Implement Michigan Family Independence Program (FIP)

# Implement Michigan Family Independence Program (FIP)

## Overview
Implementation of Michigan's Family Independence Program (FIP), the state's TANF cash assistance program providing temporary financial assistance to families with children.

## Status Checklist
- [x] Documentation collected
- [x] Parameters created (6 files)
- [x] Variables implemented (11 files)
- [x] Tests written (66 test cases across 8 files)
- [x] CI passing
- [x] Formulas verified against BEM manuals
- [x] Per-person deduction logic implemented
- [x] Dual-test system implemented (20% initial, 50% benefit)
- [x] PR ready for review

---

## Implementation Summary

### Michigan FIP (Branch: `mi_tanf_simple`)

**Current Status**: All formulas verified against Michigan DHHS Bridges Eligibility Manual (BEM). All tests passing.

**Key Features Implemented**:
- ✅ Payment standards by family size with historical values (2008-2024 frozen, 2025 increase)
- ✅ Per-person earned income deductions ($200 + percentage per working person)
- ✅ Dual-test system: 20% for initial eligibility, 50% for benefit calculation
- ✅ Resource limits with 2019 increase ($3,000→$15,000)
- ✅ Uses federal TANF demographic eligibility
- ✅ Multiple earner households with per-person deductions
- ✅ Proper use of adds pattern

**Formula (Per BEM 518 and BEM 520)**:
```
Earned Income Deduction (applied separately to each working person):
  - Flat deduction: $200 per person
  - Percentage deduction: 20% OR 50% of remainder
  
Initial Eligibility Test (new applicants only - BEM 520 Section C):
  - Uses 20% deduction rate (Qualifying Deficit Test)
  - Determines IF household qualifies for FIP
  
Benefit Calculation (everyone - BEM 520 Section D):
  - Uses 50% deduction rate (Issuance Deficit Test)  
  - Determines HOW MUCH benefit household receives
  - Applies to both new applicants and enrolled recipients
  
Countable Income = Sum(per-person countable earned) + gross unearned
Monthly Benefit = MAX(Payment Standard - Countable Income, 0)
```

**Verification**: Formulas match BEM 518 (BPB 2023-013), BEM 520 (BPB 2023-002), and BEM 503 (BPB 2025-022) exactly.

---

## Folder Structure

### Parameters (6 files)
```
policyengine_us/parameters/gov/states/mi/mdhhs/fip/
├── resource_limit.yaml                             # $3,000→$15,000 (2019)
├── income/deductions/earned_income_disregard/      # 3 files
│   ├── flat_amount.yaml                            # $200 (since 2008)
│   ├── initial_percent.yaml                        # 20% (initial eligibility)
│   └── ongoing_percent.yaml                        # 20%→50% in 2011 (benefit calc)
└── payment_standard/                               # 2 files
    ├── amounts.yaml                                # 2017 frozen & 2025 increased
    └── additional_person_increment.yaml            # $80→$95
```

### Variables (11 files)
```
policyengine_us/variables/gov/states/mi/mdhhs/fip/
├── eligibility/                                    # 3 files
│   ├── mi_fip_eligible.py
│   ├── mi_fip_income_eligible.py                   # Dual-test logic!
│   └── mi_fip_resources_eligible.py
├── income/                                         # 6 files
│   ├── mi_fip_earned_income_after_deductions_person.py         # 50% (benefit)
│   ├── mi_fip_earned_income_after_deductions_initial_person.py # 20% (eligibility)
│   ├── mi_fip_countable_earned_income.py           # Aggregates 50% version
│   ├── mi_fip_countable_earned_income_initial.py   # Aggregates 20% version
│   ├── mi_fip_countable_income.py                  # For benefit calc (50%)
│   └── mi_fip_countable_income_initial.py          # For initial test (20%)
├── mi_fip.py                                       # Main benefit
└── mi_fip_payment_standard.py
```

### Tests (8 files, 66 test cases total)
```
policyengine_us/tests/policy/baseline/gov/states/mi/mdhhs/fip/
├── eligibility/                                    # 3 files, 18 tests
│   ├── mi_fip_eligible.yaml                        # 5 tests
│   ├── mi_fip_income_eligible.yaml                 # 7 tests (20% vs 50%)
│   └── mi_fip_resources_eligible.yaml              # 6 tests
├── income/                                         # 2 files, 14 tests
│   ├── mi_fip_countable_earned_income.yaml         # 8 tests (50% benefit)
│   └── mi_fip_countable_income.yaml                # 6 tests
├── integration.yaml                                # 17 integration tests
├── mi_fip.yaml                                     # 7 tests
└── mi_fip_payment_standard.yaml                    # 10 tests
```

---

## Program Documentation

### Benefit Amounts

**Payment Standards (Effective 2024-12-01)**:
| Family Size | Monthly Benefit | Annual | 2008-2024 (Frozen) |
|-------------|----------------|--------|--------------------|
| 1 person    | $363          | $4,356 | $306 |
| 2 people    | $478          | $5,736 | $403 |
| 3 people    | $583          | $6,996 | $492 |
| 4 people    | $707          | $8,484 | $597 |
| 5 people    | $822          | $9,864 | $694 |
| 6 people    | $981          | $11,772 | $828 |
| 7 people    | $1,072        | $12,864 | $905 |
| 8+ people   | +$95/person   | - | +$80/person |

**Historical Context**: Payment standards frozen October 1, 2008 - November 30, 2024 (16 years). FY 2025 budget approved ~18.5% increase effective December 1, 2024.

### Income Deductions

**Earned Income (BEM 518 - Applied Per Person)**:
- **$200 flat deduction** per working person
- **Plus percentage deduction**:
  - Initial eligibility (new applicants): 20%
  - Benefit calculation (everyone): 50% (changed from 20% in 2011)
- Applied separately to each working person, then summed

**Example (Dual earners: $800 + $400 = $1,200)**:
```
Benefit Calculation (50% rate for both):
  Parent 1: $800 - [$200 + 50%×$600] = $300 countable
  Parent 2: $400 - [$200 + 50%×$200] = $100 countable
  Total: $400 countable
  
Initial Eligibility (20% rate for new applicants):
  Parent 1: $800 - [$200 + 20%×$600] = $440 countable  
  Parent 2: $400 - [$200 + 20%×$200] = $160 countable
  Total: $600 countable (must be < payment standard to qualify)
```

**Unearned Income (BEM 503)**: No deductions - gross amount is countable

### Resource Limits (BEM 400)

| Period | Asset Limit | Source |
|--------|-------------|--------|
| 2008-10-01 to 2018-12-31 | $3,000 | Historical |
| 2019-01-01 onwards | $15,000 | Governor Whitmer increase |

---

## Example Calculations

### Example 1: New Applicant - Passes Initial Eligibility, Gets Benefit
**Household**: Single parent + 2 children (family of 3), NEW applicant  
**Income**: $600/month employment

```
Step 1: Initial Eligibility Test (20% rate)
  Countable = $600 - [$200 + 20%×$400] = $600 - $280 = $320
  Payment Standard = $583
  $320 < $583 → PASSES, eligible for FIP

Step 2: Benefit Calculation (50% rate)
  Countable = $600 - [$200 + 50%×$400] = $600 - $400 = $200
  Benefit = $583 - $200 = $383/month
```

### Example 2: New Applicant - Fails Initial Eligibility
**Household**: Single person, NEW applicant  
**Income**: $1,000/month employment

```
Step 1: Initial Eligibility Test (20% rate)
  Countable = $1,000 - [$200 + 20%×$800] = $1,000 - $360 = $640
  Payment Standard = $363
  $640 > $363 → FAILS, not eligible for FIP
  
(Benefit calculation doesn't run - already ineligible)
```

### Example 3: Enrolled Recipient - Ongoing Eligibility
**Household**: Single parent + 2 children (family of 3), ENROLLED  
**Income**: $1,000/month employment

```
Enrolled recipients skip initial eligibility test (already qualified)

Benefit Calculation (50% rate):
  Countable = $1,000 - [$200 + 50%×$800] = $1,000 - $600 = $400
  Payment Standard = $583
  Benefit = $583 - $400 = $183/month
```

### Example 4: Multiple Earners - Per-Person Deductions
**Household**: 2 parents + 2 children (family of 4), ENROLLED  
**Income**: Parent 1 = $800/month, Parent 2 = $400/month

```
Benefit Calculation (50% rate, per-person):
  Parent 1: $800 - [$200 + 50%×$600] = $300 countable
  Parent 2: $400 - [$200 + 50%×$200] = $100 countable
  Total countable = $400
  
Payment Standard (size 4) = $707
Benefit = $707 - $400 = $307/month
```

---

## Testing & Verification

### Test Results
```bash
✅ All 66 tests passing
   - Integration tests: 17/17 passing
   - Unit tests: 49/49 passing
   - Coverage: 100%
```

### Test Coverage
| Test File | Count | Purpose |
|-----------|-------|---------|
| integration.yaml | 17 | End-to-end scenarios |
| mi_fip_payment_standard.yaml | 10 | Payment standards (sizes 1-9) |
| mi_fip_countable_earned_income.yaml | 8 | 50% benefit deductions |
| mi_fip_income_eligible.yaml | 7 | 20% vs 50% eligibility tests |
| mi_fip.yaml | 7 | Main benefit formula |
| mi_fip_resources_eligible.yaml | 6 | Asset limits |
| mi_fip_countable_income.yaml | 6 | Total income |
| mi_fip_eligible.yaml | 5 | Overall eligibility |
| **Total** | **66** | |

---

## Implementation Highlights

### Dual-Test System (BEM 518 & 520)
- **Qualifying Deficit Test**: 20% rate for new applicants to determine eligibility
- **Issuance Deficit Test**: 50% rate for everyone to calculate benefits
- Correctly implements BEM's separation of eligibility determination from benefit calculation

### Per-Person Deduction Logic
BEM 518: "Apply this disregard separately to each program group member's earned income"
- Each working person gets their own $200 deduction
- Families with multiple earners receive more total deductions
- Implemented via Person-level variables with SPMUnit aggregation using `adds`

### Legal Authority
- **BEM 518** (BPB 2023-013, effective 7-1-2023): Income Budgeting
- **BEM 520** (BPB 2023-002, effective 1-1-2023): Computing the Budget
- **BEM 503** (BPB 2025-022, effective 10-1-2025): Unearned Income
- **P.A. 280 of 1939**, as amended
- **MCL 400.57** et seq.

### Simplified Implementation Exclusions
- Time limits (not cross-sectionally modelable)
- Work requirements (behavioral)
- Child support income test (complex, case-specific)
- Recoupment (overpayment recovery)
- Minimum benefit thresholds ($1 initial, $10 ongoing)

---

## Official References

### Primary Sources
- [Michigan TANF State Plan 2017](https://www.michigan.gov/-/media/Project/Websites/mdhhs/Folder1/Folder33/TANF_State_Plan_2017.pdf#page=7) - 2008 frozen payment standards
- [Michigan TANF State Plan Rev 07-01-25](https://www.michigan.gov/mdhhs/-/media/Project/Websites/mdhhs/Inside-MDHHS/Reports-and-Statistics---Human-Services/State-Plans-and-Federal-Regulations/TANF_State_Plan_Effective_01-01-23_Rev-07-01-25.pdf) - 2025 updated standards
- [BEM 518 - FIP Income Budgeting](https://mdhhs-pres-prod.michigan.gov/olmweb/ex/BP/Public/BEM/518.pdf)
- [BEM 520 - Computing FIP Budget](https://mdhhs-pres-prod.michigan.gov/olmweb/EX/BP/Public/BEM/520.pdf)
- [BEM 503 - Unearned Income](https://mdhhs-pres-prod.michigan.gov/olmweb/EX/BP/Public/BEM/503.pdf)
- [RFT 210 - Payment Standards](https://mdhhs-pres-prod.michigan.gov/olmweb/ex/RF/Public/RFT/210.pdf)

### Research Sources
- [MLPP - FIP Analysis](https://mlpp.org/revitalize-the-family-independence-program-to-help-more-michigan-families-reach-financial-stability/)
- [2019 Asset Limit Increase](https://cedamichigan.org/2019/12/governor-whitmer-announces-sensible-policy-for-michigan-assistance-programs/)

Family Size	Monthly Benefit	Annual	2008-2024 (Frozen)
1 person	$363	$4,356	$306
2 people	$478	$5,736	$403
3 people	$583	$6,996	$492
4 people	$707	$8,484	$597
5 people	$822	$9,864	$694
6 people	$981	$11,772	$828
7 people	$1,072	$12,864	$905
8+ people	+$95/person	-	+$80/person

Period	Asset Limit	Source
2008-10-01 to 2018-12-31	$3,000	Historical
2019-01-01 onwards	$15,000	Governor Whitmer increase

Test File	Count	Purpose
integration.yaml	17	End-to-end scenarios
mi_fip_payment_standard.yaml	10	Payment standards (sizes 1-9)
mi_fip_countable_earned_income.yaml	8	50% benefit deductions
mi_fip_income_eligible.yaml	7	20% vs 50% eligibility tests
mi_fip.yaml	7	Main benefit formula
mi_fip_resources_eligible.yaml	6	Asset limits
mi_fip_countable_income.yaml	6	Total income
mi_fip_eligible.yaml	5	Overall eligibility
Total	66

Implement Michigan Family Independence Program (FIP) #6813

Description

Implement Michigan Family Independence Program (FIP)

Overview

Status Checklist

Implementation Summary

Michigan FIP (Branch: mi_tanf_simple)

Folder Structure

Parameters (6 files)

Variables (11 files)

Tests (8 files, 66 test cases total)

Program Documentation

Benefit Amounts

Income Deductions

Resource Limits (BEM 400)

Example Calculations

Example 1: New Applicant - Passes Initial Eligibility, Gets Benefit

Example 2: New Applicant - Fails Initial Eligibility

Example 3: Enrolled Recipient - Ongoing Eligibility

Example 4: Multiple Earners - Per-Person Deductions

Testing & Verification

Test Results

Test Coverage

Implementation Highlights

Dual-Test System (BEM 518 & 520)

Per-Person Deduction Logic

Legal Authority

Simplified Implementation Exclusions

Official References

Primary Sources

Research Sources

Metadata

Metadata

Assignees

Labels

Type

Projects

Milestone

Relationships

Development

Issue actions

Michigan FIP (Branch: `mi_tanf_simple`)