHHS,Constant 2000 DollarsNC Personal Income, Constant 2000Dollars
NC Population in Poverty
North Carolina Growth TrendsFiscal Years Ended June 30, 2000 through 2011