Minnesota Gov. Tim Walz aims to cut red tape, boost welfare benefits for poor families

Thousands of Minnesota families living in poverty will see a boost in monthly relief payments and will no longer have to meet cumbersome paperwork requirements to prove they are eligible for public assistance, under new proposals to simplify the state's welfare system.

The proposed changes being considered at the State Capitol would eliminate the requirement that people on Minnesota's family welfare program submit a complicated and lengthy form every month to prove eligibility. And, for the first time, monthly payments for the Minnesota Family Investment Program (MFIP) would be adjusted annually to reflect the rising costs of food, rent and other essentials.

The cost-of-living increases, if approved, would mark only the second time in 35 years that welfare recipients in Minnesota would see an increase in their monthly benefits, which have steadily eroded in value due to inflation.

The measures are designed to reduce stress and provide some income stability for the approximately 30,000 Minnesota families who receive cash assistance, and would be the most significant changes to the state's welfare program in decades.

Minnesota is the only state that still requires welfare recipients to submit an eight-page form every month showing income, assets and expenses — a paperwork burden that is roughly akin to filing taxes every month and increases the risk of losing their sole source of income. Every change in reported monthly income results in a change in benefits, which makes it difficult for low-income families to plan for the future.

"If there was ever a program whose design got in the way of its very purpose, it's this one," said Human Services Commissioner Jodi Harpstead, whose department oversees cash assistance programs. "If people spend all their time filling out MFIP paperwork instead of filling out job applications, which is what they want to be doing, then it defeats its own purpose."

Gov. Tim Walz's proposed budget would enable families receiving MFIP benefits to lock in their benefits for six months, which would align the state's welfare reporting requirements with other safety net programs, such as the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. His budget proposal also includes a one-time payment of $750 to families who receive MFIP to help them address critical needs. Currently, the maximum cash payment for a typical family of three is $632 a month, which is about 35% lower than Minnesota's median gross rent.

The proposals have support among a cross-section of nonprofits, county social service agencies and religious groups and reflect a broader shift in attitudes about cash assistance programs for impoverished families.

"This is a game changer," said Jessica Webster, a staff attorney at Mid-Minnesota Legal Aid. "After decades of eroding benefits, even a modest expansion of [MFIP] payments and easing of reporting requirements are a very big deal."

A quarter-century ago, President Bill Clinton promised "to end welfare as we know it," referring to it as a "broken system" that traps people in a cycle of dependence. His changes eliminated Aid to Families With Dependent Children (AFDC), the government's main welfare program, and replaced it with a patchwork system of block grants that gave broad powers to the states to impose new work requirements and limits on benefits.

But public portrayals of welfare have begun to change in recent years amid concerns about deepening inequality and rising costs for housing and health care. The coronavirus pandemic has amplified these concerns by forcing millions of Americans into unemployment and making it harder for many families to make ends meet. In Minnesota, the pandemic has unleashed a hunger crisis, with visits to emergency food shelves surpassing levels seen in the Great Recession of 2008 and 2009.

"There is growing awareness of how shockingly difficult we make it to get any help for people whose lives are already very difficult," said Rep. Tina Liebling, DFL-Rochester, chairwoman of the House Health Finance and Policy committee.

A sweeping new study, released earlier this year by the Department of Human Services (DHS) shows the profound effects of extreme poverty on physical health and longevity. It found that Minnesota adults living in "deep poverty," meaning their income is half the federal poverty level or less, have a mortality rate two times higher than those who are not as poor. They experience 40% more preventable visits to hospital emergency rooms and 23% more preventable hospitalizations. Children living in deep poverty also are far less likely to receive preventive medical care and are 10% more likely to have post-traumatic stress disorder, according to the DHS analysis.

The 155-page study also highlighted the extreme volatility of Minnesota's welfare benefits and the degree to which poor families rotate in and out of the program — known as "churn." Researchers at the DHS examined a cohort of cases and found that 33% of MFIP recipients who exited the program were re-enrolled within six months, much higher than the churn rate for food stamps. This volatility contributes to the stress of being poor, DHS researchers found, and could be linked to the extensive reporting requirements of MFIP.

Janesha Anderson, a 21-year-old single mother from north Minneapolis who receives MFIP benefits, said she struggles each month to get the necessary paperwork in on time. Because she has a learning disability, Anderson has difficulty understanding the questions and has to find a friend or relative to walk her through the form each month. Then she and her 7-year-old son, Jermel, must take a 20-minute bus ride from their apartment to a Hennepin County office that accepts the forms.

"Sometimes I worry about dropping an important document and getting cut off [from MFIP], and then I would have no way of supporting my son," she said.

The monthly reporting requirements stem from welfare cuts made in the early 1980s. Most states have shifted toward a more reliable payment system after recognizing the burden the extra paperwork placed on both poor families and local government agencies, said Liz Schott, senior fellow at the Center on Budget and Policy Priorities in Washington, D.C.

"One of the biggest reasons that people lose benefits is because they have to jump through all these hoops," Schott said. "People already have complicated lives and terminating benefits can wreak havoc on a person's well-being."

Chris Serres • 612-673-4308

Twitter: @chrisserres