Unconditional Cash Transfers and Association With Clinical Outcomes Among U.S. Veterans With Psychosis or Recent Homelessness

Three groups of participants (i.e., the PSY, RHV, and comparison groups) from the Greater Los Angeles VA Healthcare System were recruited and followed up longitudinally. All three groups were enrolled in VA health care services. Potential participants were recruited through two main sources: veterans whose data were in two VA administrative data sets (the Corporate Data Warehouse and Homeless Veteran Registry) from the VA Informatics and Computing Infrastructure platform and veterans who had participated in the previous studies (19, 20) and who had agreed to be contacted for future studies.

Selection criteria were intentionally broad for each group and relied on chart diagnoses (or lack thereof) obtained from the VA computerized patient record system (CPRS). In the PSY group, participants were required to have a psychotic disorder diagnosis (other than substance-induced psychosis). This group included veterans with the following diagnoses: schizophrenia (N=42), schizoaffective disorder (N=22), depressive disorder with psychotic features (N=1), bipolar disorder with psychotic features (N=9), and psychotic disorder not otherwise specified (N=7); participants could have multiple diagnoses. For the RHV group, participants were required to have a history of chronic homelessness and placement in housing within the past 12 months with a Housing and Urban Development–Veterans Affairs Supportive Housing voucher. For the comparison group, inclusion criteria were no history of a psychotic disorder or evidence of homelessness based on review of CPRS data. We could not confirm that the PSY group had no distant history of homelessness; however, only individuals in the RHV group had been recently housed after having been homeless.

Data were collected between May 2020 and July 2021—starting near the beginning of the COVID-19 pandemic to past its first year. The PSY, RHV, and comparison groups were assessed over five assessment periods: an initial period (initial) and four separate follow-ups (follow-ups 1–4). Each period lasted approximately 2 months. The initial period was between May and July 2020, follow-up 1 between August and October 2020, follow-up 2 between October and November 2020, follow-up 3 between January and February 2021, and follow-up 4 between April and July 2021. We identified 956 participants across the three groups who were potentially eligible, and they were then contacted by phone. After a short description of the study, participants provided verbal informed consent if they agreed to participate. Each participant’s contact information was then provided to one of 10 clinically trained interviewers who proceeded to conduct all assessments (see additional details below) via phone interview. All recruitment and study procedures were approved by the Greater Los Angeles VA Healthcare System Institutional Review Board.

A total of 231 participants (PSY, N=81; RHV, N=76; and comparison group, N=74) completed the initial assessment (24% response rate), and this study focused on the 158 participants who completed all four follow-up assessments and for whom complete longitudinal data were available for analysis (PSY, N=59; RHV, N=49; and comparison group, N=50).

Table 1 shows bivariate comparisons between the three groups on sociodemographic, financial, and clinical characteristics at the initial assessment. Relative to the comparison group, the PSY and RHV groups had significantly fewer years of military service and education, had fewer dependents, were more likely to be single, were less likely to be employed full-time, and had lower RFS independent living and social relationship subscale scores, indicating poorer functioning. The RHV group was more likely than the PSY and comparison groups to have used any drugs and reported more days of drug use in the past month. In terms of financial variables, the PSY and RHV groups had significantly lower monthly incomes than the comparison group and higher scores on the NFWBS material hardship subscale, indicating greater hardships.

As also shown in Table 1, no significant group difference was found in the rate of receipt of stimulus checks. Most participants in all three groups (74%–84%) reported receiving more than one stimulus check. The table displays the proportion of participants in each group who received no, one, two, or three stimulus checks as mutually exclusive proportions. For cumulative proportions, we provide a description here; no significant difference by group was found for receipt of any check. For the first stimulus check, 73% (N=43) of the PSY group, 86% (N=42) of the RHV group, and 76% (N=38) of the comparison group received it. For the second stimulus check, 73% (N=43) of the PSY group, 69% (N=34) of the RHV group, and 68% (N=34) of the comparison group received it. For the third stimulus check, 80% (N=47) of the PSY group, 84% (N=41) of the RHV group, and 64% (N=32) of the comparison group received it.

Among participants who received any stimulus check, very few significant group differences were found for using the stimulus checks for planned expenses (Table 2). Substantial proportions of participants in all three groups had planned expenses for groceries, credit card debt, and rent or mortgage. The PSY and RHV groups were significantly more likely than the comparison group to use the first stimulus check to cover planned expenses for groceries. For the third stimulus check, the PSY and RHV groups were also more likely to have planned expenses in the “other” category. Participants in all three groups were most likely to report planned expenses in the other category, compared with the alternative response categories. For the other category, roughly half of all participants across groups did not further specify responses. However, of those who did, the most common responses were as follows: PSY group, savings (42%, N=25), bills (34%, N=20), and clothing (20%, N=12); RHV group, savings (29%, N=14), bills (37%, N=18), and clothing (16%, N=8); and comparison group, savings (32%, N=16) and bills and taxes (32%, N=16).

Table 3 shows the results of mixed linear modeling to examine the association between receipt of stimulus checks and change in clinical and social functioning for the three groups over time, with the analysis controlled for other sociodemographic and financial variables. Across groups, a greater number of stimulus checks received was significantly associated with lower PHQ-9 (B=−0.48) and GAD-7 (B=−0.84) scores and with higher scores on the RFS social relationship subscale (B=0.24)—all indicating improvements. Significant interaction effects were noted between group and number of stimulus checks received in predicting past-month change in days of alcohol intoxication and days of drug use. The interactions indicated that a greater number of stimulus checks received was associated with fewer days of alcohol intoxication for the RHV group, relative to the comparison group (B=−0.38 for interaction effect; B=−0.02 for association in RHV group); however, this association was reversed for the PSY group, relative to the comparison group, indicating that a greater number of stimulus checks received was associated with more days of alcohol intoxication (B=0.16 for interaction effect; B=0.04 for association in PSY group). Similarly, a greater number of stimulus checks received was associated with fewer days of drug use in the RHV group, compared with the comparison group; however, this association was again reversed for the PSY group, who reported more days of drug use (B=−1.67 and 2.24 for interaction effects, respectively; B=2.79 for association in PSY group; and B=−0.75 for association in RHV group).

This study took the U.S. government’s response during the COVID-19 pandemic to distribute stimulus checks as a unique opportunity to study the effects of short-term unconditional cash transfers on functioning and well-being of vulnerable groups with behavioral health and social problems. We followed up with veterans with psychosis, recent homelessness, and a comparison group with no history of psychosis or homelessness over 15 months, during which three rounds of stimulus checks were distributed. We note three findings from the study. First, most participants across all three groups received stimulus checks, and about three-quarters in all three groups received at least two of the three stimulus checks. This finding suggests that the stimulus checks were successfully distributed to many of the intended recipients, including vulnerable veterans. Of note, our samples included only veterans enrolled in VA’s comprehensive health care system, and we therefore cannot generalize our findings to other U.S. adults. However, our finding helps extend results of a previous study that found that most of the U.S. middle- and low-income adult population received the first stimulus check (2). Although there were initial challenges in distribution of the stimulus checks and new distribution methods had to be developed (26), our findings suggest that stimulus checks can be successfully distributed to large numbers of veterans enrolled in the VA health care system. The knowledge gained can inform policies and programs in response to future pandemics and major crises.

A second finding, based on exploratory analyses, was a lack of a consistent difference in how participants in the three groups planned to use their stimulus checks. Most participants reported that they planned to use their stimulus checks to cover bills, groceries, credit card debt, and rent or mortgage—or they reported that they were planning to save the money. We were surprised to find few group differences because we expected that the veterans in the PSY and RHV groups would have more planned expenses for necessities. However, this finding could be attributed to the fact that the COVID-19 pandemic increased demands for basic needs for almost all participants. Our finding also accords with those from several previous studies of initial rounds of stimulus checks in which most participants planned to spend their stimulus checks on necessities (2–4).

A third notable finding was that receipt of a greater number of stimulus checks was associated with better mental health and social functioning across all three groups. In contrast to a previous study that examined receipt of only the first stimulus check (5), our study found that receiving multiple stimulus checks may have had beneficial effects on functioning. It is conceivable that one stimulus check may be too small or the period too brief to have a positive impact, and multiple stimulus checks may be needed to sustain mental health effects. Because our study was associational, it is also possible that healthier and more socially connected study participants were more likely to be aware and to have received assistance to successfully complete applications to receive multiple stimulus checks; this and other explanations therefore need to be considered in interpreting this finding.

These findings contribute to the scarce literature on unconditional cash transfers in the United States and can inform related policies in preparation for the future. The findings also contribute to the growing literature on the various ways that financial and mental health are linked in vulnerable populations (27–29) and the potential for financially based interventions to improve psychiatric outcomes (30–34). An established example for such an intervention is the VA’s Supportive Services for Veteran Families program, which provides temporary financial assistance to homeless and at-risk veterans and has been effective in improving housing and clinical outcomes (35, 36).

Moreover, we found that receipt of a greater number of stimulus checks was associated with less alcohol and drug use—but only for the RHV group, and the reverse was found for the PSY group. Thus, it appeared that RHV participants did not use their stimulus checks to purchase these substances, which is worth noting because at least one previous study reported that some participants planned to use their stimulus checks for drugs and gambling (2). Moreover, there has been public concern that social security payments and other federal cash benefits increase substance use, despite findings to the contrary (37–39). It is not entirely clear why this negative association was found only for the RHV group and not for the PSY or comparison group, although the finding may be due to the higher drug use reported by the RHV group at initial assessment. It may also be due to population-level increases in substance use observed during the COVID-19 pandemic (40) and thus unrelated to receipt of the stimulus checks. Participants in the RHV group may have been different in this respect because they were newly housed and particularly engaged in VA care for their recovery. In contrast, the slight association between stimulus checks and greater alcohol and drug use among participants in the PSY group may reflect a differential impact of the check payments on this group, although the observed association may also have been due to increases in recreational substance use. These speculations need to be further examined to determine the circumstances under which unconditional cash transfers increase the risk for substance use.

Several limitations should be noted. First, receipt of stimulus checks and finance-related variables were based on self-report, which is subject to recall and accuracy biases; we designed these assessment items, and they need to be validated with objective data sources. Second, veterans were not randomly assigned to receive stimulus checks, and we therefore cannot infer any causal effects of the checks. Third, we relied on small samples, all participants were veterans, and most were men; therefore, the generalizability of our findings to other veterans and adults is unknown. We also conducted several statistical comparisons, and these findings need to be replicated to ensure that they were not due to type I errors. These limitations notwithstanding, the findings contribute to the literature on the potential impacts of unconditional cash transfers for vulnerable groups of veterans during the COVID-19 pandemic and the link between finances and mental and social health.

About three-quarters of veterans with psychosis or recent homelessness in our sample received a COVID-19 stimulus check, which was spent mostly on basic needs. In general, veterans who received multiple stimulus checks reported better mental health and social functioning. The COVID-19 stimulus checks, as brief unconditional cash transfers, may have helped buoy the well-being of some vulnerable populations during the pandemic.