Time for a change : remaking the nation's welfare system

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Time or
A Change
Remaking the Nation's Welfare System
E L1BRARY
ReptJrlol the
anti Coordination
Alfisory
Commiffee
June 1993
Table of Contents
Acknowledgments
Executive Summary iii
I Introduction 1
II Committee History and Activities 3
III The Programs: Administration 5
and Interaction
IV Previous Attempts at Coordination 25
and Simplification
v Simplification and Coordination 33
Efforts Currently in Effect
VI Disincentives in Welfare Programs: 43
The Debate Surrounding Self-Sufficiency
VII Barriers 49
VIII Recommendations and Their Effects 63
IX Appendixes
A. Biographies of 77
Committee Members
B. Background on the 79
Four Programs
c. "The Cliffs of Self-Sufficiency" 91
IYy the Jefferson County
Self-Sufficiency Council
D. ''Public Assistance and the Working Poor: 105
How Simplification Could Support Efforts to
Make Work Pay"
1Yy Mark Greenberg,
Center for Law and Social Policy
E. Bibliography of Materials 115
Used lly Committee
F. Congressional Committees 123
and Subcommittees
G. APWA Task Force on Program Coordination: 125
List of Differences Between the
Food Stamp and AFDC Programs
H. Section 1778 of the Mickey Leland Memorial 151
Domestic Hunger Relief Act
(Public Law 101-624)
Acknowledgments
The Committee would like to thank many individuals for their help. Without their
assistance this report would not have been possible.
First, we would like to thank the staff of the four programs who provided much
of the input for the report. Specifically, we acknowledge Bonny O'Neil, Art Foley,
Ellen Henigan, Nancy Theodore, Amy Black, Phyllis Twyman, Steven Carlson,
Boyd Kowal, Barbara Murphy, and Gary Batko of USDA's Food and Nutrition
Service; Diann Dawson, Mack Storrs, and Larry Carnes ofHHS' Office of Family
Assistance; Paula Blunt ofHUD's Office of Public and Indian Housing; and
Richard Chambers ofHHS' Health Care Financing Administration.
The Committee would also like to thank the many individuals who attended the
four meetings held throughout the country. We are grateful to all those who
provided valuable input by making presentations or providing personal testimony.
Special thanks go to Congressman Bill Emerson, for his inspiration and guidance;
Barbara Earman of the House Select Committee on Hunger; Kathi Way of the
White House Domestic Policy Council; Jane McNeil, Executive Assistant to USDA
Secretary Mike Espy; Rick Ferreira and Larry Goolsby of the American Public
Welfare Association; Mary Robertson of the Los Angeles County Department of
Public and Social Services; Neal Zank of the National Commission on Employment
Policy; Mickey Allman of the Maryland Department of Human Resources; Barbara
Flaherty of the Washington State Family Independence Program; Shirley Ramsey
of the Cape Girardeau, Missouri, Community Caring Council; and Harrison
Shannon and Sharon Waters of the Charlotte Housing Authority.
Finally, we give a special thank you to Committee member Mary K. Deyampert,
Kay Fields of the North Carolina Department of Human Resources, and Merlene
Wall of the Mecklenburg County Department of Social Services for hosting our
meeting in Charlotte, North Carolina; and Committee member Thomas Eichler
and Barbara Evans, Elaine Arch angelo, and Phyllis Hazel of the Delaware Depart­ment
of Health and Social Services for their hospitality at our meeting in Wilming­ton,
Delaware.
"One central conclusion emerges from our
work to date: The welter of programs that are
collected under the rubric of the 'welfare
system' must be scrapped. Ma;or structural
reform of our income assistance programs for
the poor is necessary if we are to encourage
work wherever possible, provide basic income
protection for those who are unable to pro-vide
for themselves, provide incentives for
keeping the family together, and simplify
and make more efficient the basic administra-five
structure. "
Joseph Califano
Former Secretary of Health,
Education and Welfare, 1977
Executive Summary
HELP!
Delivery of services to the needy ofthis Nation has reached a crisis stage. Unless
dramatic steps are taken immediately to end the administrative quagmire in local
human service offices the entire system stands in danger of collapse.
The conglomeration of separate programs that supposedly comprise our
"welfare system" do not form a system at all. Instead, each operates in its own
separate orbit, assisting a specific population, without regard to the multiple needs
of the families it serves.
Just as "tinkering" with health care programs is insufficient to resolve the
Nation's health care crisis, according to First Lady Hilary Rodham Clinton, so is
tinkering with welfare programs.
The current programs should be scrapped, in lieu of one comprehensive
program with the goal of moving participants toward self-sufficiency.
Now Is the Time lor Change!
These are the findings and recommendations of the Welfare Simplification and
Coordination Advisory Committee-authorized by Congress in 1990 to examine
four major assistance programs-food stamps, Aid to Families with Dependent
Children (AFDC), Medicaid, and housing assistance programs.
The Committee was mandated to identify barriers to participation in one or
more assistance programs and the reasons for those barriers. It also examined
reasons why it is difficult for administrators to provide timely benefits efficiently to
all qualified to receive them. The Committee's work culminates in this report to
Congress and the cognizant Federal agencies. It recommends actions that could
improve the delivery of services among the programs and simplify their rules and
procedures.
The bi-partisan Committee met four times during 1992 and 1993, examining
the interactions of the current assistance programs from the perspective of
program administrators as well as the needy. Members heard from public witness­es,
including public assistance recipients, and read statements from many more,
attesting to the lack of coordination and simplicity.
The Committee shares the view of many previous workgroups that the Nation's
current public assistance system desperately needs to be overhauled. Most of the
existing programs do a good job of fulfilling their own missions. However, when
viewed together, the "system" is an antiquated and costly conglomeration of
programs with separate goals, inconsistent policies, and rules that are so complex
that neither clients nor their caseworkers should be expected to understand them.
The Committee concurs with the panel of experts working on the Ford Founda­tion
Project on Social Welfare and the American Future that "the best welfare
policy offers individuals both an economic opportunity and social protection in a
way that minimizes the waste of taxpayers' resources."'
I Project on Social We lfare and the American Future, The Common Good: Social Welfm~ and the Ameriran Future, Policy
Recommendations, (New York: The Ford Foundation, May 1989) , p. 4.
Ill
iv
Although the recommendations put forth by this Committee follow a long list
of similar ones advocated by equally earnest groups, the Committee believes that
there is cause for optimism now.
This report, the only one prepared in response to congressional concern, will
be presented in the first year of a new Presidential administration. "Ending welfare
as we know it," is a prime goal espoused by President Clinton. The recommenda­tions
herein comport with that goal.
We submit this report to a Congress with an unprecedented number of fresh­men
Members. We believe these new Members were elected by people who are fed
up with the status quo-who recognize that the current system of aid evolved not
by design, but through crisis.
The release of this report also comes at a time when Members are looking to
make Congress more efficient by streamlining its structure. The temporary Joint
Committee on Organization, which is chaired by Senator David Boren and co­chaired
by Congressman Lee Hamilton, is reviewing the committee and subcom­mittee
structure with the goal of consolidating oversight responsibility and
eliminating overlap. We will try to impress upon this joint committee the urgency
of addressing the fragmented jurisdiction over assistance programs.
During this time of extreme fiscal distress, both the Federal Government and
the States are showing an unprecedented willingness to do things differently. The
number of States applying for welfare reform waivers in recent years is evidence of
the dissatisfaction with the current system, and the receptivity to change.
The time for change is long overdue, and the time for change is clearly NOW!
Barriers
Members read material on the subject of coordination compiled from work
completed over the past 2 decades. A myriad of working groups, task forces, and
committees have attempted to tackle the problem of welfare complexity, but with
little success. That problems exist is well documented. It was not difficult for the
"In the nearly fifty years of its exis-fence,
welfare has changed to the
point that no one likes this system
and a lot of people act as though
they don't like those who receive
welfare. Change is long overdue!"
-Kay Barker
Gaston County, NC
Testimony before the
Welfare Simplification and
Coordination Advisory Committee
January 8, 1993
Committee to meet its first mandated objective: compiling a list of barriers to
effective client service and to participation.
Both "systems barriers" pertaining to administration of the programs, and
"client service barriers" at the delivery level, are identified in chapter VII of this
report.
The systems barriers stem from the different laws that created each program
and the administrative structures that evolved from those laws. The different
mission of each program results in differing policies and procedures that hamper
coordinated services. While some barriers to efficient operation are as broad in
scope as lack of coordinated oversight by the Congress and the Executive Branch,
others, such as insufficient use of automation, are more specific.
Client services barriers affect applicants and recipients directly, inhibiting
access to program benefits. While lengthy forms and complex rules are the most
commonly perceived obstacles to program participation, more subtle barriers,
such as the stigma attached to participation, also deter applications. Many people,
especially the elderly, view receipt of almost any form of assistance as humiliating.
Only 59 percent of persons eligible for food stamps actually received them in
1989.
Previous Efforts
With such obvious and well-documented problems, one might wonder why the
barriers were not eliminated years ago. Solutions are not simple and consensus is
not easily reached. Chapter IV describes previous attempts at reform and why most
have failed.
The cost of program change is paramount among the obstacles to reform. Any
change in eligibility requirements or benefit levels affects program costs. Given the
amount of funds disbursed by the programs, the fiscal magnitude of program
changes can be tremendous. For example, raising the AFDC asset limit from the
current $1,000 to the $2,000 limit of the Food Stamp Program would allow more
people to receive AFDC. Such a change would have increased AFDC costs by $135
million in fiscal year 1992. In addition, since the new AFDC recipients would be
categorically eligible for Medicaid, costs for that program would increase dramati­cally.
Other reasons for inertia in achieving program conformance include tension
between State and Federal responsibilities, congressional and Executive Branch
inattention to the administrative aspect of coordination, and competing con­stituencies.
An example of an unsuccessful attempt at simplification is President
Nixon's proposed Family Assistance Plan ofthe early 1970's. The plan would have
created a national cash welfare system with uniform eligibility and minimum
benefit levels that States could supplement. The benefit levels under the proposal
would have exceeded the AFDC grants in some States and been lower than the
grants in others. The changes were opposed by client advocates from States with
high AFDC grants who did not want to see people get less aid, as well as those
from States with low grants, who did not want to see more people added to the
public assistance rolls. The proposal failed.
v
"We want people to get work ... we
want them not to lose anything by
getting the work ... "
vi
- Senator Daniel Patrick Moynihan
Congressional Record
June 16, 1988
Guiding Principles
Principles were developed to guide the Committee's deliberations. They were
adhered to when recommendations for change were formulated. The shared
philosophy of treating persons with respect was an overriding influence. The 10
principles are:
1. Treat Persons with Dignity and Respect
2.
3.
Strengthen F amities
Direct Programs to Address the Entire Spectrum of a Family's Needs,
Not Just the Discrete Needs of Individuals
4. Promote Individual Responsibility
5. Empower Persons to Move Off Assistance and Toward Independence
6. Make Work More Rewarding Than Assistance
7. Allow Flexibility In Programs to Accommodate State, Local, and
Individual Differences
8. Focus Success Measures On Persons, Not On Processes
9. Use Public Funds Efficiently
10. Build Partnerships with the Private Sector
Recommendations
In considering the actions it would recommend to the Congress and the Executive
Branch, the Committee discussed a wide range of options. The Committee chose
not to ignore issues peripheral to simplification and coordination of the four
programs. Broad issues including adequacy of benefits, work incentives, and the
dynamics of program interactions were studied as were detailed technical propos­als
to coordinate policies and procedures.
In considering just how specific it wanted to be, the Committee deliberated
over an impressive document recently produced by the American Public Welfare
Association (APWA) in conjunction with the Food and Nutrition Service of the
Department of Agriculture (USDA) and the Administration for Children and
Families of the Department of Health and Human Services (HHS). The docu­ment,
compiled over the past year and a half by program administrators, identifies
57 differences between the Food Stamp and AFDC Programs.
Some of the differences are rooted in statute and only congressional action can
eliminate them. Others are disparities in regulations and can be addressed by the
Federal agencies. The Advisory Committee recommends that the Clinton Adminis­tration
immediately review the disparities that are rooted in regulation, not
statute, and provide a timely and full response to the Task Force recommenda­tions.
This Committee further recommends that the appropriate congressional
committees analyze the program differences based in statute, and that the House
and Senate subcommittees with jurisdiction over the programs hold joint hearings
to develop a legislative reform package to conform the two programs.
The Committee was also impressed by the work of the National Commission for
Employment Policy (NCEP) in its October 1991 Special Report entitled Coordinat­ing
Federal Assistance Programs for the Economically Disadvantaged: Recommendations
and Background Materials. The recommendations in this report parallel many of
NCEP's recommendations.
The Committee heartily recommends that the White House Domestic Policy
Council and Congress review the recommendations contained in the NCEP report
for implementation in conjunction with APWA's recommendations and those put
forth by this Committee.
• Primary Recommendation
The primary recommendation of the Committee is to replace the numerous
programs that currently serve the needy with one, family-focused, client-oriented,
comprehensive program. The three key criteria for the program would be 1)
simplicity of design; 2) service tailored to need-three broad, time-based cate­gories
of assistance (short-term, extended, and long-term) with a single case
manager for each family; and 3) benefits contingent upon progress toward self­sufficiency.
This program would provide a consistent, coordinated, and simplified approach
to meeting the interrelated needs of low-income individuals and families while
they are working toward self-sufficiency. Service would be tailored to the client
through the use of a self-sufficiency plan designed to match the needs of each
family member, and the family as a whole, to appropriate services. Although actual
service delivery may be provided by separate State and local agencies and private
sector organizations, the program would be administered by one agency at the
State level. Administration at the Federal level would also be centralized in one
agency and legislation would evolve from a single committee in each Chamber of
Congress.
Given the complexity of the task, this Committee did not have sufficient time or
resources to design the comprehensive program it envisions. This must fall to
Congress and the Federal agencies, or a special task force given this single charge.
However, the Committee feels strongly that the design concepts must reflect the
principles laid out in this report. Integral elements of the program include:
• a single point of entry with one application form;
• common definitions and rules on income, deductions, resources, and nonfinan­cial
eligibility criteria;
• a single eligibility standard (means test) for determining eligibility; and
• partnerships between public and private sector programs to provide coordinat­ed
services.
A comprehensive program addressing the multitude of human needs would be
simpler to administer than the jumble of programs that currently exist. Common
definitions, eligibility requirements, and benefit payments add to the desirability
of a comprehensive program. Eliminating duplicative bureaucracies will reduce
administrative costs, saving money that can be used, instead, for client services.
If Congress and the Executive Branch seriously wish to bring simplicity and
coordination to the public assistance network, the Committee believes this recom­mendation
is inescapable.
Vll
"It's time to honor and reward peo-pie
who work hard and play by the
rules. That means ending welfare as
we know it- not by punishing the
poor or preaching to them, but by
empowering Americans to take care
of their children and improve their
lives. No one who works full-time
and has children at home should be
poor anymore."
viii
- Governor Bill Clinton and
Senator AI Gore
Putting People First:
How We CanAl/
Change America, 1992
• Interim Recommendations
The Committee recognizes that its recommendation for one comprehensive
program will not come about overnight. In the interim, other steps can and
should be taken to improve the current state of public assistance and provide
immediate relief to program administrators and the needy.
Therefore, the Committee recommends that Congress review the interim
recommendations below and take immediate action to implement those recom­mendations
requiring legislative action. Once legislative action has been complet­ed
and for those recommendations that do not require legislative action, the
Committee recommends that the President direct the White House Domestic
Policy Council to take the lead in coordinating implementation among the
Federal and agencies.
The interim recommendations are categorized as either "Systems" or "Client
Services."
Systems recommendations are:
1. Form a work group of the chairs of the relevant congressional committees to
ensure that all legislative and oversight activities involving public assistance
programs are coordinated.
2. Ensure that all low-income Americans have access to quality health care.
3. Establish uniform rules and definitions to be used by all needs-based programs
in making their eligibility determinations, including:
a. common definitions of countable income, allowable deductions, resources,
and household composition;
b. conversion of food stamp benefits to a flat allowance for AFDC families; and
c. establishment of a standard shelter and medical deduction under the Food
Stamp Program for non-AFDC households.
4. Expand the demonstration project authority for all programs to allow for the
waiver of both statute and regulation. Cost neutrality should not be an overrid­ing
criterion for Federal approval of demonstrations or welfare reform initia­tives.
5. Allow States to make effective demonstration projects permanent and/or adopt
successful systems tested in other States.
6. Modify audit and evaluation procedures to focus primarily on the success of
individuals and families in reaching self-sufficiency as the standard for account­ability
to determine the success of the programs.
7. Establish a uniform implementation timeframe for all regulatory changes and a
common date for implementing these changes, including cost-of-living adjust­ments.
Coordination with non-needs-based programs, such as Social Security
Administration Programs and Veterans benefits, should be stressed.
8. Encourage States to form public/private partnerships to meet client needs.
9. Combine employment and training programs for the economically disadvan­taged
into one program.
Client Services recommendations are:
1. Streamline the verification process.
2. Use a single case manager for all public assistance programs and services.
3. Permit the sharing of client information among agencies.
4. Make information on eligibility available in more public places, e.g., libraries
and post offices.
5. Develop tables to be used by clients to determine how benefits may be impacted
as a result of anticipated changes in household circumstances, such as changes
in income and household size.
The Committee's recommendations are discussed in detail in chapter VIII of
the report.
The time to act is now. If these issues are once again ignored because of their
cost or complexity, we can look forward to years of legislative gridlock, high
turnover rates among disgruntled assistance workers and worst of all, lost potential
of many, many Americans. •
ix
X
"We must understand when a family unit is in
need of help, their need often crosses pro-gram
lines. Need for income assistance often
means need for food, for housing help, and
for some help in finding and keeping a job."
- Representative
Bill Emerson, MO
Hearing before the
Select Committee on Hunger
U.S. House of Representatives
April23, 1991
Introduction
By authorizing the Welfare Simplifica­tion
and Coordination Advisory Com­mittee
through Public Law 101-624,
Congress, for the first time, actively
sought to address the need to reform
the way the Nation's human services
programs work together as a system. It
was an outgrowth of longstanding dis­satisfaction
with the complexity of the
tangle of programs designed to help
the poor. Although there have been
many attempts to make these programs
more efficient and effective, the Com­mittee
's creation marks a new mile­stone
in the effort. Creation of the
Advisory Committee is a strong indica­tion
that Congress viewed the fragmen­tation
of human investment programs
as "one of the major unmet challenges
to domestic policy in America .... "1
The Committee is charged with
examining the policies and procedures
of the Food Stamp, AFDC, medical
assistance, and housing assistance pro­grams.
It must identify barriers to mul­tiple
program participation, and
elements of the system that make it
difficult for administrators to provide
timely benefits in an efficient manner
to all those qualified to receive them.
Since passage of the Social Security
Act in 1935, a multitude of programs
to help the economically disadvan­taged
have been enacted. Authorized
by different congressional committees
at different times, the programs deal
with the interconnected symptoms of
poverty. Each program was born of
good intentions. They are all evidence
of the Government's aggressive
response to pressing societal needs. As
each need was addressed, however, no
single body was taking a deliberative
look at how the individual programs
would meld together. That the pro­grams
would actually function as a
system was never a motivating factor in
their creation. This is the genesis of
the complexity and coordination prob­lems
we are dealing with today.
The governmental processes that
created the assistance programs
remain intact. No mechanism is in
place to prevent conflicting program
policies from being enacted in the
future, nor to remedy the ones that
already exist. In fact, just the opposite
is true. Achieving real compatibility
among the programs will require
major structural reforms in the way
welfare laws are promulgated. This has
far-reaching consequences for the
poor, who are hesitant even to apply
for programs benefits because of the
complexity involved. It has similar
consequences for State agencies, which
are struggling to deliver services effi­ciently
and to attract, train, and retain
caseworkers.
Services and benefits for families are
divided into rigid and distinct cate­gories
that fail to reflect their interre­lated
causes and solutions. The
fragmentation of social services at the
Federal level is mirrored at the State
and local levels. Caseworkers share
"pieces" of the same family, with no
institutional capability to address the
interrelated family needs. Consequent­ly,
services designed to correspond to
discrete problems are administered by
"dozens of agencies, each with its own
particular focus, source of funding,
guidelines, and accountability require­ments."
2 These fragmented systems
result in costly and duplicative admin­istration
and less effective services.
Social service delivery is close to
unmanageable today. Program admin­istrators
have to navigate through the
muddy waters of program
requirements handed to them from
agencies which speak different "lan­guages."
Even a seemingly simple
determination such as, "What is
income?" is greeted with different
responses from different programs.
Placing even more pressure on case­workers,
the complexities of the indi­vidual
programs and their differences
contribute to high quality control
error rates.
From the viewpoint of the person
who needs assistance, the system can
1. Marion Pines, Investing in SelfSufficiency for Poor Families: Putting It All Together, (New York, NY: Ford Foundation ,
1991) , p. 93.
2. Ate lia l Me Iaville with Martin]. Blank, What It Takes: Structuring Partnerships to Connect Children and Families with
ComprehensiveSeovices, (Washington , DC: Education and Human Services Consortium,January 1991) , p. 7.
1
"You go into [the welfare office and]
you're surrendering sovereignty.
You're surrendering control of your
life and making yourself dependent."
- Public assistance recipient
Final Report of Findings of
Focus Group Research
Conducted on Behalf of the
National Association of
Neighborhoods, Prism Corp.,
Washington, DC,
Falll986
be a nightmare. Most communities
have no central location for people to
find out what programs are available
and those for which they might be
eligible. Applicants face lengthy, com­plicated
forms and different types of
verification for each program. Com­prehensive,
holistic services tailored to
individual or family needs are not gen­erally
available. Eligibility workers do
their best just to determine program
eligibility for the sheer volume of faces
that appear at their doors day in and
day out.
This Committee has examined the
problems faced when a family needs
service from more than one program.
It has identified barriers to efficient
operations and to participation by all
those eligible. It has examined previ­ous
attempts by the Federal Govern­ment
to create a cohesive and
accessible system and explored why
these efforts were unsuccessful.
The Committee is recommending
ways to simplify the system and coordi­nate
the major social service programs.
It believes that coordination problems
can be addressed in a way that will
enhance service delivery while main­taining
a reasonable degree of pro­gram
accountability.
The findings of the Committee, as
well as its recommendations, illustrate
why it's time for a change. •
Chapter
Committee History
and Activities
Committee Selection
When Congress established the Wel­fare
Simplification and Coordination
Advisory Committee, it mandated that
the Secretary of Agriculture appoint
members with different perspectives
on public assistance, including State
and local administrators and client
advocates.
The members of the Committee
brought together a broad base of
expertise in the field of public assis­tance.
Membership was diverse, repre­senting
large and small States, rural
and urban areas, and various back­grounds.
Sammie Lynn Puett, a former Com­missioner
of the Tennessee Depart­ment
of Human Services, chaired the
11-member Committee. Members
included a Colorado State Senator, a
county legislator from Westchester
County, New York, public assistance
program administrators from Delaware
and North Carolina, a county adminis­trator
from Los Angeles County, a
scholar in health policy from the
American Enterprise Institute, an eligi­bility
worker from New Mexico, the
Chief Executive Officer of the Dallas
Housing Authority, and client advo­cates
from Kansas and California.
Biographies of the Committee mem­bers
can be found at appendix A.
Committee Activities
All four of the Committee's meetings
were open to the public, and
comments from the public were wel­comed.
At each meeting, public com­ment
was provided by recipients,
advocacy groups, administrators and
caseworkers.
The first meeting of the Committee
was in Arlington, Virginia, on April 30
and May 1, 1992. Subsequent meetings
were held in Seattle, Washington,
August 20, 21, and 22, 1992; Charlotte,
North Carolina,January 7, 8, and 9,
1993; and Wilmington, Delaware,
March 11 and 12, 1993.
In Arlington, the Committee dis­cussed
the direction it would take in
fulfilling its mission. Sites for the
future meetings were selected based
upon innovative programs and de­monstration
projects and geographic
diversity.
Committee members also received
comments on the Federal perspective
on coordination and simplification
from representatives of USDA's Food
and Nutrition Service, HHS' Adminis­tration
for Children and Families and
Health Care Financing Administration,
and the Department of Housing and
Urban Development's (HUD), Office
of Public and Indian Housing. Mis­souri
Congressman Bill Emerson,
sponsor of the authorizing legislation
and ranking minority member of the
House Agriculture Subcommittee on
Domestic Marketing, Consumer Rela­tions,
and Nutrition, addressed the
Committee.
In Seattle, the Committee formulat­ed
an initial set of basic principles to
guide its work and identified barriers
to program administration and receipt
ofbenefits. There, the Committee
visited with participants and program
administrators from the Washington
State Family Independence Program,
an innovative demonstration that uti­lizes
a case-management approach to
give special attention to the needs of
individuals. One caseworker is respon­sible
for the overall needs of the family
unit. In addition, food assistance is
provided in the form of cash rather
than food stamps. Education and train­ing
activities are emphasized and the
program offers incentives for participa­tion
by providing for child care reim­bursements
to help families move off
public assistance and become self­sufficient.
Shirley Ramsey, president of the
Community Caring Council in Cape
Girardeau, Missouri, spoke to the
Committee on the Council's work. The
Council is a nonprofit corporation that
promotes coordination and coopera­tion
between social service providers,
churches, the business community,
and the educational system to empow­er
families and individuals to become
more self-sufficient. The Council was
founded 4 years ago by Mary Katsen, a
3
"Self-sufficiency translates into a
good job and stable home life for
- One Child in Four -Investing in
Poor Families and Their Children:
------......... A Motter of Commitment
". The American Public
Welfare Association and
The Notional Council of
State Human Service
/ istr.otors, 198
4
State Representative, in response to
the frustrations expressed to her by
constituents in trying to decipher the
maze of social services.
In Charlotte, the Committee
focused on the recommendations to be
made in its final report to Congress
and heard comments from administra­tors
of innovative simplification pro­jects
in the State.
The Committee visited several tran­sitional
housing sites that offer lower
income families opportunities for
home ownership through the use of
escrow accounts. Sponsored by the
Charlotte Housing Authority, the inno­vative
programs encourage families to
make the transition from public assis­tance
to self-sufficiency.
The fourth and final meeting was
held in Wilmington, Delaware, on
March 11 and 12, 1993. The Commit­tee
visited the State's innovative one­stop
service delivery system-a
ent-centered, results-oriented net­t:&-
of-p~ms that supports per­sonal
and fami~elf-sufficiency.
Delaware has been a recent innova­tor
in the development of one-stop
services through a system of single
entry, multiservice facilities that house
human service programs, as well as
selected private sector programs in
local community locations. Two key
goals guide the one-stop services sys­tem:
1) services are provided with an
emphasis on working with individuals
and their families to maximize inde­pendence;
and 2) the system itself
must be self-correcting-constantly
working to retool to keep pace with
changing client needs and a changing
service delivery environment.
Congressman Mike Castle spoke to
the Committee on the urgent need for
simplification and coordination in the
current public assistance system, and
Delaware Governor Thomas Carper
discussed welfare reform and the inno­vative
initiatives that are currently
underway in the State. The Commit­tee
also heard from Congressman
Bill Emerson.
Problems with the assistance pro­grams
that extend beyond coordina­tion
were raised in every city the
Committee visited. Public commenters
described the unintended
consequences of program rules that
discourage entry into employment and
promote continued dependence. It
was m de clear to Committee mem­bers
th t there is intense interest in
improv ng the current system and that
the tim for change is NOW. •
The Programs:
Administration and
Interaction
At least 75 Federal programs provide
assistance to the economically disad­vantaged
in the form of cash, medical
care, food, housing and energy assis­tance,
education and training activi­ties,
and other services. 1
Congress directed the Advisory
Committee to focus on the policies of
four of these programs-the Food
Stamp Program, AFDC, Medicaid, and
housing assistance programs-to deter­mine
the difficulties faced by individu­als
when applying for and obtaining
benefits.
This chapter provides a brief
overview of the four programs, discuss­es
administrative costs and looks at
multiple program participation.
Appendix B contains a detailed
description of the four programs,
including their policies, population
characteristics, and participation and
expenditure patterns.
The Programs
• AFDC Program
The AFDC Program began in 1935
under Title IV of the Social Security
Act as a way to assist orphans and wid­ows
with small children. Today, operat­ing
under broad guidelines from the
HHS' Administration for Children and
Families (ACF), the program provides
cash assistance to families with depen­dent
children. It also offers employ­ment
and training activities to help
parents in these families become self­sufficient.
During the first 25 years of the
AFDC Program, families suffering
deprivation due to unemployment
were ineligible for benefits. In 1961
Congress allowed States to provide
AFDC to the children of unemployed
fathers who were still living at home
through the Unemployed Parent Pro-gram
(AFDC-UP). The Family Support
Act of 1988 took this a step further,
requiring all States to operate an
AFDC-UP program as of October I,
1990. Although this change makes the
program more accessible to needy two­parent
families, one-parent families
will continue to receive the most
benefits.
To receive AFDC benefits, a family
must pass certain tests based on family
structure, income and resources, and
willingness to fulfill work require­ments.
Exhibit 10 illustrates AFDC
income and resource requirements in
more detail.
The AFDC Program is funded joint­ly
by the Federal and State Govern­ments
through a matching formula
that varies according to the State's per
capita income. In fiscal year 1992, pro­gram
expenditures reached almost
$22 billion, an increase of more than
70 percent from 1982. Exhibit 1 pro­vides
information on AFDC program
expenditures for fiscal years 1983
through 1992.
Each State determines its own need
standard and grant payment levels.
The need standard is the amount of
money a State deems necessary to meet
a minimal standard of living in that
State for a family of a specified size.
Many States pay less than the full stan­dard
of need.
Since no Federally prescribed mini­mum
benefit exists for the program,
AFDC benefit levels vary from State to
State. For example, an assistance unit
composed of one adult and two depen­dent
children with no income would
receive an AFDC grant of$120 in Mis­sissippi,
whereas the same assistance
unit would receive $658 in Vermont.2
Exhibit 2 illustrates the range of AFDC
assistance payments for a family of one
adult and two children for fiscal year
1993.
I National Commission on Employment Policy, Coordinating Federal Assistance Programs for the Economically
Disadvantaged: Recommendations and Background Materials, (Washington, DC: National Commission for
Employment Policy, 1991), p. 3.
2 U.S. Department of Health and Human Resources, Administration for Children and Families, Office of Family
Assistance, Characteristics of State Plans for the AFDC Program, 1990-91 Edition, (Washington, DC: Government
Printing Office, 1991) , pp. 29, 322.
5
15
10
0
BOO
600
400
200
6
EXHIBIT 1
AFDC PROGRAM
FEDERAL AND STATE MAINTENANCE ASSISTANCE EXPENDITURES
83 84 85 86 87 88
FISCAL YEARS 1983 - 1992
EXHIBIT 2
89
RANGE OF AFDC MONTHLY PAYMENT AMOUNTS FOR SELECTED STATES
ONE ADULT AND TWO CHILDREN
FISCAL YEAR 1993
AK HI GU VT CA CT LA TN TX
STATE AGENCIES
90 91 92
PR AL MS
What are your frustrations with the
welfare system?
"So much paper work and so little
staff to do it. High caseworker
turnover, never the same caseworker
two times in a row. There is also an
unreasonable demand placed on the
caseworker due to the high numbers
in the caseload. "
- A Public Assistance Recipient
Kansas City, KS in response to
a survey about welfare
14
12
10
4
EXHIBIT 3
AFDC PROGRAM
TOTAl RECIPIENT PARTICIPATION
13.7
82 83 84 85 86 87 88 89 90 91 92
FISCAl YEARS 1982- 1992
In fiscal year 1992, more than 13.6
million people participated in the
AFDC program-almost 25 percent
more than in 1989. Exhibit 3 depicts
AFDC participation patterns for fiscal
years 1982 through 1992.
Appendix B describes in detail eligi­bility
requirements, population charac­teristics,
expenditure and participation
trends and work requirements for the
AFDC Program.
• Food Stamp Program
When the Food Stamp Program
replaced the Commodity Distribution
Program during the 1960's, its empha­sis
was as much to utilize the Govern­ment's
surplus food as to raise the
nutritional level of low-income house­holds.
The program exists as it does
today to ensure that Americans have
the means to purchase nutritionally
sound diets.
The program is administered by the
Food and Nutrition Service (FNS) of
USDA. FNS gives direction to State
agencies through regulations that
define eligibility requirements, benefit
levels, and administrative rules.
Clients receive coupons which are
redeemed in authorized stores for
eligible food items. Coupon allotments
vary according to the size of the house­hold
and income level, but eligibility
and benefit rules are the same nation­wide.
While the average household
benefit in 1991 was $162, approximate­ly
5 percent of households collected
$10 or less while 11 percent received
more than $300."
The program has financial, work­related,
and categorical tests for eligi­bility.
Exhibit 10 contains more details
on the program's eligibility require­ments.
The Federal Government provides
full funding for food stamp benefits
and the cost of administering the pro­gram
is shared equally between the
States and the Federal Government.
Since 1982, Federal expenditures for
the Food Stamp Program have
3. Nancy Heiser and Suzanne Smolkin, Characteristics of Food Stamp Households, Summer 1991 , (Washington,
DC: Mathematica Policy Research, In c., 1992).
7
10
25
20
15
10
8
EXHIBIT 4
FOOD STAMP PROGRAM
TOTAL FEDERAL EXPENDITURES*
83 84 85 86 87 88 89 90 91
FISCAL YEARS 1983 - 1992
*EXCLUDES NATIONAL LEVEL ANNUAL COSTS FOR PRINTING COUPONS, STUDIES, AND SURVEY COSTS.
EXHIBIT 5
FOOD STAMP PROGRAM
PROGRAM PARTICIPATION
82 83 84 85 86 87 88 89 90 91
FISCAL YEARS 1982· 1992
92
92
"We are dying out there. Our work-ers
are being crushed by caseloads,
delivery is slipping, timeliness is
going by the waysides. I've added
40, 000 people to the Medicaid rolls
just in the last year in my state,
because of the mandates, and with-out
new workers, because of the
recession, we are in real trouble
out there."
- Gary Stangler, Director
Missouri Department of
Social Services, Hearing before the
Select Committee on Hunger
U.S. House of Representatives
April23, 1991
60
40
20
0
increased by more than 100 percent­from
$10.2 billion in 1982 to over $22
billion in 1992. Exhibit 4 illustrates
annual Federal expenditures for the
program, beginning with fiscal year
1982.
Since 1989, participation in the
program has grown by an average of
2.2 million individuals annually and in
fiscal year 1992 USDA distributed ben­efits
to more than 25 million individu­als.
Exhibit S displays Food Stamp
Program participation patterns since
fiscal year 1982.
Appendix B describes in detail eligi­bility
requirements, population charac­teristics,
expenditure and participation
trends and work requirements for the
Food Stamp Program.
• Medicaid Program
Medicaid is the Nation's key provider
of medical assistance and long-term
care for low-income families, low­income
elderly, and the disabled.
The program was enacted as a com­panion
to Medicare in 1965 and was
designed to pay for health care for
recipients of AFDC and certain other
needy people. Establishment of the
EXHIBIT 6
MEDICAID PROGRAM
TOTAl PROGRAM EXPENDITURES
82 83 84 85 86 87
Medicaid program was an enormous
leap forward in financing and provid­ing
health care to the poor.
Today, the program's goals are to
ensure that eligible individuals receive
adequate care and to reduce the finan­cial
burden of medical care for those
with limited resources.
Federal oversight of the Medicaid
program is the responsibility of the
Health Care Financing Administration
ofHHS.
Medicaid essentially serves four
populations: low-income families that
lack health insurance, elderly people
who need help with medical care, dis­abled
elderly individuals who need
long-term care, and nonelderly dis­abled
individuals who need critical and
long-term care. Benefits and coverage
are different in each State. Exhibit 10
contains a more detailed description of
Medicaid eligibility criteria.
Since 1982 Medicaid expenditures
have grown nearly four-fold to total an
estimated $120 billion in 1992. Exhibit 6
provides annual Medicaid expenditure
information beginning in fiscal year
1982.
88 89 90 91 92*
FISCAl YEARS 1982· 1992
*ESTIMATE
9
What are your frustrations with the
welfare system?
"When a client receives a raise in
food stamps, the welfare check is
reduced. When a client finds employ-ment
their food stamps, housing, etc.
are cut. Never a chance to get ahead
just a little."
10
- A Public Assistance Recipient
Kansas City, KS in response to
a survey about welfare
25
20
15
10
0
Participation in the Medicaid Pro­gram
has grown by over 40 percent
since 1982 to reach 30 million recipi­ents
in fiscal year 1992. Exhibit 7 illus­trates
Medicaid participation levels for
fiscal years 1982 through 1992.
Appendix B describes in detail e ligi­bility
requirements, population charac­teristics,
and expenditure and
participation trends for the Medicaid
Program.
• Federal Housing Assistance Programs
The two major forms of Federal hous­ing
assistance are the Public Housing
Program and the Section 8 Program.
Similar to other assistance
programs, public housing and Section
8 housing assistance are available only
to people with low income. However,
unlike other assistance programs,
housing is not available to everyone
who needs it and is qualified to receive
it. Generally, housing authorities main­tain
waiting lists of eligible applicants
and in some of the larger urban areas,
the waits can be 4 to 6 years long. Exhib·
it 10 contains a more detailed descrip­tion
of eligibility criteria for housing
assistance programs.
EXHIBIT 7
MEDICAID PROGRAM
TOTAl PROGRAM PARTICIPATION
82 83 84 85 86 87
More than 5 million families partici­pated
in housing assistance programs
during fiscal year 1992. Exhibit 8 pro­vides
participation information for
housing assistance programs for fiscal
years 1982 through 1992.
Housing assistance programs are
financed by the Federal Government
through HUD, and administered by
local Public Housing Authorities. In
fiscal year 1992 more than $18 billion
was spent on Federal housing assis­tance
programs. Exhibit 9 illustrates
expenditure patterns for housing assis­tance
since fiscal1982.
• The Public Housing Program
The Public Housing Program was cre­ated
under the U.S. Housing Act of
1937 to provide adequate "temporary
shelter" in a decent environment to
families who could not afford housing
on the private market. For many fami­lies,
however, the transition from pub­lic
to private housing is met with a
myriad of difficulties and therefore it is
not uncommon to find third- and
fourth-generation families residing in
public housing.
Over its 56-year history, the Public
88 89 90 91 92
FISCAl YEARS 1982· 1992
4
Housing Program has been the
Nation's largest assisted housing pro­gram.
As ofjanuary 1993, more than 1
million families lived in public housing
EXHIBIT 8
HOUSING ASSISTANCE PROGRAMS
TOTAL PROGRAM PARTICIPATION
HOUSEHOLDS IN MILLIONS
82 83 84 85 86 87
around the country.
Eligibility is based on income and
family composition. More detail on
eligibility criteria is located at Exhibit 10.
5.5 5.5
88 89 90 91 92
FISCAL YEARS 1982· 1992
EXHIBIT 9
HOUSING ASSISTANCE PROGRAMS
TOTAL PROGRAM EXPENDITURES*
82 83 84 85 86 87 88 89 90
FISCAL YEARS 1982· 1992
*INCLUDES HUD PROGRAMS AND FARMERS HOME ADMINISTRATION PROGRAM FOR RENTERS.
91 92
11
AFDC
• Eligibility is determined on the basis of the family's circum·
stances in the current month.
• Needy children to age 18 deprived of parental support or
care because their father or mother is absent from the home
continuously, is incapacitated, is deceased or is unemployed
(AFDC-UP). Eligibility for AFDC·UP is limited to families who
are needy because of the unemployment of the principal
earner who has a work history.
• Certain other family members in the household of such a child
and, at state option, others who are deemed essential to the
child's well being.
• The State may opt to provide benefits to age 19 if the child is
a full-time student in a secondary or technical school and can
be reasonably expected to complete the program before
reaching age 19.
• Strikers are ineligible for any month if they are striking on the
last day of that month. If the striker is a relative-caretaker, the
whole family is ineligible.
• Eligible aliens are specifically defined. SAVE procedures are
used to determine alien eligibility.
• Women with no children who are medically verified as preg·
nant may receive benefits beginning in the sixth month of
their pregnancy.
• SSI recipients are excluded from the AFDC unit.
• As a condition of AFDC eligibility, a child's right to support
payments from an absent parent is assigned to the State child
support agency, which uses such payments to reimburse the
State AFDC Program. If the monthly child support payment
exceeds the AFDC benefit, eligibility for AFDC is lost and the
right to support payments reverts back to the child.
• AFDC recipients are automatically eligible for Medicaid and
free school meals.
• Individuals who lose AFDC eligibility due to increased earn·
ings, increased hours of work, or loss of income disregard
are eligible for up to 12 months of transitional child care and
medical assistance. Coverage may be extended for an addi­tional
6 months.
• AFDC recipients are required to participate in a State JOBS
program, subject to specific exemptions.
12
FOOD STAMPS
• Households that meet financial, employment/training-related,
and categorical tests for eligibility; and
• College students, if they are supporting dependents under the
age of six, receiving AFDC, elderly or disabled, or working at
least 20 hours per week {or under a Federal work-study pro·
gram).
• Most AFDC, SSI and general assistance recipients are auto·
matically eligible.
• SSI recipients in California are ineligible. Their SSI grants
include an additional amount designated as food stamp
benefit.
• Persons on strike are eligible only if they were eligible before
the strike. Benefits cannot be increased based on a reduction
in income caused by the strike.
• Eligible aliens are specifically defined . SAVE procedures are
used to determine alien eligibility.
• Individuals living in institutional settings are ineligible.
• AFDC families with a 1 00% overlap between the family unit
and the food stamp household unit are categorically eligible
for food stamps.
HUD-SPONSORED HOUSING
• All lower income households.
• The number of families that may be assisted at any one time
is limited by appropriation . Therefore, families are served on
a first-come, first-served basis, after Federal and local prefer­ences
are taken into account.
• Participation by single persons who are not elderly, handi­capped
or disabled requires HUD approval and is limited to
15% of the units within the jurisdiction of the local PHA.
MEDICAID
Categorically Needy
• AFDC and SSI recipients, as well as other AFDC-related
groups who do not actually receive cash payments, are auto­matically
eligible in most States.
• 209(b) States limit their Medicaid coverage of SSI recipients
by requiring that they meet certain more restrictive criteria
that was in place before SSI was implemented in 1972. Also:
• Pregnant women and children up to age 6 with family income
below 133% of Federal poverty level;
• All children under age 19 who were born after September
30, 1983 in families with incomes at or below 100% of Fed­eral
poverty level. This phases in coverage for all eligible
children up to age 19 by the year 2002;
Infants born to Medicaid-eligible pregnant women;
• Additional groups of aged, blind, or disabled persons if they
meet requisite criteria for SSI;
• Certain Medicare beneficiaries; and
• Protected groups (individuals who lose cash assistance
because of program rules, but may keep Medicaid for a
period of time).
Optional Categorically Needy
Medicaid coverage is optional for other categorically needy
groups who share characteristics of mandatory groups, but have
more liberally defined eligibility criteria. They include:
• Pregnant women and infants under age 1 with incomes
above 133% of Federal poverty level but below State-estab­lished
maximum;
• "Ribicoff Children" -children younger than age 21 who meet
AFDC income and resource requirements but not the defini­tion
of dependent child; and
• Those not receiving SSI but are receiving State-only supple­mentary
cash payments.
Medically needy {Optional for States)
• Persons who do not meet income or resource standards. This
must include children younger than 18 and pregnant women
not categorically needy, and may include others {e.g., aged,
blind, disabled persons).
• As of 10/91, 41 States have medically needy programs.
Two States exclude aged, blind, disabled.
• The medically needy are subject to means testing.
13
AFDC
• $1 ,000 equity value limitation per family (or lower amount
determined by the State).
• The resources and income of an alien's sponsor are deemed
available to the household for 3 years following alien's entry
into the U.S.
Excludable Resources
• Home owned and occupied by the AFDC family;
• One automobile if the family member's ownership interest
doesn't exceed $1,500 (or a lower amount set by the State);
• One burial plot per family member and funeral agreements
with maximum equity value of $1,500 for family members;
• Basic items essential to daily living; and
• For 6 months (9 months at State option) real property which
the family is making good-faith effort to sell, under specific
conditions.
Other Resources Excluded by Federal Statute
• Resources that are jointly owned and inaccessible, as deter­mined
by State law.
14
FOOD STAMPS
• Resource limit for a household with an elderly member is
$3,000. Otherwise the limit is $2,000.
• Counted liquid assets include cash on hand, checking and
savings accounts, savings certificates, stocks and bonds, IRAs,
funds in Keogh plans, and non-recurring lump-sum payments
such as insurance settlements. Also counted is the fair market
value in excess of $4,500 for vehicles and the equity value of
property not producing income consistent with its value (recre­ational
property).
• The resources and income of an alien's sponsor are deemed
available to the household for 3 years following alien's entry
into the U.S.
Excludable Resources
• Household's home and surrounding property;
• Household goods;
• Property, work related equipment, or installment contracts that
produce income or is the essential employment of household
members;
• Government disaster payments designated for the restoration
of a home;
• Cash value of life insurance policies;
• Resources, such as trust funds or security deposits, that are not
accessible to household;
• Personal effects, including one burial space per household
member; and
• Other resources expressly excluded by Federal statute.
• The value of a vehicle is excluded if it is used to produce
income, is necessary for employment, is used to transport a
disabled household member or if its fair market value is less
than $4,500. If the equity value of any vehicle (other than the
household's only vehicle and any vehicle used for getting to
work) is greater than the fair market value in excess of
$4,500, the equity value is counted towards the $2,000 (or
$3,000) overall resource limit.
Resources Prorated as Income
• Indian lands held jointly with the tribe;
.• Certain energy assistance payments;
• Property related to the maintenance of a vehicle; and
• Resources of any household member receiving AFDC or SSI.
HUD-SPONSORED HOUSING
There is no explicit limit on resources. If net family assets
exceed $5,000, the greater of the actual income from assets
or an amount equal to the value of the assets multiplied by the
passbook savings rate is counted as income.
MEDICAID
• Resource limits are the same as SSI in non-209(b) States.
• 209(b) States use selected more restrictive criteria that were in
effect before SSI was implemented.
• Resource standards for the medically needy are set by the
State.
• A State's definition of countable resources must be:
- reasonable;
- based on family size; and
- uniform for all individuals in a group.
• States may be more liberal with Medicaid than with SSI.
Resource Limit for 551 and Medicaid
• $2,000 for individual, $3,000 for couple. {No annual infla­tion
adjustment). Levels may be the same or higher in States
providing supplemental payments.
• Qualified Medicare Beneficiaries (QMB's) resource limits are
twice SSI's $4,000 for individuals, $6,000 for couples.
Excludable Resources
• Individual's home, if he/ she is living in it or intends to return
to it;
• Household goods and personal items up to $2,000;
• A car;
• Burial account up to $1 ,500;
• Burial space.
15
AFDC
• All income is counted except when specifically excluded by
statute or regulation.
• Income of certain persons who are not in the assistance unit
must be deemed to the assistance unit. Income of a stepparent
must be counted in determining eligibility and payment
amounts.
• 'The AFDC assistance unit also includes the parent(s} of a
dependent child and any dependent siblings who are in the
home (SSI recipients and children receiving foster care pay­ments
or adoption assistance are not included in this require­ment}.
• If a minor who is living in the same home as his/her parents
applies for aid as the parent of a needy child, a portion of the
income of the minor's parents is to be counted as available to
the filing unit.
• Total income cannot exceed 185% of the State's need stan­dard
for the relevant family size.
• Countable income must not exceed 1 00% of the State need
standard. Approximately 37 States pay less than the amount
of their need standard - and use several methods to limit the
amount of the payment. An AFDC payment cannot be less
than $10. Families that do not meet the minimum payment
rule are treated as AFDC recipients and receive Medicaid
benefits.
• The State may disregard need-based assistance received
through other programs (most States do}.
• Earned income in-kind is counted .
• Unearned in-kind income may be disregarded at State
option.
Earned Income Exclusions
• Income of an AFDC dependent child who is a full-time stu­dent,
or a part-time student but not employed full-time is
excluded.
• States may, for up to 6 months, disregard all or part of
income of a child applying for AFDC, if earnings are exclud­ed
for the month in determining the family's total income
pursuant to the 185% gross income eligibility test. Income
from JTPA programs by a dependent child applying for AFDC
may also be disregarded.
• Earned income disregards are applied to earnings of individ­ual,
not the family.
16
FOOD STAMPS
• Except for households composed entirely of SSI, AFDC, or
general assistance, monthly cash income is the primary eligi­bility
determinant.
• Household, rather than individual, income is considered .
• Households without elderly or disabled members must have
monthly gross income of less than or equal to 130% of the
Federal poverty income guidelines.
• Only net income is considered for households with an elderly
or disabled member. An elderly or disabled member is one
who is 60 years old or older or receives one of several dis­ability
payments including SSI, Social Security, Railroad
Retirement, government disability retirement benefits, and
certain Veteran's Administration payments.
• All households must have a monthly net income of less than or
equal to 100% of the Federal poverty guidelines.
• Income limits vary by household size and are adjusted each
October to reflect changes in the cost of living.
Gross income includes all of a household's cash income,
except the following:
Excludable Income
• In -kind benefits;
• Unanticipated or irregular income (not greater than $30 per
quarter};
• Scholarships, grants, loans, non-recurring lump-sum payments
(counted instead as liquid assets};
• Loans (except student loans}on which payment is deferred;
• Earned income of students under age 18;
• Cost of producing self-employment income;
• Certain energy assistance payments;
• Federal Earned Income Tax Credits;
• "On-the-job" training earnings of dependent children under
age 19 in JTPA, as well as JTPA monthly allowances and all
unearned JTPA payments;
• Income received from the care of someone outside the house­hold;
• Reimbursements for certain expenses;
• Most payments made to third parties (rather than directly to
the household;
HUD-SPONSORED HOUSING
• Housing is targeted to "lower income" families- with antici­pated
annual family incomes of not greater than 80% of medi­an
income in an area and "very low income" families- with
incomes not greater than 50% of median area income.
• Income eligibility is based upon family size and area median
income guidelines as determined by HUD.
• Where decent, safe and sanitary housing is not provided in
Indian land areas, the Indian Housing Authority may request
HUD to increase income limits for Indian families and individ­uals.
• Eligibility and rental charges are based on countable family
income expected in the 12 months following admission or
reexamination . Reexamination is required annually
Countable income includes cash income from all sources,
including income from assets.
Excludable Income
• Payments under the Domestic Volunteer Service Act;
• Irregular gifts;
• Reimbursements for medical expenses;
• Lump-sum additions to family assets;
• Scholarships;
• Earnings of children;
• Payments for care of foster children;
• Relocation payments;
• Low-income Home Energy Assistance;
• JTPA benefits;
• Interest in Indian trust lands;
• Earned income tax credit; and
• Hazardous-duty pay.
Deductions
• $400/year for elderly families plus medical expenses in
excess of 3% of income;
• $480/year for each household member younger than 18, 18
or older and disabled, or a full -time student;
• Child care expenses up to the amount of the resulting earned
income; and
• The higher of child care and travel expenses up to $25 per
family per week (for Indian Housing only).
MEDICAID
• Includes earned (cash or in-kind) and unearned income
(SS or VA benefits).
• Medically needy income limits cannot exceed 1331 /3% of
the maximum State AFDC payment made to a family of
the same size with no income.
• If income is above the limit, the individual or family may
still be eligible through a spend-down provision - where
they may deduct any medical expenses incurred over a
period of 1 to 6 months from income. When net income
falls below the income limit after medical expenses are
deducted, the family or individual becomes eligible.
• Income limit for nursing home and waiver populations can
be increased up to 300% of maximum SSI payment level.
• For Qualified Medicaid Beneficiaries (QMB), 1991 eligibility
set at 1 00% of Federal poverty level.
Countable Income
• Is the same as countable income under AFDC for individu­als
under age 21 who are not disabled or blind and care­taker
relatives;
• Is the same as countable income under SSI for aged,
blind, or disabled individuals in States covering all SSI
recipients;
• 209(b) States can use more restrictive income criteria but
are required to have a spend down provision;
• The State may be more liberal than the above descrip­tions.
Countable Income Under SSI (and Medicaid)
• Includes cash, other liquid assets, and non-liquid assets;
and
• Eligible spouse's resources, except when couple is sepa­rated.
Excludable lncome!SSI
• $20/month;
• First $65 of earned income;
• 1/2 of remaining income;
• $1,500 of life insurance proceeds;
• Cash payments for medical or other social services;
• Housing assistance under most HUD-assisted programs;
17
AFDC
• Standard $90 for work-related expenses;
• $30 and 1/3 of remaining earned income during the first 4
consecutive months of earnings - $30 deduction available for
8 more consecutive months;
• $175/month per child for dependent care expenses ($200
under age 2) or incapacitated adult;
Excluded Unearned Income
• First $50 of monthly child support payments;
• Educational grants and loans;
• Value of Child Nutrition and Dept of Agriculture benefits;
• Payments to VISTA workers and some Indian tribes;
• Payments made to AFDC children from State-only funds under
a State program in effect since before January 1, 1979;
• Reimbursements for expenses made to volunteer foster grand-parents,
senior health aides, or senior companions; and
• Agent Orange settlement payments;
• Earned Income Tax Credit payments;
• Income tax refunds;
• LIHEAP payments;
• Small non-recurring gifts not to exceed $30 per individual in
any quarter (at State option);
• Governmental housing subsidies {at State option);
• Bona fide loans at State option;
• Major disaster assistance; and
• All other payments that are required by Federal statute to be
excluded under Federal or Federally assisted means tested
programs.
18
FOOD STAMPS
• Cash donations not to exceed $300 from private nonprofit
charities;
• Employment and training-related payments; and
• Certain foster care payments.
• At State option and cost, the amount of child support pay­ments
excluded under AFDC may also be excluded for food
stamps.
• Counted {or net) monthly income is computed by subtracting
certain deductions from household's gross income. It recog­nizes
that not all of a household's income is equally available
for food purchases by disregarding a standard portion of
income, plus amounts which represent work expenses or
excessively high non-food living expenses.
Deductions lrom Income
• An inflation-indexed standard deduction of $122/month (in
1992), regardless of household size;
• 20% of any earned income;
• Up to $160/month for dependent care;
• Medical deduction for households with elderly or disabled
members equal to monthly medical expenses above $35; and
• Shelter costs exceeding 50% of counted household income
after all other deductions, up to a ceiling of $194/month in
1992 {no limit for elderly or disabled households. Households
without elderly or disabled members have a ceiling).
HUD-SPONSORED HOUSING MEDICAID
• LIHEAP payments;
• Infrequent or irregular earned or unearned income (less
than $1 0 or $20/month, respectively); and
• Receipts from reverse mortgages if spent in month
received.
19
What are your frustrations with the
welfare system?
"It seems that clients who try
to work and make it, get punished
by losing their food stamps,
Medicaid, etc."
20
- A Public Assistance Recipient
Kansas City, KS in response to
a survey about welfare
15
10
• The Section 8 Housing Program
The Section 8 Housing Program is
made up of the rental certificate and
rental voucher programs. The rental
certificate program was enacted by
Congress in the Housing and Commu­nity
Development Act of 1974. It repre­sented
a shift in Federal housing policy
from direct Federal financing for Pub­lic
Housing Authority-owned public
housing and placed emphasis on the
private rental market to supply decent,
safe, and sanitary housing.
The rental voucher program was
authorized as a demonstration pro­gram
under the Housing and Urban­Rural
Recovery Act of 1983. It was
viewed as an improvement over the
rental certificate program to more
closely reflect actual private rental
market operation. In 1988, legislation
was enacted to make rental vouchers a
permanent part of the Nation's hous-.
ing policy. As of january 1993, approxi­mately
1 million families participated
in the Section 8 Program.
EXHIBIT 11
The Cost of Administering
the Programs
The Committee believes that the costs
incurred in administering public assis­tance
programs cou"Id be lowered dra­matically
by consolidating or
coordinating program requirements.
When a person in need has to be inter­viewed
by the eligibility workers of
different programs, at different times,
providing much the same information
to each, it wastes the time of both the
caseworker and the client.
• AFDC Program
The Federal Government matches
most State expenditures for operating
the AFDC Program at a rate of 50 per­cent,
regardless of the amount the
States spend.
Since fiscal year 1983, annual oper­ating
expenditures for AFDC have
averaged $2.1 billion. In 1992, States
and the Federal Government spent
$2.6 billion (12 percent of total expen­ditures)
to administer $21.9 billion in
AFDC grant payments. Exhibit 11
TOTAL MAINTENANCE ASSISTANCE PAYMENTS AND TOTAL ADMINISTRATIVE COSTS
FISCAL YEARS 1983 · 1992
• ADM. COSTS • MAIN. ASSIST. PAYMENTS
20
15
10
depicts annual operating expenditures
as compared to overall expenditures
for fiscal years 1982 through 1992.
• Food Stamp Program
States (and counties in 10 States) and
the Federal Government share equally
in the cost of administering the Food
Stamp Program.
Administrative expenditures for the
Food Stamp Program have averaged
around $1 billion annually since fiscal
year 1983, approximately 7.5 percent
of total program expenditures. Exhibit
12 illustrates annual program adminis­trative
expenditures in contrast to total
annual expenditures.
The Federal Government spent
approximately $1.4 billion (7 percent
of total expenditures) in 1992 to
administer $20.9 billion in food stamp
benefits.
• Medicaid Program
States and the Federal Government
share in the cost of administering the
Medicaid Program.
EXHIBIT 12
FOOD STAMP PROGRAM
FEDERAL SHARE ADMINISTRATIVE AND TOTAL EXPENDITURES
83 84 85 86 87
In 1992, States and the Federal Gov­ernment
spent $4.28 billion (3.5 per­cent
of total outlays) of the program's
total $120 billion on program adminis­tration.
Annual administrative expenditures
for the Medicaid Program have grown
by more than $2.4 billion since fiscal
year 1984 to an average of $309 million
a year. Since 1984, Federal contribu­tions
to administrative costs have aver­aged
$1.6 billion; State contributions
averaged $1.2 billion. Exhibit 13 illus­trates
total annual State- and Federal­share
administrative expenditures for
the Medicaid Program.
Exhibit 14 compares total program
expenditures for each of the 4 pro­grams
for fiscal years 1982-1992.
Exhibit 15 depicts participation
trends for each program from fiscal
years 1982-1992.
88 89 90 91 92
FISCAL YEARS 1983 - 1992
• ADM. COSTS • TOTAL COSTS
*INCLUDES FEDERAL SHARE ONLY. STATES MATCH ADMINISTRATIVE COSTS AT 50%.
21
EXHIBIT 13
MEDICAID ADMINISTRATIVE EXPENDITURES
4
0
84 85 86 87 88 89 90 91 92
FISCAl YEARS 1984 - 1992
• STATE SHARE • FEDERAl SHARE
EXHIBIT 14
TOTAL PROGRAM EXPENDITURES
82 83 84 85 86 87 88 89 90 91 92
FISCAl YEARS 1982- 1992
HOUSING PROGRAMS • FOOD STAMPS* • AFDC
*EXClUDES NATIONAl lEVEl ANNUAl COSTS FOR PRINTING OF COUPONS, STUDIES, AND SURVEY COSTS
22
"The hurdles which families have to
scale in applying for help are iust
immense. They often must travel to
different agencies, meet different
eligibility standards, and abide by
different rules and regulations."
- Representative
Bill Emerson, MO
Hearing before the
Select Committee on Hunger
U.S. House of Representatives
April 23, 1991
25
20
15
10
0
EXHIBIT 15
TOTAL PROGRAM PARTICIPATION
82 83 84 85 86 87 88 89 90 91 92
FISCAL YEARS 1982- 1992
HOUSING PROGRAMS** • AFDC* • FOOD STAMPS* • MEDICAID*
Multiple Program
Participation
* RECIPIENTS
Most people who receive needs-based
benefits receive assistance from more
than one program. The chart below
shows the percentage of persons in
each of the four major assistance pro­grams
that receive benefits from multi­ple
programs.
Participation in AFDC, Medicaid,
and the Food Stamp Program is clus­tered
tightly:
• Everyone who receives AFDC is
eligible for Medicaid;
• Nine out of 10 AFDC recipients
receive food stamps;
• Two out of three Medicaid recipi­ents
receive food stamps;
• Three out of four food stamp recipi­ents
receive Medicaid; and
• One-fourth of those receiving AFDC
also receive housing assistance.
** HOUSEHOLDS
The relationship between housing
assistance and the other programs is
not as apparent. About half of all
households that receive housing assis­tance
also receive Medicaid; about half
receive food stamps and one-third
receive AFDC.
Mathematica Policy Research• exam­ined
the participation of low-income
households in 17 different programs
using the 1984 Survey of Income and
~rogram Participation. Among the find­mgs
were:
• Households of different types varied
in their receipt of multiple benefits.
While most low-income households
(those with gross incomes below 130
percent of the poverty line) partici­pated
in at least one program, about
one in four households did not
participate in any program. These
households tended to be intact fam­ilies
with children.
4. Spha
1
ronRLong, Multiple Program Participation Among Food Stamp Recipients, (Washington DC: Mathematica
o 1cy esearch, February 1988). '
23
24
MULTIPLE PROGRAM PARTICIPATION
JANUARY 1991
PERCENT OF INDIVIDUALS WHO RECEIVE:
AND THOSE WHO
RECEIVE: ASSISTED
FOOD STAMPS AFDC MEDICAID HOUSING
FOOD STAMPS 100 90 65 51
AFDC 50 100 49 35
MEDICAID 74 100 100 53
ASSISTED 30 24 27 100
HOUSING
TOTAL PERSONS 18,143 10,018 20,481 (IN THOUSANDS) 10,505
Source: Survey of Income and Program Participation (SIPP), Wave 4 of the 1990 Panel.
Notes: SIPP is a household survey that re lies on self-reported participation in programs. As such,
benefit receipt is underreported.
Percents do not sum to 100 percent due to multiple program receipt by individuals.
• Multiple program participation is
much more frequent among food
stamp households than among the
general low-income population.
• Non-food stamp nutrition programs
were among the most frequently
used benefit programs for both food
stamp households and the general
low-income population.
• The three multiple benefit combi­nations
most frequently used by
food stamp recipient households all
include AFDC and Medicaid.
Female-headed families with chil­dren
are the typical recipients of
this package.
• Multiple benefit receipt by food
stamp households is very effective in
reducing the poverty gap for those
households.
• The extent to which the needs of
different types of households are
met by the available assistance pro­grams
varies substantially. •
Previous Attempts at
Coordination and
Simplification
The need for program coordination
and simplification was recognized
decades ago. Numerous attempts have
been made since the late 1960's to
overhaul or repair a system that
seemed to be rapidly careening out of
control. From our perspective in 1993,
we can look back and see that the sys­tem,
or collage of programs serving the
needy, has become an unwieldy mon­ster.
More significantly, we can see that
without dramatic change it is almost
certain that reports such as this one
will continue to be presented to Con­gress
long into the future.
Since the early cries of alarm some
progress has been made in bringing
assistance programs into closer confor­mance
with one another and in
improving access to them (see chapter
V). To a far greater extent, however,
differences, both large and small, have
thrust the programs into their own
individual orbits-connecting, at the
Federal level, only when there was a
specific legislative mandate to do so.
Twenty-two years ago, Elliot
Richardson, former Secretary of what
was then the Department of Health,
Education, and Welfare (HEW) recog­nized
that most programs were suffer­ing
from a "hardening of the
categories."
In 1977 former HEW Secretary
Joseph Califano made a similar obser­vation:
"Given the vast resources this
Nation spends on income assistance, it
is appalling that our programs are so
poorly coordinated, that these pro­grams
unfairly exclude millions from
adequate aid ... and that they are an
administrative jungle, incomprehensi­ble
to legislators, administrators, and
the American people alike."
It is clear that ample attention has
been devoted to analyzing the dynam­ics
of program interactions. Inconsis­tencies,
duplication, barriers to
participation, and other problems have
been identified over and over again.
This Committee does not intend to
repeat this process but, rather, has
chosen to review the studies and
reports, and learn from them. As a
precursor to its work, the Committee
felt it imperative to review these efforts
and their fates.
• One of the earlier attempts to
reform the system was the Family Assis­tance
Plan (FAP). Initially introduced
in 1969 and again in 1971, this legisla­tion
included universal coverage and a
significant work component. This mea­sure
was proposed by the Administra­tion
of President Richard Nixon, who
believed that, "Hard work is what made
America great" and that any work was
preferable to public assistance. A
report released by the House Ways and
Means Committee explained the moti­vation
of the bill's supporters in the
Congress. The Committee reported it
believed "that the American people do
not want a system which results in pro­moting
welfare as a way of life." As a
result, it "developed a program which
is in the interest of the taxpayer as well
as the needy."
Under FAP, a minimum income
($2,400 for a family offour in 1970)
would have been established. It includ­ed
a provision for assistance to the
working poor with the proviso that
employable parents, including moth­ers,
work. Families exempt from work
and the training provision would get
the same amount under FAP, except
that persons considered eligible for
rehabilitation would be referred to
State vocational rehabilitation agencies
and receive $30 per month as an
incentive allowance and for expenses.
Benefits would be reduced if they
failed to comply.
Drafters of the bill recognized the
lack of child care would be an obstacle
for mothers to work. Therefore, fund­ing
was included for child care facili­ties
and services. The bill increased
funding to enforce child support col­lections
and called for Federal family
planning services.
It included no provision for cost-of­living
increases and there was no
requirement that States pay supple­mentary
assistance. Also, States would
not have to pay more for Medicaid
than they paid in 1971. Consequently,
some recipients of aid would stand to
lose under FAP.
25
"We have tinkered on the edges of
this nonsystem-we've tried to deal
with individual parts of it over the
past 1 0 or 15 years-and it has
only gotten worse. If you only take
on one piece of it at a time without
creating the environment for sys-fernie
change, you're likely to have
unintended consequences that make
the problem even worse."
26
- Hillary Radham Clinton
on health care reform
• In December of 1973 the staff of the
Joint Economic Committee, chaired by
Congresswoman Martha Griffiths,
undertook an extensive study of the
public assistance system. It resulted in
20 volumes addressing a variety of
aspects of the system, including coordi­nation
issues.
• The Allied Services Act was a pro­posal
put forth as legislation in 197 4
and again in 1975, but never enacted.
The bill would have authorized
demonstration grants to States and
through States to localities, to develop
"allied services plans" providing for
the coordinated delivery of human
services.
Special implementation grants
would have been available to assist in
covering the initial costs of consolidat­ing
administrative support services and
management functions. The Act would
have permitted States to transfer funds
from one program to another for simi­lar
uses. Administrative and technical
barriers between programs could have
been waived by the Secretary of HEW
when they impeded coordinated deliv­ery
of services.
• Former President jimmy Carter was
so impressed with the need for a more
efficient, effective public assistance
system he made it a key theme of his
1976 campaign:
We should have a simpler national public
welfare program, with one fairly uniform
standard of payment, adjusted to the extent
feasible for cost-ofliving differences by areas
and with strong work incentives built in ....
On january 25, 1977, at one of his
first press conferences, the new Presi­dent
announced that joseph Califano,
his selection for Secretary of HEW,
would present him with a comprehen­sive
plan to reform the public assis­tance
system by May 1 of that year.
With this extremely tight timeframe
Secretary Califano launched a major
effort to identify problems with the
Nation's income assistance programs
and recommend solutions.
A 32-member consulting group
consisting of representatives of the
Congress, executive branch agencies,
State and local government officials,
public assistance recipients, and public
interest organizations was appointed.
The group conducted weekly public
meetings to consider the public assis­tance
system. Attendance ranged
between 100 and 200 each week. Opin­ions
were solicited from every governor
and Member of Congress and more
than 200 State and local government
officials and experts in social welfare.
More than 10,000 newspapers, radio
and television stations, journals, and
magazines were contacted. One hun­dred
forty-five meetings were held,
including 70 open town meetings.
More than 15,000 individuals or orga­nizations
offered input.
The findings? In his report to the
President, Secretary Califano wrote
that:
One central conclusion emerges from our
work to date: The welter of programs that
are collected under the rubric of the 'welfare
system' must be scrapped. Major structural
reform of our income assistance programs
for the poor is necessary if we are to encour­age
work wherever possible, provide basic
income protection for those who are unable
to provide for themselves, provide incentives
for keeping the family together, and simplify
and make more efficient the basic adminis­trative
structure.
In his recommendations the Secre­tary
wrote,
My basic recommendation ... is that tinker­ing
with the present system-trying to make
incremental changes in the existing hodge­podge
of income assistance programs-is
not the proper course to follow. We must,
instead, view the income assistance system
as a whole and we must completely restruc­ture
the system so that it is comprehensive,
fair, and efficient. Given the inequities and
administrative chaos caused by a welter of
inconsistent and confusing programs, noth­ing
less than a total effort at welfare reform
will do.
Guidelines for a legislative proposal
included a consolidated cash assistance
component that would encompass
AFDC, Supplemental Security Income
(SSI) benefits, and food stamps. "Such
a consolidated cash assistance program
would reduce leakage, simplify existing
administrative structures, and make
income assistance more understand­able
to officials and recipients alike."
• In December 1978, President Carter
called for an interagency effort to ana­lyze
and recommend improvements in
the eligibility requirements and admin­istrative
procedures of Federal public
assistance programs. The programs
under review included AFDC, SSI,
food stamps, Medicaid, Title XX,
Section 8 Housing, and the Compre­hensive
Employment and Training
Administration.
President Carter's hope was that the
review would "produce recommenda­tions
which will lead to more consis­tent
and less burdensome
government-wide practices to make the
eligibility determination process sim­ple,
understandable, and efficient.. .. "
The Eligibility Simplification Project
Steering Group was comprised of assis­tant
secretaries directed by the Secre­tary
of HEW and the Director of the
Office of Management and Budget.
The scope of the project was limited
in two ways. First, the team analyzed
only the factors in each program that
affected financial eligibility require­ments
and procedures, not those relat­ed
to the amount of benefits or
services the programs would provide.
Second, analyses were limited to Feder­al
requirements, not those imposed by
State or local governments.
The project involved an exhaustive
study of all eligibility requirements and
procedures governing eligibility deter­mination
in the seven programs.
Requirements were broken down to
the smallest possible units of analysis to
facilitate cross-program reviews. For
example, 130 discrete elements of
income were identified.
Options to standardize or eliminate
requirements were evaluated against
this set of criteria:
• impact on program purpose;
• program and administrative costs;
• responsiveness to clients; and
• potential for reducing waste, lower­ing
error rates, and improving
understanding.
In October 1980 a final version of
the report was published, including
recommendations for specific changes
which would "reduce the conflicting
and unnecessarily burdensome and
duplicative eligibility requirements .... "
Because of the change in Administra­tions
the next year, the recommenda­tions
were not championed and most
were never adopted.
• State and local human service com­missioners,
brought together by APWA
completed work on their Matter of
Commitment Project in 1986. The
commissioners conducted a compre­hensive
review of public assistance
programs to find ways to transform
that system into a means of achieving
self-sufficiency. Recommendations in
the project's report, One Child in Four,
emphasized the need to change assis­tance
programs into vehicles for self­sufficiency
for as many recipients as
possible. The report called for a set of
mutual obligations between public
assistance agencies and clients, oppor­tunities
and incentives for education
and job training, and a realistic base of
income support. Many of the princi­ples
in the report were reflected in the
Family Support Act of 1988, sponsored
by Senator Daniel Patrick Moynihan.
The Commissioners also recom­mended
establishing a Family Living
Standard (FLS)-a nationally mandat­ed,
State-specific cash grant that would
take the place of AFDC, food stamps,
and Low-Income Home Energy Assis­tance
Program payments. While the
Family Support Act did not include the
FLS, it did require a study of this and
alternative benefit formulas by the
National Academy of Sciences. This
study is now in progress.
• In his 1986 State of the Union
Address, President Ronald Reagan
directed the White House Domestic
Policy Council to study the public assis-
27
28
tance system and to propose a strategy
to change the system so that it would
better serve the poor. In response to
this charge, the Council's Low Income
Opportunity Working Group made an
extensive year-long study of public
assistance and poverty in the Nation.
The Working Group, comprised of
officials from Federal agencies that
manage public assistance programs
and led by the White House Office of
Policy Development, consulted current
and former public assistance recipi­ents,
eligibility workers, local political
leaders, and many of the Nation's gov­ernors.
The result of its work was a
series of reports entitled Up From
Dependency: A New National Public Assis­tance
Strategy.
The group looked at public assis­tance
as a recipient would, as a system
rather than as a series of unconnected
programs. It felt that the weaknesses
that characterize a centralized
system-rulemaking from the top
down, failure to develop individual
potential, and failure to utilize local
resources-contribute to the persis­tence
of poverty.
The group held that national solu­tions
to dealing with poverty have
failed and that the only answer is to
find solutions in our neighborhoods,
communities, and States. It recom­mended
using the States as laborato-ries
to experiment with reforms on a
small scale, before proposing systemic
change at the national level.
The cornerstone of the Up From
Dependency recommendations is long­term
experimentation through demon­strations
that are both
community-based and State-sponsored.
The Federal Government would articu­late
policy goals and define parameters
for any reform experiment and main­tain
current levels of financing. Recog­nizing
the extensive amount of
experimentation already proceeding in
States and communities, the group
cautioned against proposing "national"
welfare reforms unless they had been
locally tested.
The Interagency Low Income
Opportunity Advisory Board was
formed by the White House in 1986 to
enhance coordination of public assis­tance
programs and policies across
Departmental lines and create a focal
point for intergovernmental coordina­tion
of public assistance initiatives.
• When the National Commission on
Employment Policy undertook a "coor­dination
project" to review the interac­tion
of public employment programs,
it discovered that interaction was ham­pered
by the lack of coordination of
public assistance programs in general.
The target of review was broadened, to
encompass all needs-based programs.
"Administrative convenience must no
longer govern service delivery.
Health, social service and education
providers must modify 'business as
usual' to collaboratively meet the
needs of individual adolescents and
their families. "
- National Commission on the
Role of the School and the
Community in Improving
Adolescent Health, Code Blue:
Uniting for Healthier Youth
National Association of State
Boards of Education, 1990
At a series of seminars during the
spring and summer of 1991, the Com­mission
heard from almost 200 people
involved at all levels of the public assis­tance
system. The Commission also
engaged in extensive information col­lection
and analysis.
In October 1991 the Commission
sent its recommendations to the Presi­dent
and Congress. Recommendations
to the President included:
• expand authority of the Economic
Empowerment Task Force to resolve
problems affecting design and
implementation of Federal assis­tance
programs;
• direct the agencies that administer
public assistance programs to devel­op
a common framework for
streamlining eligibility
requirements, formulating standard
definitions, and easing administra­tive
and documentation require­ments;
and
• combine the many programs that
provide employment and training
services to the economically disad­vantaged
into one agency.
The Commission recommended
that Congress:
• assign responsibility for legislation
and oversight over public assistance
programs to a single Committee on
Public Assistance in each Chamber;
• work with Executive Branch agen­cies
to develop a common frame­work
for streamlining eligibility
requirements, formulating standard
definitions and poverty measures,
and easing administrative and docu­mt;:
ntation requirements;
• enact legislation to establish human
resource councils at the State level
to foster coordinated program
approaches; and
• require that an economic, fiscal,
and institutional analysis be con­ducted
for each congressionally
authored institutional reform or
adjustment in Federal assistance
programs.
Why Have Previous Efforts Failed?
All of the attempts to simplifY and
coordinate the programs have encoun­tered
obstacles. Chief among these
have been differences in the goals of
reform efforts, the cost of program
changes, a reluctance to lower benefits
in one area (even if benefits may
increase in other areas), support for
program differences, and the relatively
low priority given to simplification
issues by the Congress.
• 1. Different Reform Goals
Reform efforts in public assistance
have run the gamut from attempts to
overhaul the entire structure for assist­ing
low-income persons to endeavors
to conform and simplifY program
rules. A consensus has never been
reached on whether the existing set of
programs should be replaced or
retained and improved by making
their rules more consistent and
straightforward. This lack of consensus
has resulted in a diffusion of effort and
attention.
• 2. Budget Impacts
Any change in program eligibility
requirements or benefit levels affects
program costs and the benefit amounts
of individuals. In fiscal year 1991 AFDC
and Food Stamp Program benefit pay­ments
totaled $37.3 billion. Given the
fiscal magnitude of these programs, a
change in program parameters can.
beget significant budgetary
consequences.
For example, raising the AFDC asset
limit from the current $1,000 to the
$2,000 Food Stamp Program limit
would allow more people to get AFDC.
In fiscal year 1992 such a move would
have increased AFDC costs by $135
million (Food Stamp Program costs
would have fallen by $4_9 million
because these people would have had
higher incomes for the purpose of
food stamp benefit determinations). In
addition, since the new AFDC recipi­ents
would be categorically eligible for
Medicaid, costs for that program would
increase. Lowering the Food Stamp
29
"Private values must be at the heart
of public policies."
30
- Former President Ronald Reagan
State of the Union Address
February 4, 1986
Program asset limit to the $1,000
AFDC threshold would save $250 mil­lion
because fewer people would be
eligible.
If AFDC were to adopt the more
liberal Food Stamp Program rules on
counting the value of vehicles in deter­mining
asset eligibility, AFDC costs
would increase by $700 million
because more people would qualify for
assistance (Food Stamp Program costs
would decrease by $200 million, based
on fiscal year 1992 estimates by FNS).
Medicaid costs would also rise with the
increase in the AFDC numbers.
Proposals to consolidate programs
or streamline eligibility determinations
are sometimes crafted to be budget­neutral
by balancing costs and savings.
While this leaves average benefit levels
unchanged, it creates groups of win­ners
and losers.
In the early 1970's, welfare reform
efforts such as President Nixon's pro­posed
Family Assistance Plan focused
on creating a national cash welfare
system with uniform eligibility and
benefit levels. Such proposals would
have established benefit levels higher
than some State AFDC grants and
lower than others. These benefit levels
were opposed by client advocates from
high-grantAFDC States who did not
want to see people get less aid and also
by interest groups from low-grant
AFDC States who did not want to see
more people added to the public assis­tance
rolls. The proposals failed.
In the Food Stamp Act of 1977, the
Congress attempted to simplify the
benefit determination process by
reducing the number of separate
income deductions that eligibility
workers must establish and compute. A
proposal to simplify the process by
replacing the individualized excess
shelter expense deduction with a larg­er
standard deduction for all house­holds
was tabled by legislators from
States with higher housing costs (and
constituents who benefit from the
individualized computation). A similar
proposal submitted by the USDA in
1983 failed, again because a higher
standard deduction-while not chang­ing
average benefitS-would create
winners and losers and there was reluc-tance
to lower benefits for households
with higher shelter cost burdens.
• 3. Financial Choices
Financial resources for these programs
are limited and subject to many com­peting
demands. Congress has not
chosen to invest in changes to better
align the programs. While in recent
years Congress has increased food
stamp benefits, the additional monies
have been targeted at raising allotment
levels rather than achieving program
conformity. Similarly, Congress provid­ed
for more resources in the AFDC
program in the Family Support Act of
1988. Again, monies were targeted
toward priorities such as establishing
the Jobs Opportunities and Basic Skills
Training Program QOBS), providing
for more transitional support for peo­ple
leaving the AFDC rolls, and extend­ing
the AFDC-UP component rather
than at changes aimed at enhancing
conformity. In Medicaid, Congress
recently provided for expanding the
case load by mandating coverage of all
young children from poor families.
Again, Congress chose to increase
funding for the program but did so in
an area that does not conform or sim­plify
the program.
• 4. Congressional Inattention
The lack of funding to support pro­gram
conformity is symptomatic of a
larger problem: conformity issues have
not received legislative attention. Part
of the problem is the split jurisdiction
within the Congress on public assis­tance
issues. No committee is responsi­ble
for aligning programs. Committees
focus on the programs within their
jurisdiction with little awareness of the
collective impact of the individual
pieces of legislation that emerge. It is
much easier to modify existing pro­grams
than to create new ones. For
example, increasing the housing cost
deduction in the Food Stamp Program
has broad support; getting any sort of
entitlement directly as part of a hous­ing
program, however, is very difficult.
Legislative action is often reactive,
depending upon the priorities estab­lished
by new administrations as well as
public opinion. Thus, congressional
I
priorities have shifted back and forth
from increasing client benefits, to pro­gram
accountability, to budget cut­backs,
and once more to program
coordination and simplification.
Another factor contributing to the
lack of attention has been a lack of
vigorous advocacy for conformity
issues.
• 5. Executive Branch Inattention
As in Congress, each major program is
overseen by its own agency and no one
below the Office of the President is
responsible for central oversight.
Although coordination has increased
in recent years, no formal structure
exists for interagency cooperation.
Each agency has its own agenda and at
the top levels of Government there are
higher priorities vying for attention.
• 6. Competing Constituencies
Another factor inhibiting change is
that some different program require­ments
may enjoy strong support from
important constituencies. For example,
the Food Stamp Program requires that
highly needy applicants get benefits
within 5 days and that all applications
be acted on within 30 days. The AFDC
program provides for 45 days for appli­cation
approval, with some exceptions
(e.g., a State invoking presumptive
eligibility provisions for special circum­stances).
The Food Stamp Program
timeframes enjoy strong support
because quick access to food assistance
is seen by many as a fundamental pro­gram
goal. The longer timeframe
allowed for AFDC is supported by State
agencies and their front line workers
because it allows more time to process
the application.
• 7. State/Federal/Local Balance
Programs may differ substantially in
terms of their balance of Federal and
State responsibility. Since 1971 the
Food Stamp Program has emphasized
uniform national standards which have
strong support in many quarters; the
AFDC Program has emphasized more
State latitude. The food stamp benefit
is entirely federally financed and the
expectation is that the Federal Govern-ment
should exert strong control over
its distribution. This control takes two
basic forms: 1) control over the details
of benefit determination; and 2) con­trol
over operations to ensure account­ability.
The AFDC benefit is funded by
both the Federal and State Govern­ments,
and there has been greater
support for allowing State
Governments more control over the
program.
The Food Stamp Program has
detailed Federal requirements for
State application processing. The
AFDC program allows more State
agency flexibility. The 1985 regulatory
proposal to extend similar flexibility to
State agencies in processing food
stamp applications was vehemently
opposed by client advocacy groups and
Members of Congress who saw the
proposal as a dilution of important
procedural protections designed to
safeguard access to food assistance.
Housing aid is 100-percent federally
funded and administered through
local public housing authorities. The
Housing Authorities have some flexi­bility
in how they administer their
programs, but the Federal Govern­ment
establishes parameters.
• 8. Timing
The timing of conformity recommen­dations
may affect their impact. For
example, the interagency task force
established in late 1978 reported in
1980. Shortly thereafter, a new Admin­istration
with a much different per­spective
on public assistance took over
and had no interest in advancing the
recommendations of its predecessors.
Interest in program integration has
been expressed periodically by Mem­bers
of Congress, Federal agencies,
and State agencies but these interests
have never come together at the same
time.
The time for change is NOW. Coor­dination
and simplification of assis­tance
programs has the attention of
the President, the Congress, and the
American people. A new economic
plan and a new system of health care
should go hand-in-hand with a stream­lined
process to aid the needy. •
31
32
"The paperwork is so overwhelming, it
precludes a focus on clients. If ever there
was a system of the 'tail wagging the dog,'
this is it."
- Virginia Mustain, National Eligibility
Workers, Testimony before the
House Agriculture Subcommittee on
Domestic Marketing, Consumer
Relations ond Nutrition
June 23, 1992
Chapter
Simplification and
Coordination Efforts
Currently· in Effect
As discussed in chapter IV, many
efforts to simplifY and coordinate Fed­eral
public assistance programs have
been attempted over the years. Some
progress has been made to bring the
programs into closer conformity. For
example, automatic eligibility forMed­icaid
for all AFDC clients eliminates a
second application and the associated
processing activities for intake in the
Medicaid program.
Efforts by the four programs
reviewed in this report have resulted in
demonstrations and policies designed
to ease the burden on clients and
administrators alike. Some examples
are highlighted in this chapter.
State and Local Efforts at
Simplification and Coordination
State, county, and city governments
have initiated innumerable projects
aimed at simplifYing and coordinating
the administration of public assistance
programs. Local efforts have often
been the catalyst for simplification and
coordination changes at the Federal
level. State and local administrators
have been vocal in urging Federal
legislators and administrators to adopt
reforms. Many local efforts can be
adapted and serve as models for Feder­al
use.
• One-Stop Shopping In Delaware
and Maryland
One example of coordination at the
State and local level is the concept of
one-stop services. At its meeting in
Wilmington, Delaware, the Committee
had the opportunity to learn more
about this concept.
The concept of one-stop services for
public assistance has been around for a
long time. Delaware has been a
recent innovator in the development
of one-stop services through a system
of single entry, multiservice facilities
that house public and private human
service programs in community loca­tions.
Two key goals guide the one­stop
services system: 1) service is
client-cent~red and results-oriented,
with an emphasis on working with
individuals and their families to maxi­mize
independence; and 2) the system
itself must be self-correcting-con­stantly
retooling to keep pace with
changing client needs and a changing
service delivery environment.
Accessibility and client convenience
are integral features of the one-stop
services concept. Twelve State Service
Centers are located strategically
throughout Delaware. Most clients
need to travel fewer than 5 miles to get
to a center. An 800 number provides
telephone assistance in getting infor­mation
about services.
The services provided at each center
are geared to the population of the
surrounding community. Collocation
or consolidation of service providers is
maximized. The major services avail­able
include certification for public
assistance, public health, child support
enforcement, mental health, and help
with alcohol and drug abuse. To the
extent possible other related agencies,
such as Vocational Rehabilitation,
Adult Corrections, Child Protective
Services, Youth Rehabilitative Services,
and Department of Public Instruction
may be housed in the Service Centers.
Numerous nongovernment agencies
are also collocated within the Service
Centers, including Head Start, Senior
Centers, and Alcohol and Drug Coun­seling
programs. When a particular
center does not offer a service onsite,
staffwill make referrals to those orga­nizations
above and such organizations
as Social Security Administration,
Meals on Wheels, Visiting Nurse Asso­ciation,
Alcoholics Anonymous, Family
Court, and the Special Olympics.
Elsewhere, the City of Baltimore is
combining housing and human ser­vices
through the Family Development
Center located in the Lafayette Courts
public housing development. The
Development Center was inaugurated
in 1987. With 85 percent of the fami­lies
in Lafayette Courts receiving some
form of public assistance, many of the
families are trapped in the cycle of
poverty with little hope of breaking
into the mainstream. The Develop-
33
34
ment Center offers residents one-stop
shopping for programs from five gov­ernment
agencies.
The center occupies nine adjacent
apartment units on the first floor of a
high-rise. The apartments have been
converted to a health center, day care
facility, preschool classroom, literacy
lab, education and employment train­ing
center, computer lab, and counsel­ing
offices. The Development Center
is working to provide the comprehen­sive
resources necessary to boost self­esteem,
improve skills, enhance the
ability to deal with setbacks and obsta­cles,
and provide a structured plan to
help guide families away from depen­dence
on public housing and public
assistance and toward self-sufficiency.
Federal Efforts at Simplification
and Coordination
Federal efforts at simplification and
coordination often have their roots in
State and local initiatives. Many of the
initiatives discussed in this section were
the result of input and pressure from
States, counties, and others, such as
recipient advocates.
• Joint Processing and
Categorical Eligibility
Joint processing and categorical eligi­bility
save time and money, and reduce
the "hassle" factor for both clients and
caseworkers. Under joint processing,
applicants have the benefit of "one­stop
shopping", i.e., they can apply for
more than one program at a time
using one application form, with a
single interview at initial application.
Joint processing may not work, howev­er,
if membership of the assistance
group varies between programs.
Categorical eligibility, which often
goes hand-in-hand with joint process­ing,
is a policy whereby an applicant
for a particular program is presumed
eligible based on his or her eligibility
for another program that has compara­ble
or stricter needs tests. This policy
saves time and effort for both the
applicant and the caseworker since
normal verification requirements are
waived under presumptive eligibility.
A major drawback, however, is that in
some instances benefit levels are very
low or nonexistent due to the differ­ences
in the treatment of income
between programs and the definition
of eligible members.
Many of the programs have devel­oped
joint processing and categorical
eligibility policies. For example, a
family seeking assistance from a social
services office will find that procedures
for processing the application and
determining eligibility for AFDC, gen­eral
assistance, and food stamps are
integrated to a large extent. The fami­ly
will have only one interview for
AFDC and food stamps and will not
have to provide the same information
to both the food stamp and AFDC
eligibility workers. If everyone in the
household is eligible for AFDC or gen­eral
assistance programs, the house­hold
group is automatically eligible for
food stamps.
Even though the household is cate­gorically
eligible for both programs,
separate rules still apply for counting
income and establishing benefit levels.
Computation of benefit levels for each
program must be done separately as
well. If the household does not qualify
for AFDC, its case is handled as a non­public
assistance food stamp house­hold,
and it does not have to provide
additional information.
Similarly, individuals applying for
SSI benefits may apply for food stamps
at the same time. The State may
arrange to have Social Security Admin­istration
(SSA) staff complete and
forward food stamp applications to the
local social services office, or it may
outstation food stamp eligibility work­ers
at the SSA offices. Through these
procedures, SSI applicants are able to
apply for food stamps without having
to make a separate trip to the food
stamp office. Households in which all
members receive SSI are categorically
eligible for food stamps.
AFDC and SSI clients living in
"mixed" households with non­AFDC/
SSI beneficiaries are deemed to
have satisfied the food stamp asset
"Interrelated problems and programs
represent a compelling case for
transforming the current fragmented
array of services into local integrated
service delivery systems organized
holistically around at-risk families to
produce measurable improvements
in their lives and their prospects. "
- Services Integration:
A Twenty Year Retrospective
Department of Health and
Human Services,
Office of the
Inspector General, 1991
eligibility test because they have passed
the AFDC or SSI test. The AFDC or
SSI client is categorically asset-eligible,
and his or her assets are not counted
in judging the household's eligibility
for food stamp purposes.
In 32 States, AFDC and SSI clients
are automatically eligible for Medicaid
(79 percent of all SSI recipients are
represented). A State may limit its
Medicaid to SSI recipients by requiring
a separate Medicaid application or by
using criteria no more restrictive than
were used in the approved State Medic­aid
plan injanuary 1972. Twelve
States, representing 18 percent of SSI
recipients, use this option.
In most States, other AFDC-related
groups who do not actually receive
cash payments are automatically eligi­ble
for Medicaid.
• Demonstration Projects,
Welfare Reform Initiatives and
Regulatory Waivers
Through demonstration projects, wel­fare
reform initiatives, and waivers of
program regulations, States are better
able to coordinate policies among
programs to enhance service to clients
and improve administrative efficiency.
Demonstration projects and welfare
reform initiatives permit a broader
expression of waiver authority than is
normally allowed under the general
administrative waiver authority, espe­cially
for certain programs, such as
AFDC and the housing assistance pro­grams
under HUD, that do not have
waiver authority. Section 1115 of the
Social Security Act permits statutory
and regulatory waivers for the AFDC
Program under the auspices of demon­stration
projects. Unlike the general
administrative waiver authority, the
expanded demonstration authority
includes a requirement for evaluation;
each demonstration and welfare
reform initiative must be evaluated to
determine its effectiveness.
Demonstration Projects
The idea for legislation authorizing
demonstration projects often origi­nates
with States or other sources out-side
the Federal government. But,
demonstrations are also initiated at the
Federal level and States are solicited to
participate. Some examples of ongo­ing
demonstrations follow.
• Food Stamp Employment and
Training Program/JOBS
Demonstration
In March 1992, USDA offered to
allow selected States to test confor­mance
between the Food Stamp
Employment and Training (E&T)
Program and the JOBS Program of the
AFDC Program. Under this demon­stration,
Food Stamp Program regula­tions
are waived to allow for
conformity with JOBS. The five partici­pating
State agencies will evaluate the
results of their efforts and report them
to USDA.
• Economic Empowerment
Partnerships
HHS and the U.S. Department of
Housing and Urban Development
(HUD) are jointly funding 13 econom­ic
empowerment partnerships to pro­mote
self-sufficiency among AFDC
clients residing in public housing
developments. This demonstration
began in October 1991. The two
Departments are allowing creative
waivers designed to reduce the disin­centives
to employment. HUD is per­mitting
the sites to use public housing
units for nonresidential activities (e.g.,
training centers, micro-businesses, and
supportive services activities).
HHS is allowing waivers of certain
AFDC rules which are disincentives to
business ownership (e.g., restrictions
on personal or business asset accumu­lation)
and permitting clients to keep a
greater portion of increased income
from work. In addition, HHS is allow­ing
sites to require that AFDC
payments be contingent upon success­ful
participation in work or other activ­ities.
Finally, HHS is extending
eligibility for the JOBS program to a
larger population than would ordinari­ly
be covered.
35
"There are great people in public
housing. Although folks will tell you
it's full of lazy people, drug-pushing
thieves looking for a place to stay, I
found out that wasn't true. I found
there were young people so talented,
they should be anywhere from Holly-wood
to the White House. But they
don't have the opportunity. With the
resources, the support systems and
training, they can be iust like people
in any other community. "
- AnnWilson
Milwaukee Housing Authority
36
• Transitional Housing
The Housing Act of 1987 created
the Transitional Families Demonstra­tion
Program which required waivers
from programs within HHS, USDA,
and HUD. This 7-year demonstration
project, called the GATEWAY
Program, is being carried out by the
Charlotte Housing Authority. The
purpose of the program is to demon­strate
the effectiveness of providing a
comprehensive program of services to
participating public housing residents
to ensure the successful transition of
such residents to private housing.
During its Charlotte, North Caroli­na,
meeting in January 1993, the Com­mittee
visited the GATEWAY Program.
The program assists families with annu­al
incomes under $12,500 living in
assisted housing to become self-suffi­cient
by offering both a safety-net and
a means to accumulate the capital
necessary to make the transition to
private housing. GATEWAY offers
educational and job training assistance
along with other supportive services to
prepare participants for employment.
Upon entry into the GATEWAY
Program, a participant's rent and any
AFDC, Medicaid, and food stamp ben­efits
are frozen while he or she receives
educational and occupational training
necessary to compete on the private
market, along with an array of other
services to help the participant become
self-sufficient. This "remedial stage"
may last up to 2 years. This period
allows families to pay off their debts
and repair their credit rating prior to
pursuing homeownership.
Once the major barriers have been
overcome, the family enters the second
part of the GATEWAYProgram, the
"transitional stage," which can last up
to 5 years. During this part of the pro­gram,
the family 's rent will rise as it
normally would for residents of public
housing in relationship to their
income (30 percent). Also during this
phase, the families will receive assis­tance
in upgrading their job skills and
training on home ownership. At the
end of the program, the family agrees
to leave assisted housing to seek hous­ing
on the private market.
One of the unique features of the
GATEWAYProgram, in addition to the
freezing of benefits, is that an escrow
savings account is established for the
family to be used at the end of the
program either as a downpayment on a
home or other private market housing
when the family is ready to leave public
housing. During the transitional stage,
a portion of the family 's rent is placed
in this savings account.
• Washington Family
Independence Program
At its August 1992 meeting in Seat­tle,
Washington, the Committee visited
with staff and participants of the Wash­ington
Family Independence Program
(FIP). FIP is a 5-year demonstration
project aimed at illustrating how
enhanced employment and training
services and incentives for entering
training or work helps families get off
public assistance and move towards
self-sufficiency. The FIP program is
unique in that it emphasizes individu­alized
assessment and training services.
Under FIP, participants receive a
guaranteed level of cash assistance
equal to what they would have received
under the AFDC and Food Stamp Pro­grams,
and may receive cash incentives
for participating in training or employ­ment
activities. In addition, the pro­gram
offers help with child care costs
and offers 1 year of transitional bene­fits
in the form of medical care assis­tance
when participants are earning
enough to make them ineligible for
cash assistance.
FIP has been applauded by adminis­trators,
staff, and clients because it
emphasizes education and training for
individuals and gives special attention
to the needs of pregnant and parent­ing
teens. Its case management
approach, the positive attitude of staff,
and regular monitoring of participants
gives the participants the emotional
and physical support they need to be
successful.
Despite its success and popularity
among clients and administrators
alike, the State will be unable to con­tinue
FIP at the end of the demonstra­tion.
The authority for the
demonstration will expire and the
State would have to seek legislative
relief to be able to continue. More­over,
the State reports that it cannot
afford to continue FIP. A requirement
of the demonstration is that it be cost­neutral,
i.e., the total cost of operating
the demonstration shall not exceed the
base-line cost to individually operate
the Food Stamp, AFDC and Medicaid
Programs in absence of the demonstra­tion.
FIP is more expensive than the
cost to operate the three programs.
The State is currently paying the differ­ence
in cost, but will be unable to con-tinue
this practice beyond the end of
the demonstration.
• Utah Single
Parent Employment
Demonstration
The Utah Single Parent Demonstra­tion
is an attempt to change AFDC in
that State from an income­maintenance
program to an employ­ment
program. The key components
of the demonstration are: required
self-sufficiency planning for AFDC
applicants, greater coordination of
AFDC and JOBS with child support
enforcement, stricter JOBS participa­tion
requirements, greater coordina­tion
between AFDC and services for
public housing residents, and greater
financial incentives to encourage work.
The latter provision will include raising
the resource limit to $2,000 and the
automobile limit to $8,000, replacing
the current earned income disregards
with a single disregard of $100 (for
applicants and recipients) plus 45 per­cent,
and expanding eligibility for
transitional Medicaid and child care
services.
The evaluation of this 5-year demon­stration
will measure the project's
impacts on employment, income, child
support collections, and exit and
recidivism rates for AFDC and food
stamps. Along with AFDC and food
stamp payments and receipt of Medic­aid
services, the evaluation will also
determine the project's effect on JOBS
and Food Stamp E&T Program partici­pation
rates and paternities and child
support orders established.
It should be noted that projects like
Washington FIP and the Utah Single
Parent Employment Demonstration
are limited in scope since they reach
relatively small populations for short
periods of time. Consequently, despite
their successful outcomes they do not
eliminate dependency for longer-term
recipients.
Welfare Reform Initiatives
Welfare reform initiatives are launched
at the State and county level. Waivers
are granted in concert by USDA, HHS,
37
"The dirty little secret is that, far
from being forced to work, welfare
mothers are for practical purposes
prevented from working. "
38
- Senator Daniel Patrick Moynihan
Congressional Record
April 21, 1988
and other Federal agencies, as appro­priate,
for the projects proposed by
States.
• Alabama's Avenues to
Self-Sufficiency through
Employment and
Training Services
Known as ASSETS, this is one of the
earliest welfare reform initiatives. It
combines food stamp and AFDC bene­fits
to provide clients a single monthly
cash grant. Case management is an
integral part of ASSETS. Among other
things, the approved waivers permit
the State to require food stamp clients
to cooperate with child support collec­tion
efforts. Nationally this is required
only of AFDC clients. Administrators
also established a vehicle disregard,
authorizing one licensed driver per
household to own a car without affect­ing
the family's benefits.
ASSETS has been praised by work­ers
and administrators because it is
simpler and easier to understand than
existing rules. Implemented in three
counties-Clarke, Limestone, and
Madison-ASSETS began onjuly 1,
1990, and will continue until june 30,
1994. The project will be evaluated by
an independent contractor using a
longitudinal study to compare the
three test counties with three matched
non treatment counties in terms of net
impact and cost-benefit.
• To Strengthen Michigan
Families Program
Another welfare reform initiative is
the To Strengthen Michigan Families
Program, which began in 1992. A
broad family support program, this
project consists of a wide variety of
AFDC,JOBS, child support, and Med­icaid
provisions. This 5-year project
changes current AFDC procedures
through expansion of the AFDC­Unemployed
Parent Program by elimi­nating
the 100-hour work limitation
and the attachment to the labor force
requirement, replacing the current
AFDC earned income disregards with a
single disregard of $200 plus 20 per­cent
of the remainder with no time
limit, and excluding all income earned
by dependent children who are stu­dents.
JOBS-related provisions include
allowing noncustodial parents to par­ticipate
inJOBS, removing the JOBS
requirement that gives first considera­tion
to voluntary clients, and lengthen­ing
the job search period before
assessment from 3 weeks to 8 weeks.
As for Medicaid eligibility, the pro­ject
establishes a $5,000 maximum
limit (except for SSI recipients) for
exclusion of funeral goods and ser­vices,
and it requires medically-needy
Medicaid clients to meet their spend­down
requirement by paying their
excess income to the State.
A wide variety of improvements in
child support enforcement, which did
not require waivers, are included in
the project: requiring child support
agencies to establish mechanisms to
identify persons with access to health
insurance coverage, requiring noncus­todial
parents to disclose their child
support obligations to employers for
mandatory withholding, and requiring
hospitals to accept and record paterni­ty
acknowledgements as part of birth
registration.
The evaluation will measure the
project's impacts on employment,
earnings, marital status, AFDC and
food stamp receipt, and exit and
recidivism rates for AFDC. The evalua­tion
will also include a nonexperimen­tal
study to determine whether the
demonstration leads to increased col­lection
of court-ordered child support
and increased paternity establishment.
General Administrative
Waiver Authority
The programs also have varying
degrees of authority to waive legislative
and regulatory provisions. The Food
Stamp Program has administrative
authority to grant waivers that would
result in a more effective and efficient
administration of the program.
Often, waivers are sought by States in
an effort to coordinate food stamps
with other programs, such as AFDC.
Waivers may be granted if they are not
inconsistent with the provisions of the
Food Stamp Act of 1977 or they will
not result in the impairment of any
statutory or regulatory rights of clients
or potential clients.
The AFDC program does not have
broad administrative waiver authority
like the Food Stamp Program; howev­er,
the Social Security Act permits
waivers beyond those afforded under
demonstration authority, to promote
compatibility with the Food Stamp
Program on monthly reporting and
retrospective budgeting. Also, HUD
does not have waiver authority for the
administration of its housing assistance
programs.
• Cash-Out
In California, individuals receiving SSI
benefits and/or State supplementary
payments are ineligible to receive food
stamps. Instead, they receive a State­financed
adjustment to their SSI pay­ment
each month. These individuals
are not considered food stamp clients;
however, the SSI payments are
increased to include a flat allowance
in lieu of a food stamp benefit. There
is no individualized computation of
food stamp benefits for an SSI case.
This policy benefits clients in several
ways. Many SSI participants have
severe disabilities. Providing food
stamp benefits in cash rather than
coupons (cash-out) relieves them of
the inconvenience of traveling to
issuance centers to obtain their
coupons. It also allows them more
flexibility if they are unable to travel to
a store and someone else must make
their food purchases for them. Receiv­ing
cash instead of coupons removes
the stigma of being "on public assis­tance"
and may encourage eligible
households not currently participating
to apply for benefits.
Demonstrations were conducted by
the USDA's FNS in Alabama and San
Diego, California, on the feasibility of
cashing out food stamp benefits for the
general food stamp population. The
San Diego demonstration began in july
1989 and is scheduled to last 54
months. The project began with 20
percent of the county's case load and
expanded to the entire county in Sep­tember
1990. The Alabama demon-stration
was a short-term project that
ran from May to December 1990. The
project was implemented in 12 coun­ties
and involved approximately 2,000
households.
Findings from the Alabama and San
Diego demonstrations, as well as
results from two other demonstrations,
the Washington State Family Indepen­dence
Program and the Alabama
ASSETS Program, have allowed FNS
officials to draw some tentative conclu­sions
about the effect of cash-out on
food stamp