# Welfare Reform: A Comparison of H.R. 3500 an > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3A94-176 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** February 23, 1994 - **Citation:** 94-176 ## Text 94-176 EPW CRS Report for Congress Welfare Reform: A Comparison of H.R. 3500 and S. 1795 With Current Policy Carmen D. Solomon Specialist in Social Legislation Education and Public Welfare Division February 23, 1994 :e The Library of C gress TABLE OF CONTENTS AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) . . . . . . . . . . . . . . . . . . . . . . . . . . 1 GENERALDESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Needy Dependent Children Under Age 18 or 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 FamilyUnit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Children of Minor Parents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Assignment of Child Support Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Citizenship or Alien Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CONDUCT REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Treatment and Testing of Drug Addicts and Alcoholics . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Participation in Parenting and Money Management Classes . . . . . . . . . . . . . . . . . . . . . . . 6 Preventive Medical Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 School Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 WORKPROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Program Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Overall Time Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Participation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Measure of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Participation Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Evaluation of Education and Training Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 CHILD SUPPORT ENFORCEMENT (CSE) PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GENERAL DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ESTABLISHING PATERNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paternity Establishment Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W-4REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . STATE INFORMATION SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NATIONAL INFORMATION SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INCOME WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UNIFORMORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WORK REQUIREMENT FOR NONCUSTODIAL PARENT . . . . . . . . . . . . . . . . . . . . . . . . 22 22 22 23 24 26 27 29 30 31 WELFARE REFORM: A COMPARISON OF H.R. 3500 AND S. 1795 WITH CURRENT POLICY SUMMARY The Family Support Act of 1988 (P.L. 100-485). which put new stress on education, work, and training for recipients of the Aid to Families with Dependent Children (AFDC) program, was signed into law on October 13, 1988 by President Reagan. The law established a work, education, and training program called Job Opportunities and Basic Skills (JOBS), for which it sharply expanded Federal workltraining funds, and it required States to engage in JOBS most AFDC parents with children age 3 and over. Under the AFDC program, a family can receive AFDC for an indefinite period, if it meets program income and eligibility rules. The JOBS program imposes no time limit on general participation, but does limit the length of time a person may be required to participate in job search or a specific work activity. Because of severe budget pressures most States used only part of the $1 billion appropriated for JOBS in Federal matching funds in FY 1991-93. Since JOBS began AFDC rolls rose to historic peaks. AFDC now serves one in seven children, a total of 9.6 million children in 5 million families. In his 1994 State of the Union address, President Clinton said he would send a comprehensive welfare bill to Congress in the spring and that it would impose a 2-year limit on benefits, provide community service work for those without a private job after AFDC ends, forbid AFDC for unwed teenage parents not living at home, and increase collection of child support payments. His call for welfare reform during the Presidential campaign kindled a debate and has prompted some legislation. In late February 1994, a welfare proposal was being developed by the Democratic Mainstream Forum of the House, and two major bills were pending in Congress: H. R. 3500, the Responsibility and Empowerment Support Program Providing Employment, Child Care, and Training (RESPECT) Act, and S. 1795, the Welfare Reform Act of 1994. H.R. 3500 was introduced by 160 House Republicans on November 10, 1993, and was referred to eight committees. S. 1795, the Welfare Reform Act of 1994, was introduced by 17 Senate Republicans on January 25, 1994, and was referred to the Finance Committee. This report presents a side-by-side comparison of H.R. 3500 and S. 1795 with current policy. Both bills would require the JOBS program to include a time-limited "transition" component and a work component. Both bills would require the transition component to include job search activities. Unlike the current JOBS program, which exempts mothers whose youngest child is under age 3 (or under age 1 at State option), both the House and Senate bills would exempt only mothers with newborns (up to age 6 months for first baby born to an AFDC mother, 4 months for subsequent babies). Both bills would allow or require States to place more conditions on AFDC recipients without having to obtain Federal waivers (e.g., end AFDC for teenage parents and their children, deny AFDC for additional children, pay new residents the lower benefit of their former State, require AFDC parents to attend parenting and money management classes). Both bills would require that paternity be established for a higher percentage of children and add new measures to improve collection of child support payments (such as State and national information systems, income withholding procedures, uniform information to be included in child support orders, and work requireme* for noncustodial parents with child support arrearages). Both bills would limit or ban AFDC for most legal aliens. The House bill would deny welfare benefits to most legal aliens after a 1-year transition period. The Senate bill would allow legal aliens to retain eligibility, but their sponsor's income and resources would be deemed to them until they became naturalized U.S. citizens. Under current law, States may help a recipient obtain a job under a work supplementation program, in which the employer receives a wage subsidy paid with the AFDC grant. Both bills would revise the work supplementation program by allowing States to include food stamp benefits in the wage supplement and to assign work supplementationparticipants to unfilled jobs. S. 1795 is unlike current law and H.R. 3500 in that it would require States to establish an employment voucher program. The voucher would be in lieu of AFDC and food stamp benefits and for the first 6 months of work, would equal each month the combined monthly value of the family's AFDC and food stamp benefits. For the second 6 months of work, the voucher would equal 50 percent of the combined monthly value of the AFDC and food stamp benefits. Recipients would be required to give the voucher to their employers (as a wage supplement) during the first year of employment. To obtain a voucher, an employer would have to guarantee the recipient monthly wages equal to at least twice the employment voucher, or the minimum wage for hours worked, whichever is greater. After 1 year, the voucher would be eliminated. Unlike current law, both bills would pennit States to limit the length of time that a person could receive AFDC. Under both bills participation in the transition component (i.e., job search, education, and training activities) could not exceed 2 years. H.R. 3500 would give States the option of dropping an AFDC family from AFDC after the caretaker relative had participated in the work program for 3 years--after a maximum total of 5 years on AFDC. S. 1795 would give States the option of dropping an individual from AFDC after he or she had participated in the work component for 1 year--after a maximum total of 3 years on AFDC. H. R. 3500 would limit Federal funding for AFDC, Supplemental Security Income (SSI), food stamps, the Earned Income Tax Credit (EITC), and housing subsidies. Both House and Senate bills would amend the Child Support Enforcement (CSE) program. The House measure would require some employees to report child support obligations on their W-4 forms. A preliminary estimate by the Congressional Budget Office (CBO) indicates that the gross Federal cost of the transition and work components of H.R. 3500 would be $5.4 billion during the first 5 years of implementation (FY 1994-98) and $7.3 billion in the sixth year (FY 1999). PROVISIONS RELATlNG TO RECEIPT OF "WELFARE" BY ALIENS . . . . . . . . . . . . . . . . . . . 32 Provisions Related to Alien Eligibility for Federal Assistance . . . . . . . . . . . . . . . . . . . . . . . . 32 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 SSI Benefits for Drug Addicts and Alcoholics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Social Security Benefits for the Criminally Insane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Cap on Funding for Selected Means-Tested Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Option To Conver-t AFDC Program to a Block Grant Program . . . . . . . . . . . . . . . . . . . . . . . 34 Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 EIectronic Benefit Transfer De~nonstrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Waiver Requests . . .; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Public Housing Rent Reform . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . 36 Eligibility for Food Stamps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Food Assistance Block Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 WELFARE REFORM: A COMPARISON OF H.R. 3500 AND S. 1795 WITH CURRENT POLICY Itern Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 AID TO FAnlILlES WITH DEPENDENT CHILDREN (AFDC) GENERAL DESCRIPTION The AFDC program, title IV-A of the Social Security Act, provides Federal matching grants to States to enable them to aid "needy" children and their relative caretakers. Although many AFDC provisions would remain, its Job Opportunities and Basic Skills (JOBS) program would be required to have a t'imelimited "transition" component and a work component . Although many AFDC provisions would remain, its JOBS program would be required to have a time-limited "transition" component and a work component. Federal law requires States, to the extent resources permit, to require most able-bodied AFDC recipients with no child under age 3 to participate in the State's education, training, and work program, the JOBS program. States would be required to require most ablebodied recipients to participate for up to 2 years in the transition component, which would be required to include job search and might include education, training, and work experience programs. States would be required to require recipients to participate in either the transition o r work program. States would be required to establish an employment voucher program as part of both the transition component and the work component. T h e purpose of the voucher would be to help a recipient gain employment by providing the employer with a subsidy. After 2 years (or lesser period, at State option), a person could continue to receive AFDC benefits only by participating in the program's work component, which might include a work supplementation program (subsidized job), a community work experience program, o r any other State work program approved by the Secretary of the Department of Health and Human Services (DHHS). If at the end of 2 years (or 1 year, at State option), the recipient were unable to obtain a job, h e o r she would have to participate in the work component o f the JOBS program o r face loss of his o r her portion of the family's AFDC benefit. States would have the option of dropping an AFDC family from AFDC rolls after the caretaker relative had participated in the work program for 3 years (after a minimum total of 3 years on AFDC). These persons would continue to qualify for Medicaid. States would have the option of dropping an individual family member from the AFDC rolls after he o r she had participated in the work component of the program for 1 year (after a minimum total of 2 years on AFDC). These persons would continue to qualify for Medicaid. Recipients remain eligible for benefits as long as they meet program rules. Needy Dependent Children Under Age 18 or 19:" 1. Who live with one parent because of the death or continued absence from home of the othm *Note: Eligibility for AFDC ends on a child's 18th birthday, or at State option upon a chiltl's 19th birthday if the child is a full-time student in a secondary or technical school and is expected to complete Coverage mandatory, child born to an AFDC recipient or to an individual who received AFDC at any time during the 10-month period preceding the child's birth (unless the State adopted a law exempting itself from this Federal provision). [Sec. 30.51 Note: ,4lthough the intent of this provision appears to require States to deny higher AFDC benefits to recipients who have z~riditional children, under H.R. 3500 as currently drafted a child born to a woman who received AFDC while she was pregnant would be ineligible for AFDC benefits, unless the State adopted a law of exemption. (Under current law AFDC is available, at State option, for a pregnant woman in her third trimester.) benefits to children conceived by women already receiving AFDC. [Sec. 4031 Item Current law 4. Who live with one parent and a stepparent. AFDC law requires that part of the stepparent's income be counted in determining AFDC eligibility and benefit amounts; marriage, hence, generally reduces benefits (the stepparent is not part of the AFDC unitlfamily). In a few States, however, State law requires that all stepparents assume the legal and financial responsibility of a natural or adoptive parent. In those States the stepparent is considered a natural parent for AFDC purposes and the family would be entitled to AFDC only if either the parent or the stepparent were incapacitated o r the principal earner in the stepparent family were unemployed. [Sec. 402(a)(3 1) of SSA] Family Unit Federal law requires that the AFDC "assistance unit" include any parent of a dependent child and any dependent brothers or sisters (except Supplemental Security Income (SSI) recipients, stepsiblings, and children receiving foster care or adoption assistance maintenance payments) who are living in the home. This means that eligibility and benefits are based on the income and needs of these family members. [Sec. 402(a)(38) of SSA] House Republican bill, H.R. 3500 H.R. 3500 would permit States to continue AFDC benefits for the parent of an AFDC child who marries someone other than the child's other parent. The AFDC benefit (called a married couple transition benefit) would equal 5 0 percent of the amount payable immediately before the marriage and would be paid for not more than 1 year if the family's income does not exceed 150 percent of the poverty level. If the stepparent family were to be eligible under AFDC-UP, as could happen in the event of the stepparent's unemployment--but only if the family were living in one of the few States that make all stepparents legally and financially responsible for their stepchildren--it could get the full AFDC-UP benefit rather than the married couple transition benefit, but not both. [Sec. 3071 Senate Republican bill, S. 1795 Same as H.R. 3500. [Sec 4041 exempts it from this rule. [Sec. 3021 minor parent, o r in a foster home, maternity home, o r other adult-supervised supportive Note: As of September 1993, four States (Connecticut, Delaware, Wisconsin, and the Virgin Islands) had chosen this option. tile teenage parent, or in a foster home, maternity home, or other supportive living parent--only if they lived with a parent, legal child of a teenage parent who lived State savings resulting from these provisions would have to be used to fund group homes, Item Assignment of Child Support Rights Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 As a condition of AFDC eligibility, applicants and recipients must assign their rights to child support to the State. Child Support Enforcement (CSE) services are available automatically without charge to AFDC families and upon application and for a fee to non-AFDC families. ISec. 402(a)(26) and 454(6) of SSA] Unless a State adopted an exemption law, the State would be prohibited from paying AFDC to the family of a child whose paternity was not established except in cases where the child was conceived as a result of rape or incest, or where the State determined that efforts to establish paternity would result in physical danger to the relative applying for AFDC. [Sec. 201(a)] The custodial parent would have to prove that an alleged parent was dead. [Sec. 201(a)] Unless a State adopted an exemption law, the State would be prohibited from paying AFDC on behalf of the mother until (1) paternity of the child had been acknowledged by the father, (2) a paternity suit had been initiated, or (3) the custodial parent had demonstrated that the alleged father was dead or missing; except in cases where the child was conceived as a result of rape or incest, or where the State determined that efforts to establish paternity would result in physical danger to the AFDC applicant or impose undue hardship on the family. [Sec. 201(a)] If paternity of an applicant child were not established and the relative alleged that any of up to three men might be the father and provided the appropriate addresses, and if the State did not disprove the allegation, then the State would be required to reduce (rather than end) the AFDC benefit to the family. The reduced benefit would be based on a family size that excluded the child whose paternity was in question. The entire family would be eligible for Medicaid benefits. [Sec. 201 (a)] If the CSE agency found that the man named was not the father, the mother would be dropped from the AFDC rolls until paternity was established (AFDC for the children would be made as a protective payment; i.e., the AFDC benefit would be paid to a person, other than the mother, interested or concerned with the child recipient's welfare). [Sec. 20l(a)] Beginning Oct. 1, 1994, the above provisions would apply to recipients as well as applicants. [Sec. 20 1 (b)] Citi~enshipor Alien Status See page 32. States would be required to develop procedures for determining undue hardship when, despite full cooperation of the custodial parent, the State were unable to determine paternity. [Sec. 201(a)] REQUIREMENTS Addicts and Alcoholics requirements, regardless of whether they arc drug addicts or alcoholics. to be a drug addict or alcoholic would be required to agree to participate in (and maintain satisfactory participation in) an to comply with these requirements would be disqualified from AFDC during the 2-year to participate in (and maintain satisfactory participation in) an appropriate treatment to comply with these requirements would be still would be eligible for Medicaid). [Sec. 7021 Money Management Classes cooperation with child support efforts). requirements to attend parenting and money classes on money management. [ S e c . 4061 Item Preventive Medical Care Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 The AFDC program provides benefits to needy children and their families. AFDC families are automatically eligible for Medicaid services. AFDC Law does not make eligibility contingent upon meeting health care requirements. AFDC benefits would be denied for children under age 6 who have not received "preventive health care" (medical examinations at specified periods) or immunizations. [Sec. 907(a)] Unless a State adopted an exemption law, the State would be required to increase the total monthly AFDC benefit of a family by up to $50 per month for up to 6 months if each child under age 6 in the family had received Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) and had been immunized in accordance with recommendations issued by the Surgeon General of the Public Health Service. Families with children under age 6 who did not meet these requirements would be sanctioned by a benefit reduction of up to $50 per family per month until the requirements were met. [Sec. 401(a)] Same as H.R. 3500. [Sec. 401(a)] The State would be required to conduct appropriate education and outreach activities to increase public awareness regarding the importance of immunizations for preschool children, inform the public about the availability of preventive health care services, clinics providing free o r reduced-price immunizations, and transportation and other supportive services that would help parents get their children immunized. [Sec. 907(a)] School Attendance Under the AFDC JOBS program, most young AFDC mothers (those under age 20) who failed to complete high school (or equivalent) must be required to participate in an "educational activity," regardless of the age of their youngest child. [Sec. 402(a)(19)(E) of SSAJ The law provides that parents who fail to participate in JOBS shall lose their share of the AFDC grant and that the children's grant shall be lwid to another adult selvi~igas a "protective" payee. See "Sanctions," page 20. ISec. 402(a)( I9)(G)(l) of SSA] States would have the option of reducing a family's AFDC benefit by up to $75 per month for each parent under age 21 who has not completed secondary school (or equivalent) and each dependent child in the family who, during the previous month, failed, without good cause, to maintain minimum school attendance. [Sec. 304 1 States would have the option of increasing a family's AFDC benefit by up to $75 per month if family members attending an educational institution or participating in a course of vocational or technical training met or exceeded school attendance requirements. Families with members who failed, without good cause, to meet school attendance requirements would be sanctioned by reducing their AFDC benefit by up to $75 per month. ISec. 4021 who has earned income and has accrued savings The money saved in the education account would for each AFDC family member, a funeral because of earnings. Statesalso could exclude as a resource for a period of up to 2 years, the ises owned by a family member. of the AFDC farnily in a month must be as a nonrecurring lump-sum payment. [Sec. eligibility for the number of months that equal the guaranteed cash income level for AFDC families with no countable income. As of consecutive months, to pay the same level of benefits could be provided for up to 1 year. in Alaska ($703 in Suffolk County, New York) to a low of $120 in Mississippi. 145 CFK Sw. 233.20(a)(2)(iii)] Federal regulations provide Item Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 - Federal law requires that all income received by the recipient or applicant be counted against the AFDC benefit except that explicitly excluded by (1) definition or (2) deduction. [Sec. 402(a)(7) of SSA] Interest on savings is not excluded. States would have the option of disregarding any interest or income earned on a "qualified asset" account and any qualified distribution from a qualified asset account. The term "qualified asset account" means a mechanism approved by the State that allows savings of an AFDC family to be used for qualified distributions. The term "qualified distributions" means payments from the qualified asset account for the purpose of (1) attending an education or training program, (2) improving one's employability (e.g., purchasing an automobile), (3) buying a home, or (4) moving to another residence. [Sec. 308(b) and 308(e)l States would be required to disregard in determining AFDC eligibility and benefit amount any savings from a "qualified education account" that are used for education expenses. [Sec. 408(b)] Federal law allows some earned income received by a recipient to be disregarded in determining the amount of the family's AFDC benefit. Same as current law. For the first 4 cot~secutivet?rorrths of AFDC eligibility irr which the recipient has (1 job: -- first $90 of monthly earned income, -- $30 a month of earned income, -- one-third of remaining earnings, and -- actual dependent care costs of up to $175 per month per dependent (up to $200 per month for a child under age 2)--less for part-time work. For. trlotrths 5 througli 12: -- first $90 of monthly earned income, -- $30 a month of earned income, and -- actual dependent care costs of up to $175 per month per dependent (up to $200 per month for a child under age 2)--less for part-time work. Afrer. 12 morrths: -- first $90 of monthly earned income, and -- actual dependent care costs of up to $175 per 1no11t11per dependent (up to $200 1x1- month fbla child under age 2)--less for part-time wol.k. (Sec. 402(a)(S) o f SSAj States would have the option of ignoring the current Federal earned income disregard rules as long as the earned income rules applied to an individual family would be at least as favorable as current law but not more favorable than disregarding the first $200 monthly of earned income plus one-half of remaining earnings. [Sec. 3061 States would be required, for 1 year, to disregard wages paid to recipients receiving an employment voucher (described on page 12) in determining whether the person were eligible for AFDC or food stamps. Although persons with an employment voucher could retain eligibility for AFDC and food stamps, they would receive wages instead of those benefits. However, by retaining eligibility for AFDC they would continue to qualify for Medicaid benefits. [Sec. 1 CRS- 10 Item Current law House Republican bill, H.R. 3500 Federal regulations stipulate that with respect to self-employment the term earned income means the total profit from business enterprise resulting from a comparison of the gross receipts wit11 the business expenses. However, items such as depreciation, personal business and entertainment expenses, personal transportation, purchase of capital equipment, and payments on the principal of loans for capital assets or durable goods are not considered business expenses. 145 CFR Sec. 233 .ZO(a)(G)(v)(RjJ States would have the option of considering as earned income, for a period of up to 2 years, only the net profits of an AFDC family's microenterprise. The term microenterprise means a commercial enterprise with 5 or fewer employees including the owner. The term net profits means the gross receipts of the business n~inus(1) payments of principal o r interest on a loan to the microenterprise, (2) transportation expenses, (3) inventory costs, (4) expenditures to purchase capital equipment, (5) cash retained by tht: business for future use by the business, ( 6 ) taxes paid by the business, (7) insurance expenses, (8) reasonable costs of obtaining one motor vehicle necessary for the operation of the business, and (9) other expenses of the business. [Sec. 308(d) and 308(e)] Federal law states that it is the purpose of the JOBS program to "assure that needy families with children obtain the education, training, and employment that will help them avoid long-term welfare dependence. " [Sec. 48 1 of SSA] H.R. 3500 would amend the statement of purpose to read: " . . . to assure that needy families with children obtain the education, training, and work experience needed to prepare them for a life without welfare." [Sec. 101(a)] Senate Republican bill, S. 1795 WORK PROGRARlS Purpose - States must establish a JOBS program and, to the extent that the program is available and resources otherwise permit, must require participation by all nonexempt adult recipients to whom the State guarantees child care. (Sec. 482 of SSA] No provision. Item Program Activities Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 State JOBS programs must include educational activities (as appropriate), including high school or equivalent (combined with training as needed), basic and remedial education to achieve basic literacy level, and education for individuals with limited English proficiency; job skills training; job readiness activities; and job development and placement. [Sec. 482(d) o f SSA] Each State's JOBS program would be expanded to include a transition component and a work component. Each State's transition component would have to include a job search program and might include any other service, activity, or program of the State's JOBS program (e.g., educational activities, job skills training, job readiness activities, job development and placement, on-the-job training, etc.). [Sec. 101(b)(l)l Each State's JOBS program would be expanded to include a transition component and a work component. The transition component would have to include a job search program and the employment voucher program (described on page 12) and might include any other service, activity, or program of the State's JOBS program (e.g., educational activities, job skills training, job readiness activities, job development and placement, on-the-job training, etc.). [Sec. 103(a>l Each State would be required to have applicants engage in job search, and at the time of their AFDC enrollment, to refer recipients to either the transition or work components of the JOBS program. [Sec. 101(a) and 103(a)] At the end of 6 months in the transition program, the State would be required to determine whether the recipient had made "clear and substantial" progress toward preparing for work. [Sec. 103(a)] If at any time during a person's participation in the transition component, he or she were determined to be employable, the person would be assigned to the work component of the program. [Sec. l03(a)] In addition, States must offer at least two of the four following items: group and individual job search; on-the-job training; work supplementation program; or community work experience program (CWEP) (or another work experience program approved by the Secretary of DHHS). [Sec. 482(d) of SSA] Each State's work component might include a work supplementation program (as revised by the bill), a community work experience program (as revised by the bill), or any other work program of the State that is approved by the Secretary of DHHS). [Sec. lOl(b)(l)l Noie: In a work supplementation program, the AFDC gla~itsubsidizes a ,iob. The work component would have to include a work supplementation program (as revised by the bill), a community work experience program (as revised by the bill), and the employment voucher program, and might include any other work program approved by the Secretary of DHHS. [Sec. 103(a)J I CRS- 12 Item Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 Each State would be required to establish an employment voucher program. Recipients of AFDC benefits only, food stamp benefits only, or both AFDC and food stamps benefits who obtained employment would qualify for tlie voucher. The voucher would be in lieu of AFDC and food stamp benefits and for the first 6 months ot work, would equal each month the combined monthly value of the family's AFDC and food stamp benefits. For the second 6 months of work, the voucher would equal 50 percent of the combined monthly value of the family's AFDC and food stamp benefits. Recipients would be required to give the voucher to their employers (as a wage supplement) during the first year of employment. To obtain a voucher, an employer would have to guarantee the recipient monthly wages equal to at least twice the employment voucher, or the minimum wage for hours worked, whichever is greater. At the end of 1 year, the voucher would be eliminated entirely. T o obtain a voucher employers also would be required to adhere to specified work standards, such as the prohibition against displacement of currently employed workers or positions and provision of workers' compensation and tort claims protection to recipients in the einployment voucher program. [Sec. 1021 Item Senate Republican bill, S. 1795 Current law House Republican bill, H.R. 3500 Federal law stipulates that no work assignment under the JOBS program result in the displacement of any currently employed worker or position or the employment or assignment of a participant or the filling of a position when (I) any other individual is on layoff from the same or any equivalent position or (2) the employer has ended the employment of any regular employee or otherwise reduced its workforce with a participant subsidized under the JOBS program. It states that no participant may be assigned under Sec. 482(e), work supplementation, or (0, community work experience, to fill any established unfilled position vacancy. [Sec. 484(c) of SSA] H.R.3500 would allow States to assign work Under H.R.3500, States would be able to use food stamp benefits as well as AFDC benefits to provide subsidized jobs for work supplementation participants. [Sec. 103(b)(l)] Employers would have to pay work supplementation participants a "salary" as least equal to the family's prior AFDC benefit and if the State elected to include food stamps as part of the subsidy, the State would have to pay the participant a salary at least equal to what the family would have otherwise received in combined AFDC and food stamp benefits. [Sec. 103(b)(2)1 Same as H.R.3500. [Sec. 103(c)] The State AFDC agency may require job search by an individual applying for AFDC beginning at the time such individual applies for aid and continuing for a period of not more than 8 weeks. Moreover, at the end of the 8-week period the State agency may require the recipierit to participate in job search activities for another p e r i d of not more than 8 weeks in any 12-month period. [Sec. 482(g)(2) of SSA] Unless a State adopted an exemption law, the State would have to require each AFDC applicant to participate in job search activities while his or her application was pending. The State would be required to reimburse the applicant for necessary transportation and child care expenses caused by job search. [Sec. 9041 States would have to require each AFDC applicant to participate in job search activities w h ~ l ehis or her application was pending. The State would be required to reimburse the applicant for necessary transportation and child care expenses caused by job search. [Sec. 101(a)] Same as H.R.3500. [Sec. 103(c)] supplementation participants to unfilled jobs. [Sec. 103(a)] CRS- 14 Overall Time Limit The JOBS program imposes no time limit on person if the person had participated in the transition component for 24 months, unless the person found a job o r was participating in the work component. [ S e c . l03(a)] Note: At State option, the num8)cr of months of participation could be reduced to 12. spend in job search is 8 ~ e r k for s AFDC app!icants and 8 v;.r.ei.;s per year for . V D C participate in the work program for a period (determined by the State) of at least 3 years. CWEP position and at the conclusion of each CWEP assignment, the AFDC agency must reassess and revise, as. appropriate, the recipient's employability plan. After 9 months in a CWEP position, the maximum number of family's AFDC benefit could be reduced by an amount allocated to one person and the person Persons who have exhausted their time in the transition or work programs would remain eligible for Medicaid benefits. [Sec. 103(a)] As under current law, States would be directed to make an assessment of the family's needs and skills. If the adult member were deemed employable, he or she would be assigned to the States must require participation by all nonexempt recipients to whom the State H.R. 3500 would require .each "qualified" At the time of AFDC enrollment, families would be referred to the AFDC transition or work CRS- 15 Item Exempt ions Current law House Republican hill, H.R. 3500 Exempt from JOBS are (1) persons who are ill, incapacitated, or of advanced age; (2) children under age 16; (3) children between ages 16 and 18 (or 19, at State option) who are attending full time an elementary or secondary school or who are enrolled in a vocational or technical program full time; (4) parents or other relative caretakers of a child under age 3 (at State option, under age 1) who are personally providing care for the child; (5) parents or other relative caretakers of a child between 3 and 6, unless child care is "guaranteed" (required participation cannot exceed 20 hours per week); (6) persons whose presence in the home is required because of the illness or incapacity of another household member; (7) persons working 30 hours or more a week; (8) pregnant women in their second or third trimester; and (9) persons living in areas where the program is not available. [Sec. 402(a)(19)(C) of SSA] Qualified individuals are defined as (1) persons eligible for AFDC who applied for such aid on or after Oct. 1, 1994 and are not exempt from participation requirements and (2) beginning Oct. 1, 1998, persons eligible for AFDC (regardless of when they applied) who are not exempt from participation requirements. [Sec. 101(b)(2)1 Exempt individuals are (1) persons who are incapacitated; (2) persons who work 30 or more hours per week; (3) persons who attend full time, an elementary, secondary, or vocational (or technical) school; (4) parents of a child who was removed from the home and recently returned (within preceding 2 months); (5) persons providing full-time care for a disabled dependent; (6) at State option, persons who are making progress in a substance abuse treatment program, unless the person has already been exempt for 12 months; (7) first-time mothers during such 6-month period that they choose that encompasses the birth of the child; and (8) mothers who already have a child during such 4month period that they choose that encompasses the birth of their second or subsequent child. [Sec. 101(b)(3)] Senate Republican bill, S. 1795 Exempt individuals are (1) persons who are ill, incapacitated, or of advanced age; (2) persons working 35 hours or more a week; (3) children under age 16 who are attending full time an elementary, secondary, or vocational (or technical) school; (4) persons providing full-time care for a disabled dependent; ( 5 ) at State option, persons who are making progress,in a substance abuse treatment program, 12-month limitation; (6) first-time mothers during a 6-month period after they give birth to the child; and (7) mothers who already have a child during a 4-month period after they give birth to their second or subsequent child; and (8) persons living in areas where the program is not available. [Sec. 1051 CRS- I6 A qualified individual could be permitted but not required to participate in the transition component if, on the basis of demographic criteria, the State finds it unlikely that she or he would be an AFDC recipient during a "significant length" of time. [Sec. 101(b)(2)] If an individual were making progress In a months. [Sec. lOS(a)] Item Measure of Participation C u r r e n t law Federal regulations stipulate that paiticipation is to be measured in terms of a 20-hour-per-week standard. Under this rule, the welfare agency is instructed to count as participants the largest number of persons whose combined and averaged hours during the month equal 20. [45 CFR Sec. 250.781 Federal law requires that at least one parent in each AFDC-UP family participate at least 16 hours a week in a work activity. T h e percentage of AFDC-UP families required to meet this work requirement is 40 percent in FY 1994, 5 0 percent in FY 1995, 6 0 percent in FY 1996, and 75 percent in FY 1997-98. (A State may substitute participation in an educational program in the case of a parent under age 25 who has not completed high school or equivalent.) [Sec. 403(1)(4) of SSA] House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 Each qualified individual in the transition component would have to participate for an average of not fewer than 10 hours per week. [Set 101(b)(2)1 Each qualified individual in the transition component would have to participate for an average of not fewer than 20 hours per week. [Sec. 103(a)] If a qualified individual (who is not a member of an AFDC-UP family) were not participating in the transition component, the State would have to require the person to participate in the work component for 35 hours per week (30 hours per week if the individual also were required to engage in job search). [Sec. 101(b)(2)] At State option, each person participating in the work component would have to participate in work activities for an average of at least 35 hours per week o r in work activities for an average of 30 hours per week and engage in job search for an average of at least 8 hours per week. [Sec. 103(a)l The State would have to require at least one parent in an AFDC-UP family to participate in the work component by engaging in work activities for 32 hours per week and by engaging in job search activities for 8 hours per week. [Sec. 101(b)(2)] Same as H.R. 3500. Further, the community work experience program hour requirements would be changed to require recipients to work for 32 hours per week and engage in 8 hours of job search. [Sec. 103(a)] CRS- 18 States would be required to regard as participants (in the transition component) persons enrolled in a full-time program of study at an educational institution who are making satisfactory progress in his o r her studies as determined by the institution. H.R. 3500 would require the DHHS Secretary to prescribe mles govenning how to convert time spent in this kind of study program into hours of participation in the transition program. [Sec. 101(b)(2)] Same as H.R. 3500. [Sec. 103(a)] States would have to require one parent in an AFDC-UP family to participate in the work component. States would have the option of requiring one parent to participate in the transition component. [Sec. 106(b)] In the case of an AFDC-UP family, a State would be allowed to substitute participation in an educational program In the case of a parent under eted high school (or Item Participation Rates Senate Republican bill, S. 1795 Current law House Republican bill, H.R. 3500 Federal law sets the general JOBS participation rates at 7 percent in FY 1990-91, 11 percent in FY 1992-93, 15 percent in FY 1994, and 20 percent in FY 1995. For years after FY 1995, no participation rates are specified in the law. [Sec. 403(1)(3)(A) of SSA] Under H.R. 3500, with respect to nonexempt persons who applied for AFDC before Oct. 1, 1994, the general participation rates would be the same as in current law, except that the schedule would extend beyond FY 1995, providing a 20-percent rate in FY 1996-98. [Sec. lOl(b)(5)] Same as H.R. 3500. [Sec. 106(a)l With respect to nonexempt persons who applied for AFDC on or after Oct. 1, 1994, the general participation rates would be 30 percent in FY 1996, 40 percent in FY 1997, and 50 percent in FY 1998. [Sec. 101(b)(5)] Same as H.R. 3500. [Sec. 106(a)] With respect to all nonexempt persons, regardless of when they applied for AFDC, the general participation rates would rise to 60 percent in FY 1999, 70 percent in FY 2000, 80 percent in FY 2001, and 90 percent in FY 2002. [Sec. 101(b)(5)] Same as H.R. 3500. [Sec. 106(a)] Under H.R. 3500, the special participation rates for persons in the AFDC-UP program would be the same as under current law, except that in FY 1998 the rate would be 90 percent. [Sec. 10l(b)(6)] Same as H.R. 3500. [SK. 106(b)] Federal law sets participation rates for persons in the AFDC-UP program at 40 percent in the case of the average of each month in FY 1994, 50 percent in the case of the average of each month in FY 1995, 60 percent in the case of the average of each month in FY 1996, and 75 percent in the case of the average of each month in FY 1997-98. [Sec. 403(1)(4)(B) of SSA] the entire Family (of the noncooperating compIies o r 6 months, whichever is longer. 1 . s 402(a)(lS))(G) ~ of SSR] be deemed to have started the second offense. In the case of the second failure to comply, at least 6 months would have to elapse before AFBC: benefits would be restored. If the recipient still case of the third failure to comply, the parent more than 3 months would be considered the third failure to comply. Families that lost AFDC because of failure to comply would continue to be eligible for Medicaid benefits. Note: Although the noncomplying recipient's family cash loss would equal 25 percent, his o r her total benefit loss would be less than 25 percent (17.5 percent) because food stamp benefits generally increase 30 cents for every dollar lost in income. (The food stamp increase and payments on behalf of the children would be made as protective payments. [Sec. 1041 I tern Senate Republican bill, S. 1795 Current law House Republican bill, H.R. 3500 Evaluation of Education and Training Programs Federal law requires the Secretary of DHHS to conduct a study to determine the relative effectiveness of the different approaches used by States under the JOBS program for helping longterm recipients and potentially long-term recipients. The study is to be based on data gathered from demonstration projects in five States (which are required to operate for at least 3 years). The projects are to use an experimental design. The law authorized $5 million for FY 1990-91. [Sec. 203(c) of P.L. 100-4851 The Secretary of DHHS would be required to conduct research projects for at least 5 years to examine the impact of education and training programs on the ability of individuals to get off the AFDC program, AFDC expenditures, wage rates, employment histories, and the resumption of AFDC participation. At least one of the projects would have to include random assignment of adult AFDC recipients to control and experimental groups. [Sec. 9031 Same as H.R. 3500. [Sec. 7031 Funding Federal law entitles each State to a share of JOBS matching funds equal to its share of adult AFDC recipients. Authorized is $1 billion yearly in FY 1991-93, $1.1 billion in FY 1994, $1.3 billion in FY 1995, and $1 billion in FY 1996 and years thereafter. The Federal matchi& rate for JOBS activities and cost of full-time JOBS personnel ranges from 60 percent to 80 percent (90 percent for the State's share of the first $126 million, FY 1987 appropriation for the predecessor Work Incentive (WIN) program), but is 5 0 percent for administrative expenses other than full-time personnel and for work-related expenses other than child care (separately funded). [Sec. 403(k) and 403(1) of SSA] Each State that has used its full allocation of Federal JOBS funds (under terms of current law) would be entitled to additional funds for JOBS. The following amounts would be authorized: $300 million in FY 1996, $1 billion in FY 1997, and $1.9 billion in FY 1998. Allocations of these funds would be based on each State's share of adult AFDC recipients. The Federal matching rate for the new JOBS funds would range from 70 percent to 80 percent (statutory maximum 83 percent) for work activities and costs of full-time personnel, but would be 5 0 percent for administrative expenses other than full-time personnel and for work-related expenses. [Sec. I0 l(c)] Same as H.R. 3500. [Sec. 1071 The Federal matching rate for the new JOBS funds would fall to a flat 50 percent for work activities and all administrative expenses if a State failed to achieve these overall participation rates: 15 prrct.nt ill FY 1994, 20 percent in FY 1995, 30 percent in FY 1996, 40 percent in FY 1997, 50 percent in FY 1998, 60 percent in FI' 1999, 70 percenl in FY 2000, 80 percent in FI' 2001, and 90 ~,c.r.centin FY 2002. [ S e . I0 I (c)] Same as H.R. 3500. [Sec. 1071 - - -- --- - - No change in stated purpose. IV of the Social Security Act, is to establish and colleci child support obligations, locate absent parents, and establish paternity. paternity and new measures to encourage paternity and new measures to encourage support obligations of some employes, State and national information systems, income withholding procedures, uniform terms and information to be included in child support orders, and work requirement for noncustodial parents with child support arrearages. paternity of a child. Federal law allows Under the "good cause" regulations, the CSE identifies the prospective father and, after the child is born, cooperates in establishing the interests of the child to seek to establish would be required to encourage the woman to Federal law requires States to have laws and I tern Paternity Establishment Percentage Current law House Republican bill, H.R. 3500 States are required to meet Federal standards for the establishment of paternity. The standard relates to the percentage obtained by dividing (a) the number of children in the State who are born out of wedlock, are receiving AFDC o r CSE services, and for whom paternity has been established by (b) the number of children who are born out of wedlock and are receiving AFDC or CSE services. T o meet Federal requirements, this percentage in a State must: (a) be at least 75 percent, on the basis of the most recent reliable data or (b) m e t these standards of improvement from the preceding year: percentage between 50 and 75 percent, up 3 percentage points from the score of the preceding year; percentage between 45 and 50, up 4 percentage points; percentage between 40 and 45 percent, up 5 percentage points; and percentage below 40 percent, up at least 6 percentage points from preceding year. [Sec. 452(g) of SSA] T o meet Federal requirements, the paternity establishment percentage in a State would have to: (a) be at least 90 percent or (b) meet these standards of improvement: percentage between 50 and 90, up 6 percentage points from score of preceding year; o r percentage below 50 percent, up at least 10 percentage points from preceding year. [Sec. 2041 Senate Republican bill, S. 1795 Same as H.R. 3500. [Sec. 2031 to establish a system for reporting child support obligations on W-4 forms. Employees with a legal obligation to pay child support that is to be collected through wage withholding would be required to indicate on the W-4 form (1) the existence of the obligation, (2) the amount of the obligation, (3) the name and address of the person owed, and (4) whether health care insurance is available through the employer to the employee's family. Employees in designated industries would also be required to provide this information on their W-4 forms. In addition, every employee would be required to file a onetime update of the above described information on a W-4 form during a period prescribed by e in which the person works. [Sec. information from an employee regarding his or her child support obligation would be required, within 10 days, (1) to forward the information to the State's child support enforcement agency, and (2) to withhold from the income of the employee, the amount indicated on the W-4 form (or if the State indicates that the W-4 information is incorrect, the amount that the State indicates should be withheld). [Sec. Item Current law House Republican bill, H.R. 3500 States would be required to have a law that establishes procedures under which the State must designate a public agency to maintain the W-4 form information provided by employers in a manner that allows other States easy access to the information through the Interstate Locate Network and to determine whether the information provided by the employer is accurate. If the information is correct (verified by comparing it to the copy of the child support order on file with the State registry), the State would be required to notify the custodial parent who lives in the State of the information. If the information is not correct, the State would be required to notify the employer and to correct the information. If the State registry does not contain a copy of the support order, the State would be required to search other State registries for a copy of the child support order. [Sec. 501(b)] States would be required to have a law that establishes procedures under which the State must (I) designate at least one industry as an industry with respect to w h ~ c huniversal employment reporting would improve child support enforcement in an effective manner, (2) prescribe the period during w h ~ c hemployees would be required to file updated W-4 forms, (3) impose a fine against an employee who fails to file a W-4 form with his or her employer; the fine would be equal to the average cost of noncompliance or $25. wh~cheveris less. [Sec. 5 0 1 (b)l Senate Republican bill, S. 1795 Senate Republican bill, S. 1795 Current law House Republican bill, H.R. 3500 The State must provide that, at the request of either parent, child support payments be made through the agency that administers the State's income withholding system regardless of whether there is at1 arrearage. The State must charge the parent who requests the service a fee equal to the cost incurred by the State for these of $25 per year. services, up tc; a nlaxjrn~~ni [Stx. 466(c) or' SSA] States would be required to have a law establishing procedures under which the designated State agency would have to maintain a child support order registry. The registry would include a copy of each child support order being enforced under the State CSE plan, and at the request of an individual who has or is owed a legal obligation to provldt: child support, a copy of the order that imposes the obligation. [Sec. 502(a)] Same as H.R. 3500. [Sec. 301(a)] States would be required to have a law establishing procedures that provide other States access to "locate" illformation through the Interstate Locate Network. States would be permitted to charge reasonable fees for access to their State records. [Sec. 502(b)] Same as H.R. 3500. [Sec. 301(b)] States would be required to have a law establishing procedures under which (1) noncustodial parents would be given access to State parent locator services to aid in the establishrnent or enforcement of visitation rights and (2) custodial parents would he b'w e n access to State parent locator services to aid in the establishment and enforcement of child support obligations. [Sec. 502(b)] Same as H.R. 3500. [Sec. 301(b)] Itern NATIONAL INFORMATION SYSTEMS Current law House Republican bill, H.R. 3500 The law requires that the Federal Parent Locator Service (FPLS), established as part of the CSE program, be used to obtain and transmit information about the whereabouts of any absent parent when that information is to be used for the purpose of erforcirrg child support obligatiorrs. Upon request, the Secretary of DHHS must provide to an authorized person the most recent address and place of employment of any absent parent if the ~nformationis contained in the records of DHHS, or can be obtained from any other department or agency of the United States or of any State. The FPLS also can be used in connection with the enforcement or determ~nationof child custody and in cases of parental kidnapping. [Sec. 453 and 463 of SSA] H.R. 3500 would expand the FPLS "purpose" language to include establishing parentage, and establishing and modifying child support obligations. Also, the bill would require use of the FPLS to obtain (and transmit to the noncustodial parent) information regarding the whereabouts of the custodial parent when the information is to be used for the purpose of enforcing child visitation rights and obligations. [Sec. 503(a)] The Secretary of DHHS would be required to establish an Interstate Locate Network linking the FPLS to State databases relating to child support enforcement. Any State could use the network to locate a noncustodial parent by accessing the records of any Federal, State, or other source of locate or child support information, directly from one computer system to another. Any State could direct a locate request to another State or a Federal agency, or to selected States or to all States. The network would allow on-line access for cases in which information was needed immediately and batch processing to locate individuals or update information periodically. The network would enable courts to access information through a computer term~nallocated in the court. [Sec. 503(b)l Senate Republican bill, S. 1795 Same as H.R. 3500. [Sec. 302(a)] Information would not be disclosed to a custodial parent or noncustodial parent if it would jeopardize the safety of any person. [Sec. 302(a)] The Secretary of DHHS would be required to establish an Interstate Locate Network linking the FPLS to State databases relating to child support enforcement. The network would help States to locate noncustodial parents who owe child support and custodial parents who are not complying with the vis~tationrights of the noncustodial parent. [Sec. 302(b)] Secretary of DHHS (Director of the Office of Child Support Enforcement) to prescribe regulations governing information sharing among States, within States, and between States and the FPLS, to ensure that the response time for locate information not e x c d 48 hours. escribe regulations governing information aring among States, within States, and between tates and the FPLS, to ensure that the response for locate information not exceed 48 hours. r the regulations, a State trying to locate a oncustodial parent or collect child support ayments would be required to compare all outstanding cases with information in the employment records of the State. If the State failed to find the ~~oncustorliai parent or collect child support and had reason to believe that the noncustodial parent were in a particular State or States, information would be requested from that State or States. Otherwise information would be Item INCOME WITHHOLDING Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 Since Nov. 1, 1990, all new or modified child support orders that were being enforced by the State's CSE agency were subject to immediate income withholding. Beginning Jan. 1, 1994, States are required to provide for immediate income withholding for all support orders initially issued on or after that date, regardless of whether a parent has applied for CSE services. [Sec. 466(b)(3) and 466(a)(8)(B) of SSA] H.R. 3500 would require the designee of the Secretary of DHHS to develop a uniform order to be used in all cases in which income is to be withheld for the payment of child support, which is to contain the name of the individual whose income is to be withheld, the number of children covered by the order, and the individual or State to whom the withheld income is to be paid. The order would apply to all sources of income. [Sec. 504(b)] The Secretary of DHHS would be required to develop a uniform order to be used in all cases in which income is to be withheld for the payment of child support, which is to contain the name of the individual whose income is to be withheld, the amount to be withheld, the number of children covered by the order, and the individual or State to whom the withheld income is to be paid. The order would apply to all sources of income. [Sec. 303(b)] States would be required to designate a public agency to collect child support and distribute promptly all amounts collected as child support. States would be required to require courts that establish or modify child support orders to transmit a copy of the order to the State CSE agency, unless both parents object and the order does not provide for income withholding. States would be required to designate a State agency to use the uniform income withholding order to notify involved parties of the ~dentityof the individual, the amount to be withheld, and the State agency to which the withheld amount is to be paid. [Sec. 504(a)] States would be required to designate a public agency to collect child support and distribute promptly all amounts collected as child support. States would be required to require courts that establish or modify child support orders to transmit a copy of the order to the State CSE agency, unless both parents object and the order does not provide for income withholding. States would be required to designate a State agency to use the uniform income withholding order in connection with child support collection efforts. [Sec. 303(a)] Item UNIFORM ORDERS Current law No provision. House Republican bill, H.W. 3500 Senate Republican bill, S . 1795 States would be required to have laws requiring employers to withhold child support pursuant to uniform income withholding orders. After receiving a copy of an order, the employer would be required to provide a copy to the employee subject to the order, and within 10 days after receipt of the order, to withhold income from the employee. l'he State would be required to impose a civil fine equal to the average cost of noncompliance (as determined by the State) or $25, whichever is less, on an employer who fails to comply with the order within 10 days after receipt. Any fee imposed by the employer for the administration of child support income withholding and related reporting requirements could not exceed the average cost of such administration, as determined by the State. [Sec. 504(c)] Same as H.R. 3500. [Sec. 303(c)] Under H.R. 3500, the designee of the DHHS Secretary would be required to develop, in conjunction with State executive and judicial organizations, a uniform abstract of a child support order, for use by all State courts to record, with respect to each child support order in the child support order registry the same basic information--such as the date support payments are to begin, the circumstances under which support orders are to end, the amount of child support payable, social security numbers of both parents, name, date of birth, and social security number of the child, etc. (Sec. 5051 Same as H.R. 35QO. [Sec. 3041 Item Current law House Republican bill, H.R. 3500 Senate Republican bill, S. 1795 WORK REQUIREMENT FOR NONCUSTODIAL PARENT Federal law authorizes the Secretary of DHHS to grant waivers to up to five States to allow them to provide services to noncustodial parents under the JOBS program. [Sec. 482(d)(3) of SSA] States would be required to have a law providing procedures under which 2 to 4 weeks of job search would be imposed (by court order) on able-bodied noncustodial parents who are delinquent in paying their child support by an amount at least equal to twice the monthly child support obligation and who are not subject to a court-approved plan for payment of such arrearages, provided the arrearage has not been reduced by a specified percentage within 30 days after notification by the State CSE agency that he or she is required to pay child support and subject to fines and other penalties for failure to pay the full amount in a timely manner. The required State law also would have to provide that if the arrearage has not been decreased by a specified percentage by the end of the 30-day period that began when an order to require the parent to participate in job search was entered, the parent must participate in a work program for at least 35 hours per week (30 hours per w e k if the program includes job search). [Sec. 5061 Same as H.R. 3500, except that the parent would have to participate in a work program for at least 32 hours per week (rather than 30) if the program includes job search. [Sec. 3051 Itern Current law Senate Republican bill, S. 1795 House Republican bill, H.R. 3500 PROVISIONS RELATING TO RECEIPT OF "WELFARE"BY ALIENS Provisions Related to Alien Eligibility for Federal Assistance Aliens who are lawful permanent residents or are otherwise legally present on a permanent basis (e.g., refugees) generally are eligible for Federal benefits on the same basis as are citizens. Illegal (undocumented) aliens are eligible only for emergelicy Mediclrid services. In determining the SSI eligibility and/or benefit amount for a pe.rsor, who is an aiien, a portion of the income and rescwrces of any person (and spouse) who sponsors an alien (i.e., by signing an af'fidavit of support) is deemed to be the income and resources of the alien for a period of 3 years after the alien's entry into the United States. [Sec. 1621 of SSA] H.R.3500 would prohibit most aliens from As under current law, illegal aliens would be prohibited from receiving AFDC, Medicaid (except emergency services), food stamps, SSI, o r Federal unemployment compensation. [Sec. 60 l(a)l receiving Federal assistance. The exceptions would be refugees until they had been in this country for 6 years, and persons aged 75 and older who had been lawfully admitted for permanent residence and who had resided in the United States for at least 5 years. Aliens would be barred from 61 Federal programs, including With respect to legal aliens, their sponsor's (and sponsor's spouse's) income and resources would AFDC, SSI, Food Stamp, child nutrition I be attributable to the alien until the alien had programs, housing programs, education programs, job training programs, etc.. The only become a naturalized U.S. citizen. [Sec. 601(b)] program from which they would not be barred would be the Medicaid emergency services Any legal alien who receives welfare benefits for 12 months would be reported to the Immigration program. The bar would go into effect 1 year and Naturalization Service (INS) as a public after enactment. [Sec. 6011 charge for possible deportation. [Sec. 60 1(b)] 1 1 State welfare agencies would be required to report to the Immigration and Naturalization Service (INS) the name, address, and other relevant information that it has concerning any person unlawfully in the United States who is the parent of a child with citizenship (by birth). [Sec. 6021 Item House Republican bill, H.R. 3500 Current law Senate Republican bill, S. 1795 MISCELLANEOUS PROVISIONS SSI Benefits for Drug Addicts and Alcoholics Under the SSI program an individual is considered to be a medically determined drug addict o r alcoholic only if (1) he o r she is disabled (as defined by SSI law), and (2) drug addiction o r alcoholism is a contributing factor to such disability. The presence of a condition diagnosed or defined as addiction to alcohol or drugs does not by itself qualify an individual for SSI benefits. The Secretary of DHHS would be required to identify all SSI recipients whose disability is the result of addiction to illegal drugs. The Secretary would be required, on a random basis and periodically, to test each identified recipient to determine whether the recipient is using illegal drugs. Any individual found to be using illegal drugs or who refused to submit to testing would become ineligible for SSI. [Sec. 902(a)] Same as H.R. 3500. [Sec. 705(a)] Section 1631(a)(2)(A) of the Social Security Act requires SSI recipients disabled because of drug addiction o r alcoholism to have a representative payee; section 16 11(e)(3)(A) of the Social Security Act requires these recipients to participate in an approved treatment program when available and appropriate; and section 161 1(e)(3)(B) of the Social Security Act requires recipients to allow their participation in that treatment program to be monitored by SSA. Government agencies would be allowed to become paid representative payees. H.R. 3500 would set the maximum fee payable to a representative payee at no more than 10 percent of the individual's monthly SSI benefit. [Sec. 902(b)1 Same as H.R. 3500. [Sec. 705(b)] Social Security Benefits for the Criminal1y Insane Social Security benefits are not paid to prisoners convicted o f felonies. But, some persons who have committed violent crimes are able to receive social security benefits because they were found "not guilty by reason of insanity." [Sec. 202(x)(1) of SSA] No provision. Persons who have been found "not guilty by reason of insanity" or guilty, but insane, would not be able to collect Social Security benefits during the period in which they were confined in prison or other public institution. [Sec. 7011 Cap on Funding for Selected Means-Tested Programs AFDC, SSI, food stamps, and the Earned Income Tax Credit (EITC) are treated as openended entitlements. Housing subsidies are not entitlements, and many eligible persons are excluded for lack of funding. H.R. 3500 would limit funding for AFDC, SSI, food stamps, rental assistance, public housing assistance, and EITC to a base level, adjusted for ~nflation,plus 2 percent per fiscal year. (Sec. 701 and 7021 No provision. F'rogram to a 'Block Grant Control Act of 1985 established a series s f declining annual deficit targets and created a process known as sequestration intended to ensure that the deficit targets are adhered to. Under the sequestration process, across-the- sequestrations have been made, specified meanstested program accounts would be sequestered to achieve reductions sufficient to eliminate a budget-year breach of the aggregate spending cap on the selected means-tested programs (noted above). [Sec. 7021 program. The States are entitled to matching receive its Federal AFDC funding as a block conform to their only State plan. The State eligibility requirements, and the F d e r a I payments to the State for each fiscal year in an funds based on a prescribed formula. The to which the State was entitled in FY 1992. children, but the State would not be subject to match). It also pays 50 percent of after the end of each fiscal year block grant otherwise would be payable to a State if the State failed to provide cash benefits to needy and (b) pl.oct.dr~resFor referring to l a w e~lforce~iient oficials cases in which fraud is Item Current law House Republican bill, H.R. 3500 Federal law requires States to have in effect an income eligibility and verification system covering AFDC, food stamps, Medicaid, and unemployment compensation. [Sec. 402(a)(25) of SSA] H.R. 3500 would require the DHHS Secretary to establish a commission to determine the cost and feasibility of creating an interstate system to compare the Social Security account numbers of all AFDC recipients in order to identify any persons who receive AFDC from two or more States. The Secretary would be required to submit a report to the Congress containing the commission's findings within 2 years of enactment. [Sec. 905(b)] Same as H.R. 3500. [Sec. 704(c)] States also have the option of establishing an AFDC fraud control program. Under this program, persons found to have intentionally made a false or misleading statement or misrepresented, concealed, or withheld facts, or committed any act intended to mislead, misrepresent, conceal, or withhold facts in order to gain AFDC eligibility or maintain or increase the family's AFDC benefit are to be disqualified from the AFDC program for 6 months for the first offense, 1 year for the second offense, and permanently for the t h ~ r doffense. [Sec. 416 of SSA] No provision for "fraud control" program. States would be required to establish an AFDC fraud control program. Under this program, persons found to have intentionally made a false or misleading statement or misrepresented, concealed, or withheld facts, or committed any act intended to mislead, misrepresent, conceal, or withhold facts in order to gain AFDC eligibility or maintain or increase the family's AFDC benefit would be permanently disqualified from the AFDC program. [Sec. 7061 Electronic Benefit Transfer Demonstrations - - . - ,, - . Senate Republican bill, S. 1795 Same as H.R. 3500. [Sec. 704(a)] However, Federal approval of Electronic Benefit Transfer (EBT) demonstrations would be conditioned on cost neutrality, distribution of cost savings between the State and Federal Government, reasonable time frames for development and ~mplementation,reasonable limits on the number of transactions and the amount of service fees, st~pulationof anti-fraud procedures to prevent msuse of EBT cards, privacy protections, an equ~tablecost accounting system for expand~ng EBT to other State and Federal programs, and submittal of evaluat~onreports to the DH HS Secl.etary. [Sec. 704(h)] . .. - . . . -, H.R. 3500 would authorize the DHHS Secretary to conduct demonstration projects in several States to determine whether providing benefits based on need through the use of electronic cards and automatic teller machines would reduce administrative costs and fraud. The Secretary would be required to report to Congress, within 5 years of enactment, a summary of the results of the project and recommendations concerning whether and how more States might he required or encouraged to use elrctlonic funds transfer in providing benefits based on need. ISw. 905(a)l -- , - -- -, - Current law House Republican bill, H.R. 3500 Senate Republican bill, S, 1795 Waiver Requests The primary way in which a State may receive Federal matching finds for AFDC program expenditures that otherwise would be disqualified because of not conforming to State AFDC plan provisions is for the State to obtain a waiver under Section 11 15 of SSA. Section 11 15 authorizes the Secretary of DHHS to waive compliance with s p ~ i f i e di-qmirernents of the Act that the Secretary judges likely, via experimental, demonstration, o r pilot projects, to assist in promoting the objectives of the AFDC, child support, or Medicaid programs, among others. [Sec. 1115 of SSA] H.R. 3500 would establish an Interagency Waiver Request Board to develop and coordinate waiver requests designed to improve opportunities for low-income individuals and their families, [Sec. 4011 The chairperson of the board would be required to approve o r disapprove an application within 9 0 days after receipt. [Sec. 4031 Entities that obtain waivers would be required to submit annual reports to the chairperson on the program's principal activities and achievements. [Sec. 4041 Entities that seek a waiver must establish a public-private partnership committee to aid in the development and implementation of the program. [Sec. 4051 The General Accounting Office would be required to issue two reports on the implementation and effectiveness of the waiver request process on the covered Federal assistance programs. [Sec. 4071 The authority for the Waiver Request Board would expire 7 years after enactment. [Sec. 4081 Same as H.R. 3500. However, the Interagency Waiver Request Board would be required to provide States assistance and technical advice in applying for waivers. The board would be required to develop a standardized 5-year waiver process. If a waiver request has not been finally acted on within 9 0 days, the waiver would be deemed approved. If the waiver were denied, the board would be required to give the State specific reasons for the denial so the State could make corrections and reapply. [Sec. 501 -5071 Public Housing Rent Reform As of December 1993, "adjusted income" used to determine rent charged in public housing and Section 8 housing is defined as annual gross income minus: $480 per dependent, $400 for an elderly family, excess medical cost for an elderly family, and costs of child care and handicapped assistance. P.L. 101-625 increased deductions from income used to calculate rent (and established a work reward: disregard of 10 percent of earnings), but the chan,