The stereotype of the low-income people enrolled in government programs is that they spend the money on frivolities and are unwise with their budgets. But the data proves otherwise. Families who receive public benefits such as housing assistance, welfare cash assistance, food stamps, Medicaid, and Social Security Income (SSI) for the disabled or low-income elderly have much smaller spending budgets than those who don’t receive benefits and spend a bigger portion on the basics such as food, housing, and transportation, according to an analysis by the Bureau of Labor Statistics.
On average, families who are enrolled in these public programs spend less than half of what families who aren’t enrolled spend. They also put a bigger percentage of that money toward food, housing, and transportation, devoting 77 percent of their budgets to these necessities compared to about 65 percent for other families. Meanwhile, they spend less, on average, on some things thought to be luxuries like eating out and entertainment. A family that doesn’t get public benefits spends 4.5 percent of its budget on “food away from home,” while a two-parent family who gets benefits spends 4 percent of its budget on eating out and a single parent spends 3.6 percent. “Food away from home spending was higher in both dollar amount and percent of total spending among families not receiving assistance,” the report notes. Families who don’t need assistance also spend more on entertainment in both dollar and percentage terms and devote more of their budgets to “other” expenses.
Families who receive benefits are also more likely to go without higher priced items like houses and cars. Just 3 percent of families who don’t get benefits went without a car, compared to nearly a quarter of those on the rolls. On average, a family that isn’t enrolled in public programs has about two cars, while a family that is enrolled has about one. Meanwhile, more than three-quarters of families not receiving assistance are homeowners, while the opposite is true for families who do need the support: just about three-quarters are renters instead of homeowners.
And while the stereotype of the “welfare queen” is a woman who has more children to increase the benefits she gets from government programs, families who are enrolled look similar to those who aren’t. “Average family size was the same (3.7 persons), whether or not a family received assistance,” the report notes.
In reality, many of these benefits that families rely on are paltry and, worse, have recently shrunk. The value of benefits from the Temporary Assistance for Needy Families program (TANF), formerly known as welfare, have fallen so that their purchasing power is less than what it was in 1996 for the vast majority of recipients. A family of three that relies solely on TANF won’t be able to make market rent for a two-bedroom apartment and will live at just 50 percent of the poverty line, or $9,765 a year. Food stamps from the Supplemental Nutrition Assistance Program (SNAP) were reduced in November to an average of less than $1.40 a meal and more cuts are likely on their way after Congress agrees to a new farm bill. Housing assistance from the Section 8 rental voucher program got hammered by sequestration and local authorities had to rescind vouchers from those who had gotten off waiting lists, freeze the lists, and reduce the amount of rent each voucher would cover.
Still, these programs represent a vital lifeline. Government programs such as SNAP, SSI, housing assistance, cash assistance, and others kept millions out of poverty last year.