February 7, 1997
There is overwhelming evidence that our current welfare system has failed many Americans and it has, in fact, been extremely harmful to the very people it was designed to protect C women and children. Several states, including Georgia, have learned that a reform approach emphasizing personal responsibility and work is much more likely to bring about real improvements than one that perpetuates the practices of the past. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 took just that type of approach.
Both the new federal welfare law and Georgia’s plan for implementing a substantial portion of that law are positive attempts to improve the flawed system. Both are good in many ways. Some of their most promising aspects include:
As was expected, these plans have not gone unchallenged. Opponents have labeled them unfair because of their requirement that recipients participate in work-related activities in exchange for benefits, and because recipients may be harshly reprimanded for failing to abide by program provisions, but in reality, the old system was unfair. It was unfair to working Georgians who lived by tougher standards and it was unfair to recipients who were not given the guidance or tools to become self sufficient. Yet even though these plans look promising on paper, much work will have to be done to ensure that their intent is carried out and that their results can be monitored and tracked.
With the imposition of a four-year lifetime limit on cash assistance, any time an individual spends on welfare is time that will not be available to that individual in the future. Therefore, moving recipients into unsubsidized employment as quickly as possible is in the best interest of both the state and recipients. Michael Thurmond, Director of Georgia’s Division of Family and Children Services, had repeatedly expressed his intent to require work of individuals as soon as they are able. He has also expressed his intention to utilize community service when unsubsidized jobs are not readily available or when recipients are not yet able to hold down such jobs. Georgia’s welfare reform plan and Governor Zell Miller’s proposed legislation stop short, however, of putting these commitments in writing. These commitments must be vigorously pursued if Georgia is going to win the war on welfare.
One of the toughest challenges for Georgia in the upcoming years will be moving welfare recipients into unsubsidized jobs in which they can earn a living. Fortunately, Georgia has created more jobs than any other state during the past four years, but additional steps can be taken to encourage private sector employers to hire welfare recipients. The federal law is unprecedented in the freedom it gives states to contract with nonprofit and faith-based organizations to provide recipients with assistance and guidance. This type of community involvement has proven itself to be both effective and efficient.
Georgia might also consider utilizing private employment placement firms, like the New York-based firm America Works, that teach recipients valuable work skills and help them find suitable employment. Likewise, some states have found that employers are more apt to hire welfare recipients if the expenses of hiring and training new personnel are offset through short-term tax credits, or if the risks associated with hiring “unexperienced” or “unproven” workers is minimized through the use of trial employment periods during which an employee may be subjected to random drug testing or dismissed without question.
With continued work and cooperation combined with the involvement of individuals, charitable and religious organizations, and employers, Georgia’s chances at substantially improving the decades-old welfare dilemma look promising.
TABLE OF CONTENTS
A. Eligibility Limits and Non-Compliance Penalties
B. Personal Responsibility and Work Plans
C. Transitional and Support Services
D. Earned Income Tax Credit
E. Aid to Immigrants
F. Denial of Assistance to Certain Felons
A. Work Requirement
B. Community Service
C. Exceptions from Work Participation
D. Differential Treatment
E. Domestic Violence Screening
F. Continuation of Waivers
G. Individual Development Accounts
IV. POTENTIAL POT HOLES ON THE ROAD TO REFORM
Georgia’s plan to implement the new welfare program, Temporary Assistance for Needy Families (TANF), was signed by Governor Zell Miller on November 15, 1996. This signing, which was followed by a 45-day comment period that included a series of public hearings throughout the state, marked the beginning of a new era for government-funded cash assistance programs. No longer will any resident of Georgia be automatically entitled to lifetime assistance just by satisfying the welfare eligibility requirements. The new federal program is just what its name suggests: temporary assistance, with benefits capped at a lifetime maximum of 5 years (60 months) and mandatory work for many able-bodied adult recipients.
While debates over welfare reform have spanned the entire political spectrum, there is a general consensus that the old system was a failure. It failed not only working taxpayers who got few if any results for their trillion-dollar investment, but also recipients themselves who found that the system allowed them to live a bit above the poverty level but did nothing to help them help themselves. Children’s advocates argue that, while welfare reform may be necessary, innocent children will be unintended victims. This is a concern shared by others C recipients, government officials, average citizens, and analysts. Although these concerns are legitimate, it is readily apparent that the welfare practices of the past have in fact harmed children.
In addition to promoting illegitimacy by denying benefits to most two-parent families, welfare dependency has disadvantaged many of those it was intended to help. While it has been assumed that raising family income benefits children, studies have shown the exact opposite may be true. For example, long-term welfare-dependent children in states paying high welfare benefits had no appreciable difference in IQs than did welfare-dependent children living in states that paid low levels of benefits. Likewise, a similar study revealed that while increases in non-welfare income during a boy’s childhood tended to result in higher earnings as an adult, the receipt of welfare benefits had a negative effect on the long-term earnings capacity of young boys.
Although evidence that the old welfare system harmed and disadvantaged the very children it was intended to protect is a compelling argument for reform, critics should also take comfort in the pro-child provisions of the new act. The lifetime eligibility limit applies to adults only, meaning that the clock does not start ticking against individuals until they reach the age of 18. Single parents and guardians caring for a child under the age of one will be excused from work or work activities unless adequate child care is available to them. Similarly, single parents or guardians caring for a child under 6 may not be sanctioned or penalized for failure to participate in work activities if they demonstrate an inability to obtain necessary child care. And while able-bodied adults may lose their cash assistance for failure to comply with TANF program provisions, or after receiving benefits for the maximum time period, they and their minor children may still be eligible for a variety of public assistance programs including food stamps, Medicaid, WIC (supplemental food program for women, infants, and children), and public housing.
Veteran businesspersons and politicians alike know that comprehensive reform in anything is almost always accompanied by some level of uneasiness. Predictably, neither the federal law nor Georgia’s TANF plan has escaped the attacks of critics. Much of this fault finding stems from the inability of legislators to guarantee success, and from adversaries who want assurances that children will be insulated from poverty, that there will be enough quality jobs to employ all welfare recipients, and that welfare will continue as an entitlement for those truly in need. Change, by its very nature, precludes absolute predictability. Fear of the unknown can, however, impede or completely halt progress.
While the new federal welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, presents states with a tremendous challenge, a few states have shown that real welfare reform is not only possible, it is good for all concerned. Throughout this report, references will be made to the reform efforts undertaken by the state of Wisconsin. These references are not meant to suggest that Georgia duplicate Wisconsin’s welfare programs, but they are instructive in light of the enormous success Wisconsin has had in reducing its welfare caseload (41 percent in the past three years) and because of the thoroughness of its program documentation.
At the heart of the federal welfare reform law is the return of power to the states. With this new latitude, Georgia’s welfare officials and the governor could have adopted a welfare plan that merely complied with the requirements of the federal law. Instead, they opted to send a clear message that, while they are willing to provide real assistance and guidance to those in need, they will expect personal responsibility and accountability in return. Georgia’s plan embodies a real commitment to changing its welfare system from the ground up.
In addition to establishing a cap that limits assistance to a total of 48 months during an individual’s lifetime, as opposed to the 60-month maximum established by the federal law, Georgia’s plan contains several other provisions where the state has opted to impose more stringent requirements than were mandated by the federal law. Pregnant women without other dependent children, for example, will not be eligible for cash assistance although they may continue to receive Medicaid and other benefits. Individuals who voluntarily quit a job without good cause will be sanctioned. And those who fail to comply with work or other requirements will be penalized.
Under the federal law, states are required to reduce a family’s cash assistance grant at least “pro rata with respect to any period during a month” in which an individual fails to satisfy work requirements. States are given the discretion to impose greater penalties or terminate assistance altogether. Georgia’s plan proposes a 25 percent benefit reduction for the first offense, and a complete termination of assistance for a second offense. While this approach may be more severe than the minimum reduction required by the federal law, proponents of the “pro rata” approach argue that welfare’s work requirements should mimic, as closely as possible, the requirements most individuals face in unsubsidized employment. Reducing a welfare recipient’s monthly benefits pro rata for each hour of work he/she misses, just as hourly employees are only paid for hours they actually work, helps instill in that individual the value of work.
Despite the criticism surrounding the lifetime cap and other “tough” reform provisions, Georgia’s officials recognized that the welfare problem stems from more than just unemployment, and they therefore devised a plan aimed at truly assisting recipients in their transition from welfare to work. Rather than just setting rigid eligibility standards and stiff work requirements, the plan employs what the federal act terms “individual responsibility plans” to provide recipients with individually tailored plans by which they will obtain critical work skills to help them be self-reliant members of society. Georgia’s version, Personal Responsibility and Work Plans, set forth specific responsibilities that both the recipients and the welfare agency will be responsible for carrying out. The plans emphasize that public assistance is both temporary and contractual in nature, with self-sufficiency as the ultimate goal.
County-level employees of the Department of Family and Children Services (DFACS) will work with each applicant to devise a plan tailored to that individual’s abilities and needs. The three-part plan begins with a Participant / Agency Agreement that will stipulate general policies that govern all TANF cases (i.e., that recipients are required to work in order to support themselves and their families and that DFACS will assist them by providing child care, transportation, and other employment / training-related expenses that are needed to place the recipient in a job). The second part of the plan, the Personal Responsibility Requirements section, provides recipients with an individually tailored list of tasks that must be performed. These Personal Responsibility Requirements may include such tasks as attending parent / teacher conferences, participating in parenting skills classes, participating in substance abuse counseling and treatment, and participating in financial management counseling. The third and final section is the Work Plan, which defines an employment goal, the steps the participant needs to take to achieve the goal, and the date by which the participant is expected to have achieved the goal.
Both the Personal Responsibility Plan and the Work Plan are followed by signed oaths acknowledging the participant’s agreement to abide by the plans, with the understanding that failure to comply with the requirements will result in the “reduction or termination of any or all benefits (cash assistance, food stamps, and Medicaid).” The state plan stipulates sanctions for families who fail to meet the obligations and responsibilities outlined in a Personal Responsibility and Work Plan, to wit:
“an initial failure to satisfy work requirements or other obligations will result in a reduction of the participant’s grant. A subsequent failure will result in the termination of family assistance.”
The State plan also makes a commitment to assist welfare recipients in finding jobs by providing them with a variety of support services when needed. These services may include child care, transportation, uniforms, tools needed for employment, and licensing fees (for both occupational licenses and drivers’ licenses).
One of the most proactive provisions, however, involves diversionary support services aimed at preventing altogether the need for cash assistance. Through Georgia’s diversion package, applicants may be eligible for housing vouchers, transportation assistance, help with energy bills, and other emergency needs. This approach reflects what several states have already found – prevention is the best cure for welfare dependence.
But no matter how hard states try to divert applicants from welfare by placing them directly into jobs, there will always be some who are not able to immediately enter the work force. Under the new system, these individuals will enter the welfare rolls but their 48 months of eligibility will immediately begin to tick away. Georgia’s welfare caseworkers will be called upon to evaluate these individuals and begin preparing them for work as quickly as possible, utilizing programs such as job training, vocational education, substance abuse counseling, and community service. In addition to DFACS caseworkers, Director Thurmond has suggested that state vocational rehabilitation workers may be utilized to provide disabled welfare recipients with job training.
Transitional benefits also play an integral role in Georgia’s plan, providing recipients who might otherwise become ineligible for cash assistance because of increased earnings or the payment of child support, with child care subsidies and medical assistance for up to 12 months.
One of the most pervasive complaints about the old welfare system was that recipients received more for doing nothing than they would working for minimum wage. Understandably, there was no incentive for recipients to work C if anything, they were penalized (financially) for trying to become self-sufficient. Based on the federal minimum wage of $4.75 per hour, a single parent working 40 hours per week earns less than $10,000 in an entire year. Of course, minimum wage jobs were never able to support an entire family. It is nevertheless true that the majority of welfare recipients making the transition to unsubsidized work will begin in low-paying positions. Some may never make much, if any, above minimum wage.
In recent months, Georgia’s DFACS has undertaken to educate welfare recipients about the tools available to them when re-entering the work force. Transitional Medicaid and child care assistance (discussed above in Section C) are two such tools, but perhaps the most important of all is the Earned Income Tax Credit (EITC). EITC is a federal tax provision that grants low-income families with children additional funds to supplement their take-home pay C in effect, a negative income tax.
A family with two children and a gross income of between $741 and $967 per month, for example, may be eligible for an extra $3,556 annually in EITC money just by filing a federal tax return. DFACS uses this example to show the contrast between annual earnings and welfare receipts. While an individual working in an unsubsidized job could earn $11,600 per year plus $3,556 in EITC money (a total of more than $15,000), a non-working welfare recipient would only get $3,360 per year in cash assistance. In addition, EITC grants are not counted as income for purposes of determining Medicaid, food stamp, Supplemental Security Income, or housing assistance eligibility.
While the federal act denies TANF, food stamps, and Medicaid (with a few exceptions) to all newly arriving legal immigrants during their first five years in the United States, it delegates to states the decisions regarding the continuation of cash assistance for legal immigrants already on their welfare rolls. States that opt to extend benefits to these immigrants will bear the total brunt of the funding with no help from the federal government. Under Georgia’s plan, which took effect on January 1, 1997, current legal immigrants will be eligible for cash assistance for up to 12 months. Although, by most accounts, fewer than 2 percent of the state’s AFDC caseload are immigrants, this number could increase should Georgia’s economy sink into a recession.
This policy, while not as tough as that adopted by some states, may present a challenge for Georgia’s immigrants who have grown dependent on government assistance. Furthermore, Georgia’s plan provides that immigrants moving into Georgia from a state that does not provide cash assistance to legal immigrants will be denied benefits in Georgia as well ¾ – a clear message that Georgia will not be a haven for other states’ poor.
Georgia’s plan also goes beyond the federal requirement regarding individuals who have been convicted of drug-related felonies. In Georgia, these felons will be denied TANF benefits, and the State will further deny cash assistance to all those convicted of one or more of the “serious violent felonies” of murder, felony murder, armed robbery, kidnapping, rape, aggravated child molestation, aggravated sodomy and aggravated sexual battery. This is in keeping with the belief that cash assistance should only be given to those who are willing to help themselves.
Critics argue that those penalized by this provision are often the ones that need help the most. Some also suggest that by denying assistance to these individuals, states are only further alienating them and increasing the odds that they will continue in their destructive, illegal behavior. Although these arguments may have some validity, it is abundantly clear that the purpose of both the federal law and Georgia’s plan is to emphasize responsibility and accountability, with antisocial actions having negative consequences.
As discussed in Part I of this report, the new federal law established a set of broad mandatory guidelines for states, but also created a series of permissive regulations that states could adopt and enforce at will. Georgia’s plan, although not set in stone, is in large part an expression of Governor Miller’s intent with regard to many of these permissive provisions. In addition, DFACS Director Thurmond and several members of his staff have publicly expressed the intent of their division with regard to specific policies and goals that were either absent from the state plan altogether or the details of which were not sufficiently explained by the plan.
The federal law provides that states may require parents and caretakers receiving TANF to begin work at any time after that person is deemed able, but mandates that states require all able-bodied adult recipients who have received benefits in excess of 24 months to work. Although DFACS Director Thurmond has indicated that the state’s policy is to get people to work as soon as possible, Georgia’s plan adopts the federal provision virtually verbatim, declining to establish a firm written work deadline that would supersede the lenient federal time limit.
Georgia’s plan permits county-level DFACS employees to decide when a recipient is able to work. This local control can be advantageous so long as local level DFACS employees share Director Thurmond’s commitment to place able bodied recipients in work. And while the argument can be made that this 24-month grace period is irrelevant given the mandatory work participation rates established by the federal law, it is highly plausible that more than 25 percent of Georgia’s TANF recipients can and should be deemed able to work during 1997. It is even possible that the 50 percent of TANF recipients who will be required to work by 2002 is an understatement of those who will actually be able to work.
Much of the concern about the federal law is that there may not be enough jobs to support those recipients required to “work.” According to a recent report by Business Week, Georgia should find this daunting task easier than many other states. From 1991 to 1995, Georgia led the nation in the creation of new jobs. While it may be true that unsubsidized, private-sector jobs might not always be readily available in all areas of the state, the federal definition of “work” contains a wide array of traditional and nontraditional work activities. Community service is one such “work activity” that can fill the gap left by an inadequate job market.
Wisconsin has been aggressive in its use of community service, not as a substitute for unsubsidized employment, but as a starting point for those who do not possess adequate work habits or work socialization skills. Participation in community service allows those individuals to practice work skills in preparation for a smooth transition to the private job market.
As part of its newly implemented W-2 program, Wisconsin places participants in community service jobs for up to six months with each employer, and up to 24 months in all. While some states shy away from community service because of the perceived difficulty in creating jobs for participants, Wisconsin’s plan demonstrates it can be done.
Wisconsin’s community service job participants are typically placed in one of four broad types of positions: municipal or other government positions, community-based organizations, contract organization positions or positions customized by the participant. Participants may be “employed,” for example, by school systems, parks and recreation departments, sanitation departments, private nonprofit entities, community-based nonprofits, and hospitals, with duties ranging from painting of public housing and cleaning of city property to providing clerical or administrative assistance. Again, the premise is that while for most TANF recipients, private employment is the best option, community service jobs often benefit both participants and the public.
Under the new federal law, states must require community service of all able-bodied recipients who are not working after receiving assistance for two months. States may, however, opt out of this requirement entirely. Georgia’s plan does not invoke this option, but it postpones until August 1997 the critical decision of whether or not to make community service mandatory.
While DFACS Director Thurmond and other DFACS representatives informally suggest that community service will play an integral role in Georgia’s work requirement, nothing has been formally decided. Work, in any form, yields positive results for its participants, their families and society as a whole, and with every day that passes eligibility is ticking away for welfare recipients. Immediate steps should be taken to develop a comprehensive community service program so that those who are not able to participate in unsubsidized or subsidized employment can still make progress toward independence.
States may excuse from work any single custodial parent caring for a child under one year of age. Georgia’s TANF plan invokes this option but tempers it by conditioning exclusion on the lack of necessary child care.
This is one provision that rouses cries of unfairness from the many thousands of working poor and middle-class mothers who are by necessity forced to return to work within 6-12 weeks of delivering a child. Yet while this portion of Georgia’s plan is not as strong as it could have been, the availability of adequate and affordable child care is a legitimate concern. Given the high cost of child care (especially for infants), it may be appropriate to temporarily delay, or phase in, work requirements for this population.
The exceptions, however, do not end there. As discussed in the introduction to this report, states are also prohibited from reducing or denying benefits to any single parent who fails to comply with mandatory work requirements provided that that individual is caring for a child under the age of 6 and can demonstrate an inability to obtain necessary child care.
States are also allowed to limit benefits of those who move into their state from another state whose benefits are lower. This differential treatment may be imposed for up to 12 months after a recipient moves into the state. States with higher-than-average benefit levels find this type of provision particularly appealing as a means of discouraging other states’ poor from migrating there for purely financial reasons.
Georgia’s plan adopts this distinction and expands upon it by adding the limitation that families moving into Georgia from another state will be eligible for assistance only for the time period for which they would have been eligible in their previous state of residence, or the time period permitted by Georgia, whichever is shorter. So, if an individual moves into Georgia from a state where, for example, lifetime TANF eligibility was limited to three years, that person would only be eligible for assistance in Georgia for the remainder of that three years, rather than the four years allowed other Georgia residents. Likewise, benefits received in any other state will count against Georgia’s four-year limit on cash assistance.
DFACS employees may encounter problems in enforcing this provision, however, because there is currently no nationwide database or tracking mechanism to verify an applicant’s welfare history in other states. DFACS employees will likely find themselves, in the short term, relying solely on the word of welfare applicants.
Recognizing that domestic violence is often a contributing factor to welfare dependence, Georgia’s plan establishes a domestic violence screening program. Through this program, DFACS will establish screening procedures for individuals with a history as victims of domestic violence. Once identified, these victims may be referred to counseling and the state may waive some program requirements such as time limits, residency requirements, child support cooperation requirements and family cap provisions if it is determined that compliance with these requirements would unfairly penalize such persons or make it more difficult for them to escape domestic violence.
As with community service, Governor Miller has put off an announcement about whether Georgia will continue operating under its existing federal waivers that are inconsistent with the new federal law. One such waiver, the Work for Welfare program, would create a double standard if continued by allowing TANF recipients in 10 pilot counties to satisfy the work requirement by engaging in work activities for only 20 hours per month as opposed to the 20 hours per week required by the new law. And while a spokesman for Georgia’s Department of Human Resources indicated that waivers will not be utilized to weaken the impact of the federal law, a formal decision about the continuation of this and other waivers must be made no later than 90 days after the conclusion of the 1997 Session of the Georgia General Assembly.
To counteract the welfare system’s decades-old problem of trapping recipients in a cycle of dependency caused, in part, by basing eligibility on an applicant’s resource levels, the new law, while not doing away with eligibility standards, does allow for the establishment of Individual Development Accounts by or on behalf of welfare recipients. Moreover, states are permitted to fund these accounts using federal TANF block grant monies. Unlike other personal resources, money held by an individual in an Individual Development Account is disregarded for purposes of determining eligibility for cash assistance.
Individual Development Accounts are, in essence, trusts funded by contributions from the individual who establishes it, or from other qualified entities such as not-for-profit organizations and state and local government agencies. Use of account funds is strictly limited to one or more of three specific purposes: 1) post-secondary educational expenses, 2) the purchase of a first home, or 3) business capitalization.
The establishment of Individual Development Accounts is intended to yield positive results by teaching welfare recipients about financial responsibility, rewarding them for establishing savings and enabling those who lose case benefits upon obtaining employment to continue on the path to self-sufficiency. Another benefit of these accounts, although less obvious, is the opportunity it creates for community involvement. By allowing not-for-profit organizations to contribute to Individual Development Accounts, the federal government encourages assistance from those at the local level, where the harmful effects of welfare dependence are most visible and where direct aid from individuals and organizations is most effective. Unfortunately, Georgia’s plan gives no indication that the state intends to utilize this tool.
The inability of individuals to find and afford adequate child care is often a factor contributing to welfare dependency, keeping those on welfare at home with their children while putting many others at risk of becoming welfare-dependent themselves.The need for child care is often a tremendous obstacle to getting persons into school or work.Full-day care is necessary for infants and toddlers of many working parents, and most of their school age children (ages 6-12) require before- and after-school care during the school year (often called “wrap-around” day care), and full-day care during holidays and summer breaks.While working parents are left to make these types of arrangements for themselves, TANF recipients rely on the state to subsidize the cost and facilitate child care arrangements.
In recent years, Georgia has allowed welfare recipients to select their own child care provider. The state then pays a portion of the child care cost, using a sliding scale based on the recipients’ income and the type of provider selected.In Cobb County, for example, a parent of a pre-school aged child (3-6 years) would be eligible for a maximum of $65.00 per child per week for full-day center-based day care, and $40.00 per child per week for full-day care provided by a relative or non-relative, either in- or out-of-home.Persons in the urban areas of the state generally pay more for child care services than do those in more rural counties.Likewise, child care costs typically decrease as the age of the child increases.
In October 1996, there were more than 230,000 minors (0-17 years old) receiving AFDC in Georgia each month, nearly 82 percent of whom were under the age of 12.The adjoining chart shows the average number of AFDC-dependent children in each of the traditional child care age groupings.
Since 1990, federal child care funding has been available for families “at risk” of going on welfare, in addition to those receiving assistance.Under Georgia’s Work First initiative, child care services may also be provided to individuals who apply for assistance, through a program known as Applicant Services.These individuals are immediately diverted into unsubsidized jobs rather than processed as usual.Transitional child care is available for up to 12 months for those at the other end of the welfare spectrum ¾ individuals who have been recipients of cash assistance but now have full-time unsubsidized jobs.
Many fear that as states are pressured to get more welfare recipients into work, affordable child care will become scarce and the working poor will be the first to lose their assistance.The result could be a cycle of poor persons moving off welfare and into the workforce with the help of state-subsidized child care, only to find themselves back on welfare once the subsidy runs out. In one Ohio county, for example, officials recently announced that child care subsidies to 1,450 working poor families would have to be eliminated to provide child care for welfare recipients required to work.
Georgia’s DFACS reports that during 1995 it provided an average of 38,264 children with child care subsidies each month, at an annual cost of $74,623,661.Director Thurmond estimates that DFACS spends about $400 per month for each child it subsidizes in day care.Yet the children served in 1995 only account for a little more than 20 percent of the TANF (formerly AFDC) children under the age of 12.In order to achieve the work requirements of the new welfare act, Georgia will have to ensure that at least 25 percent of its able-bodied adult TANF recipients are working at least 20 hours per week in 1997.This will naturally translate into an even greater demand for child care assistance as welfare parents are forced to leave their homes and return to the workforce.The demand doesn’t stop there, however, as work requirements will increase by an additional 5 percent each year, topping out at 50 percent in 2002.
The state has made some projections as to child care needs in future years, estimating that if it spends $160 per month per child, there will be a $19,773,408 child care shortfall in 1999, increasing each year to a $104,906,888 shortfall in 2002.Funding for state-subsidized day care has historically come from a number of sources, which include the Family Support Act of 1988, the At-Risk Child Care Program, the Child Care and Development Block Grant Program and the Social Services Block Grant Program. Under the new federal law, the delivery of child care services should be simplified as these four sources of child care funding are merged into one integrated child care system, the Child Care and Development Block Grant Fund.
But funding is not the only thing to be considered. Even if money were not an issue, some observers question whether there are enough child care providers to support the demand created by full implementation of the work requirement. Nearly all states that have made great strides in turning welfare recipients into self-sufficient members of mainstream society have had to overcome problems of child care funding and availability.
In conjunction with their much-heralded W-2 program, Wisconsin’s welfare officials began easing restrictions on those seeking to enter the W-2 day care provider system in order to ensure that the increased demand for day care could be satisfied. In addition to the existing licensed and certified providers, the W-2 program created a new, less-restrictive category of provider called Provisional Day Care. A substantial financial investment, however, was also necessary once Wisconsin began requiring work in exchange for cash assistance. Under their old system, Wisconsin spent approximately $48 million to serve 17,000 children each year. The W-2 budget more than tripled child care spending in the first year, allocating $158 million to serve 55,500 children. Further increases are budgeted for year 2, with spending rising to $180 million to serve approximately 70,000 children. In addition, W-2 calls for increased participant co-payments (under the assumption that parents who are required to make reasonable co-payments will often choose to make their own arrangements outside of the subsidized system, thereby reducing unnecessary utilization of the subsidized child care system). No subsidies are available to providers living in the child’s household.
Georgia’s child care efforts have been aided by the implementation of the lottery-funded pre-kindergarten (pre-K) program.While it was not designed as a day care substitute, pre-K’s open enrollment policy should alleviate some of the burden placed on DFACS and child care providers.Any child who is four years old on or before September 1 is eligible to participate in the program during the school year.This 6.5-hour instructional program is available statewide five days per week, 36 weeks a year.Pre-K enrollment has risen from 15,500 in 1995 to more than 55,000 in 1996.
In addition, any four-year-old who is eligible for any one of a number of public assistance programs (including Medicaid, AFDC and PEACH) automatically qualifies for extended care and additional program benefits.More than 28,000 children qualified for these extra benefits in October 1996.In these instances, DFACS reimburses child care providers anywhere from $34 to $45 per child per week for extended day services, and may charge parents on the basis of a sliding scale.While pre-K should diminish the financial burden of subsidized child care for TANF recipients, it is only a partial solution because children of “working” TANF recipients must still be cared for during the remaining portion of the year.
The Head Start program is another alternative to subsidized day care.A part-day, part-year program, Head Start is available nationwide to predominantly low-income families (those living below the federal poverty level).In Georgia, an average of 19,000 pre-school-age children participate in the program annually.Unlike pre-K, however, extended day service is not available for children enrolled in Head Start.If parents and guardians are going to work full-time, additional arrangements must be made for before- and after-school care, as well as day care during holidays and summer breaks.
Further child care assistance could come from the new federal provision allowing child care services provided by TANF recipients to satisfy the federal work requirement. And while the federal law is narrowly tailored in permitting the provision of child care services to count as work, limiting it to instances where the child’s parent or guardian is participating in a community service program, many analysts agree that TANF recipient-provided care should only be utilized as a last resort (if at all).Much of the criticism is based on concern for the children’s well-being because TANF recipients, for the most part, have not received adequate training to enable them to provide high-quality child care.Another criticism is that this arrangement would be detrimental to the recipient-providers themselves because they would be in less formal work situations, allowing the progression of their job skills to go unchecked and possibly delaying their transition into unsubsidized employment.
Despite these criticisms, states should not lose sight of the fact that Congress intended to give states more flexibility to design programs that “provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives.”Unregulated care providers like family members are often the most cost-efficient, convenient and accessible, but their most attractive feature is familiarity with the family.Parents are less likely to worry about the quality of care their children are receiving if they are cared for by someone the recipient knows, like a family member, relative or friend.
Transportation is yet another challenge in getting welfare recipients into the workforce.Work requirements are futile if recipients have no reliable means of transportation.Yet for years, AFDC eligibility was restricted to those with minimal or no personal resources, making it virtually impossible for anyone owning a vehicle to qualify for assistance.Georgia’s TANF plan, however, allows families to exclude from their resource limit the equity value of one vehicle up to $4,650,) so long as that vehicle is used to look for work or to travel to work, education or training.This provision is a definite improvement over past practices, yet most TANF recipients still do not own a car.
As with child care, DFACS annually provides transportation subsidies to a number of welfare recipients.Subsidizing the cost of public transportation is a viable solution in areas where such transportation is available.As one might expect, the metro Atlanta transportation system is the most extensive in the state, with fares running approximately $12 per week or $45 per month.
Public transportation is available in many of Georgia’s other urban centers, and on a much smaller scale in numerous rural cities and counties. These Rural Public Providers are typically Demand Response, meaning that they do not operate fixed routes.Riders must call in their transportation needs up to 24 hours in advance.In addition, though they could be expanded, service hours are currently limited to 6:00 a.m. until 5:00 p.m. in most counties, which is often inadequate to accommodate the transportation needs of full-time and evening workers.
Under Georgia’s PEACH program, transportation subsidies have been provided at a cost of approximately $3.00 per person per day.In order to qualify for this assistance, participants must be actively involved in work, education, training or any other qualified program activity, and must demonstrate a need for such assistance. From July 1995 to June 1996, Georgia’s DFACS spent more than $6.9 million on subsidized transportation for approximately 10,000 PEACH participants ¾ an average of $58.69 per person per month. Given that in 1995 nearly 45 percent of PEACH participants received transportation subsidies, it can reasonably be concluded that half of those participating in TANF work activities will need some sort of transportation assistance.
Simply working out transportation logistics can be a particularly difficult problem for those who not only have to get themselves to and from work, but must also make provisions for getting children to child care and school.Wisconsin’s W-2 program allows for full-time or part-time transportation facilitators to be hired in some of the state’s larger counties.
As with child care, some states have recently begun bold new transportation initiatives aimed at facilitating work and saving money.Wisconsin officials, for example, recognized that transportation needs created by the new work requirements represented a business opportunity for welfare recipients and
low-income individuals.Some of the opportunities envisionedby W-2’s drafters are:
– W-2 participants going into business providing transportation services using leased or purchased vehicles;
– W-2 agencies contracting with individuals who have a good driving record and a reliable automobile;
– Community service work opportunities at public or private transport companies utilizing participants for tasks such as driving, vehicle maintenance and logistics coordination;
– W-2 participants organized into cooperatives, providing transportation and child care services to other newly employed parents; and
– Vehicles donated by individuals or businesses (in exchange for tax deductions) organized into small fleets and made available on a low-cost basis, or even as loaners, while newly employed individuals save for their own cars.
In addition to Wisconsin’s innovative transportation program, some states have begun experimenting with the possibility of using school busses during off hours to transport welfare recipients to and from work.
Oregon officials report that they began by searching for any alternative means of transportation that recipients may already have at their disposal rather than assuming that cash subsidies were the only solution. Those seeking assistance were asked, for instance, how they traveled to and from the grocery store and doctor’s office.Oftentimes those same means of transportation were able to be utilized for work.
Welfare applicants should only be asked to apply for those services they really need, not all available services, as is required under the Georgia TANF plan.Making the transition to self-sufficiency is more difficult for those receiving cash assistance, food stamps, child care subsidies and transportation subsidies than for those who are taking only the assistance that they truly need.And while many states, for reasons of administrative efficiency, make it a policy to determine an applicant’s eligibility for all assistance programs at one time, a few states have taken the position that doing so is not always in the applicant’s best interest.
Take, for example, a young mother who just separated from her husband and lost her job because he took the family car, her only means of transportation.Rather than automatically enrolling her in a cash assistance program, some states have found it better to attack the root of her problem.The young woman does not have a work problem, she has a transportation problem.By providing this woman with transportation subsidies or helping facilitate alternative transportation arrangements, states might be able to help her return to her old job and avoid her entering the welfare rolls altogether.
A large part of solving any problem is identifying its source.Treating symptoms, although somewhat effective, will not likely make the problem go away. Observers have found that the source of the welfare crisis varies from state to state.In some states, poor economic conditions lead to a high rate of unemployment, resulting in large welfare rolls. Other states report extremely high incidence of drug abuse, which often leads to unemployment and domestic violence. Violence in turn leads to an increase in single-parent families and greater numbers of welfare recipients.
Although this explanation is oversimplified and most states actually suffer a combination of two or more contributing factors, Georgia’s officials readily admit that teen pregnancy and statutory rape play a large role in the state’s welfare problems. Georgia has, in fact, consistently had one of the highest teen pregnancy rates in the nation.
Recognizing that this problem is not limited to Georgia, the federal law requires states to “establish goals and take action to prevent and reduce the incidence of out-of-wedlock pregnancies, with special emphasis on teenage pregnancies” and conduct a statutory rape education program “designed to reach state and local law enforcement officials, the education system, and relevant counseling services.”
Georgia’s plan makes a commitment to continue the work begun by the Department of Human Resources Interdivisional Teen Pregnancy Prevention Committee and to expand its efforts in cooperation with DFACS, the Division of Public Health, the Department of Education, the Department of Medical Assistance and “other community-based organizations and pregnancy prevention projects.” A key part of this commitment is the state’s plan to refer all persons needing information regarding family planning to such planning classes, and to provide after-school programs through which youths may be offered “enrichment opportunities, tutoring, self-esteem, and other positive alternatives to early parenting.”
Pursuant to the statutory rape education program required by the federal law, Georgia’s plan affirms the state’s intent to include in the state’s program a discussion of the impact of the state statutory rape law which recently increased statutory rape penalties for adult perpetrators.
One of the most common misconceptions about the plight of welfare recipients is that they do not have the education and job training requisite for today’s job market. While the value of a high school diploma is immeasurable to anyone seeking employment and while it may be true that some welfare recipients do not have adequate job skills, all too often these insufficiencies are used as a justification for welfare dependency.
Wisconsin’s welfare officials drafted their W-2 program with the basic assumption that “everybody is able to work, or if not, at least capable of making a contribution to society through work activity within their abilities.” When countered with the argument that the high average rate of welfare recipients returning to AFDC proved their assumption wrong, Wisconsin’s officials responded that “analyses of the reasons for their return do not credit the lack of technical or basic skills as the major reasons, nor the difficulty of arranging child care. Both research and our own experience show that AFDC recipients return to AFDC because of high voluntary quit rates and frequent dismissals due to poor work habits.”
As was discussed in Part I of this report, the private employment placement firm of America Works has spent nearly a decade helping welfare recipients find and keep jobs. One of the keys to their success has been their focus and follow-up on recipients’ work habits. By teaching recipients general rules of the work place, including things a simple as how to dress appropriately, how to answer the phone and take messages, and the importance of being on-time, and making post-employment visits to the work place to talk with both the employee and employers and address any additional problems that may have arisen, America Works has been successful in placing at least 85 percent of its participants in jobs and keeping them there in excess of one year.
Unfortunately even welfare recipients with the best work habits sometimes encounter a reluctance by employers to hire persons with a less than sterling work history. This “welfare stigma” has persisted for years. In a recent effort to counteract this stigma and offset some of the cost of hiring and training new employees, some states have utilized short-term tax incentives for employers who hire welfare recipients.
A 1995 Wall Street Journal article by Richard L. Barclay suggested another approach to encourage public sector employers to give “untried” and “risky” welfare recipients a chance. Barclay proposed three changes in federal and state employment laws:
Overhauling the nation’s failed welfare system requires comprehensive change, and while the long term effect of welfare reform is expected to be a reduction in the number of recipients nationwide, no one suggests that this can be achieved without some level of initial investment. Computers must be modified to allow for more thorough reporting. States must establish programs aimed at combating illegitimacy and statutory rape. DFACS county employees must be retrained to place recipients in jobs and routinely monitor their progress, rather than just processing applications and issuing checks. Many recipients will require child care and transportation subsidies before they will be able to return to work. In essence, the entire welfare system must be re-tooled.
Georgia’s welfare officials undoubtedly realize the enormity of their undertaking, but have yet to release definitive budgetary projections as to what their reform program will cost. Michael Tanner of the Cato Institute, a Washington, D.C. based public policy organization, estimates that it will cost an average of $6,000 to $8,000 more per person to place welfare recipients in jobs than it would cost to continue supporting them under the current system.
Some might therefore argue that reform is not worth its price. A look beyond the immediate cost, however, suggests that the long-term benefits more than justify the initial investment. The problems with the nation’s current welfare system are pervasive. They are the product of decades of poor policy decisions. Allowing welfare recipients to collect assistance without requiring personal responsibility and work is wrong and demeaning to the recipient. For years the system has not only tolerated this type of behavior, it basically required it. Even more tragically, welfare recipients are not the only ones disadvantaged by the system C their children often grow up in homes where the concept of working for wages is unknown. Progress often comes with a price, but in this instance the long-term benefits will likely be well worth it.
Georgia is fortunate to be one of several states that have seen a steady decline in their welfare rolls during the past few years. Welfare rolls in Georgia reached their all time high of more than 141,000 cases in January of 1994 and have dropped by approximately 20 percent in the last two years. This decline is not just good because it lowers Georgia’s welfare expenditures, but also because federal funding under the new block grant program is based on each state’s welfare rolls during 1994. As a result, Georgia will receive more money per recipient than it has in previous years.
But before viewing this funding increase as a windfall, Georgia’s officials should consider that this decrease in the welfare rolls has come in a time of economic prosperity and a favorable job market. If the economy takes a turn for the worse, the rolls could begin to climb once again. Many observers of social policy suggest that Georgia and other similarly situated states should not spend all of their federal block grant but should create a rainy-day fund instead.
Accurate budget estimates for Georgia’s new cash assistance program are difficult to calculate for many reasons: 1) official estimates for several budget areas were unavailable from the state; 2) it is next to impossible to accurately predict economic conditions over an extended period of time; and 3) no one really knows with certainty the effect these reforms will have on welfare caseloads. Therefore, any estimates must be taken for what they are, estimates.
Georgia will receive $420 million from the federal government in FY 1997. This is composed of the TANF block grant of $331 million and the Child Care Development Fund block grant of $89 million. Although the TANF block grants will remain constant, the Child Care Development Fund block grant will increase at an annual rate of approximately 3 percent. Beginning in FY 1998, Georgia will likely be eligible to receive a supplemental grant of $9 million based on the state’s population growth and low level of spending per welfare recipient. This grant will increase to $18 million in FY 1998 and $27 million in FY 1999. All remaining funding must come from the state.
The average monthly AFDC benefit in Georgia is currently $242 per case or per family. Based on the current number of TANF-eligible families (120,000), benefits for 1997should amount to approximately $350 million. This number will change based upon actual caseloads.
The new welfare reform plan places additional responsibilities on DFACS personnel. Central Office personnel will be required to manage a more complex program as well as to install and maintain a database to track welfare benefits and individuals. Local caseworkers will be required to become much more involved in developing an individualized approach for each recipient, as well as monitoring his or her work activities.
The best model to use for estimating administrative costs is the W-2 program in Wisconsin since it has similar work and tracking requirements. Administrative costs in Wisconsin are $132 million, or $2,300 per family. This includes salaries and benefits for state and local staff, overhead (excluding computer costs), training, and employment services for recipients.
Assuming Georgia’s administrative spending per recipient approximates that of Wisconsin, total administrative expenses for 1997 will amount to approximately $275 million. In addition, Georgia should expect start-up costs such as training and database programming to amount to another $21 million.
Child Care Costs
Table 6 shows Georgia’s child care cost projections through 1999. These projections, utilizing data provided by DFACS, are based upon the assumption that 76 percent of those required to participate in work activities will need child care services, an average of 1.7 children per adult, and an average reimbursement for child care expenses of $160 per month. These costs may change based upon the actual caseload and work activity participation rates. Included in this cost estimate are allowances for child care expenses related to applicant services, transitional services and at-risk households.
Statistics indicate that approximately 45 percent of the participants in Georgia’s PEACH program require some sort of transportation. These transportation costs amounted to approximately $59 per recipient per month. These costs will change based upon the actual caseload and work activity participation rates.
These services, such as housing vouchers, transportation assistance, help with energy bills, etc., are designed to help an individual forego cash assistance altogether. Unfortunately, there has been no projection of the extent to which these services will be utilized and, therefore, no projection of the costs and subsequent savings involved. Although diversionary support should save money if it limits the number of incoming welfare recipients, the costs of the program could be significant.
Fortunately, the experience of states that have implemented many of these approaches indicate that short-term costs will increase, but long-term costs will decrease. Rough estimates seem to indicate that this should also hold true for Georgia. However, in order to guard against an economic downturn, any savings realized should be placed in a trust fund that could be drawn upon at a future date. Some good news is that the highest caseload reached in Georgia in the last ten years was approximately 141,000 in 1994.
Child care expenses are probably the most volatile and unpredictable of the potential costs because of the number of variables involved: caseload levels, work participation rates, availability, number of children per family, ages of children, rural vs. urban vs. suburban cost differences, Pre-K and Head Start participation, etc. Although costs could be contained by increasing co-payments or scaling back on work participation requirements, actual experience may be the only reliable indicator.
Minimal compliance with federal work requirements
At first glance, doing the minimum required may seem a way to reduce the need for child care and transportation expenses. However, states that have been aggressive in implementing work requirements have had more success in controlling overall costs than those that have been less aggressive.
Exemptions for adults with young dependents
Although Georgia has indicated that it intends to move all adults into a work activity as soon as possible (as long as child care is available), child care for infants and young children is quite expensive. The federal law allows states to exempt adults with dependents under the age of six from otherwise required work activities, provided the recipients can demonstrate an inability to obtain needed child care. Although this may not be in the state’s best interest in the long term and should be implemented only as a last resort, it would provide short term savings.
Estimates contained herein assume a large increase in administrative expenses. This could provide some savings if this estimate proves to be overly generous.
As with any comprehensive reform package, both the federal act and Georgia’s plan for implementing a substantial portion of it have so many new provisions that it is difficult to take them all in at once. Below is a list of some of the key elements of Georgia’s TANF plan, expressed in terms of pluses and minuses with regard to their potential for truly improving Georgia’s ailing welfare system.
During December 1996, Georgia’s Department of Human Resources hosted a series of public hearings in cities throughout the state in order to allow residents the opportunity to comment on the TANF plan.A representative of the Georgia Public Policy Foundation was present and delivered testimony at each of these 10 hearings.
Comments from members of the community varied widely at each hearing, however, there were some provisions of the plan that consistently drew questions and criticisms.Many such remarks were simply the result of public misconception or misunderstanding and were easily dispelled by explanation from Director Thurmond or a representative of his division. Below is a list of questions similar to those posed at the various public hearings, followed by a brief answer based on Georgia’s TANF plan and comments made by DFACS personnel.
Q Are there enough jobs to employ all of those welfare recipients who will be required to
A One of the greatest misconceptions of the federal law is that all recipients will have to begin
working in full-time traditional jobs immediately or face losing their benefits. While the ideal
situation would be one in which every able-bodied adult recipient is placed in unsubsidized
employment, both the federal law and Georgia’s TANF plan recognize that this is unrealistic. In
a recent television broadcast, Director Thurmond commented that people seem to think that they
will wake up tomorrow to find that welfare has been reformed. He stressed that it just isn’t so.
Welfare reform is an ongoing process that will take many years and require the work of all
members of society, it is not something that just happens overnight.
The work requirements of the federal law are a good example of this process. Beginning in
1997, states will be expected to achieve a 25 percent work participation rate. This rate
increases by 5 percent in future years, eventually topping out at 50 percent work participation
in 2002. Likewise, the definition of “work” includes activities that persons might not normally
consider to be work, including subsidized employment, work experience, on-the-job training, and
community service.Some recipients will be able to attend vocational education classes for up
to a year and teen heads of households will be able to attend school.
In addition to this progressive participation requirement and liberal work definition, Georgia’s
welfare officials should find themselves at a distinct advantage over many states due to good
economic conditions. In fact, Business Week reports that from 1991 to 1995, 35,064 new jobs
were created in Georgia C more than in any other state in the nation. Even so, jobs might not
be readily available in some of Georgia’s more rural counties. In these instances, Georgia’s
welfare officials might opt to implement a program utilized in a few other states whereby the
state helps recipients relocate from areas of high unemployment to areas in which quality jobs
are more readily available. While this may seem harsh, for years, many Americans have
followed the jobs as they moved from city to city or state to state.
Q Isn’t it unfair to terminate a persons assistance just because he/she misses one or two
“mandatory” parent/teacher conferences?
A As part of the Personal Responsibility and Work Plan, an individual may be required to attend a
number of classes, conferences, and treatment sessions. These requirements are determined
based on the needs of each individual recipient and are geared toward helping those individuals
lead responsible, self sufficient lives. Parent/teacher conferences, for example, are important
tools for the teacher, the parent and the student, and attendance at such conferences should be
mandatory of all parents.
While a recipient may be sanctioned for failure to comply with this section, DFACS personnel
have been quick to respond that failure to comply due to circumstances beyond an individuals
control will not automatically result in sanctions. Case managers will discuss the noncompliance
and the reason(s) thereof with each recipient before making the final determination of whether a
sanction is warranted. If a parent, due to work or other good cause, cannot attend a scheduled
conference, the case manager will work with that parent and teacher (if necessary) to ensure that
the conference is rescheduled at a more convenient time.
Q Georgia’s plan prohibits recipients from voluntarily quitting a job. Doesn’t this make
welfare recipients susceptible to abuse from employers who know that the employees’ hands are tied?
A The “voluntary quit” provision stipulates that “applicants / recipients who voluntarily quit a
job without good cause will be sanctioned.” (underline added for emphasis) The “good cause”
exception was designed to prevent just such abuses while giving employees the freedom to move
into a better job should one be offered to them. Welfare recipients, like non-recipients, are not
without recourse when they believe that they are being treated unfairly or discriminated against
by an employer. Federal law puts numerous restrictions on employer / employee relations and
anyone whose rights have been violated has a remedy at law.
As oppressive as this provision may seem, and in spite of the claim that its effect is tantamount to
slavery, this “voluntary quit” prohibition puts welfare recipients and non-recipients on a level
playing field. Most individuals employed in unsubsidized jobs do not have the flexibility to quit
at will without ensuring that they have an alternative means of employment. Even those that
encounter unfair or discriminatory working conditions often have to continue working to support
their families while pursuing remedies to the unwanted situations.
Q What will happen to recipients who are working in either subsidized or unsubsidized
employment and must miss work unexpectedly when a child becomes ill?
A The federal law requires states to impose a pro rata reduction in benefits for those failing to
satisfy the minimum federal work requirement. In addition, recipients may be sanctioned for
non-compliance under Georgia’s “two-strikes-and-you’re-off” provision.
One of the most difficult aspects facing case workers overseeing recipients’ transition into the
work force is teaching recipients to prepare for such situations in advance. Most working
parents, especially single parents, are not able to unexpectedly miss work to care for a sick
child. They are forced, instead, to make arrangements with relatives, friends or neighbors. It
might even be necessary for an individual to have 2 or 3 alternative care-givers lined up in
advance to ensure that the child will be cared for when an emergency arises.
Q How can Georgia’s welfare officials expect the elderly and disabled to find jobs?
A Georgia’s plan for implementing the federal TANF program allows participation in any one
or combination of specified activities for the minimum number of hours to satisfy the work
requirement of the federal law. These activities include: subsidized and unsubsidized
employment, work experience, on-the-job training, job search and job readiness, community
service, vocational education, job skills training, education directly related to employment,
secondary education, and/or the provision of child care for recipients engaged in community
While it may be difficult, if not impossible, for some of Georgia’s elderly and disabled to
maintain traditional full-time unsubsidized jobs, this list of allowable activities is diverse
enough to accommodate those with even the most modest level of work skills. In addition, a statement that accompanied the Governor’s TANF plan indicated that Georgia’s 20 percent hardship exemption from the federal lifetime eligibility limit would be reserved solely for elderly
and disabled welfare recipients.
Q Why does Georgia’s plan discriminate against immigrants?
A Under the federal law, newly arriving legal immigrants will not be eligible for public welfare
assistance until they have been in the United States for 5 years. States, however, have the option
of continuing assistance to legal immigrants already residing in the United States, but must do
so solely with state funds.
While Georgia’s plan limits assistance to such immigrants to just one year or until such time as
they become citizens, it is more generous than what some states have opted to do as well as what
was required under the federal law.
Q Can recipients really be expected to become self sufficient when the welfare laws won’t
allow them to earn any money or amass even negligible savings without penalizing them by
reducing or terminating their cash assistance?
A The problem of welfare recipients finding their cash benefits abruptly reduced or even
terminated when they begin to work for their own income is not a new one. And unfortunately,
it is a problem likely to persist under the new system.
While it may be harsh, the reality is that states will now be operating on limited budgets based
on their welfare enrollment in previous years, rather than an endless supply of federal dollars.
It will be important for Georgia and other states to disperse their funds conservatively and
wisely. Naturally, those persons with the greatest need should receive the most assistance, but
the result may be that some welfare recipients (those with earned income) will get a smaller
While neither the federal law nor Georgia’s plan offer a cure for this problem, they do provide
partial solution. These solutions include, but are not limited to, diversionary assistance,
recipient support services and Individual Development Accounts (should the state opt to
Q What will happen to those who lose their benefits because they can’t find jobs or who use up
their entire 48 months of eligibility?
A It is important to realize that TANF is more than just an updated, state-run version of the old
AFDC program. Neither the federal law nor Georgia’s plan for implementing TANF were
designed to pull the rug out from under recipients without warning. Recipients will not just wake
up four years from now to find that their benefits have been terminated. Welfare is no longer
about determining which applicants are eligible for assistance and providing them with cash
benefits, it is about helping people become self reliant.
In addition, too little focus has been put on the “charitable choice” provision of the federal law.
Historically, private sector assistance programs have been run more efficiently and produced
better results than government-funded welfare efforts. More than 85 percent of American adults
contribute time, goods, or money totaling in excess of $125 billion each year. States can not
bring about comprehensive reform on their own – local non-profit and faith-based organizations
must be utilized to aid their efforts. Local institutions must be willing to help out and businesses
must be willing to give recipients a chance at mainstream employment.
Q Under the PEACH program, recipients have been allowed to attend college full-time. How,
if at all, will this change under the new plan?
A The federal law does not consider the pursuit of a college degree to be a “work activity”,
however the act only requires participants to work 20 hours per week in the first year, and never more than 30 hours per week. While Georgia officials indicate that they are still determining how to handle those attending such classes, the minimum federal work requirements are such that it would be possible for these recipients to continue their course of study, at least on a part-time basis, and still satisfy the work requirement.
Q How can the DFACS county-level caseworkers possible handle all the additional
responsibilities and duties that Georgia’s plan requires?
A In 1995, DFACS began to shift the duties of its county-level employees from those of determining
eligibility to placing individuals in jobs. DFACS will undoubtedly have to continue this process
and possibly re-train some employees in certain areas of job training and placement.
Although only in its initial stages, this transition appears to be producing positive results and as
more recipients are placed in jobs there will be fewer recipients in all allowing more time for
caseworkers to devote to ensuring that each individual is making steady progress toward self
Q Welfare recipients often lack the education and skills needed to get and maintain a full-time
job. Isn’t it unfair to threaten these persons with termination of benefits if they are truly not
qualified to work? What type of assistance does Georgia’s plan provide for these individuals?
A One of the most comprehensive changes in this new legislation is its treatment of those who
who are disadvantaged. Under the old law, welfare recipients were not required to engage in
any activities that would help improve their work and socialization skills – they were allowed to
receive public assistance as long as they met the eligibility requirements.
Now, through tough work requirements and strict life-time eligibility limits, recipients who lack
adequate skills will have to begin developing such skills immediately or ultimately face
termination of their cash assistance. While some might argue that this requirement is
insensitive, the old practice of allowing individuals to remain disadvantaged was at least as
destructive, if not more so, to welfare recipients, their families, and their entire community.
Under the new system, welfare recipients will be allowed to participate in some job training and
vocational education in satisfaction of their minimum work requirement. There are, however,
limits imposed on such activities. While participation in these activities will only satisfy the
work requirement for a few months, states like Wisconsin, for example, have found that
recipients are best served if they participate in some combination of job skills training and
development, education, and either work or community service for a total of 40 hours per week.
Under this approach, the work requirement is achieved through participating (for 20-30 hours
per week) in work or community service and the recipient continues to get critical training
during an additional 10-20 hours per week.
From a 1994 report compiled by June O’Neill (now-Congressional Budget Office Director) and Anne Hill of Queens College, City University of New York. Cited in How Welfare Harms Kids, The Heritage Foundation Backgrounder, No. 1084, June 5, 1996.
Id., citing a 1992 study by Mary Corcoran and Roger Gordon of the University of Michigan.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104-193, 110 Stat. 2105, 212131, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 407(b)(5)). Under this provision, Governor Miller exercised his option to exempt from work a single custodial
parent caring for a child who has not attained 12 months of age.
110 Stat. 2105, 2132, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 407 (e)(2)).
TANF benefits received while a recipient was living in another state will count toward the 48-month lifetime limit in Georgia.
110 Stat. 2105, 2132, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ?407(e)(1)(a)).
In addition, a small percentage of welfare applicants and recipients will never truly be qualified to hold unsubsidized employment.
DFACS reports that the average welfare recipient receives $3,360 annually in cash assistance. This figure does not include the value of other public assistance benefits, such as Medicaid, food stamps and child care assistance.
Codified at O.C.G.A. 17-10-6.1.
110 Stat. 2105, 2114, ? 103 (amending 42. U.S.C. 601 et seq. by inserting ? 402(a)(1)(A)(ii)).
Bill Shipp’s Georgia, January 13, 1997, at page 6.
Department of Workforce Development, State of Wisconsin, W-2 Program Narrative, page 36 (1996).
Id. at 38.
States may also disregard such individuals entirely when calculating the states’ work participation rate.
See supra note 4.
From the remarks of Tom Wade, spokesman for the Department of Human Resources, at the Republican Welfare Task Force meeting,
January 12, 1997.
Georgia’s TANF plan considers items such as cash, checking and savings accounts, credit union accounts, and non-EITC tax refunds to be resources and sets the resource eligibility limit at $1,000. The equity value of one vehicle (up to $4,650) may be excluded from the resource calculation provided that the vehicle is used to look for work or used to travel to work or educational activities.
110 Stat. 2105, 2124, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 401(h)).
Id. 110 Stat. 2105, 2124, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 404(h)(2)(C)). An individual may only contribute to an Individual Development Account such amounts as are derived from earned income.
There are seven classifications of child care: Center-Based Care, Group Home Care, Family Day Care, Relative In-Home, Non-Relative In- Home, Relative Out-of-Home and Non-Relative Out-of-Home.
Judith Havemann and Barbara Vobjeda, Wisconsin Moves to Cover Welfare’s Day-Care Costs, Landmark Reform Program Gets $25 Million Injection, The Washington Post, December 13, 1996, at A02.
Division of Family & Children Services, State of Georgia, 1995 Descriptive Data Book, page 85 (1996).
Williamson, Laura, DFACS to make deadline for federal child care grant, Atlanta Journal & Constitution, September 19, 1996.
These projections are based on the state’s anticipated level of child care funding as of August 21, 1996. As of that date, DFACS estimated that it would have a total of $118,285,892 (state and federal funds) at its disposal to assist needy Georgians with child care. Under the new law, it is now estimated that Georgia’s combined Child Care Development Block Grant funds will equal $123,311,807.
Welfare Reform, Child Care Costs, and Taxes Delivering Increased Work, 13 Yale L. & Pol’y Rev. 173, at 181 (1995).
Mandatory Funds are allocated based on the federal share of expenditures for Title IV-A child care in FY 1994, FY 1995 or the average of FY 1992-1994, whichever is greatest.
This is a preliminary calculation and may need to be adjusted. In order to be eligible for matching funds, states are required to maintain the greater of FY 1994 or FY 1995 expenditures for IV-A child care.
Matching Funds are allocated according to the proportion of children under age 13 using census data as of July 1995, in accordance with the At- Risk Child Care program allocation formula.
State expenditures above the maintenance of effort (MOE) level are matched based on the FY 1995 FMAP rate.
Discretionary allocation is preliminary and based on the $1 billion in authorized funds.
W-2 Program Narrative, supra note 12 , pages 52-53.
Child / family eligibility for additional program services is satisfied by participation in or income eligibility for one of the following: Medicaid, AFDC and / or food stamps, Women / Infants / Children (WIC), free and reduced lunch participation, or PEACH (Positive Employment and Community Help). Extended day services are limited to children of parents who are involved in work activities, school or job training for at least 20 hours per week.
Ten percent of the state’s Head Start enrollment must be available for children with disabilities, regardless of income. Maximizing Opportunities, Minimizing Barriers, 1994-1995 Data Book, Care Solutions, Inc.
110 Stat. 2105, 2132, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 407(d)(12)).
Id. 110 Stat. 2105, 2113, ?103 (amending 42 U.S.C. 601 et seq. by inserting ? 401(1)(i)).
PEACH Program policy limits transportation subsidies to $350.00 per person per month.
This figure is a combination of the average number of PEACH recipients (9,239 per month) and PEACH applicants (651 per month).
W-2 Program Narrative, supra note 12, pages 68-69.
110 Stat. 2105, 2113, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 401(a)(v)).
Id. 110 Stat. 2105, 2113, ? 103 (amending 42 U.S.C. 601 et seq. by inserting ? 401(a)(vi)).
O.C.G.A. 10-6-3 (1995).
W-2 Program Narrative, supra note 12, pages 1-2 (1996).
Lucy Soto, State’s got its work cut out for it, Atlanta Journal & Constitution, September 2, 1996, at B2.
Wisconsin operates an aggressive community service program through which it “employs” nearly 50 percent of its able-bodied welfare recipients for up to 30 hours per week, with an additional 10 hours per week of education and training activities.
See supra note 11.
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