Why Guaranteed Basic Income is becoming a key anti-poverty strategy

Guaranteed Basic Income (GBI), or Universal Income programs, are gaining traction across the country and for good reason. GBI programs provide a monthly cash payment to the recipient for a fixed number of months with no strings attached. Study after study has shown that receiving even an extra $500/month in the form of a cash payment to be used at the recipient's discretion can have a positive impact on the health, well-being, and stability of participants, especially those from low-income households, and is a promising anti-poverty intervention. To realize the full potential of GBI, we need to be careful not to disrupt access to critical safety net benefits. Safety net programs should adopt the lessons learned from GBI pilots as well. Complex rules and programmatic requirements are not necessary to help low-income households achieve self-sufficiency.

As public benefits attorneys at Bay Area Legal Aid, we've had the opportunity to support local GBI programs for former foster youth, Black youth, formerly homeless families, artists, and caregivers. Our primary objective has been to ensure that GBI programs can meet their intended purpose of increasing a participant's income. Many GBI recipients also qualify for and receive means-tested public benefits, including CalFresh, CalWORKs, Supplemental Security Income (SSI), Section 8 housing, and Medi-Cal. These programs have complex eligibility and reporting rules. Public benefits are generally reduced or even terminated by the receipt of other income and resources. It would defeat the purpose of GBI programs if an individual's public benefits were reduced by the amount that they gain through the GBI program, or if their access to critical benefits and services were jeopardized altogether. Thankfully, California's commitment to explore the impact of GBI payments has included legislative and regulatory changes that protect some means-tested public benefits for GBI recipients. 

Interest in GBI surged in California after the success of the Stockton Economic Empowerment Demonstration (SEED), which provided 125 people with $500 each month for 24 months starting in February 2019. Data showed positive outcomes on participants' health and financial stability, and an increase in full-time employment. Spurred into action by SEED, the California Legislature passed Welfare & Institutions Code Section 18997 a few years later, providing the legal framework for several GBI pilots across the state, which were then funded in subsequent state budgets. The legislation required these pilots to prioritize youth aging out of extended foster care and individuals who are pregnant. Importantly, the law also specified that GBI payments would not be considered income or resources when determining eligibility for state or local government public benefits, such as CalWORKs, and when calculating grant amounts. This provision allowed GBI recipients to avoid the risk of termination, reduction, or mandated repayment of means-tested benefits. Subsequent guidance and policy changes have further expanded the scope of public benefits protections for GBI recipients. These protections are important not only so that GBI programs enhance participants' income as intended, but also to preserve access to critical supports often attached to benefits, such as health insurance, childcare, homeless services, domestic violence supports, transportation, and more.

California's authority to protect public benefits does not extend to federal benefits. Fortunately, some federal benefits also have rules that can protect benefits for GBI recipients. For example, if a GBI program structures payments to recipients as gifts, the payments may be exempted from consideration by Medicaid (Medi-Cal in California) under existing law. Similarly, Congress sets the income eligibility rules for CalFresh (also known as SNAP or Food Stamps), but states are allowed to exempt GBI payments from CalFresh if the GBI program is at least partially funded by private funds. Finally, the U.S. Department of Housing and Urban Development (HUD) recently released guidance on the flexibilities available to local housing authorities to exclude GBI payments from means-testing for Section 8 federal housing subsidies. 

Perhaps the most problematic means-tested federal benefit for GBI participants is SSI, a cash benefit for people living with disabilities or who are over age 65. There is no generally applicable legal provision authorizing the exemption of GBI payments from SSI and there has been no law or policy to change this. For SSI recipients, GBI payments will reduce their monthly SSI payment almost dollar for dollar and put SSI recipients at risk of being charged an overpayment for benefits paid while receiving GBI payments. They could even lose their eligibility for SSI after the GBI payments end if the GBI payments last more than twelve months. In 2022, almost 7.5 million people in the U.S. received SSI, and the average monthly payment was $622. Although SSI recipients would likely greatly benefit from participating in GBI programs, the intent of GBI to increase a person's economic stability is almost impossible to realize for SSI recipients under current regulations. 

Together, we hold decades of experience advocating for our clients as they navigate the complicated bureaucracies of our safety net system. We believe strongly in the importance of a safety net to support the health and well-being of our communities and that access to safety net benefits and services should not be compromised. We are also all too familiar with the many ways in which the rules and regulations governing programs meant to provide aid to those who most need it can perpetuate cycles of poverty. We hope that our safety net will learn and evolve from the possibilities demonstrated by GBI, based on the understanding that access to resources rather than additional layers of control is the most effective anti-poverty strategy.