Cambridge will start giving low-income families $500 cash monthly
The city of Cambridge will start giving low-income families $500 a month as part of a new guaranteed income program.
City leaders and community members will gather Tuesday to announce the new $22 million program, which is called "Rise Up Cambridge: Cash Payments for Families with Kids."
The program, which builds on the city's previous pilot program, aims to combat poverty and income inequality by providing direct cash payments to families with children under the age of 21, and who earn at or below 250% of the federal poverty level. (For example, $75,000 for a family of four.)
Eligible families will get the $500 cash payments each month for 18 months. The city plans to explore ways to make the program more permanent, according to Cambridge Mayor Sumbul Siddiqui.
"It really is to give our families a lifeline in these hard times where there are things that are still very much expensive," Siddiqui said. "When you look at the cost of living in a city like Cambridge, really there's a lot of need."
The city will take applications for the program from June l until July 31, with payments expected to roll out by the end of June. It is the only guaranteed income program in the country that won't use a lottery to select participants, according to Siddiqui. "It is really for anyone who is eligible," she said. The city expects some 2,000 families will be eligible.
Other cities have piloted guaranteed income programs using prepaid debit cards. The Cambridge program will distribute money via direct deposit, according to Siddiqui. Participants who don't have a bank account will receive help in setting one up, she said.
The idea of guaranteed income has gained steam in recent years — particularly during the coronavirus pandemic when federal relief checks became a financial lifeline for many Americans. Critics often raise concerns about costs. They also argue the payments could dissuade some recipients from working or say existing social programs may be adversely impacted.
Reports on pilot programs in other cities have found direct payments didn't impact employment, and families mostly spent the money on basic needs such as food. Cambridge reported similar findings from its previous pilot. Organizers of such programs have also found they were able to reach people that didn't qualify for existing social programs, and they say the programs gave people more flexibility in how to spend their money.
"It's not the thing that's going to fix everything," Siddiqui said. "It is a part of broader solutions, whether that's looking at systems involving affordable housing, for example, better wages at jobs and so forth."
Basic income programs can be expensive and have often been funded in part by donors.
Cambridge will fund its guaranteed income program using federal dollars from the American Rescue Plan with some money coming from the nonprofit Cambridge Community Foundation, Siddiqui said. The mayor's office is partnering with the foundation and the Cambridge Economic Opportunity Committee (the city's anti-poverty agency) on the program.
"We want to stabilize as many households as possible and make sure that they have a chance to continue to stay in our city that, you know, is not easy to stay in," Siddiqui said.