MFIP used financial work incentives and mandatory employment and training activities to increase employment and reduce poverty among Aid to Families with Dependent Children (AFDC) recipients.
MFIP was one of the demonstration projects made possible by Section 1115 waivers to the rules in effect at the time for the AFDC program. These Section 1115 waivers allowed states to test new approaches to advance the objectives of the AFDC program.
MFIP was evaluated with single-parent families, two-parent families, and families in Ramsey County(MFIP-R). The MFIP program for single-parent and two-parent families was implemented in three urban Minnesota counties (Hennepin, Anoka, and Dakota) and four rural Minnesota counties (Lacs, Morrison, Sherburne, and Todd), and the MFIP-R program was implemented in Ramsey County, MN. MFIP used the following strategies to encourage AFDC recipients to find employment and reduce their dependence on public assistance:
- MFIP provided financial incentives for work by (1) increasing the basic AFDC grant by 20 percent if participants worked; (2) reducing AFDC benefits by only 62 percent for every earned dollar (rather than dollar for dollar); and (3) eliminating the work history requirements and the 100-hour rule for two-parent families, which had required that two-parent family work less than 100 hours per month to remain on welfare.
- MFIP made it easier for families to receive benefits by combining families’ AFDC, Food Stamps (provided in cash, rather than coupons), and Family General Assistance (a state-funded cash assistance program) into one monthly payment.
- MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket.
- Long-term welfare recipients were required and others could volunteer to participate in employment and training activities that focused on rapid entry into employment. Long-term welfare recipients were single-parent families that had received AFDC for two of the past three years; two-parent families that had received AFDC for more than six months; Ramsey County single-parent families that had received AFDC for more than one year; and Ramsey County two-parent families that had received AFDC for more than six months.
- Single-parent or two-parent families had the option to choose from various MFIP employment and training activities, which included job search, education and job training programs, and case management to develop plans for employment, whereas Ramsey County families were required to partake in a one-week job skills workshop that was followed by seven weeks of guided job search and group activities.
- Participants were exempt from employment and training activities if they were working at least 30 hours per week, had a child younger than 1, or met “good cause” criteria. Participants who did not participate in employment and training activities could have their benefits reduced by 10 percent.
The financial incentives remained in effect as long as clients remained in MFIP. All AFDC, Food Stamps, or Family General Assistance applicants and recipients were eligible to participate in MFIP.
The study also evaluated the MFIP Incentives Only program.