A new report from the Iowa Policy Project (IPP) finds many work-support policies for low-income Iowa families are presenting barriers to those families moving out of poverty. IPP research director Peter Fisher says the “basic needs” cost of living for an Iowa family is two to three times higher than federal poverty guidelines.
“Therein lies the problem, because most public benefit programs, including these work supports, are geared to the official federal poverty guidelines and most of them cut off benefits well before that self-sufficiency wage is reached,” Fisher says. This is the last of three reports on “The Cost of Living in Iowa” issued by IPP this year.
An earlier report stated 1 in 6 Iowa households do not earn enough to provide for a basic standard of living. Fisher says programs, such as Child Care Assistance, have “cliff effects.” Eligibility for the program vanishes when an family makes just 145-percent of the federal poverty level, which is very low, according to Fisher.
“That’s a huge penalty to take for someone who’s in a low-wage job, find they can work more hours or get an opportunity to get a better job, they can find themselves in a position of making their families worse off by earning more money because they would lose all of that child care assistance,” Fisher says. “We have one of the lowest eligibility ceilings in the country at 145-percent of poverty. Many states go to 200-percent of poverty or close to it.”
The IPP report recommends several reforms to Iowa’s work-support policies, such as raising the eligibility for the Child Care Assistance program to 200-percent of the poverty level and implementing a copay schedule that “eases people off the program” as their income rises.