Spending patterns of families receiving means-tested government assistance

Government means-tested assistance programs, such as Medicaid and Supplemental Security Income (SSI), provide cash and noncash benefits to many low-income families. In 2009, 19.0 percent of U.S. families, on average, participated in at least one major means-tested program per month. Participation rates were highest for one-parent families headed by women, 46.3 percent, compared with 26.5 percent for one-parent families headed by men and 12.3 percent for married-couple families.¹

This article uses data from the 2011 Consumer Expenditure Interview Survey to examine the spending patterns of families receiving benefits from one or more government means-tested assistance programs.²  Families with children under 18 are the focus of this research, because the poverty rate for children under 18 was highest for this group, at 21.9 percent in 2011, compared with 13.7 percent for people age 18 to 64 and 8.7 percent for people age 65 and older.³

Findings show that:

Average total expenditures of families receiving means-tested assistance were less than half those of families not receiving assistance.

For families receiving assistance, food, housing, and transportation accounted for 77.0 percent of the family budget, compared with 65.5 percent of the budget of families not receiving assistance.

Among one-parent families receiving assistance, 36.8 percent did not own a car, compared with 3.0 percent of families not receiving assistance and 9.7 percent of two-parent families receiving assistance.

Scope of analysis

The sample used in this analysis consisted of families with at least one child under 18.⁴ Families receiving assistance were compared with families not receiving assistance; demographic characteristics, as well as spending patterns, were examined. 

Additional analysis of families receiving assistance was made by comparing single-parent and dual-parent families. 

The benefit programs in which sample families participated include housing assistance (provision of public housing and housing subsidy payments); Medicaid, the joint federal-state program that pays for medical care for low-income persons; and public assistance (cash assistance from state and local government welfare programs, such as Temporary Assistance for Needy Families (TANF), and short-term emergency help). Also included are the Supplemental Nutrition Assistance Program (SNAP) and the SSI program that provides monthly benefits to disabled adults and children, and to those 65 and older who have limited income and assets but are not disabled. Participation in any of these programs is determined by information provided by survey respondents. 

Findings

Unless otherwise indicated, all findings are statistically significant.

Demographic characteristics

Consumer Expenditure Survey (CE) data show that in 2011,⁵ there were 27.1 million families in the United States with at least one child under 18 years old.⁶ About 24 percent of families with children under 18 received government means-tested assistance benefits. Among families receiving assistance, 51.6 percent were one-parent families, and 48.4 percent were two-parent families. Average family size was the same (3.7 persons), whether or not a family received assistance. Among families receiving assistance, however, one-parent families averaged 3.1 persons, compared with 4.4 for two-parent families. (See table 1.) 

Families not receiving assistance averaged 1.7 earners per household, compared with 0.8 for one-parent families receiving assistance and 1.4 for two-parent families receiving assistance.

More than 86 percent of the sampled families had a reference person who was White, Asian, or all other (than Black or African-American, in this case) races. This proportion ranged from 55.8 percent of one-parent families receiving assistance to 90.8 percent of families not receiving assistance. Nearly 14 percent of all families had a reference person who was Black or African-American. This proportion ranged from 9.2 percent of families not receiving assistance to 44.2 percent of one-parent families receiving assistance. (See table 1 and chart 1.)

Chart 1

Chart 1. Percent distribution of families, by race, receipt of means-tested government assistance, and type of family, 2011

Race	All	Families receiving		Type of family receiving assistance
		No assistance	Assistance	One-parent	Two-parent
Black or African-American	13.7	9.2	27.6	44.2	9.9
White, Asian, and all other races	86.4	90.8	72.5	55.8	90.2

View Chart Data

The reference person was Hispanic or Latino in 16.8 percent of families with children under 18, with a range of 12.9 percent of families not receiving assistance to 40.5 percent of two-parent families receiving assistance. (See table 1 and chart 2.) Among one-parent families receiving assistance, female household heads predominated (93.2 percent, compared with 6.8 percent headed by men).⁷

Chart 2

Chart 2. Percent distribution of families, by Hispanic or Latino origin of reference person, receipt of means-tested government assistance, and type of family, 2011

Ethnicity	All	Families receiving		Type of family receiving assistance
		No assistance	Assistance	One-parent	Two-parent
Hispanic or Latino	16.8	12.9	28.8	17.8	40.5
Not Hispanic or Latino	83.2	87.1	71.2	82.2	59.5

View Chart Data

In all families with children under 18, 11.2 percent had a reference person with less than a high school education. This proportion ranged from 6.1 percent of families not receiving assistance to 31.9 percent of two-parent families receiving assistance. In families not receiving assistance, 43.4 percent had a reference person with a bachelor’s degree or higher, compared with 7.4 percent of one-parent families and 11.1 percent of two-parent families receiving assistance. (See table 1 and chart 3.)

Chart 3

Chart 3. Percent distribution of families, by education of reference person, receipt of means-tested government assistance, and type of family, 2011

Education level	All	Families receiving		Type of family receiving assistance
		No assistance	Assistance	One-parent	Two-parent
Less than high school	11.2	6.1	27.0	22.5	31.9
High school graduate	21.5	17.8	32.8	33.3	32.3
Some college or associate's degree	32.3	32.7	31.0	36.8	24.8
Bachelor's degree or higher	35.1	43.4	9.2	7.4	11.1

View Chart Data

About 76 percent of families not receiving assistance were homeowners, compared with 24 percent of such families who were renters. The situation was reversed among families receiving assistance, with 26.5 percent homeowners and 73.5 percent renters. Two-parent families receiving assistance were more likely (36.5 percent) to be homeowners than one-parent families (17.1 percent).

Participation in means-tested assistance programs

Among families receiving government means-tested assistance, Medicaid was the program with the highest participation rate (69.7 percent). (See table 2.)⁸

SNAP benefits were reported by 60.9 percent of families receiving assistance. A greater proportion of one-parent families received SNAP benefits (72.2 percent, compared with 48.9 percent of two-parent families). For families with SNAP benefits, the average amount received was $2,702; one-parent families received an average of $2,758, not statistically different from the $2,615 received by two-parent families.⁹

Nearly 26 percent of families received housing assistance; one-parent families had a participation rate of 41 percent, compared with almost 10 percent for two-parent families.¹⁰

A small proportion (12.5 percent) of families received SSI benefits. One-parent families received SSI benefits averaging $5,998, not statistically different from the $8,402 received by two-parent families.¹¹

Public Assistance had the lowest participation rate (10.7 percent), and the average benefit received was $2,713. Participation, however, was 15.7 percent for one-parent families, compared with 5.1 percent for two-parent families. Benefits averaged $2,666 for one-parent families and $2,867 for two-parent families, but these differences were not statistically significant.¹²

Spending patterns

In 2011, total expenditures were more than twice as high for families not receiving assistance, $66,525, compared with $30,582 for families receiving assistance.  Total expenditures for one-parent families receiving assistance were $24,780, roughly two-thirds of the $36,756 spent by two-parent families receiving assistance.  Food, housing, and transportation accounted for the greatest proportion of the budget of all families. These three categories made up 65.5 percent of the total budget of families not receiving assistance, compared with 79.7 percent for one-parent and 75 percent for two-parent families receiving assistance. (See table 3.)

Housing expenditures were almost twice as high among families not receiving assistance ($22,833, compared with $11,835 for families receiving assistance). One factor affecting the difference in expenditures is the higher homeownership rate among families not receiving assistance. Another factor is the provision of public housing or housing subsidy payments for 26 percent of families receiving assistance. Although greater in dollar amount, housing expenditures represented a smaller share of total expenditures among families not receiving assistance (34.3 percent, compared with 38.7 percent for families receiving assistance). 

Food expenditures were higher among families not receiving assistance, but accounted for a lower share of total expenditures than among families receiving assistance. A different pattern emerges when separately examining food at home and food away from home, the two components of food spending.  Food away from home spending was higher in both dollar amount and percent of total spending among families not receiving assistance. One explanation is the prevalence of SNAP benefits, which can only be used for food at home, among families receiving assistance.¹³

Transportation expenses, both in dollars ($3,734) and as a percentage of the family budget (15.1 percent) were lowest among one-parent families receiving assistance. A major factor is the lower rate of automobile ownership among one-parent families.  Almost 37 percent did not own a car, compared with almost 10 percent of two-parent families receiving assistance and 3 percent of families not receiving assistance. Transportation expenses were $11,249 for families not receiving assistance, but represented a smaller share of the family budget (16.9 percent) than the $6,906 spent by two-parent families, which accounted for 18.8 percent of the family budget. 

Although clothing is a basic necessity, it claimed a relatively small proportion of the family budget of all families, ranging from 2.4 percent for families not receiving assistance to 4 percent for one-parent families receiving assistance.¹⁴

Healthcare was greatest in dollar amount ($3,728) and as a proportion (5.5 percent) of the budget of families not receiving assistance. Among families receiving assistance, healthcare spending averaged $487 (2.0 percent of the family budget) for one-parent and $1,290 (3.5 percent of the family budget) for two-parent families. One explanation is the fact that 70 percent of these families had Medicaid coverage for healthcare expenses.  The data, however, do not indicate whether, all factors being equal, families with Medicaid benefits received the same services and quality of care as either families receiving no assistance or families receiving assistance other than Medicaid.

Personal insurance and pensions accounted for 13.7 percent of the budget of families not receiving assistance, compared with 6.2 percent for families receiving assistance. Families receiving assistance had fewer earners and so would be less likely to make pension contributions than families without assistance who had more earners.

Entertainment expenses were 5.1 percent ($3,423) of the budget of families not receiving assistance, compared with 4.4 percent ($1,347) of families receiving assistance.  Other expenses ¹⁵ claimed 7.6 percent of the budget of families not receiving assistance and 5.8 percent of the budget of those receiving assistance.

Conclusion

Although average family size was the same, average annual expenditures of families receiving assistance were less than half the amount spent by families not receiving assistance. 

Food, housing, and transportation took up the greatest share of the family budget, regardless of whether any assistance was received. Families not receiving assistance spent more on food and on housing than families receiving assistance, but expenditures represented smaller proportions of the family budget, compared with families receiving assistance. 

Healthcare spending was highest in dollar amount and as a percentage of the family budget among families receiving no assistance. One reason is that 70 percent of families receiving assistance had Medicaid coverage.