A local pilot program to give up to 200 qualifying low-income residents $500 a month for two years, no strings attached, will move forward without any public funding.
For a few months last fall, Arlington County was poised to spend either federal or county money on “Arlington’s Guarantee,” a guaranteed income pilot program launched by nonprofit Arlington Community Foundation.
This commitment fell through, however, when the county and ACF realized any infusion of public funding would have put participants at risk of losing their government benefits, such as child care subsidies or food stamps.
“It would put them back instead of putting them forward,” says Anne Vor der Bruegge, ACF’s Director of Grants and Initiatives.
She and Department of Human Services spokesman Kurt Larrick call this income precipice the “benefits cliff.” The little additional income would make the fall particularly painful in Arlington given its high cost of living.
“The issue was that in order to give money to recipients and then not push them off the benefits cliff — where, for example, they lose SNAP because they make too much income — and to make the net effect of receiving the cash zero, we had to get a waiver from the Virginia Department of Social Services (VDSS),” Larrick said.
He added that with the waiver, the monthly stipend “would not count as income in the calculation of benefits, and no one who joined the program would lose benefits by being ‘over income.'”
But this waiver only works if the program is 100% privately funded. Last year, the county and ACF learned that neither the county’s original plan to use American Rescue Plan Act funding nor its revised plan to use unspent funds from the 2021 fiscal year would have worked.
“The County decided to rescind the plan to give ARPA money so as to not negatively impact the recipients,” he said. “Using closeout funds would have created the same issue.”
ACF’s wide donor base ensures this loss of funding won’t impact the program’s trajectory, says Vor der Bruegge, but it may slow it down slightly.
“We had intended all along for it to be privately funded from the get-go: that is, through individual people, philanthropic organizations and corporate dollars,” she said, adding that the ARPA funding “evolved as an opportunity we didn’t plan for or seek out.”
County contributions would have allowed ACF to enroll all 200 participants immediately, she says. Now, ACF will resume its plan to continue accepting donations until it reaches 200 participants.
So far, 105 residents are receiving money directly onto debit cards through the program. ACF will continue expanding enrollment in groups of 25, as funding becomes available, up to 200 people. Donations benefit participants directly, says Vor der Bruegge, as ACF obtained a grant to cover the program’s operating costs.
The “benefits cliff” issue is not exclusive to Arlington.
Vor der Bruegge says it hurt nascent guaranteed income programs across the state and nation that were counting on ARPA funding, she said. These programs are proliferating right now because federal stimulus checks normalized the idea of automatic payments to residents — and many were latching onto ARPA funding.
Now, they’re having to “go back to the drawing board,” she said, adding that some states are introducing legislation to override this unintended consequence.
“It is pretty prevalent across the country,” she said.