The mystery of New York City’s public assistance denials

Why were more people denied public assistance in a year marked by severe financial hardship when neither the number of applications nor the budget for aid changed?

NYC Public Housing. Image source: NYCHA

Hard hit by the COVID-19 pandemic, New York City faced an incredibly challenging year in 2020, with unemployment, homelessness and hunger at record highs. The number of residents that applied for public assistance from the city and state, however, decreased slightly from previous years. Surprisingly, the percentage of denials by the government surged – reaching its highest level in the last two decades.

Almost half of all applications for public assistance in

New York City were denied in 2020. 

Public assistance, administered by the OTDA in New York State, includes temporary cash assistance for emergencies and unexpected need. During the pandemic, the number of applications reduced but denials were still at a record high.

Both the city and state of New York have more than 80 programs that provide aid for a range of issues, including housing, disability, food access, immigration, family and childcare, as well as emergency cash assistance for unprecedented, temporary crises. Not all these benefits saw spikes in denial – in fact, unemployment benefit and SNAP aid (formerly known as food stamps) were predictably higher. Some other programs like rent assistance and homelessness prevention took a backseat as the city announced a moratorium on evictions altogether.

 

But public assistance in the form of cash aid, however, was denied to almost half of the 300,000+ people that applied for it. Administered state-wide by the Office of Temporary and Disability Assistance (OTDA), this cash assistance – known interchangeably as “Temporary Assistance” and more generally as simply “Public Assistance” – is given to meet urgent needs like the inability to afford a meal, sudden eviction notices, lack of heating in winter, or immediate danger from a violent domestic situation, among several others. The amount given varies; it is calculated by need and income of the recipient, and can range from $300 per month to $1200, sometimes more.

 

Why so many people were denied, despite there being fewer applications, is something of a mystery. In previous years, 37% of cases are denied on average – so in context, a 47% rate of denial is not the most massive jump. But in a pandemic year marked by severe financial distress for families not just in New York but across the world, it’s worrying that these denials would go up rather than down.

 

“There are no easy conclusions that can be drawn from this data,” said Anthony Farmer, Director of Public Information at the OTDA. “It’s a complicated process that varies based on a number of circumstances, and takes into account a household’s needs and the income and resources available.”

 

Each year, the OTDA publishes comprehensive data on the reasons for denial, including financial and compliance issues. The data also splits total Public Assistance numbers by the two main categories: Family Assistance (FA) and Safety Net Assistance (SNA).

 

FA provides cash directly to needy families with one or more minor children, and is calculated based on total household need. SNA provides the same, but to individuals and families otherwise ineligible for FA, like couples without children or children living without adult relatives. The FA program operates under the federally-funded Temporary Assistance for Needy Families (or TANF) program, and comes with a 60-month limit. SNA, on the other hand, has a maximum limit of 2 years for cash aid and then moves to other non-cash forms of assistance if the person is still eligible for it.

A third of applications for assistance were denied due to financial ineligibility. 

Denial of public assistance due to "financial issues" includes applicants with a higher earned income and/or resources than the eligibility threshold, making them financially ineligible for cash aid. Among all the reasons for denial in data published by the OTDA, financial ineligibility was the highest.

In both those categories, two specific denial reasons stand out. First, denials due to “issues related to employment” reduced dramatically, compared to other reasons as well as to the same metric in previous years. According to the data’s documentation, this reason includes “failure to participate as required in Public Assistance work participation requirements, failure to attend work program assignments and voluntarily leaving or failing to accept employment without good cause.”

 

This information tracks: with unemployment levels soaring across the United States, it stands to reason that thousands of people require assistance based on the loss of a job, and that seemingly most of them did not violate public assistance guidelines and/or requirements set forth by the OTDA.

Public assistance applications denied due to "employment issues" were at an all-time low

Such denials are caused by the applicant's inability to get a job or failure to meet OTDA guidelines. During the pandemic, unemployment and poverty were at record highs, so it is understandable that significantly fewer people were denied assistance on the grounds of being unemployed.

Second, denials due to “financial ineligibility” saw a massive increase. Defined as “increased earned or unearned income, exceeding resource limits, or other household circumstance changes that make the case financially ineligible,” this reason essentially states that the families had a higher income than the threshold that deem them eligible for financial assistance. Given what we know about economic hardship and unemployment caused by the pandemic – including in this data itself – such findings are counterintuitive and even concerning.

 

In previous years, the average income of a family on public assistance was $1400 per month. The “resource limit”, according to Farmer, is $2000 a month for a household, which increases to $3000 if any of the household members are disabled or above the age of 60. If the total household income exceeds that amount, they are ineligible to receive assistance.

 

According to the data, three fourths of the denials were for SNA cases – which are mostly applied for by individuals or small households. Neighborhood-wise data has not been published yet for 2020, but in previous years, households in the Bronx typically receive the highest percentage of public assistance, followed by Brooklyn and Queens, which mirrors the average rates of poverty in these boroughs.

 

Data published by TANF, which includes recipients receiving federal funds as well as recurring public assistance cases from previous years, puts the average number of recipients for any given month at around 350,000 in all five boroughs – a figure that has not changed drastically since the program’s conception. None of these numbers can fully explain the increase in denials.

 

 

A different dataset, which details the average earned income of families applying for public assistance, is perhaps more illuminatory. In the past decade, the total cases with earned income are decreasing, but the average income per household is increasing. In other words, fewer people get assistance, but they have a higher income than households in previous years. This could mean that more assistance is being given to people with no income at all, or that incomes in general have increased – due to inflation, economic changes, and so on – and that fewer cases overall are accepted for public assistance. By itself, the data still does not explain the spike in denials during the pandemic.

earned income table.png

“Shortly after the start of the pandemic, many people quickly experienced unemployment and, unsure where to turn, many likely sought help anywhere they could, including applying for public assistance,” said Farmer, offering possible explanations for the same. But given that the total number of applications did not change – in fact, they reduced – the problem persists.

 

The city tries to make information about all of their programs as accessible as possible, but it is still an immensely complex system that is difficult for residents to navigate. It’s not immediately clear which program they should choose, which ones they are eligible for, and how to successfully apply for them. Farmer explained that while paperwork and applications inconsistencies can sometimes result in denials, the “OTDA has authorized and encouraged local departments of social services to generously waive any penalties for failing to meet programs requirements due to COVID-19.”

 

Each month, New York spends between $110-120 million in public assistance for the city’s residents. Last year, additional funds were made available to the state in various federal packages and stimulus payments. Public data is still being collected and cleaned for 2020, and there are understandable gaps in our understanding of how many people are receiving assistance or why they are being denied.

 

New York City prides itself on its robust public programs that, despite the challenges posed by the pandemic, continue to assist thousands of vulnerable people in the city.

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