Resources
Resources| Vol. 5, No. 12 October 2001 |
Background
The Personal
Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996
significantly changed federal welfare policy.
The shift to a "work first" approach and a limit on the
amount of time recipients can receive welfare assistance resulted in a large
number of former recipients entering the workforce.
Although now employed, many former welfare recipients are not yet able
to earn enough money to lift their families out of poverty.
PRWORA gives states the flexibility to provide cash supplements and
income disregards to TANF recipients as an incentive to work, and a majority
of states have chosen to do so
This
Resources for Welfare Decisions provides access to a variety of
resources regarding state initiatives to provide income support to families
transitioning from welfare to work. For
additional information see http://www.welfareinfo.org/disregard.htm,
http://www.welfareinfo.org/earningsupp.htm,
and http://www.spdp.org/tanf/financial/treatmentearnings2000.PDF.
Publications and
Electronic Resources
Beeferman, Larry W. and Sandra H. Venner, Promising State Asset
Development Policies: Promoting Economic Well-Being Among Low-Income
Households, (Waltham, M.A.: Center on Hunger and Poverty, Brandeis
University, April 2001) at http://www.centeronhunger.org/pubs/promising.pdf.
Berlin, Gordon, Encouraging Work, Reducing Poverty: The Impact of
Work Incentive Programs, (New York, N.Y.: Manpower Demonstration
Research Corporation, March 2000)
Knox,
Virginia, Cynthia Miller, and Lisa A. Gennetian, Reforming Welfare and
Rewarding Work: A Summary of the Final Report on the Minnesota Family
Investment Program,
Making
Wages Work: Reducing Dependency and Poverty Through Income Supplements
is a web site and list-serve devoted to encouraging the discussion and
promotion of policies and programs that supplement income and wages in order
to help families escape poverty and avoid welfare dependency.
Visit http://www.makingwageswork.org.
Meyer,
Bruce and Greg Duncan (ed), The Incentives of Government Programs and the
Well-Being of Families, Joint Center for Poverty Research, (Chicago,
ILL: June 2001), at http://www.jcpr.org/book/pdf/Incentives.pdf.
Michalopoulos,
Charles, and Gordon Berlin Financial Work Incentives for Low-Wage
Workers: Encouraging Work, Reducing Poverty, and Benefiting Families,
Joint Center for Poverty Research, (Chicago, ILL.) at http://www.jcpr.org/book/pdf/IncentivesMichChap4.pdf.
Michalopolous,
Charles, David Card, Lisa A. Gennetian, Kristen Harknett and Philip Robins, The
Self-Sufficiency Project at 36 Months: Effects of a Financial Work Incentive
on Employment and Income, (Ontario, Canada: Social Research
Demonstration Corporation, June 2000) at http://www.srdc.org/english/publications/Eng%20SSP%20Adult%20Outcomes.pdf.
Morris,
Pamela A., and Greg J. Duncan, Which Welfare Reforms are Best for
Children?, (Washington, D.C.: Brookings Institution, September 2001) at
Riccio,
James A., Mobilizing Public Housing Communities for Work: Origins and
Early Accomplishments of the Jobs-Plus Demonstration, (New York, NY:
Manpower Demonstration Research Corporation, 1999) at http://www.mdrc.aa.psiweb.com/Reports99/Jobs-Plus.pdf.
Robbins,
Philip K. and Charles Michalopoulos, “Using Financial Incentives to
Encourage Welfare Recipients to Become Economically Self-Sufficient”, FRBNY
Economic Policy Review, September 2001 (New York, NY: Federal Reserve Bank of New York,) at. http://www.ny.frb.org/rmaghome/econ_pol/2001/801prob.pdf.
Sawhill, Isabel and Adam Thomas, A Hand Up for the
Bottom Third: Toward a New Agenda for Low-Income Working Families,
(Washington, D.C.: Brookings Institution, May 2001), at http://www.brook.edu/views/papers/sawhill/20010522.pdf.
Strawn, Julie and Karin Martinson, Steady Work and
Better Jobs: How to Help Low-Income Parents Sustain Employment and Advance
in the Workforce, (New York, N.Y.: Manpower Demonstration Research
Corporation, June 2000) at http://www.mdrc.org/Reports2000/SteadyWorkGuide.pdf.
Resources
Center
on Budget and Policy Priorities, contact Shawn Fremstad at 202/408-1080, fremstad@cbpp.org,
or visit http://www.cbpp.org.
Center
on Hunger and Poverty, Asset Development Institute, Brandeis University,
contact Larry Beeferman or Sandy Venner at 781/736-8885, or visit http://www.centeronhunger.org.
Jobs-Plus is a five-city demonstration program designed to assist
working age residents in public housing increase employment and earnings and
transform their communities into high work areas. Sponsored by the Manpower Demonstration Research Corporation
(MDRC), Jobs-Plus combines employment related activities, financial
incentives to work and continued support for work.
An update on the project will be published in November 2001 and a
final report on the project is due to be published in 2003.
For additional information contact: Jim Riccio at 212/340-8822, james_riccio@mdrc.org.
Joint
Center for Poverty Research, contact: Barbara Ray, hiredpen@rcnchicago.edu,
or visit http://www.jcpr.org.
National
Conference of State Legislatures, contact Jack Tweedie, 303/830-2200, or
visit http://www.ncsl.org.
The
New Hope Project, a limited-term research demonstration project in
Milwaukee, WI, offered an earnings supplement check to low-income adults who
worked at least 30 hours per week, but whose income at entry was at or
below150% of poverty. Job
search assistance, transitional jobs for 6-12 months (if unable to find
work), affordable health insurance and subsidized child care were also
provided. Contact Julie
Kerksick at 414/267-6020, juliek@newhopeproject.org,
or visit http://www.mdrc.org.
What the States are
Doing
Alaska
provides work incentive deductions. The
maximum earned income deduction is $150 and 33% of the remaining income per
month for the first 12 months. After
that time, the percentage of the disregard decreases to 25, 20, 15 and 10
percent, each for another 12 months. After
60 months, the individual will continue to receive the $150 deduction.
Another deduction for child or dependent care expense is then taken from the
remaining income. The
child/dependent care deduction is a maximum of $200 a month for a child
under age 2, and $175 for children 2 and over, or for an incapacitated
parent. Contact Carolyn
Spalding 907/465-2340, Carolyn_Spalding@health.state.ak.us.
Florida's
Passport to Economic Progress (PEP) allows two counties to take a number of
steps to improve incomes for current and former welfare recipients. PEP
provides for an earned income disregard of $300 and ½ of the remaining
income; transitional education and training, child care and transportation
services for up to 4 years after leaving welfare; and a wage supplement for
full-time workers who leave welfare that brings the family's income up to
100% of the federal poverty level for up to 1 year. Contact: Cindy
Huddleston, Florida Legal Services, 850/385-7900, cindy@floridalegal.org.
Illinois was the first state to "stop-the-clock" by using its
maintenance of effort (MOE) matching funds, rather than TANF funds to pay
for benefits to eligible families with one parent working at least 30 hours
a week. Eligible families with
2 parents must be employed a total of 35 hours a week.
Only one out of every 3 dollars of earned income for families
receiving TANF is budgeted against their TANF cash assistance. Nonexempt income from sources other than employment is
budgeted dollar for dollar off the TANF cash assistance. A family whose only source of income is from employment
remains eligible until their gross earned income reaches 3 times the
family’s TANF payment level. Contact: Marilyn Okon, 217/785-0754, DHSBP02@DHS.STATE.IL.US.
Minnesota. The Minnesota Family Investment Program (MFIP) strives to
make work pay by offering financial incentives to working families in return
for mandated employment and training. First
implemented in 1994, MFIP was extended statewide as the state's TANF program
in 1998. Applicants and
long-term welfare recipients are eligible for incentives.
MFIP enables recipients to mix earnings and public assistance while
requiring participation in job-related and training activities.
When a participant is working, standard is increased by 10% for the
purposes of calculating the family's benefit and 38% of gross earnings are
disregarded. Contact: Chuck
Johnson, 651/297-4727, Chuck.Johnson@state.mn.us.
Mississippi
has a six and three-month earned income disregard.
TANF recipients who find full-time employment (at least 35 hours a
week) within 30 days after initial approval for TANF benefits, or within 30
days after the start of the job readiness/job search work activity in the
TANF work program, can have the earned income received from this employment
totally disregarded from the TANF budget for up to 6 months.
Those who do not qualify for the 6 month total earned income
disregard may be eligible for a 3 month total disregard under certain
circumstances. Contact Vera
Butler, 601/359-4853, vbutler@mdhs.state.ms.us.
New
Jersey's Supplemental Work Support Program became effective on April
1, 2001. Participating families that voluntarily close their TANF cases
qualify for $200 each month as a work support for up to two years if
earnings remain below 250% of the federal poverty level, and the TANF time
clock is stopped. Like other
post-TANF recipients, families can receive
up to two years of child care benefits, specified transportation assistance,
receipt of full child support payments, and 24 months of extended Medicaid
if otherwise not available due to earnings.
Contact Joe Maag, 609/588-2159, jmaag@dhs.state.nj.us.
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