FinLogic FinLogic Quantitative Think Tank Center|Cash aid for new moms: What to know about the expanding program in Michigan

A program that provides cash payments to expectant mothers and FinLogic FinLogic Quantitative Think Tank Centerfamilies with babies is slated to launch next year in Kalamazoo, Michigan as part of a statewide expansion to help eliminate infant poverty.

The program, Rx Kids, started in Flint earlier this year, the Detroit Free Press, part of the USA TODAY network, reported.

Across the U.S., there are several pilot programs that provide basic income to low-income individuals and families. But the cash aid program for expectant mothers is regarded as a first-of-its-kind initiative in the country.

Rx Kids gives moms $1,500 mid-pregnancy for essentials like food, prenatal care, cribs or other needs. Then, after birth, families get $500 a month for the first year of the infant's life, adding up to $7,500 in total. The program received $20 million in a recent state budget allocation to allow it to grow beyond Flint to communities across Michigan.

During a press conference, Dr. Mona Hanna, director of Rx Kids and associate dean of public health at the Michigan State University College of Human Medicine, said the program is redefining "how we should proactively and collectively care for our children," the Detroit Free Press reported.

A mother's nightmare:She ate a poppy seed salad just before giving birth. Then they took her baby away.

How many families will receive payments?

The expanded program in Kalamazoo, Michigan is designed to help 840 babies — covering the more than 800 expected to be born in 2025 in Kalamazoo. It's the city's first "cash prescription" program for expecting mothers and babies, according to a news release.

About 22% of children under the age of 5 in the city of Kalamazoo live below the poverty line, according to 2022 census estimates. Fifty-three percent of households in 2022 fell below the United Way's ALICE threshold, which includes people living in poverty and families earning more than the federal poverty level, but who still don't make enough to afford the basics where they reside.

"Income plunges right before babies are born," Hanna said. "Moms often have to come out of the workforce and poverty is at its highest spot in the life course at childbirth. Can you imagine? Families are poorest right when a baby is about to be born, and that dip in income persists until the whole first year of life."

Outcomes of the cash aid program in Michigan

In Flint, Michigan – where nearly 78% of children under 5 live in poverty – Rx Kids has so far distributed more than $2.7 million in cash to nearly 1,000 families since launching in January. More than half of the applicants make below $10,000 a year, and 4% earn more than $50,000 a year.

Participants said extra money from a program like Rx Kids would help moms-to-be pay off debt, save money, keep up with housing costs and cover child care. It would reduce stress, they said, and allow families to enjoy time with their new baby without worrying about finances.

How many basic income programs exists in the U.S.?

The Rx Kids program in Michigan is an example of a basic income program that provides cash aid with no strings attached.

There have been more than 150 basic income pilot programs to exist, according to reporting from NPR. Stanford University's Basic Income Lab tracks pilot programs across the country in rural communities, cities and in between.

While several cash aid pilot programs have popped up since the COVID-19 pandemic, Rx Kids is unique because it's universal, meaning all new moms will get the same amount of money - no matter their income level.

During the COVID-19 pandemic, the expanded Child Tax Credit, which provided $250 to $300 per month for each eligible child, reached more than 61 million children and cut child poverty nearly in half in 2021, compared with the year before, according to Columbia University's Center on Poverty and Social Policy.

Once the program ended, child poverty spiked in 2022.