- Tatiana Lopez is a participant in a guaranteed basic income program for new parents.
- RxKids provides $1,500 during pregnancy and $500 monthly through a child's first year.
- The program aims to reduce poverty and financial stress for over 900 participating families.
Tatiana Lopez's newborn, Matteo, curled up in her arms. His tiny fingers clung to her T-shirt as she stood in her Flint, Michigan living room.
The 39-year-old's pregnancy and birth process had been stressful. She faced medical complications that left her hospitalized, and she was worried about how her family would afford their third child.
But, on the first day that she was home with Matteo after the hospital, all Lopez could think was how happy he looked when she held him.
"I was over the moon," she told Business Insider.
Just a few weeks earlier, in early January, Lopez had applied to be a participant in RxKids, a guaranteed basic income pilot based in Flint. The money — a $1,500 lump sum during pregnancy and $500 monthly through a child's first birthday — is available to all Flint-based mothers who have a baby in 2024. Applicants didn't have to meet specific income criteria, which is typical for GBI programs. Lopez's application was quickly approved and she began receiving payments.
The money eased some of her financial fears, Lopez said. She's the main income earner for her household and works full-time as a patient representative at a hospital in Flint. Her husband works part-time and is their children's primary caregiver.
Raising children — especially an infant — is expensive, and Lopez's income dipped during her maternity leave by about 70%. The extra $500 a month is making a difference.
"That money came in handy as far as paying the bills and trying to get things that the baby still needed, like a crib and a car seat," Lopez said.
RxKids is one of over 100 guaranteed basic income programs that have been launched across the US. The programs are an approach to poverty reduction and offer participants recurring cash payments for a set period of time, no strings attached. And a growing number are focused on parents with young children.
The Flint program has already given cash to more than 900 participating families like Lopez's. It's expected to continue enrolling new participants through at least 2026. RxKids is financed through the federal Temporary Assistance for Needy Families (TANF) program and several foundations.
Luke Shaefer, a co-director of RxKids, previously told BI that the program lets parents spend the money however they choose.
"Families are good stewards of this money," he said. "By giving them the flexibility of providing cash rather than giving them stuff, we both save the government more money and families are better off as a result."
GBI helped with costs when Lopez's income dipped during maternity leave
After Matteo was born, Lopez took four months of maternity leave. She initially planned to take three but had to extend it to recover from birth.
She estimates that her typical net monthly income is $2,100 a month, which is added to her husband's part-time monthly income of about $1,200 a month. But, during maternity leave, Lopez said her monthly paycheck was reduced to around $600 due to her employer's limited parental leave policy.
Lopez also said none of her maternity paychecks went toward health insurance fees, so she now has to pay down four months-worth of insurance payments. She's been back at work all summer, but Lopez doesn't expect to receive her full paycheck again until September.
This experience isn't uncommon for new parents: most employers don't offer full pay during maternity leave. Shaefer said the goal of RxKids is to mitigate this income loss to help new parents and prevent childhood poverty.
"Household income really plummets in the last few months of pregnancy and it actually hits the lowest point right at childbirth," he said. "Then it slowly starts to return to where it was — pretty close to age one."
Lopez said the RxKids income helped her pay her electricity and water bills, afford groceries, and buy the supplies she needed for her baby. The cash also gave her the financial freedom to recover and bond with Matteo instead of rushing back to work.
Going forward, she said she wants to earn a bachelor's degree and be able to afford outside childcare so her husband can return to full-time work. Lopez also plans to put some money aside in savings for her children's education.
BI has heard GBI participant stories similar to Lopez's: parents who used their cash payments to supplement their income during maternity leave and buy necessities for their baby. Some have even said spending guaranteed basic income on childcare meant they could work more regular hours, earn promotions, and pursue higher education.
Still, it's important to note that GBI programs study participant outcomes in the short term. Results are usually based on quantitative spending data and participant's self-reported experiences, but it's not yet clear how cash payments impact participants' lives in the years after their programs end. Some critics say that the millions of dollars it costs to run GBI programs isn't sustainable for funders — and the basic income model continues to face legal and political challenges across the US.
Lopez knows her payments will end next January when Matteo turns one. She didn't expect to be a guaranteed basic income participant, she said, but it came at just the right time for her family.
"I'm going to be nervous and I'm going to be sad," she said. "But it's a blessing for the time being."
Are you struggling with the high costs of raising children? Have you benefitted from a guaranteed basic income program? If you're open to sharing your story, reach out to [email protected].