A welfare-to-work program that combines mandatory participation in employment and training services with earnings supplements for participants who do find work.
The Minnesota Family Investment Program (MFIP) was implemented as a pilot program in seven urban and rural counties from 1994 to 1998 and served as an alternative to the federal welfare program (Aid to Families with Dependent Children (AFDC). Minnesota’s current MFIP program, adopted in 1998 as a successor to this MFIP pilot program, is based largely on the pilot, but has slightly different features (namely, stricter work requirements and less generous financial incentives).
Under the MFIP pilot program, when a welfare recipient or applicant went to work, he or she received a cash supplement amounting to a 20 percent increase in cash benefits to offset work-related expenses (e.g., transportation, work clothes, etc.). The MFIP pilot program also provided these individuals with full welfare benefits until their income (i.e., job earnings plus welfare benefits) reached 140 percent of the poverty line. By contrast, AFDC provided no cash supplement, and reduced welfare benefits one dollar for every dollar increase in earnings.
In addition, the MFIP pilot program required all participants who had received welfare for 1-2 years to participate in state-provided employment/training activities – i.e. job search assistance, education, or job training programs (whereas AFDC only included a training requirement for two-parent families). The MFIP pilot program also simplified the benefits process for its participants by combining AFDC, food stamp benefits, and state-funded cash assistance into one program with a single set of rules and procedures, and a single monthly payment.
The net cost of the MFIP pilot program to the government was between $2,500 and $5,900 more per family per year than AFDC in 2017 dollars (depending on the family’s demographic characteristics). These costs primarily consist of the pilot program’s more generous benefit payments and the cost of families’ continued enrollment in Medicaid while receiving benefits.
Click here for a more detailed description of the MFIP pilot program. See especially pages 3-10.