Welfare Reform Hits the Bay Area

This law, which makes fundamental changes to our national system of support for the needy, is officially known as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The new law covers nine areas of welfare assistance:

· Temporary Assistance for Needy Families (TANF)

· Supplemental Security Income-SSI

· Child Support

· Restricting Welfare and Public Benefits for Aliens

· Child Protection

· Child Care

· Child Nutrition Programs

· Food Stamps and Commodity Distribution

· Miscellaneous

The Legislative Analyst estimates that welfare reform will result in a net reduction of $6.8 billion in federal funds to California over the first six years of implementation

AFDC Eliminated; Meet TANF

The Department of Social Services recently unveiled an initial state plan for Temporary Assistance for Needy Families (TANF).

This program will replace AFDC, which was eliminated under the federal law.

The Department of Social Services has emphasized that the TANF plan is not the new welfare redesign plan for California; the real overhaul will take place over the coming year through state legislation and administrative actions.

By submitting the TANF plan to Washington, California will draw down approximately $195 million in federal monies. The State has committed $60 million of these funds to the GAIN program- designed to improve the job readiness of those on aid.

State Block Grants Replace Individual Entitlements

The concept of individuals being "entitled" to cash assistance simply by meeting basic eligibility standards is history, as of October 1.

Instead, under the TANF program, states will receive block grants of federal funds. Each state is authorized to establish its own benefit levels and eligibility standards.

In California, the block grant program will replace AFDC, JOBS (which is the federal funding portion of GAIN), and Emergency Assistance Programs.

Funding of the block grants can be based on average federal funding in FYs 1992-94 or on average spending in FY 1994-95. The block grants are fixed allocations- regardless of caseload growth or economic changes.

One dramatic aspect of welfare reform is a five year (60 month) time limit on TANF assistance.

Any month during which a family receives any type of assistance with TANF funds will count toward the time limit; emergency assistance, job training, child care, as well as cash payments all count toward the 60 month total.

However, states are authorized to exempt twenty percent of their caseloads from this requirement, and child-only cases are all exempt.

Beyond five years, families may still receive non-cash assistance provided with state funds or federal social service funds.

Restricting Benefits for Non-Citizens

Under welfare reform, current immigrants are ineligible for SSI and Food Stamps (except refugees, veterans, asylees, and those whohave worked 40 quarters). States are also authorized to deny TANF benefits, the Social Services Block Grant (Title 20) and Medicaid services to current immigrants.

Immigrants arriving in the United States after the law was enacted are ineligible for all means-tested federal benefits for five years, except for emergency medical services and certain child nutrition and educational programs

Food Stamps Slashed

Half of the federal dollars saved under welfare reform ($23.3 billion) will be derived from major cuts to the food stamp program.

Able-bodied persons age 18 to 50 without dependents will be limited to food stamps for a maximum of three months out of any three year period- unless they are working a minimum of 20 hours per week. Recipients who lose their jobs may be eligible for oneadditional three month period.

Cutting Programs for Children

Significant protests have been raised over the cuts to support services for children under welfare reform.

While the Legislative Analyst estimates that California will receive an additional $525 million for child care, $28 million for child support enforcement and $21 million for child protection over the next six years, $340 million is being slashed from funding for childnutrition programs in the State and $524 million will be cut from SSI for disabled children.

Fiscal Impact of Welfare Reform

Federal Savings

Under welfare reform, federal spending will be reduced by $55 billion in fiscal years 1997 through 2002.

The bulk of the savings will come from food stamps ($23.3 billion) and benefit limits for legal immigrants ($22 billion).

State Losses

California will lose $6.78 billion (net) over the next 6 years: $5.86 billion in restricted benefits to immigrants, $1.68 billion fromreductions in food stamps, $430 million in cuts to child nutrition programs, and $524 million to SSI. However, California will gain$1.35 billion under TANF.