Welfare Reform: States' Early Experiences With Benefit Termination
(Chapter Report, 05/15/97, GAO/HEHS-97-74).

Pursuant to a congressional request, GAO reviewed states' early
experiences with waiver provisions for Aid to Families With Dependent
Children (AFDC) benefit termination under the Personal Responsibility
and Work Opportunity Reconciliation Act, focusing on: (1) those families
whose benefits have been terminated and why; (2) federal or state
benefits that are available and are being received after termination;
and (3) states' experiences in implementing these provisions.

GAO noted that: (1) so far, states have seldom used benefit termination
provisions; (2) moreover, of the 18,000 families whose benefits were
terminated under waivers through December 1996, more than 99 percent
failed to comply with program requirements; (3) most terminations took
place in Iowa, Massachusetts, and Wisconsin; (4) through June 1996,
prior recipients' failure to comply with new enrollment requirements
accounted for over half of the terminations nationwide; (5) by the end
of December 1996, failure to comply with work requirements increased by
one-third and became the most significant reason for termination; (6)
recipients' explanations for this noncompliance included wanting to stay
at home with their children and an unwillingness to do community service
or work for low wages; (7) terminating a family's AFDC benefit
represented the loss of a significant source of monthly income; (8)
although more than 80 percent of the cases GAO studied in Iowa,
Massachusetts, and Wisconsin were subsequently found to have some source
of support or had returned to welfare, the percentages of such families
receiving food stamps and Medicaid declined significantly after
termination; (9) before termination, the percentage of cases receiving
these benefits ranged from 84 to 100 percent; after termination it
ranged from 26 to 61 percent; (10) many families did not take the steps
necessary to continue to receive these program benefits after losing
AFDC, even though the waivers provided for program eligibility to be
unaffected unless other family circumstances changed; (11) officials in
the three states generally believed their benefit termination program
effectiveness by contributing to increases in work activity, job
placements, and families moving off welfare more quickly; (12) these
officials emphasized that only a small percentage of cases had been
terminated; (13) nevertheless, they acknowledged that implementing these
provisions had been challenging; (14) for example, states had to develop
systems to accurately track hours worked to monitor compliance and to
correctly and adequately notify recipients of pending termination
actions; (15) in addition, states had to provide certain activities and
services before they could terminate a family's benefits; and (16) these
states' experiences with benefit termination provisions under waivers
highlight the challenges all states may face in implementing similar pr*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-97-74
     TITLE:  Welfare Reform: States' Early Experiences With Benefit 
             Termination
      DATE:  05/15/97
   SUBJECT:  Public assistance programs
             Welfare benefits
             Welfare recipients
             Workfare
             State-administered programs
             Noncompliance
             Eligibility determinations
             Families
IDENTIFIER:  AFDC
             HHS Temporary Assistance for Needy Families Program
             Medicaid Program
             Supplemental Security Income Program
             Job Opportunities and Basic Skills Training Program
             AFDC Unemployed Parent Program
             Iowa
             Massachusetts
             Wisconsin
             Aid to Families with Dependent Children Program
             Food Stamp Program
             HHS Low Income Home Energy Assistance Program
             JOBS Program
             Iowa Limited Benefit Plan
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Finance, U.S. 
Senate

May 1997

WELFARE REFORM - STATES' EARLY
EXPERIENCES WITH BENEFIT
TERMINATION

GAO/HEHS-97-74

Welfare Benefit Termination

(106611)


Abbreviations
=============================================================== ABBREV

  AFDC - Aid to Families With Dependent Children
  CWEP - Community Work Experience Program
  HHS - Department of Health and Human Services
  HUD - Department of Housing and Urban Development
  JOBS - Job Opportunities and Basic Skills Training
  LIHEAP - Low-Income Home Energy Assistance Program
  SSI - Supplemental Security Income
  TANF - Temporary Assistance for Needy Families
  TEEM - Training, Education, Employment, and Management

Letter
=============================================================== LETTER


B-276396

May 15, 1997

The Honorable Daniel P.  Moynihan
Ranking Minority Member
Committee on Finance
United States Senate

Dear Senator Moynihan: 

This report, prepared at your request, examines states' early
experiences with benefit terminations under welfare reform.  The
report focuses on the extent to which states have used benefit
termination provisions, what happens to families after termination,
and states' experiences in implementing these provisions. 

We are sending copies of this report to the Chairman, Committee on
Finance, U.S.  Senate; the Chairmen and Ranking Minority Members,
Committee on Ways and Means and its Subcommittee on Human Resources,
House of Representatives; the Secretary of Health and Human Services;
the Assistant Secretary for Children and Families; and other
interested parties.  We will also make copies available to others on
request. 

If you or your staff have any questions concerning this report,
please call me at (202) 512-7215 or David P.  Bixler, Assistant
Director, at (202) 512-7201.  Other GAO contacts and major
contributors to this report are listed in appendix XIII. 

Sincerely yours,

Mark V.  Nadel
Associate Director
Income Security Issues


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

The Personal Responsibility and Work Opportunity Reconciliation Act
(P.L.  104-193) was enacted in August 1996, instituting the most
fundamental reform of welfare since the program's inception.  The new
law ends the individual entitlement to federally supported cash
assistance to needy families with children and provides for
terminating benefits to families failing to comply with program rules
or after a certain time period.  With few exceptions, prior federal
welfare law has not allowed states to terminate benefits to an entire
household on the basis of sanctions for noncompliance or a time
limit.\1

Since 1987, however, most states had received waivers from statutory
requirements to experiment with such provisions. 

The Ranking Minority Member of the Senate Committee on Finance asked
GAO to review states' early experiences with waiver provisions for
benefit termination to provide information useful to other states as
they implement the new law.  Specifically, this report describes (1)
those families whose benefits have been terminated under waivers and
why, (2) federal or state benefits that are available and are being
received after termination, and (3) states' experiences in
implementing these provisions. 


--------------------
\1 Although referred to here as "prior law," in general, the law in
effect before passage of the new welfare reform law remains in effect
until July 1, 1997, or 6 months after the date the U.S.  Department
of Health and Human Services (HHS) receives a state plan regarding
certain provisions.  Effective dates could be accelerated at state
option. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Since its inception in 1935, the Aid to Families With Dependent
Children (AFDC) program provided benefits to economically
disadvantaged families with children lacking support from one or both
parents because of death, absence, or incapacity.  AFDC was funded
with federal and state dollars; states administered the program and
HHS had federal oversight responsibility.  States were required to
provide aid to all people eligible under federal law whose income and
assets were within state-prescribed limits.  In fiscal year 1996,
AFDC paid benefits of over $20 billion in combined state and federal
funds to about 4.6 million families a month (average nationwide
caseload). 

Before the recent reform, federal welfare law limited states' ability
to terminate benefits on the basis of sanctions or time limits. 
Since welfare-to-work programs were initiated in 1968, certain
categories of recipients were required to work or participate in
other specified activities; however, if recipients failed to comply
as required, benefits could not be terminated but merely reduced. 
With one minor exception, no time limits on benefits were allowed.\2

The new welfare reform law replaces AFDC with block grants to the
states under Temporary Assistance for Needy Families (TANF).  To
encourage work and end welfare dependence, the law has provisions for
terminating benefits for families' failure to comply with work and
child support enforcement requirements and for teen parents' failure
to comply with school attendance and living arrangement requirements. 
In addition, the new law imposes a 5-year lifetime time limit on
receiving federal benefits. 

Even before this new welfare reform law was passed, states had been
allowed to experiment with benefit termination under section 1115 of
the Social Security Act, which provides authority for HHS to waive
the statutory requirements for AFDC.  Between January 1987 and
passage of the new federal welfare reform law in August 1996, 46
states had received approval for waiver provisions experimenting with
their AFDC and welfare-to-work programs, including 33 states with
benefit termination provisions similar to the new federal law's.\3
With increased flexibility under the new law, many states have
incorporated their benefit termination waiver provisions into the
state plans required by the new law. 

To obtain information for this request, GAO reviewed the law and
discussed benefit termination issues with federal officials and
experts from private research organizations.  GAO surveyed states
with waiver provisions for benefit termination based on sanctions or
time limits to (1) determine whose benefits have been terminated and
on what basis and (2) select three states with large numbers of
terminations for more detailed study.  In each of these three
states--Iowa, Massachusetts, and Wisconsin--GAO analyzed statewide
automated and case file data to determine which families were being
terminated and why and federal or state benefits that were available
and were being received after termination (see app.  I).  To explore
states' experiences in implementing benefit termination provisions,
GAO staff talked to state officials, caseworkers, and representatives
of welfare advocacy groups. 


--------------------
\2 Under the Unemployed Parent program, 12 states were allowed to
impose time limits on benefits for two-parent families. 

\3 The term "state" includes the District of Columbia in this report. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

So far, states have seldom used benefit termination provisions. 
Moreover, of the 18,000 families whose benefits were terminated under
waivers through December 1996, more than 99 percent failed to comply
with program requirements.  Most terminations took place in Iowa,
Massachusetts, and Wisconsin (referred to as "case study" states). 
Through June 1996, prior recipients' failure to comply with new
enrollment requirements accounted for over half the terminations
nationwide.  By the end of December 1996, failure to comply with work
requirements increased by one-third and became the most significant
reason for termination.  Recipients' explanations for this
noncompliance included wanting to stay at home with their children
and an unwillingness to do community service or work for low wages. 

Terminating a family's AFDC benefit represented the loss of a
significant source of monthly income.  Although more than 80 percent
of the families in the cases GAO studied in Iowa, Massachusetts, and
Wisconsin were subsequently found to have some source of support or
had returned to welfare, the percentages of such families receiving
food stamps and Medicaid declined significantly after termination. 
Before termination, the percentage of cases receiving these benefits
ranged from 84 to 100 percent; after termination, it ranged from 26
to 61 percent.  Many families did not take the steps necessary to
continue to receive these program benefits after losing AFDC, even
though the waivers provided for program eligibility to be unaffected
unless other family circumstances changed. 

Officials in the three states studied generally believed their
benefit termination provisions had improved program effectiveness by
contributing to increases in work activity, job placements, and
families moving off welfare more quickly.  These officials emphasized
that only a small percentage of cases had been terminated. 
Nevertheless, they acknowledged that implementing these provisions
had been challenging.  For example, states had to develop systems to
accurately track hours worked to monitor compliance and to correctly
and adequately notify recipients of pending termination actions.  In
addition, states had to provide certain activities and services
before they could terminate a family's benefits.  These states'
experiences with benefit termination provisions under waivers
highlight the challenges all states may face in implementing similar
provisions of the new welfare reform law. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      MOST FAMILIES' BENEFITS
      TERMINATED ON THE BASIS OF
      SANCTIONS IN A FEW STATES
-------------------------------------------------------- Chapter 0:4.1

Through December 1996, 14 of the 33 states with benefit termination
provisions had not terminated any families' benefits.  Of the 19
states that had terminated benefits, 7 had terminated benefits in
fewer than 100 cases, according to available data.\4 In addition to
relatively small, less urban caseloads, many states had a gradual
phase-in of the program, which limited the number of families whose
benefits were terminated.  In addition, the program's
structure--which either required a minimum amount of time to elapse
before termination or excluded large portions of the caseload from
coverage--limited the number of terminations.  States' view of the
role of benefit termination in their programs also affected the
number of cases terminated.  For example, some states continued to
assume primary responsibility for ensuring that recipients complied
with program requirements and viewed benefit termination as a failure
of their programs to work as intended.  These states established
rigorous processes to keep the number of terminations low.  In
contrast, other states sought to shift primary responsibility for
compliance to recipients and viewed benefit termination as a needed
strengthening of their sanctions to enforce recipients' obligation to
move toward self-sufficiency.  Most terminations took place in the
latter states.  The three states with the most terminations--Iowa,
Massachusetts, and Wisconsin--all shared this view and accounted for
about 13,000 of the approximately 18,000 (or about 72 percent)
terminations nationwide through December 1996. 

Between June and December 1996, the proportion of terminations
nationwide based on failure to comply with enrollment requirements
decreased from 57 to 44 percent; terminations based on failure to
comply with work requirements increased from 34 to 47 percent.  The
proportion of terminations for failure to comply with other
requirements--such as child support enforcement, teen parent school
attendance, and teen parent living arrangements--remained constant at
about 8 percent.  Less than 1 percent lost benefits because of a time
limit, although this percentage will probably change as increasing
numbers of families begin reaching their time limits. 

State surveys and discussions with caseworkers in selected sites
provided various explanations for families' failure to comply.  For
example, state and local officials suggested that some families may
have had unreported employment, extended family support, or other
sources of income.  According to state surveys and case file notes,
families did not comply for such reasons as not feeling well; caring
for a sick household member; wanting to stay home with their
children; wanting to follow their own career plans, including higher
education; and an unwillingness to do community service or work for
low wages. 

In general, the demographic characteristics of families whose
benefits had been terminated in Iowa, Massachusetts, and Wisconsin
were similar to the characteristics of families in the states'
overall caseloads.  The most significant variations resulted from the
structure of states' programs.  For example, a disproportionately
high number of parents under age 20 had their benefits terminated in
Massachusetts, which imposed school attendance and living arrangement
requirements on teen parents. 


--------------------
\4 Neither North Carolina nor Ohio had data on the number of cases
terminated; data from Oregon were available only through Nov.  15,
1996 (see app.  II). 


      AFTER LOSS OF AFDC, FAMILIES
      HAD VARIOUS SOURCES OF
      SUPPORT
-------------------------------------------------------- Chapter 0:4.2

Under most states' waiver provisions, families whose benefits were
terminated for noncompliance could have had their AFDC cases reopened
if they subsequently complied with program requirements.  From 18 to
47 percent of such families returned to welfare, according to
available data from seven states.  In Massachusetts and Wisconsin,
about one-third of families whose benefits had been terminated after
enrollment subsequently had their cases reopened because of
demonstrated compliance or documented exemption or because their
cases had been closed due to administrative error, according to an
analysis of state data.  In Iowa, families whose benefits are
terminated must wait 6 months before reapplying; however, once this
period had elapsed, about one-third of families studied also had
returned to welfare. 

AFDC provided a significant source of income for most families before
termination, including those studied in Iowa, Massachusetts, and
Wisconsin.  After AFDC benefits had been terminated, between 43 and
48 percent of the cases studied in these three states included
household members who reported income from wages, pensions, or child
support; and most likely, additional households had support that did
not have to be reported.  In addition, about 75 percent of terminated
cases studied included household members who were receiving benefits
from one or more other federal programs--such as food stamps,
Supplemental Security Income, housing assistance, or Medicaid.\5

Although in many cases the sources of support were a continuation of
income or benefits that were being received before termination, the
percentage of cases receiving food stamps and Medicaid declined
significantly.  Reductions ranged from 23 to 70 percent among cases
not returning to welfare.  According to waiver provisions of all
three states, termination was not to affect eligibility to receive
these program benefits,\6 but many families did not take the steps
necessary to keep their benefits after losing AFDC, even though they
may have continued to be eligible.  Because reported income and
receipt of benefits provide only a limited indication of the
well-being of families losing AFDC, states tried to locate such
families and determine their status. 


--------------------
\5 GAO used household as the unit of analysis, which may include
household members not included in the AFDC family unit used for
determining AFDC eligibility and calculating AFDC benefit levels
before termination. 

\6 In Wisconsin, however, termination of AFDC benefits could result
in a sanction reducing the food stamp allotment to $10 per month. 


      TERMINATION PROVISIONS WERE
      EFFECTIVE BUT POSED
      CHALLENGES
-------------------------------------------------------- Chapter 0:4.3

In all three case study states, benefit termination provisions had
encouraged those with other means of support to move off welfare more
quickly and those who truly needed assistance to cooperate more fully
with program requirements, according to state officials.  Declines in
all three states' caseloads exceeded the national average.  While
crediting the economy as a major factor, state officials believed at
least some of the decline was due to their waiver programs and that
the threat of benefit termination had significantly improved program
participation.  Officials reported increases in job placements in all
three states. 

In implementing these provisions, however, states faced challenges in
establishing systems to track recipients' work participation to
accurately determine when benefits should be terminated for
noncompliance and in adequately notifying recipients of these
actions.  This was particularly true in Wisconsin, where monthly
benefits and sanctions were based on the number of hours worked in a
previous month and the state tried to implement its complex
provisions statewide with no pilot program.  In Milwaukee County, 44
percent of benefit termination notices through August 1996 were
subsequently reversed because county officials determined that
program requirements had been met or the sanctions had been based on
inaccurate data. 

Providing enough services to afford recipients a reasonable
opportunity to comply with requirements and avoid termination posed
another challenge for states.  To meet increased demand for
activities and services under their new programs, all three states
opened or expanded job centers to help with job search activities,
created new partnerships with employers to provide placements, and
increased funds for child care.  Despite such efforts, however, both
welfare advocates and state officials raised concerns that workers
were not adequately trained in case management.  In addition, high
caseloads and complex new program rules prevented workers from paying
enough attention to individual cases to ensure that recipients, many
with barriers to employability, were assigned appropriate work
requirements and provided sufficient supports.  For example, state
reviewers in Iowa found that 50 percent of the cases referred for
sanction for noncompliance with work requirements had not received
sufficient case management and the cases had been sent back to the
caseworkers for more services. 

Although state officials acknowledged these challenges, they
maintained that the guiding principle of their new
programs--consistent with the new federal reform law--is that it is
ultimately the recipients' responsibility to either comply with
program requirements, inform their caseworkers of any barrier to
employment or service need, provide good cause reason for
noncompliance, or have their benefits terminated. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

GAO is not making recommendations in this report. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

GAO obtained comments on a draft of this report from the three case
study states:  Iowa, Massachusetts, and Wisconsin.  The states
generally agreed with the report's findings and made technical
comments, which were incorporated as appropriate.  Comments were
requested but were not received from HHS. 


INTRODUCTION
============================================================ Chapter 1

With the stated intent of making our nation's welfare system "more
consistent with fundamental American values--by rewarding work and
self-reliance, encouraging personal responsibility, and restoring a
sense of hope in the future," the Congress enacted the Personal
Responsibility and Work Opportunity Reconciliation Act (P.L. 
104-193) in August 1996.  The law was passed amid a growing number of
families receiving benefits and increasing dissatisfaction with the
system (see fig.  1.1).  Although more recently, caseloads had begun
to decline, many people continued to criticize a system that they
believed discourages work and encourages dependency and that,
according to the Congress, failed to promote personal responsibility. 

   Figure 1.1:  Percentage of
   Families Nationwide Receiving
   Benefits From Aid to Families
   With Dependent Children (AFDC),
   1970-95

   (See figure in printed
   edition.)

Sources:  Social Security Bulletin, "Annual Statistical Supplement -
1995," table 9.G1; Statistical Abstract of the United States - 1996;
and the U.S.  Census Bureau, Current Population Reports, Series
P20-488, "Household and Family Characteristics:  March 1995" and
earlier reports. 

The new federal welfare reform law ended an individual's entitlement
to welfare benefits and replaced it with a block grant to the states,
changing the fundamental structure of the more than 60-year-old
welfare system.  Among its provisions, the new law allows states to
terminate benefits to a family on the basis of penalties (called
sanctions) for noncompliance and requires states to terminate federal
benefits to a family who has reached a 5-year time limit.  With few
exceptions, prior federal welfare law did not allow states to
terminate a family's benefits on the basis of sanctions or time
limits; however, it did allow for states to obtain waivers to
experiment with termination provisions.\7


--------------------
\7 Although referred to here as "prior law," in general, the law in
effect before the new welfare reform law was passed remains in effect
until July 1, 1997, or for 6 months after the date HHS receives a
state plan regarding certain provisions.  Effective dates could be
accelerated at state option. 


   THE WELFARE SYSTEM BEFORE
   RECENT FEDERAL REFORM
---------------------------------------------------------- Chapter 1:1

Since its inception in 1935, AFDC provided benefits to economically
needy families with children lacking support from one or both parents
because of death, absence, or incapacity.  AFDC was funded with
federal and state dollars.  States administered the program, and HHS
had federal oversight responsibility.  States were required to
provide aid to all people eligible under federal law whose income and
assets were within state-prescribed limits.  In fiscal year 1996,
over $20 billion in combined state and federal funds were paid in
benefits to a nationwide caseload that averaged about 4.6 million
families a month.  Families with children could receive benefits if
they conformed with income eligibility criteria and lacked parental
support, until 1968 when work incentives and welfare-to-work programs
were established.\8 These programs introduced the ideas of mutual
obligation and transitional benefits, reflecting an expectation that
the recipient should move toward self-sufficiency in exchange for
welfare benefits and that receiving benefits should be temporary--not
a way of life.  With passage of the Family Support Act of 1988, the
Congress combined elements of these earlier programs into a single,
more comprehensive program:  Job Opportunities and Basic Skills
Training (JOBS).  The act also expanded the Unemployed Parent
program, introducing time-limited benefits for two-parent families in
some states.\9

The purpose of the JOBS program was to ensure that AFDC families
obtained the education, training, and employment that would help them
avoid long-term welfare dependence.  JOBS required states to develop
employability plans based on assessments of each recipient's
employability skills and supportive services needs.  JOBS also
required states to offer a broad range of education, training, and
work-related activities.  States were further required to guarantee
child care if necessary for the recipient to work or participate in
education and training or other activities specified under JOBS and
to pay or reimburse recipients for transportation and other
work-related expenses.  Recipients, on the other hand, who were
able-bodied individuals aged 16 or older were required to participate
in the activities specified in their employability plans.  If a
recipient failed to comply with program requirements without good
cause, benefits could be reduced by the amount attributable to the
noncomplying recipient, but the entire family's benefits could not be
terminated. 

More than half of AFDC recipients were exempt from participating in
JOBS, however, most often because they were caring for a young
child,\10 and a large portion of the nonexempt recipients were not
required to participate due to limited state funding.  Historically,
less than a third of those required to participate actually
participated in JOBS because, according to program administrators,
the states could not provide all the needed services and
assistance.\11


--------------------
\8 See Welfare to Work:  States Begin JOBS, but Fiscal and Other
Problems May Impede Their Progress (GAO/HRD-91-106, Sept.  27, 1991),
pp.  10-11. 

\9 Beginning in 1961, states were given the option of providing AFDC
to two-parent families who were needy due to the unemployment of the
principal wage earner.  The Family Support Act of 1988 required all
states to implement such programs, and those states that did not
already have a program in place were allowed to impose a time limit
on the receipt of benefits.  The 29 states and territories with
programs already in place were required to continue operating their
programs with no time limit.  However, remaining states implementing
new programs were allowed to deny benefits to two-parent families
once they had received benefits for at least 6 of the preceding 12
months.  As of February 1996, 12 of these states had chosen to impose
time limits on benefits for two-parent families. 

\10 Other recipients exempted from participation in JOBS included
those who were ill, incapacitated, or of advanced age; needed in the
home because of the illness or incapacity of another family member;
the parent or other relative of a child under age 3 (or younger than
3 but not younger than age 1 at states' option) who was personally
providing the care for the child; employed 30 or more hours a week; a
child under age 16 or attending an elementary, secondary, or
vocational school full time; a woman who was in at least the second
trimester of pregnancy; or residing in an area where the program was
not available. 

\11 Federal matching funds for JOBS were available as a capped
entitlement, set at $1.0 billion in fiscal year 1996.  See also
Welfare to Work:  Current AFDC Program Not Sufficiently Focused on
Employment (GAO/HEHS-95-28, Dec.  19, 1994), pp.  5-8. 


   BENEFIT TERMINATION UNDER
   WELFARE REFORM
---------------------------------------------------------- Chapter 1:2

The new federal welfare reform law ended the AFDC program, including
JOBS, and replaced it with block grants to the states under a new
title, Temporary Assistance for Needy Families (TANF).  TANF allows
states more flexibility to operate programs designed to end
dependence on government benefits by promoting job preparation, work,
and marriage.  To accomplish these goals, states must submit plans
reflecting the obligations of both the state and the recipient. 
These plans must outline how the state intends to conduct a program
that provides recipients with job preparation, work, and support
services enabling them to leave welfare and become self-sufficient as
well as how the state intends to require recipients to engage in
work. 

To encourage recipients to fulfill their obligations, the law
includes provisions allowing states to terminate benefits to a family
for failure to comply with work and other requirements.  After no
more than 24 months of receiving benefits (whether or not
consecutive), parents and caretakers must engage in work.  The
recipient must work a minimum average of 20 hours a week (increasing
to 30 hours a week by the year 2000) in most circumstances to meet
this requirement.  Unmarried teen parents under age 18 who do not
attend high school (or its equivalent), or who do not live with their
parents, legal guardian, or other adult relative, may not receive
assistance under TANF unless extenuating circumstances exist, as
specified in the law.\12 In addition, states are allowed to deny TANF
benefits to a family for not cooperating with child support
enforcement actions, including establishing paternity, or
establishing, modifying, or enforcing a support order.  The new law
generally allows states to use their discretion in establishing
criteria for exempting families from these requirements; however, the
extent to which states exercise this discretion could affect their
ability to meet prescribed participation rates and avoid financial
penalties. 

To ensure that assistance is temporary for most recipients, the law
also includes provisions for a 5-year lifetime time limit on benefit
receipt.  After no more than 60 months of benefit receipt (whether or
not consecutive) by an adult in the family, the family may no longer
receive any federal assistance under the program.  By allowing up to
20 percent of the caseload to be exempt from the time limit, the law
intends to protect those who experience genuine and intractable
hardship. 


--------------------
\12 The new welfare reform law specifies that requiring teen parents
to live with their parents, legal guardians, or other adult relatives
would not be appropriate when (1) the teen parent has no living
parents, legal guardian, or other appropriate adult relative with
whom to live or the whereabouts of such individuals are unknown; (2)
such individuals will not allow the teen parent to live with them;
(3) the state determines that the teen parent is, has been, or may be
subject to serious physical or emotional harm, sexual abuse, or
exploitation in such individuals' home; or (4) the state determines
it is in the best interest of the teen to waive the requirement.  In
cases in which living with parents, legal guardians, or other adult
relatives is not an option for the teen parent, the state must help
the teen locate an alternative adult-supervised living arrangement,
unless it determines that the teen parent's current living
arrangement is appropriate. 


   STATES' WAIVER PROVISIONS FOR
   TERMINATION GENERALLY SIMILAR
   TO NEW LAW
---------------------------------------------------------- Chapter 1:3

Although prior law limited states' ability to terminate benefits to
entire households on the basis of sanctions or time limits, it did
provide a way for states to experiment with such provisions.  Section
1115 of the Social Security Act authorizes the Secretary of HHS to
grant states waivers of statutory requirements for the AFDC program,
including JOBS.  Between January 1987 and the passage of welfare
reform in August 1996, 46 states\13 had received approval to
implement waiver provisions experimenting with changes to their AFDC
and JOBS programs, including 33 states that had provisions to
terminate benefits to entire families either for failure to comply
with program requirements or for reaching a time limit.\14 Such
provisions reflected states' belief that they needed stronger
measures to deal effectively with recipients who fail to meet program
requirements.\15 With their increased flexibility under the new
federal reform law, many states have incorporated their benefit
termination waiver provisions into their new state plans.\16

Thirty-one states had received approval to implement waiver
provisions terminating benefits to entire families (referred to as
full-family sanctions) for failure to comply with one or more
requirements similar to those in the new welfare reform law.  In most
cases, such families could have had their benefits restored upon
compliance with the requirements; but in some cases families must
wait several months before being eligible to reapply.  (For a more
detailed description of states' full-family sanction provisions, see
app.  III.)

Fourteen states had received approval to implement waiver provisions
terminating benefits to a family after a specified of time period,
somewhat similar to the time-limit provision in the new welfare
reform law.  However, states' waiver provisions to terminate benefits
due to a time limit differed from the new law in significant ways,
such as allowing an unlimited percentage of cases to be exempt and
providing for extensions or the opportunity to reapply after a
certain time period had elapsed.\17 (For a more detailed description
of states' time-limit provisions, see app.  IV.)


--------------------
\13 The term "state" includes the District of Columbia in this
report. 

\14 Under prior law, states could also choose to terminate a family's
benefits on the basis of failure to comply with teen living
arrangements without a waiver. 

\15 See Welfare Waivers Implementation:  States Work to Change
Welfare Culture, Community Involvement, and Service Delivery
(GAO/HEHS-96-105, July 2, 1996), pp.  30-32. 

\16 In addition, the new law provides states the option of continuing
under certain conditions to implement any waiver provisions in effect
or requested before enactment of the new law if approved by July 1,
1997. 

\17 In addition, several of these and other states had time-limit
provisions that called for imposing some consequence other than
benefit termination upon reaching a time limit, including work
requirements, benefit reduction, or use of vouchers.  (See app.  IV.)




   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:4

The Ranking Minority Member of the Senate Committee on Finance asked
us to review states' early experiences with benefit termination
provisions under waivers to provide information useful to other
states as they implement the new law.  Specifically, this report
describes (1) those families whose benefits have been terminated
under waivers and why, (2) federal or state benefits that are
available and are being received after termination, and (3) states'
experiences in implementing these provisions. 

To obtain information for this request, we reviewed the law and
discussed benefit termination issues with federal officials and
experts from private research organizations.  To determine which
states had terminated benefits under waivers and the bases for those
terminations, we examined waivers approved from January 1987 through
passage of the new law in August 1996 and surveyed all states with
approved benefit termination provisions.  To determine whose benefits
had been terminated, identify what federal or state benefits were
available and were being provided after termination, and describe
states' experiences in implementing these provisions, we selected
Iowa, Massachusetts, and Wisconsin (three states with large numbers
of terminations) for more detailed study.  In each of these states,
we chose a group of families whose AFDC benefits had been terminated
and relied upon state and federal automated records to determine if
these families were receiving benefits from various programs,
including food stamps, Supplemental Security Income, housing
assistance, and Medicaid.  We also identified other sources of income
to the extent such information was reported, including partial data
on wages, pensions, and child support.  (See app.  I for a more
detailed discussion of case selection and analysis of automated
data.) To identify implementation issues, we discussed the provisions
with state officials and representatives of welfare advocacy groups
and caseworkers in selected sites. 

We conducted our work between April 1996 and April 1997 in accordance
with generally accepted government auditing standards. 


MOST FAMILIES' BENEFITS TERMINATED
ON THE BASIS OF SANCTIONS IN A FEW
STATES
============================================================ Chapter 2

Of the 33 states with waiver provisions to terminate AFDC benefits on
the basis of full-family sanctions or a time limit, most had
terminated the benefits of few, if any, families through December
1996.  Iowa, Massachusetts, and Wisconsin had the highest number of
terminations.  Of the 18,000 families whose benefits were terminated
nationwide, over 99 percent had failed to comply with program
requirements.  Most failed to comply with new JOBS enrollment or work
requirements.  The demographic characteristics of families losing
their AFDC benefits in these three states were generally comparable
to the characteristics of families in the states' overall caseloads. 
The most significant variations were due to the state programs'
structure. 


   MOST STATES HAD FEW, IF ANY,
   TERMINATIONS
---------------------------------------------------------- Chapter 2:1

Through December 1996, 14 of the 33 states with benefit termination
provisions had not terminated the benefits of any families on the
basis of such provisions.  (See fig.  2.1.) Of the 19 states that had
terminated benefits, 7 had terminated fewer than 100 cases, according
to available data.\18 Less than half of the 19 states had terminated
benefits for families living in large urban areas with populations
over 500,000--either because the state had no large urban areas or
because the waiver provisions had not been implemented statewide. 
(For a more detailed description of states terminating benefits, see
app.  II.)

   Figure 2.1:  States Terminating
   Benefits to Families as of
   December 31, 1996

   (See figure in printed
   edition.)

Note:  NA = not available. 

\a According to state officials surveyed, North Carolina and Ohio had
terminated benefits for some families because of noncompliance with
program requirements under waivers as of Dec.  31, 1996, but their
data systems could not provide the number of families losing
benefits. 

\b Data from Oregon were available only through Nov.  15, 1996. 


--------------------
\18 Neither North Carolina nor Ohio had data on the number of cases
terminated; data from Oregon were available only through Nov.  15,
1996 (see app.  II). 


      PROGRAM STRUCTURE LED TO FEW
      TERMINATIONS IN MOST STATES
-------------------------------------------------------- Chapter 2:1.1

In addition to some states' having relatively small, less urban
caseloads, many had a limited number of terminations because of the
program's being gradually phased in, requiring a minimum amount of
time to elapse before termination, or excluding large portions of the
caseload from coverage.  States' views of the role of benefit
termination in their programs also affected the number of families
losing benefits. 


         NOT ENOUGH TIME HAD
         ELAPSED
------------------------------------------------------ Chapter 2:1.1.1

Most of the 33 states with benefit termination provisions based on
either full-family sanctions or a time limit began implementing their
programs in 1995 and 1996.  Because of this, not enough time had
elapsed through December 1996 for families to have been in the
programs long enough to have had full-family sanctions imposed or to
have reached a time limit.  In some states, no terminations were yet
possible due to the structure of the programs.  In addition, for
recipients cycling on and off welfare, the length of time required to
reach a time limit is extended beyond when it would have been met if
benefits had been received continuously.\19

Among the 26 states with termination provisions based on
noncompliance with work requirements, most terminated benefits only
after a specified time period had been reached (referred to as a
"work trigger")\20 or graduated sanctions imposed.  For example,
Delaware and North Dakota had work trigger time limits of 24 months;
Vermont had a 30-month time limit for most families.\21 Other states,
such as Illinois, had graduated sanction processes lasting 6 months
to a year before terminating benefits.  These states had terminated
the benefits of relatively few, if any, families. 

Among the 14 states with termination provisions based on a time
limit, most allowed families to receive benefits for at least 24
months or longer before termination.  Only one state, Florida, had
implemented its program long enough to have terminated the benefits
of any families because of a time limit through December 1996.\22


--------------------
\19 Researchers using monthly data have found that no more than 30
percent of recipients receive welfare in 24 consecutive months.  Many
recipients leave welfare for a month or two and then cycle back on. 
(See LaDonna Pavetti, The Number and Characteristics of Families Who
Will Potentially Be Affected by Policies to Time-Limit AFDC Benefits,
The Urban Institute (Washington, D.C.:  1996)). 

\20 Of the 26 states terminating benefits on the basis of work
requirements, 12 provided for the requirements to be imposed after
work triggers ranging from 60 days to 60 months of receiving
benefits.  The other 14 states either imposed the work requirement
immediately on families entering the program or set the length of
time before imposing the requirement on a case-by-case basis. 

\21 Vermont had a work trigger time limit of 15 months for two-parent
families. 

\22 In addition, Florida initially implemented its program in only 2
of its 67 counties (Alachua and Escambia), covering no large urban
areas.  Because of the program's structure, terminations through
December 1996 based on Florida's time limit were restricted to these
two initial counties, which covered only about 8,000 families (or
about 4.3 percent) of a statewide caseload of about 187,000 families. 


         LARGE PORTIONS OF
         CASELOADS EXCLUDED
------------------------------------------------------ Chapter 2:1.1.2

Some states limited implementation of their waiver programs to
selected sites; those implementing their programs statewide generally
phased in implementation over periods lasting up to a year.  Thus,
these states initially excluded large segments of their caseloads. 

In addition, some states initially excluded large portions of their
caseloads from benefit termination primarily on the basis of
exemptions.\23 Variation in states' exemption provisions, especially
regarding the age of the youngest child, significantly affected the
portion of the caseload exempted from work requirements.  For
example, Iowa set its age-of-youngest-
child exemption at 6 months and excluded 24 percent of its caseload
from having to comply with work requirements; Massachusetts set its
age-of-youngest-child exemption at 6 years and excluded 69 percent of
its caseload from having to comply with work requirements.  (See app. 
V.)

Under the new welfare reform law, states still have discretion in
establishing criteria for exempting families from work and other
requirements, with few exceptions.\24

The extent to which they exercise this discretion, however, will
affect their ability to meet the prescribed participation rates and
avoid financial penalties.\25


--------------------
\23 Families were also excluded from the waiver provisions because
they were assigned to a control group for evaluation purposes or for
other reasons (see app.  V). 

\24 For example, the law stipulates that a state may not reduce or
terminate assistance on the basis of a refusal to work if the
household includes a single parent and a child under 6 years old and
child care is unavailable due to (1) unavailability of appropriate
child care within a reasonable distance from the individual's home or
work site, (2) unavailability or unsuitability of informal child care
by a relative or under other arrangements, and (3) unavailability of
appropriate and affordable formal child care arrangements.  Although
exempted, such families must still be counted in determining the
state's participation rate.  The law also allows states not to
require a single parent caring for a child under 1 year old to engage
in work and to disregard such families in determining the state's
participation rate. 

\25 The new law requires prescribed percentages of a state's caseload
to participate in specified work and work-related activities for the
state to avoid financial penalties.  In fiscal year 1997, 25 percent
of a state's caseload must participate; by fiscal year 2002, 50
percent must participate.  Separate, higher rates are prescribed for
two-parent families.  For further discussion of these issues, see
Welfare Reform:  Three States' Approaches Show Promise of Increasing
Participation Rates (GAO/HEHS-97-80, forthcoming report). 


         ROLE OF BENEFIT
         TERMINATION
------------------------------------------------------ Chapter 2:1.1.3

Prior law placed primary responsibility for acting to move recipients
toward self-sufficiency on the states by requiring states to provide
specified activities and support services.  Under waivers, some
states sought to shift primary responsibility for such action to the
recipients; other states continued to assume primary responsibility
for ensuring that recipients complied with program requirements.  The
latter states often viewed benefit termination as a failure of their
program to work as intended.  Their waiver programs required
caseworkers to provide intensive case management services, including
home visits if possible, and established a rigorous conciliation and
review process before termination.  Such states terminated benefits
only after they had determined that recipients were making an
informed choice, were mentally and physically able to participate,
and barriers to participation had been identified and addressed. 
Florida established a review panel consisting of seven community
members to advocate for recipients by reviewing cases of those not
meeting program requirements and finding ways to help, including
requiring provision of additional or new services when appropriate. 
After 2 years of implementation, 74 families had reached their time
limits and had their benefits terminated; of these, 31 had a family
member who had found a job or who was working before termination.\26
In Michigan, rigorous conciliation efforts resulted in continued
benefits for 727 (81 percent) of the first 895 cases nearing benefit
termination. 

In addition to intensive case management services and rigorous review
processes, some states also had flexible definitions of the
activities required to meet participation requirements, lessening
instances of noncompliance.  For example, Utah exempted no one over
age 15 from program participation but defined a wide range of
activities as meeting the requirements.  Utah allowed such activities
as attending postsecondary education programs, drug and alcohol
counseling, parenting classes, and even weight-reduction programs for
2 or 3 hours a week, to qualify as meeting the work requirement. 
These activities, however, would not meet the more restrictive
definition of participation under the new federal welfare reform
law.\27

After more than a year of using these flexible definitions of
participation, Utah had terminated 180 families' benefits.  Nebraska
also used a flexible definition of participation, allowing the hourly
participation requirement to be individually based and requiring
families with a child under 6 months to participate part time in such
activities as family nurturing and pre-employment skills.  After more
than a year of implementation, Nebraska had terminated 59 families'
benefits for failure to participate. 


--------------------
\26 These families had continued to be eligible for benefits until
reaching their time limit due to the increased amount of earned
income disregarded under the waiver program.  In addition, under
Florida's waiver, officials had to determine whether terminating a
family's benefits could result in a child being placed in an
emergency shelter or foster care; if so, the family's benefits would
be reduced but not terminated.  Through December 1996, three Florida
families who had reached their time limits continued to receive
reduced benefits because the state determined the children to be at
risk. 

\27 The new law requires the recipient to work a minimum average of
20 hours a week (increasing to 30 hours a week by the year 2000) and
stipulates the following limited list of activities as meeting its
definition of work activities:  unsubsidized employment, subsidized
private-sector employment, subsidized public-sector employment, work
experience (including work associated with the refurbishing of
publicly assisted housing) if sufficient private-sector employment is
not available, on-the-job training, job search and job readiness
assistance, community service programs, vocational educational
training (not to exceed 12 months for any individual), job skills
training directly related to employment, education directly related
to employment in the case of a recipient without a high school
diploma or certificate of high school equivalency, satisfactory
attendance at secondary school or in a course of study leading to a
certificate of general equivalence in the case of a recipient who has
not completed secondary school or received such a certificate, and
the provision of child care services to an individual who is
participating in a community service program. 


      THREE STATES ACCOUNT FOR
      MOST TERMINATIONS
-------------------------------------------------------- Chapter 2:1.2

Most terminations based on implementation of full-family sanction or
time limit waiver provisions nationwide took place in three states: 
Iowa, Massachusetts, and Wisconsin.\28 Through June 1996, these three
states accounted for about 7,700 of the nearly 9,800 terminations or
about 78 percent.  Through December 1996, these states still
accounted for about 13,000 of the approximately 18,000 terminations
or about 72 percent, according to available data. 

All three states placed requirements on recipients immediately upon
entry into their new waiver programs.  In Iowa, a family's failure to
comply meant placement in a Limited Benefit Plan, leading to benefit
termination.  Families in the Limited Benefit Plan were to receive 3
months of full benefits (this period of receiving full benefits was
eliminated in February 1996), followed by 3 months of reduced
benefits and then 6 months of no benefits.\29 Families whose benefits
had been terminated could reapply only after the 6-month period of no
benefits had elapsed.  Massachusetts and Wisconsin terminated
benefits more quickly for noncompliance, but families could reapply
at any time and have benefits restored once they had demonstrated
compliance. 

Both Massachusetts and Wisconsin had large urban areas; therefore,
although Massachusetts excluded a large portion of its caseload from
coverage, it still had a large number of terminations.  Finally, all
three of these states sought to shift primary responsibility for
moving toward self-sufficiency from the state to the recipient and
viewed benefit termination as a needed strengthening of their
sanctions to enforce recipients' obligation to move toward
self-sufficiency.  Although the states provided support services to
help recipients become self-sufficient, recipients were responsible
for using these services if they wished to continue to receive AFDC
benefits.  With the increased flexibility provided under the new
federal welfare reform law, all three states planned to continue
implementing the basic provisions of their programs.  (For a more
detailed description of the benefit termination provisions
implemented as part of the reform programs in Iowa, Massachusetts,
and Wisconsin, see app.  VI.)


--------------------
\28 On the basis of data provided in April 1997 as this report went
to press, Virginia also had a large number of terminations, nearly as
many as Massachusetts (see app.  II). 

\29 After February 1996, families in Iowa's Limited Benefit Plan
immediately entered the 3-month period of reduced benefits, followed
by 6 months of no benefits.  In addition, if families entered a
second or subsequent Limited Benefit Plan, they would immediately
enter the 6 months of ineligibility without the initial 3 months of
reduced benefits. 


   MOST TERMINATIONS WERE BASED ON
   FAILURE TO MEET ENROLLMENT AND
   WORK REQUIREMENTS
---------------------------------------------------------- Chapter 2:2

Nearly all families having their AFDC benefits terminated through
December 1996 failed to comply with various program requirements. 
Over 90 percent of terminations were based on failure to comply with
either JOBS enrollment or work requirements, although the proportions
shifted between June and December (see fig.  2.2).  In our three case
study states, the demographic characteristics of the families losing
AFDC benefits were generally comparable to those of families in the
states' overall caseloads, with the most significant variations
attributable to the state programs' structure. 

   Figure 2.2:  Bases for
   Terminations Nationwide

   (See figure in printed
   edition.)

\a Terminations based on reaching a time limit were 0.2 percent
through June 1996 and 0.4 percent through Dec.  1996 (not included in
figure). 


      MANY FAMILIES HAD BENEFITS
      TERMINATED IN TRANSITION TO
      NEW PROGRAMS
-------------------------------------------------------- Chapter 2:2.1

Over half the families losing their AFDC benefits nationwide failed
to meet new JOBS enrollment requirements under waiver programs, but,
by the end of December 1996, the percentage had dropped below half
(see fig.  2.2).  Of the 11 states with termination provisions for
failure to comply with enrollment requirements, 4 states--Iowa, North
Carolina, Virginia, and Wisconsin--had terminated benefits to
families on the basis of these provisions.\30

In Wisconsin, converting the existing caseload of families to the new
program accounted for the relatively large proportion of terminations
for failure to appear and enroll in JOBS.  Once the program was fully
implemented, the state expected that other reasons for termination
would predominate.  In the first 4 months of program implementation,
Wisconsin terminated 1,634 ongoing cases for failure to meet this
requirement (about 74 percent of families whose benefits had been
terminated).  For the most part, such cases included recipients who
had been under partial sanction for failure to participate in the
previous program but got a second chance to comply with the new
program.  When told to enroll in JOBS and participate up to 40 hours
per week, about half of these recipients chose not to do so.  Once
the state converted ongoing cases to the new program, cases
terminated for failure to enroll in JOBS were limited to existing
cases involving families who failed to appear after losing an exempt
status (such as families whose youngest child reached the age of 1
year).  The state did not identify new applicants' cases as
terminations for failure to enroll in JOBS because they were not
eligible for AFDC benefits unless they first completed 60 hours of
JOBS activities; because these families had received no AFDC
benefits, none had benefits terminated.  As expected, over time
monthly caseload statistics reflected a sharp drop in terminations
for failure to enroll--from about 1,300 in May 1996 to about 300 in
September 1996.  A Wisconsin program official predicted the number
would level off at a few hundred per month. 

Iowa's waiver required families to enter into a Family Investment
Agreement and stipulated a time frame and specific JOBS activities
leading to self-sufficiency.  If they failed to enter into an
agreement, families would be placed in a Limited Benefit Plan,
leading to benefit termination.  Under Iowa's waiver, however,
families could receive benefits for a limited time even when they
failed to enroll.  As a result, although Iowa implemented the program
more than 2 years ago, over 80 percent of terminations continued to
result from families' failure to enter into such agreements. 


--------------------
\30 For more details, see app.  III for the states with termination
provisions based on enrollment requirements and app.  VII for the
number of families whose benefits were terminated due to these
requirements, by state. 


      INCREASING PROPORTION OF
      TERMINATIONS BASED ON
      FAILURE TO COMPLY WITH WORK
      REQUIREMENTS
-------------------------------------------------------- Chapter 2:2.2

Between June and December 1996, the proportion of families losing
their AFDC benefits due to failure to comply with work requirements
increased nationwide from 34 to 47 percent (see fig.  2.2).  Of the
26 states with termination provisions for failure to comply with work
requirements, 15 had terminated benefits to families on the basis of
these provisions.  Most states based compliance on recipients'
participation in activities specified in an individualized contract
or plan, with failure to participate resulting in termination.  In
addition, some states also terminated benefits for recipients'
failing to accept job offers or quitting jobs.  Explanations for
families' failure to comply varied. 

The proportion of families losing their AFDC benefits due to failure
to comply with other requirements remained constant at about 8
percent, with less than 1 percent losing benefits due to reaching a
time limit (see fig.  2.2).  These proportions are most likely to
change, however, over time and after existing cases are converted to
the new programs.  (For details on the bases for termination, by
state, see app.  VII.)


         NONCOMPLIANCE DUE TO
         VARIOUS REASONS
------------------------------------------------------ Chapter 2:2.2.1

Recipients cited various reasons for not complying with work
requirements, according to state surveys of families losing AFDC
benefits and our review of case files in Des Moines, Boston, and
Milwaukee.  For example, recipients said they would not participate
because they

  wanted to continue an activity that no longer qualified, such as
     attending beauty school or college;

  were unwilling to do community service or work for low wages;

  wanted to stay home with their children;

  had other means of support;

  did not feel well enough to work; and

  needed to care for a sick household member. 

In the three case study states, caseworkers generally believed that
families who allowed their benefits to be terminated had sufficient
other sources of income--such as from unreported employment, extended
family support, or other benefit programs.  Caseworkers believed that
if such families truly needed the assistance, they would call, come
back into the office, and try to comply.  According to surveys and
case file notes, those families whose benefits were terminated often
believed that the work activity available through the program was
beneath them or the family simply disappeared.  Many cases were later
reopened or had other sources of support (see ch.  3).  Welfare
advocacy groups have raised concerns that some families may truly
need the assistance and have good cause for their failure to comply
but nevertheless fail to contact the office to explain their
situation.  State officials maintain, however, that it is recipients'
responsibility--not the caseworker's--to either comply or to inform
caseworkers of any good cause reason for noncompliance.\31


--------------------
\31 For further discussion of these issues, see Evelyn Z.  Brodkin,
"The State Side of the `Welfare Contract':  Discretion and
Accountability in Policy Delivery," Social Security Administration
Working Paper No.  6, Social Security Administration (Washington,
D.C.:  Nov.  1995.)


         STATES HAVE LIMITED
         EXPERIENCE WITH
         TERMINATIONS BASED ON
         TIME LIMITS
------------------------------------------------------ Chapter 2:2.2.2

Of the 14 states with termination provisions based on time limits,
only 1 state, Florida, had families reaching their time limits
through December 1996.  Under Florida's waiver, families reaching
their time limits were allowed extensions and a job guarantee if they
had substantially complied with program requirements.  Of the 74
Florida families whose benefits were terminated due to reaching a
time limit as of December 1996, 43 families had substantially
complied with program requirements and 31 families had not.  All 43
families who complied nevertheless had their benefits terminated:  31
were employed and had continued to be eligible for AFDC until
reaching their time limits only because of the waiver's higher earned
income disregard provisions, and the remaining 12 recipients got job
offers from the state upon reaching their time limits) that they
declined for various reasons.  The 31 families who did not comply
with program requirements had their benefits terminated and received
no job offers upon reaching their time limits.\32 In addition, more
than 30 families left the program voluntarily before reaching the
time limit because of employment or to retain some months of
eligibility for the future. 


--------------------
\32 Another four Florida families who had not complied with program
requirements also had reached their time limit as of Dec.  1996 but
did not have their benefits terminated:  three families continued to
receive reduced benefits because the state determined that the
children may be at risk for placement in foster care, and one family
had benefits reinstated upon appeal. 


         PROPORTIONS WILL MOST
         LIKELY CHANGE OVER TIME
------------------------------------------------------ Chapter 2:2.2.3

The proportion of families whose benefits are terminated due to time
limits will most likely increase significantly over time, although
this proportion was negligible in the early stages of program
implementation.  As more families in Florida and the other 13 states
with time-limit waiver provisions begin to reach their time limits,
the number of such terminations will most likely increase
significantly.  Under the new federal welfare reform law, families in
all 50 states will begin to reach the 5-year federal time limit and
have their benefits terminated in the year 2001 or 2002. 

In addition, the proportion of terminations based on failure to
comply with work requirements will most likely increase over time,
compared with other nonwork requirements.  Many states' waivers
called for work requirements to be imposed after a specified time
period, allowing families--including new applicants--to be enrolled
in the program and to receive benefits for a time without having to
comply.  As a result, states would almost always identify cases
closed due to failure to comply with work requirements as
terminations.  In contrast, those states with waivers calling for
benefit termination for failure to comply with other, nonwork
requirements often treated those other requirements as eligibility
criteria.  As a result, states would identify as terminations only
ongoing cases that became subject to the requirements and failed to
comply.  Thus, like the proportion of terminations for failure to
appear and enroll, the proportion of terminations for failure to
comply with these nonwork requirements often primarily reflected the
conversion of existing cases to the new programs during initial
implementation and will most likely decline once programs are fully
implemented.  This trend will most likely continue under the new
federal welfare reform law as well because states may still provide
up to 24 months of federal benefits to families before imposing work
requirements; while states must impose school attendance and living
arrangement requirements on teen parents immediately as eligibility
criteria.\33


--------------------
\33 Under the new law, states have an incentive to keep the period of
time brief for which they provide benefits to families before
imposing work requirements, however, because participation rates and
federal funding levels under the block grant could be affected (see
footnote 25). 


      CHARACTERISTICS OF FAMILIES
      LOSING AFDC VARIED DUE TO
      STATE PROGRAMS' STRUCTURE
-------------------------------------------------------- Chapter 2:2.3

The characteristics of families losing AFDC benefits were generally
representative of states' overall caseloads.  In Iowa, Massachusetts,
and Wisconsin, most of the families studied reflected the states'
overall caseloads:  they had been receiving assistance less than 3
years and comprised a female head of household aged 20 to 39, with
one or two children (see app.  VIII).  The most significant
variations resulted from the structure of states' programs regarding
requirements placed on teen parents and the age-of-youngest-child
exemption. 

In Massachusetts, for example, which had termination provisions for
families headed by teen parents who fail to comply with requirements
for school attendance and living arrangement, a disproportionately
high percentage of terminated cases studied were headed by a parent
under age 20.  Although teen-headed families constituted about 6
percent of the state's overall caseload, they accounted for almost 19
percent of the terminated cases studied as of June 1996. 

In addition, states' provisions for the age-of-youngest-child
exemption resulted in disproportionately fewer families with children
under the designated age having their benefits terminated.  For
example, in Wisconsin, families were exempt if their youngest child
was under age 1.  Such families constituted more than 18 percent of
the state's total caseload but less than 3 percent of the terminated
cases studied.\34 Similarly, Iowa exempted families if their youngest
child was under 6 months old.\35

Families with a child under age 1 constituted about 12 percent of the
state's total caseload but less than 7 percent of the terminated
cases studied.  Massachusetts did not impose a mandatory work
requirement on families if their youngest child was under age 6. 
Such families constituted 61 percent of the state's total caseload
but less than 33 percent of the terminated cases studied.\36

Most states had little information on family characteristics, such as
education, work experience, and primary language, for their overall
caseloads compared with those families losing benefits.  In
Massachusetts, which did gather such data, recipients in families
losing their benefits were less likely to have finished high school
or to have worked in the past 10 years.  (See app.  IX.) Most of
these differences could be attributed, however, to the
disproportionately large percentage of teen parents among the
families losing their benefits.  In Michigan, where state officials
also compiled data on the educational background of heads of
household, the data indicated that although 38 percent of the total
caseload was headed by a recipient who had not completed high school
or its equivalent, this was true in 61 percent of cases terminated as
of April 1996.  Unlike in Massachusetts, however, this difference
could not be attributable to benefit termination provisions for teen
parents failing to comply with school attendance and living
arrangement requirements because Michigan had not yet implemented
such provisions. 


--------------------
\34 According to a state analyst who examined these cases,
Wisconsin's terminations of families with a child under 1 year old
were mostly because these were two-parent families.  Two-parent
families could only exempt one parent for the care of a child under
age 1, and noncompliance by the other parent resulted in benefit
termination. 

\35 Iowa's age-of-youngest-child exemption was lowered to under 3
months of age in a waiver amendment implemented on Nov.  1, 1996. 

\36 Massachusetts families with children under age 6 still had other
requirements, such as the teen school attendance and living
arrangement requirements, for which noncompliance resulted in benefit
termination. 


AFTER LOSING AFDC, FAMILIES HAD
VARIOUS SOURCES OF SUPPORT
============================================================ Chapter 3

Families losing AFDC benefits lost a significant source of monthly
income.  Although more than 80 percent of families in our analysis
were subsequently found to have one or more sources of support, or
had returned to welfare, the number of families continuing to receive
food stamps and Medicaid after losing AFDC dropped significantly in
all three states.  Because reported income and receipt of benefits
provide only a partial indication of families' well-being after
losing AFDC, states tried to locate such families and determine their
status. 


   MANY FAMILIES HAD RETURNED TO
   WELFARE
---------------------------------------------------------- Chapter 3:1

Under most states' waiver provisions, families whose benefits were
terminated for noncompliance could have had their AFDC cases reopened
if they had subsequently complied with program requirements.  In
addition, families reaching a time limit could generally have had
their AFDC benefits extended (at least temporarily) if they had
complied with program requirements or could have had their cases
reopened after a specified time period.  A few states had variations
to these basic provisions.  For example, in Iowa, families placed in
the Limited Benefit Plan leading to benefit termination for not
signing a Family Investment Agreement may choose to comply and sign
such an agreement at any point before termination; once terminated,
however, all families must wait 6 months before their AFDC cases may
be reopened.  Under the new federal welfare reform law, families may
have their cases reopened upon compliance only until they reach their
5-year lifetime time limit, after which no further federal cash
benefits may be provided under the TANF grant. 

Several states had many families (ranging from about 18 to 47
percent) who lost AFDC benefits due to noncompliance and subsequently
had their cases reopened (see fig.  3.1).\37 In Massachusetts and
Wisconsin, about one-third of enrolled families whose cases had been
closed for noncompliance were subsequently receiving AFDC.  States
reopened cases on the bases of demonstrated compliance and documented
exemption or because cases had been closed due to administrative
error.  In Iowa, once the 6-month benefit termination period had
elapsed, about one-third of the families studied also had returned to
AFDC rolls. 

   Figure 3.1:  Percentage of
   Cases Reopened After
   Termination for Noncompliance

   (See figure in printed
   edition.)

\a In Wisconsin, this figure represents the percentage of cases
reopened for those whose benefits were terminated for noncompliance
after enrolling in JOBS.  Those families whose benefits were
terminated for failure to enroll had a much lower percentage of their
cases reopened--about 4 percent. 

The number of reopened cases demonstrated that the stronger sanctions
were working as intended--to reinforce the need for recipients to
comply with requirements if they wished to continue receiving
benefits, according to state officials.  As one Boston caseworker
said, "Many clients don't take the program seriously until the checks
stop.  Loss of just the adult portion of the grant isn't enough to
get their attention.  [But] when they get no benefits at all, they're
on the phone with their caseworker right away."\38 In most cases,
recipients agreed to comply or provided a reason for an exemption; in
some cases, however, administrative errors were revealed (see
"Establishing Tracking and Notification Systems Challenged States" in
ch.  4). 


--------------------
\37 We gathered data on case status between Sept.  and Dec.  1996,
which in most instances represented the case status 2 to 8 months
after case closure but varied by state (see app.  I). 

\38 Under the JOBS program, the sanction for noncompliance was
removing the adult portion of the grant, commonly referred to as
"reduced benefits" (rather than terminated benefits) or a "partial
sanction" (rather than a full-family sanction). 


   FAMILIES LOST INCOME, BUT MANY
   HAD SOME SOURCES OF SUPPORT
---------------------------------------------------------- Chapter 3:2

Although AFDC represented a significant source of income for most
families before they lost their benefits, after AFDC benefits were
terminated, at least 75 percent of families studied in Iowa,
Massachusetts, and Wisconsin reported having some source of income or
benefits.\39 In many cases, families' sources of support were a
continuation of income or benefits received before AFDC termination,
though the amount of reported income increased after termination. 
The number of families receiving food stamps and Medicaid
significantly decreased after termination, however, despite waiver
provisions that eligibility was to be unaffected.  Although some of
these decreases may have been due to increases in household income,
at least some decreases may have been due to families' no longer
receiving benefits for which they may still have been eligible. 


--------------------
\39 We used household as our unit of analysis, which may include
household members not included in the AFDC family unit used for
determining AFDC eligibility and calculating AFDC benefits before
termination.  (See app.  X for a summary table of the percentage of
households studied receiving reported income and benefits and app.  I
for more details on the methodology used in conducting the data
matches.)


      FAMILIES LOST A SIGNIFICANT
      SOURCE OF INCOME
-------------------------------------------------------- Chapter 3:2.1

The AFDC monthly benefit represented a significant source of income
for families in states terminating benefits under waivers--not only
because of the average dollar amount of the AFDC benefit, but also
because AFDC was the only reported source of income for some families
(see apps.  XI and XII).  Among the households studied in Iowa,
Massachusetts, and Wisconsin whose cases remained closed, average
AFDC payments were smaller than other sources of income before
termination, but AFDC was the only source of income received by all
families (although most also received food stamps).  Supplemental
Security Income (SSI) and wages were the largest income sources, but
relatively few households reported such income.\40 (See table 3.1.)



                                        Table 3.1
                         
                         Sources of Income Before Termination for
                                    Households Studied


                      Percent             Percent             Percent             Percent
                           of                  of                  of                  of
                     househol            househol            househol            househol
            Average        ds   Average        ds   Average        ds   Average        ds
            monthly  receivin   monthly  receivin   monthly  receivin   monthly  receivin
State      amount\a         g    amount         g    amount         g    amount         g
---------  --------  --------  --------  --------  --------  --------  --------  --------
Iowa           $277     100.0      $279      83.6      $490       9.8      $692      17.4
Massachus       390     100.0       215      95.9       482      12.7       394      14.3
 etts
Wisconsin       369     100.0     246\b      76.2       554      12.6     551\c      35.9
-----------------------------------------------------------------------------------------
\a Average monthly AFDC benefits lost were lower than the statewide
averages (see app.  XI) mainly because many families had been
sanctioned and were receiving reduced benefits before termination. 
In addition, under benefit determination standards, families with
earned income often received a reduced AFDC benefit. 

\b Does not include those households under food stamp sanction
receiving $10 per month. 

\c May include other income such as pensions. 

During winter months, fuel assistance provided through the federal
Low-Income Home Energy Assistance Program was also a significant
source of income.  Families on AFDC were generally also enrolled in
this program, but the amount of assistance varied by state as
determined by the state allocation plan.  In 1995, households
received fuel assistance averaging $197 a month in Iowa, $348 in
Massachusetts, and $300 in Wisconsin.\41 In addition, about 25
percent of the households studied in Iowa, Massachusetts, and
Wisconsin lived in subsidized housing.\42

In households in which the amount of the AFDC benefit was low
compared with the amount of other available benefits, states had less
leverage for encouraging compliance through threats of terminating
AFDC benefits.  Among cases closed for noncompliance in our case
study states, 25 percent or more of the households were receiving
benefits from two or more other programs before termination, so that
the combined amount perhaps minimized the loss of the AFDC
benefit.\43


--------------------
\40 However, the percentage of families losing AFDC benefits who had
a household member receiving SSI was significantly higher than the
percentage of families in the general AFDC caseload who had a
household member receiving SSI (see apps.  X and XII). 

\41 No data were gathered for the amount of fuel assistance benefits
received by the individual households in our study because these
benefits were mainly provided only during winter months, and we
conducted our analysis before implementation of the 1997 winter
benefit allocation. 

\42 At the time of our review, some families also received $50 per
month from a child support pass-through; however, no data were
available from Iowa and Wisconsin indicating which families received
such payments.  The new welfare reform law has eliminated the $50
child support pass-through requirement. 

\43 Analysis of benefits received included food stamps, SSI, and
housing assistance.  The percentage of cases receiving benefits from
two or more of these programs before termination were 27.9 percent in
Iowa, 33.2 percent in Massachusetts, and 24.6 percent in Wisconsin. 


      MANY FAMILIES REPORTED
      HAVING WAGES, PENSIONS, OR
      CHILD SUPPORT
-------------------------------------------------------- Chapter 3:2.2

Between 43 and 48 percent of the households whose AFDC cases remained
closed in Iowa,\44 Massachusetts, and Wisconsin reported having some
income from wages, pensions,\45 or child support after losing AFDC. 
Between 23 and 32 percent of households had reported wages (see fig. 
3.2).  Because not all households had to report such income, these
percentages are likely to be understated.  Households not applying
for or receiving AFDC or other benefits did not have to report such
income (about 25 percent of cases studied).  In addition, neither
Iowa nor Wisconsin had data on pensions,\46 and all three states had
only partial data on child support.\47 As a result, households in our
study were likely to have additional unreported income, according to
state officials we spoke with.\48

   Figure 3.2:  Percentage of
   Households Reporting Income
   After Benefit Termination

   (See figure in printed
   edition.)

Although in many cases households had reported these sources of
income both before and after termination, some reported changes in
income sources after termination.  For example, of those households
with reported wages after termination, about half had reported no
wages before termination, suggesting that household members found new
jobs or that household composition changed.\49 Of those reporting
wages both before and after termination, the amount of monthly wages
increased significantly.\50 (See table 3.2.)



                         Table 3.2
          
              Reported Wages Before and After
                        Termination


                                   Average         Average
                   Average    monthly wage    monthly wage
              monthly wage          before           after
----------  --------------  --------------  --------------
Iowa                  $667            $648            $741
Massachuse             594             373             540
 tts
Wisconsin              754             607             870
----------------------------------------------------------
Note:  Includes wages of all household members, including those who
may not have been part of the AFDC family unit before termination. 

Despite the increases for some families, the amount of reported
average monthly wages among families losing AFDC still placed them
below the poverty level, even for the smallest family unit of one
adult and one child.  This level is $875 a month, according to the
Census Bureau's 1995 poverty thresholds.  Wisconsin state officials
pointed out, however, that a low-wage job, combined with the earned
income tax credit, would result in a significantly higher income than
the average AFDC grant--which was $465 a month for a three-person
family in Wisconsin in 1995.  Massachusetts state officials agreed
with this observation and noted further that income would be even
greater for families using child care services, Medicaid benefits,
and food stamps (for which earned income is treated more generously
than AFDC income).  In addition, officials noted that families with
earned income also realize self-esteem benefits from working and
being productive members of society. 

Of those with reported child support income after termination,
average monthly payments received were $274 in Iowa, $249 in
Massachusetts, and $217 in Wisconsin.  In accordance with prior
federal law, any child support payments received before termination
would have been signed over to the state, and the families would have
only received a pass-through of up to $50 a month.  The new welfare
reform law has eliminated the $50 pass-
through requirement, and states are allowed to keep the full amount
of payments received for families on welfare. 

Consistently in all three states, a lower percentage of households in
the urban areas studied had reported income from wages, pensions, and
child support than households in the rest of the state.  The
percentage of cases reporting child support revealed the most
significant variations:  10 to 14 percent in Des Moines, Boston, and
Milwaukee, compared with 18 to 29 percent in cases outside these
urban areas.  (See app.  X for complete data on reported income and
benefits received by cases in urban areas compared with cases studied
in other areas.)


--------------------
\44 At the time of our analysis, 6 months had not yet elapsed and all
the Iowa cases included in our study were still closed. 

\45 Pension income includes Social Security, Veterans' Benefits, and
employment-related pensions. 

\46 Wisconsin's wage data may include some pension data. 

\47 Once no longer receiving AFDC, some families may receive child
support payments privately, which they do not have to report to the
state and local offices of Child Support Enforcement, where we
obtained the child support data. 

\48 Even when reporting is required, households sometimes fail to
report wages and other income.  See Christopher Jencks and Kathryn
Edin, "The Real Welfare Problem," The American Prospect, No.  1
(1990), pp.  31-50; and Kathryn Edin, Single Mothers and Absent
Fathers:  The Possibilities and Limits of Child Support Policy,
Center for Urban Policy Research, Rutgers University (New Brunswick,
N.J.:  1994). 

\49 In Iowa, the percentage of households that reported wages after
termination but none before termination was 52.6 percent; in
Massachusetts, 61.5 percent; and in Wisconsin, 39.5 percent. 
(Wisconsin data may include other income, such as pensions, which was
a likely income source before termination.)

\50 Although some households had members who were working before the
family's benefits were terminated, these families' benefits were,
nevertheless, terminated for noncompliance and are not included in
the statistics on those leaving welfare to go to work.  Many of these
families' benefits were terminated for failure to enroll in JOBS.  In
other cases, either (1) the household members who were working were
not part of the AFDC assistance unit, (2) those who were working were
part of the assistance unit but were not working consistently enough
to meet states' work requirements or had not reported their wages to
their caseworkers, or (3) the family's benefits were terminated for
failure to comply with some other requirement such as failure to
attend school. 


      MANY RECEIVE BENEFITS FROM
      OTHER FEDERAL AND STATE
      PROGRAMS
-------------------------------------------------------- Chapter 3:2.3

As under the waivers, under the new federal welfare reform law,
families whose AFDC benefits are terminated for noncompliance
generally continue to be eligible for benefits from other federal and
state programs.\51 In the case of fuel assistance and housing, the
benefit amount may even increase when income falls from loss of AFDC. 
At the time of our review, families continuing to receive food stamps
after their AFDC benefits were terminated also often had an increase
in their monthly food stamp allotment due to losing AFDC.\52

However, federal law now prohibits any increase in food stamps to
families losing AFDC (or TANF) benefits due to sanctions.\53

After losing AFDC, about 75 percent of households studied in Iowa,
Massachusetts, and Wisconsin received benefits from one or more other
federal programs--including food stamps, SSI, housing assistance, and
Medicaid.  Analyzing benefits received separately for each program
revealed variations among states (see fig.  3.3).  The ranges of
percentages were fairly consistent for housing, SSI, and Medicaid but
varied significantly for food stamps, partly reflecting the states'
different food stamp policies. 

   Figure 3.3:  Percentage of
   Households Receiving Benefits
   After Termination, by Program

   (See figure in printed
   edition.)


--------------------
\51 The new law, however, provides that states may terminate Medicaid
eligibility for adults who fail to comply with work requirements
under TANF and that states may terminate food stamps to an entire
household if adults fail to comply with work requirements under TANF,
with some restrictions. 

\52 On average, the increase ranged from $21 to $51 per month for
households studied in Iowa, Massachusetts, and Wisconsin.  Households
with other sources of income had lowered the average amount of
increases. 

\53 Federal regulations (7 C.F.R., Parts 272 and 273) were effective
May 31, 1996; however, states had until Nov.  27, 1996, to implement
the provisions. 


         PERCENTAGE OF FAMILIES
         RECEIVING FOOD STAMPS AND
         MEDICAID DECREASED
         SIGNIFICANTLY
------------------------------------------------------ Chapter 3:2.3.1

In general, according to program policies, termination of AFDC
benefits due to noncompliance was not to affect a family's
eligibility for SSI,\54 housing assistance, and Medicaid--and, in
most states, food stamps--unless the family's circumstances changed. 
Consistent with these policies, the percentages of households studied
in Iowa, Massachusetts, and Wisconsin receiving SSI and housing
assistance did not change before and after termination in all three
states; however, the statewide percentages of cases receiving food
stamps and Medicaid decreased significantly, with even greater
reductions in the urban areas.  Michigan's study of terminated cases
found similar decreases.\55 While some of the decreases in each state
may legitimately be due to families' finding employment and no longer
meeting income eligibility standards, at least some of the decreases
reflect families' no longer receiving benefits for which they were
still eligible. 

To maintain eligibility for food stamps and Medicaid after losing
AFDC benefits, families must continue to meet monthly reporting
requirements and appear for periodic eligibility reviews.  To
maintain eligibility for food stamps in Massachusetts, families must
also appear for recertification.  When families lose their AFDC
grant, some recipients fail to take the steps necessary to maintain
eligibility even though they would be eligible for continued food
stamp and Medicaid benefits, explained officials in our case study
states.  On the basis of an internal review of cases closed for
failure to comply with work requirements over a 2-month period,
Massachusetts state officials concluded that most of such families
might have believed it not worth the effort to seek benefits or, in
fact, might not have been eligible for continued benefits due to
changes in their circumstances following case closure.\56
Nevertheless, officials in all three states expressed surprise at the
amount of the decline in receipt of food stamps and Medicaid among
households losing AFDC benefits (see fig.  3.4). 

   Figure 3.4:  Percentage of
   Households Receiving Food
   Stamps and Medicaid Before and
   After Termination

   (See figure in printed
   edition.)

Before losing AFDC, virtually all families were covered by Medicaid,
as required under prior federal law.  In addition, due to comparable
income eligibility criteria, a high percentage of families receiving
AFDC also received food stamps:  the national average was 90 percent
in 1995.  After AFDC benefit termination, under most states' waivers
(including Iowa's and Massachusetts's) eligibility for food stamps
was to continue unaffected.  In Iowa, state officials viewed
continued receipt of food stamps as part of a safety net for families
during the 6-month period they must wait to reapply for AFDC
benefits. 

In contrast, other states' waivers required food stamps to be
sanctioned along with AFDC for failure to meet work requirements.\57
In Wisconsin, waiver provisions linked the two programs so that cases
closed due to failure to comply with JOBS enrollment and work
requirements would have their food stamp allotment reduced to $10 per
month indefinitely (that is, no 2-month limit) if they were not
exempt from the food stamp employment and training program.\58 As
shown in fig.  3.4, this food stamp sanction affected 8.1 percent of
the AFDC cases studied in Wisconsin before closure and 16.3 percent
after closure.  Under the new federal welfare reform law, states may
still choose to link the work requirements of the food stamps and
TANF programs.\59


--------------------
\54 Aged, blind, and disabled individuals are eligible for SSI
benefits if they meet specified criteria and federal income
standards.  Individuals receiving SSI may not receive AFDC and were
excluded from the benefit calculation for an AFDC family unit; SSI
recipients were included in our analysis of income and benefits of
household members (see footnote 39). 

\55 Of those families whose benefits were terminated as of Apr.  1996
in Michigan, after 3 months, food stamp receipt had dropped to 57
percent and active Medicaid status had dropped to 59 percent. 

\56 For a more detailed description of this case review and its
findings, see "Other Indicators of Family Well-Being" in this
chapter. 

\57 Similar to AFDC, the food stamp program also provided for work
requirements, but the requirements were generally more lenient than
those included in states' AFDC waivers.  For example, families with
children under age 6 were exempted from the food stamp work
requirements, and the sanction for failure to meet the requirement
was limited to 2 months. 

\58 Wisconsin cases sanctioned but not closed for noncompliance with
AFDC work requirements would have their food stamp benefits reduced
on the basis of hours not worked, similar to the sanctions under AFDC
(see app.  VI). 

\59 In addition, if states had submitted waiver requests to lower the
age-of-youngest-child exemption, and such requests had been denied as
of Aug.  1, 1996, states were allowed to lower the age of youngest
child to 1 year for the food stamps work requirement, providing for
greater comparability in the two programs' requirements as an
experiment for up to 3 years.  Furthermore, the law stipulated that
the food stamp sanction may last up to 6 months but not longer. 


         AVAILABILITY OF OTHER
         SERVICES AND BENEFITS
         VARIED
------------------------------------------------------ Chapter 3:2.3.2

In addition to the programs discussed above--food stamps, SSI,
housing, fuel assistance, and Medicaid--states offered other benefits
and services to terminated families; such services varied somewhat by
state.  For example, states generally offered mental health and
substance abuse counseling and treatment programs, often within the
same departments administering the AFDC program and with priority
given to AFDC recipients.  Massachusetts administered such programs
by a separate department with no direct eligibility links to AFDC. 
Of the households whose cases remain closed in Massachusetts, 33.6
percent had used such counseling and treatment services either before
or after termination, with 12.7 percent using services after
termination (including 3.9 percent who began receiving services only
after termination). 

In addition, the availability of child care or transportation
assistance for those losing AFDC benefits varied by state.  States
generally provided child care and transportation subsidies linked to
the AFDC program, including transitional help for those leaving AFDC
due to employment in all three of our case study states; however, for
those families losing AFDC benefits due to noncompliance,
state-provided subsidies varied.  In Iowa, non-AFDC recipients could
receive state-assisted child care if they met the income criteria
(less than 110 percent of the federal poverty level), according to a
state official.  Wisconsin also provided child care assistance on a
sliding scale.  Although Massachusetts offered a similar child care
assistance program for non-AFDC recipients, funding was limited and
waiting lists were long.  Non-AFDC families could expect to wait
several months, or even years, for a subsidized child care slot
depending on the location and type of care needed. 

Although many states have general assistance programs (state- and
county-funded assistance programs, generally for adults), families
losing AFDC benefits do not always qualify for such assistance.\60 In
Massachusetts, less than 1 percent of the families studied were
receiving general assistance after losing AFDC.  Iowa had no
statewide data on its county-funded general assistance program, and
Wisconsin had discontinued its statewide general assistance program
in January 1996. 


--------------------
\60 Of the 42 states with general assistance programs, 12 states
provide assistance to all financially needy people who qualify; 30
states provide assistance only to certain categories of people.  Of
these 30, 19 states provide assistance to low-income children or
families with children.  (See State General Assistance Programs 1996,
The Urban Institute (Washington, D.C.:  1996.))


   OTHER INDICATORS OF FAMILY
   WELL-BEING
---------------------------------------------------------- Chapter 3:3

Reported income and benefits receipt only partially describe the
well-being of families after losing AFDC.  Some families may not
report income, and no data were available for some families.  Also,
despite receiving some income and benefits, total household income
may still fall short of the poverty threshold, and children's
well-being may be at risk.  In response to concerns about the
well-being of families losing AFDC for noncompliance under waivers,
states have tried to locate such families and determine their status. 

In Iowa, the state public health workers have routinely tried to
visit families 1 month after benefit termination to check on their
well-being and make referrals for other services as needed.  Of the
5,333 families they tried to visit in the year ending in June 1996,
they contacted less than half (2,270).  Of those contacted,
caseworkers found no cases of severe deprivation.  Results of their
contacts were as follows: 

  37 percent no longer need assistance,

  18 percent planned to go back on AFDC when eligible,

  29 percent received information or referral for other services, and

  16 percent refused to cooperate. 

In addition, Iowa's contracted evaluators, Mathematica Policy
Research, Inc., and the Institute for Social and Economic
Development, conducted a survey of recipients whose cases had been
terminated between November 1995 and January 1996 to determine what
happened after termination.  Tentative findings from this study
indicate that the effects of losing cash assistance varied widely. 
Forty percent of families' incomes increased after benefit
termination, but nearly half the families' incomes decreased. 
Despite such decreases, the study did not find evidence of extreme
economic distress among the survey's 137 respondents. 

Massachusetts made a special effort to locate minor teens whose
benefits had been terminated.  As of February 1997, state officials
reported that 192 of the 314 teens referred for follow-up (about 61
percent) had returned to welfare or had been located by the two
contractors hired to find and interview these teens.  As of our
review, however, data on the status of those not returning to welfare
had not yet been compiled. 

In addition, in December 1996, Massachusetts released the results of
a state study to determine the status of families who had left
welfare during September and October 1996.  Data on those families
whose benefits had been terminated for noncompliance with work
requirements and who had not returned to welfare showed the
following: 

  51 percent had new jobs,

  16 percent had new living arrangements,

  14 percent had new unearned income,

  6 percent had moved out of state, and

  13 percent were in an "other" category. 

Michigan gathered data on the 168 families whose AFDC benefits had
been terminated as of April 1996, surveying the 126 families whose
cases had not been reopened after 3 months.  Interviewers did not
complete surveys with 59 (or about 47 percent) of these families
mainly because they could not be located or refused to cooperate.  Of
the 67 families interviewed, when asked about their problems and how
they were managing without cash assistance, 22 percent responded that
they were having no problems.  A few commented that closing their
case was the best thing that ever happened, that it was the push they
needed, and that it gave them the opportunity to better their lives. 
The study concluded that of those interviewed, however, many faced
serious problems, with 27 percent indicating a problem providing
enough food for their family and 29 percent with insufficient money
to provide for personal needs.  One family had been evicted, and
seven had received eviction notices.  Families said they were getting
by financially by finding jobs and relying on help from family,
friends, or community resources, and some were receiving child
support or SSI; 3 percent said they were "not getting by."

A wide variety of family histories and characteristics may affect a
family's prospects after benefit termination.  On the one hand,
according to caseworkers, families with previous work experience or
unreported income are most likely to be doing well.  On the other
hand, caseworkers were less optimistic about other families'
prospects.  In some cases, because the caseworkers believed the
families' situations were tenuous, they tried repeatedly but to no
avail to contact the families and encourage compliance. 


TERMINATION PROVISIONS WERE
EFFECTIVE BUT POSED CHALLENGES
============================================================ Chapter 4

Benefit termination provisions have improved the effectiveness of
welfare programs in Iowa, Massachusetts, and Wisconsin by increasing
work activity and job placements and decreasing the number of
families on the welfare rolls, state officials believed.  In
addition, the percentage of the caseload terminated for noncompliance
was small compared with the total number of cases--generally about 1
percent or less per month.  Nevertheless, implementing benefit
termination provisions has posed significant challenges.  First,
states had to develop systems to accurately track hours worked to
monitor compliance and to correctly and adequately notify recipients
of pending termination actions.  Second, states had to provide
certain activities and services or they could not terminate a
family's benefits. 


   PROVISIONS RESULTED IN
   INCREASED COMPLIANCE AND
   DECLINING CASELOADS
---------------------------------------------------------- Chapter 4:1

Benefit termination provisions in all three states encouraged those
with other sources of income to move off welfare more quickly and
those who truly needed assistance to cooperate more fully with
program requirements, according to state officials.  With an
improving economy, welfare caseloads nationwide have generally
declined over the past 3 years; however, the declines in Iowa,
Massachusetts, and Wisconsin have exceeded the average decline for
the country's 54 states and territories (see fig.  4.1).  Wisconsin's
decline for the period was 38 percent, nearly three times the
national average of 13 percent.  While crediting the economy as the
major factor, officials in all three states believed at least some of
the declines were due to their waiver provisions.  Iowa's program has
succeeded, in part, because the prospect of benefit termination is a
much more effective motivator than the previous adult sanction, which
was a relatively minor grant reduction, according to the state
program administrator.  Massachusetts's caseload fell after the
provisions of the new program were publicized in the press and in
mailings to and discussions with recipients.  In Wisconsin, when
staff explained the benefit termination policy for noncompliance with
work requirements to new applicants, many chose to accept jobs rather
than go on welfare in the first place, explained state officials. 
According to data compiled in one county, 46 percent of 880
applicants deemed likely to have gone on welfare between March and
July of 1996 were diverted from welfare through this process. 

   Figure 4.1:  AFDC Caseload
   Declines in Case Study States
   Exceeded National Average,
   1993-96

   (See figure in printed
   edition.)

\a Total caseload nationwide divided by 54 states and territories
(District of Columbia, Guam, Puerto Rico, and the Virgin Islands). 

\b The increase in Iowa's caseload in 1994 was due to the increase in
the amount of income disregarded, which allowed more people to be
eligible for assistance, and the expansion of the program for
two-parent families, according to the program coordinator. 

Sources:  1993 to 1996, HHS data on states' total caseloads
representing the average of monthly caseloads during the fiscal year;
Sept.  1996 HHS and state monthly caseload data. 

The threat of benefit termination significantly affected program
participation, stated officials in Wisconsin and Massachusetts.  In
Wisconsin, in the first 3 months after implementation, participation
in JOBS sessions increased by 36 percent compared with the previous 3
months, according to staff at a Milwaukee job center we visited.  In
addition, job placements at the center more than doubled between 1995
and 1996, from about 1,000 to about 2,500.  Statewide, Wisconsin
reported 24,000 job placements in 1996.  In Massachusetts, in less
than a year after implementing the waiver provisions, cases with
earned income had increased from 8 to 13 percent, and about 12,000
recipients left the rolls by finding work, according to state
officials.  In addition, among recipients required to work, the
number participating in work activities increased 28 percent between
June and October 1996.  In Iowa, where noncompliance did not result
in immediate termination of benefits, the percentage of recipients
participating in JOBS sessions had not increased significantly, and
state officials said they were considering program changes to impose
sanctions more quickly.  Nevertheless, after 2 years of
implementation, state officials reported that 35,000 recipients had
been placed in jobs. 


   ESTABLISHING TRACKING AND
   NOTIFICATION SYSTEMS CHALLENGED
   STATES
---------------------------------------------------------- Chapter 4:2

The states faced challenges in establishing systems to track
recipients' work activity to accurately determine when benefits
should be terminated for noncompliance and in adequately notifying
recipients of these actions.  This was particularly true for
Wisconsin's Pay for Performance project, which determined the amount
of each month's benefits and imposed sanctions on the basis of the
number of hours worked in a previous month.  Wisconsin implemented
the project statewide without first pilot testing its provisions and
encountered many start-up difficulties.  While Iowa and Massachusetts
phased in implementation over 7 to 10 months, these states also faced
challenges in accurately tracking cases and adequately notifying
recipients of pending sanctions. 

In Wisconsin and Massachusetts, recipients and employers sometimes
failed to submit time stubs or verify hours on a timely basis, and
often pay periods did not correspond with calendar months.  In
addition, work hours for recipients in low paying jobs often
fluctuated from week to week and month to month, making it difficult
for states to determine how many hours a recipient was required to
work and, if the hours dropped below that amount, what if any
additional requirements the recipient must fulfill to avoid a
sanction. 

In Wisconsin, JOBS and AFDC workers, who often worked for different
organizations and were located at different sites, split
responsibility for handling cases.  The JOBS workers determined the
number of hours each recipient must work and tracked the hours of
JOBS activities for their caseloads of up to 200 or more.  The AFDC
workers received pay stubs from employers and entered hours worked
for their caseloads of up to 400.  Both had difficulty gathering and
entering data in the short time frames required, and communication
between the two was often lacking.  The computer system in Wisconsin
was fairly new, and the eligibility workers and case managers entered
information differently.  As a result, sometimes the data they
entered conflicted and they often had a hard time determining the
status of individual cases.\61

Massachusetts, also initially split responsibilities between JOBS and
AFDC workers, but generally these workers were collocated at the
sites we visited.  JOBS workers monitored hours worked, and AFDC
workers determined if recipients met requirements.  Sometimes
difficulties arose because JOBS and AFDC workers did not know of each
others' actions, but workers we spoke with generally liked this
arrangement.  To streamline operations, however, in September 1996
the state began integrating these two roles--expanding the AFDC
workers' job duties to include employment functions.  Because of
this, Massachusetts's most significant implementation issues involved
training AFDC workers to assume these functions.  Several AFDC
workers noted a dramatic increase in their workload due to the need
to constantly monitor recipients' participation in work activities on
a biweekly basis in addition to assessing compliance with other
eligibility requirements. 

Due to the difficulties of accurately tracking recipients' hours
worked, as well as training workers to understand and apply all the
new program rules correctly, all three states had problems notifying
recipients of sanctions during initial program implementation. 
Milwaukee County, Wisconsin, issued 5,182 sanctions through August
20, 1996.  Of these, 44 percent were later reversed because
recipients had met program requirements or inaccurate data had been
corrected.  During the 2 months when the system converted to
automatically issuing sanction notices, the error rate was as high as
70 percent.  In addition, staff had reopened cases on the computer
with no evidence that the recipient had begun to comply with program
requirements, according to our case file review.  Because so many
incorrect sanction notices had been sent out, recipients were
confused by what was required of them and overwhelmed workers with
calls.  Even when accurate, the notices confused recipients because
of the system's prospective aspect:  hours worked in any given month
determined the amount of benefits 2 months in the future.  Thus, when
recipients received a sanction notice and then began to participate,
they did not understand why they did not get any benefits the
following month. 

In Massachusetts, program staff and welfare advocates also reported
initial difficulties in tracking recipients' work hours, applying new
program rules correctly in individual cases, and adequately notifying
recipients of termination actions.  Initially, if multiple actions
took place, Massachusetts's computer system combined these into a
single notice to the recipient.  This sometimes resulted in notices
that did not make sense.  For example, we found one notice that
informed the recipient, "The Department will raise your [AFDC]
benefits from $55 to $343 .  .  .  because you or a household member
failed to comply with the requirements of the work program without
good cause." State officials eventually resolved these problems by
issuing separate notices for each action.  In addition, welfare
advocates raised concerns that termination notices did not provide
enough information on good cause reasons for failure to participate,
requirements for recipients to have benefits reinstated, and on the
continuation of food stamps and Medicaid eligibility.  The notices
did state, however, that Medicaid benefits would continue
(subsequently revised to include food stamps), that recipients could
call their caseworker with questions, and that free legal services
were available.  When the state learned of instances of its failure
to accurately track work hours or apply program rules correctly in
individual cases, those cases were reopened and recipients given
another opportunity to comply.  As of December 1996, recipients
appealed 978 actions, and records show that 47 percent of actions
resolved had been decided, at least in part, in the recipients'
favor. 

Iowa officials also reevaluated their notification procedures because
of concerns about recipients being overloaded with information and
instructions and the effectiveness of procedures in giving recipients
informed choice.  Of the 2,073 cases entering the Limited Benefit
Plan between November 1995 and January 1996, about 28 percent
subsequently enrolled in the Family Investment Program before
termination due to either (1) recipients signing a Family Investment
Agreement or (2) the state determining that recipients had been
enrolled in the Limited Benefit Plan in error. 


--------------------
\61 As part of its 1997 implementation plan, Wisconsin planned to
have one case manager handle both JOBS and AFDC functions.  State
officials believed this would lead to reduced caseloads and eliminate
the work and confusion between the two staffs.  In Dane County
(Madison) and in a few instances in Milwaukee County, where the AFDC
and JOBS workers have been collocated at one JOBS center,
administering cases has become easier, and program managers believe
that fully integrating the two roles would further facilitate case
management. 


   PROVIDING SUFFICIENT CASE
   MANAGEMENT SERVICES ALSO
   CHALLENGED STATES
---------------------------------------------------------- Chapter 4:3

Another challenge facing the states was providing sufficient services
to afford recipients a reasonable opportunity to comply with
requirements and avoid termination.  States had to provide certain
activities and services to recipients consistent with JOBS
requirements.  If states failed to meet this obligation, they could
not terminate a family's benefits.  To meet increased demand for
activities and services under their new programs, all three states
opened or expanded job centers to help in job search activities,
created new partnerships with employers to provide placements, and
increased funds for child care.  Despite such efforts, however, both
welfare advocates and state officials raised concerns that workers
were not adequately trained in case management and that large
caseloads and complex new program rules prevented workers from paying
enough attention to individual cases to ensure that recipients, many
with barriers to employability, were assigned appropriate work
requirements and provided sufficient support services. 

In Iowa, for example, JOBS workers were to develop an individualized
Family Investment Agreement with each recipient.  In most terminated
cases, however, recipients failed to come in and sign the agreement,
and workers had minimal contact with these recipients.  For
recipients who did sign agreements, the prescribed activity in many
cases was "individual job search," according to our case file review. 
Recipients had to make four face-to-face job contacts per day and
were recommended for sanction if they did not do so.  State reviewers
concluded that not enough casework had been done in 50 percent of
these cases to determine whether the recipient knew about the
proposed action and its consequences and whether the barriers to the
recipient's participation had been adequately addressed.  As a
result, the program required caseworkers to provide more case
management services before relegating cases to the Limited Benefit
Plan leading to benefit termination.  In addition, Iowa had
established a special program to provide intensive case management
services to families identified with many or severe barriers to
employment.  However, funding allowed less than 3 percent of the
state's caseload to participate in this program, and insufficient
contact with recipients hindered caseworkers' ability to identify
candidates for referral. 

Massachusetts tried to implement a subsidized job program in which
the value of a recipient's AFDC and food stamp grants was paid as
subsidized wages from a private employer rather than provided
directly to the recipient as benefits.  The state, however, found it
difficult to effectively fill job placements created through such
partnerships.  Up to 2,000 slots had been authorized, but the state
had placed fewer than 200 recipients in positions at the time of our
review. 

Finding a good match between employers and recipients presented
problems, according to state officials.  About 40 to 50 percent of
recipients had no high school diploma or equivalent, and placing
recipients in jobs required them to have job development and
training.  What a welfare caseworker was expected to do had its
limits, according to officials.  Welfare advocates criticized the
state program, however, for terminating benefits to families for
noncompliance with work requirements without providing recipients
specific, available placements.  As in Iowa, many Employment
Development Plans simply called for "60 days of job search" or "20
hours per week of work or community service." In some cases, the
state terminated benefits after recipients had received referrals for
community service assignments where no positions were actually
available.  After the state decided an appeal in a recipient's favor
in August 1996 and the action to terminate voided for failure to
offer a specific job placement, the state provided guidance to
workers emphasizing the importance of securing a placement before
sanctioning recipients for noncompliance.  As of December 1996, 121
appeals regarding work requirements and Employment Development Plans
had been decided or withdrawn in the recipients' favor. 

In addition, some raised concerns about caseworkers' ability to
identify needs and inform families of available services.  Welfare
advocates cited examples of families being allowed child care
assistance only when other family members were not available to
provide free care, contrary to program policy.  Records show that 25
appeals regarding denials of child care services were later decided
or withdrawn in the recipients' favor. 

Wisconsin's biggest implementation challenges occurred in Milwaukee,
where workers' caseloads were the largest and, according to state
officials, the number of recipients with multiple barriers to
employment was disproportionately large.\62

In 1996, Milwaukee County had 58 percent of the state's AFDC caseload
but accounted for 44 percent of the 24,500 job placements.  Large
caseloads made it difficult for caseworkers to pay personal attention
to each case to help recipients meet program requirements and move
toward self-sufficiency rather than terminate benefits for
noncompliance.  In addition to handling as many as 200 to 400 cases,
caseworkers had to spend time learning new roles and responsibilities
and performing such tasks as tracking hours of participation. 
Caseworkers had little time left to understand the particular
circumstances of each case and identify services recipients might
need to comply with program requirements and avoid termination. 

In all three states, officials acknowledged the challenges inherent
in the culture shift required of their caseworkers--from determining
eligibility to emphasizing work,\63 the difficulty of learning and
accurately applying complex new program rules, and of handling a
large number of cases.  Nevertheless, state officials maintained that
the guiding principle of their waiver programs--consistent with the
new federal reform law--was that it is ultimately the recipient's
responsibility to either comply with program requirements, inform
their caseworkers of any barrier to employment or service need,
provide good cause reason for noncompliance, or have their benefits
terminated. 


--------------------
\62 One reason Milwaukee's caseworkers' caseloads were the largest is
because the county had a hiring freeze due to uncertainty over its
role in future program administration.  As part of its 1997
implementation plan, other public and private agencies would be
allowed to submit bids to administer the program.  Some of the JOBS
programs had already been contracted to private organizations such as
Goodwill and the Young Men's Christian Association. 

\63 For more discussion of these changes, see Welfare Waivers
Implementation:  States Work to Change Welfare Culture, Community
Involvement, and Service Delivery (GAO/HEHS-96-105, July 2, 1996). 


CONCLUSIONS AND COMMENTS FROM THE
STATES
============================================================ Chapter 5


   CONCLUSIONS
---------------------------------------------------------- Chapter 5:1

States' early experiences with benefit termination provisions reveal
that such provisions have seldom been used.  Nevertheless, state
officials we spoke with consider these provisions successful in
discouraging those with other adequate means of support from
receiving benefits and encouraging those on welfare to comply with
requirements so that they might move toward self-sufficiency. 
Although our analysis yielded little information on implementing
time-limit provisions, it provided several insights for states
implementing full-family sanction provisions under the new federal
welfare reform law. 

First, states will probably experience relatively low percentages of
cases terminated for noncompliance with program requirements as
compared with their total caseloads.  Although the states we studied
in detail were chosen for their relatively large numbers of
terminations, these states still terminated on average about 1
percent or less of their monthly caseloads. 

Second, depending on program structure, states will probably have a
relatively higher proportion of terminations due to noncompliance
with enrollment and other nonwork requirements when initially
converting their existing caseloads to their new programs.  Once
programs are fully implemented, the proportion of such terminations
will most likely decrease, while the proportion of terminations due
to failure to comply with work requirements and, eventually, that due
to reaching a time limit, will most likely increase. 

Third, states will probably see a significant percentage of families
whose benefits are terminated for failure to comply with requirements
return to welfare.  In the three states we studied, about one-third
did so.  In most cases, families returning to welfare demonstrated
compliance with program requirements or provided a basis for
exemption.  Although the federal 5-year lifetime limit on benefit
receipt will probably affect decisions to return to welfare, its
impact is not yet known. 

Fourth, states will probably see significant reductions in the number
of families continuing to receive food stamps and Medicaid after AFDC
benefits are terminated.  Many families do not take the steps
necessary to maintain food stamp and Medicaid benefits after losing
AFDC, even though they may continue to be eligible.  Many families
not returning to welfare, however, do have some sources of support
according to data from federal and state programs--and most likely,
additional families have support they have not reported. 

Fifth, states will probably face challenges in establishing reliable
tracking and notification systems and ensuring that families get
adequate case management and support services to meet program
requirements and avoid having benefits terminated. 

Our analysis yielded little information on implementing time-limit
provisions.  Only one state, Florida, had terminated benefits due to
reaching a time limit through December 1996.  Of the 74 Florida
families losing benefits, those who complied with program
requirements and were not already employed upon reaching their time
limit received job offers from the state (which all declined); those
who failed to comply were not offered jobs.  Once a family reaches
the new federal 5-year lifetime time limit, compliance with program
requirements neither secures more time on welfare nor a job
guarantee.  To protect those experiencing genuine and intractable
hardship, the law allows up to 20 percent of a states' caseload to be
exempt from the time limit.  Under waivers, however, states generally
excluded more than 20 percent of their caseloads from coverage.  The
number of families who will ultimately reach the new federal 5-year
lifetime time limit under TANF is unclear.  Also unclear is whether
states will devise other programs for addressing the needs of these
hard-to-serve families. 


   COMMENTS FROM THE STATES
---------------------------------------------------------- Chapter 5:2

We obtained comments on a draft of this report from our three case
study states:  Iowa, Massachusetts, and Wisconsin.  The states
generally agreed with the report's findings and provided technical
clarifications about their programs and data interpretation.  We
incorporated their comments in the report as appropriate.  We
requested but did not receive comments from HHS. 


SCOPE AND METHODOLOGY
=========================================================== Appendix I

This appendix details our methodology, including information about
our AFDC case selection process and databases used in determining (1)
the number and characteristics of families with benefits terminated
in Iowa, Massachusetts, and Wisconsin; (2) the number of cases later
reopened; and (3) the number of cases with other reported income and
benefits. 

We obtained data on all cases terminated in Iowa through the Limited
Benefit Plan from April through June 1996, a total of 408 cases.  The
data included cases assigned to the Limited Benefit Plan for failure
to sign a Family Investment Agreement and for failure to fulfill such
agreements.  To determine benefits and reported income after
termination, we obtained data for the month of August 1996.  At the
time of our analysis, none of the terminated cases had been reopened. 
(Under Iowa's waiver, states could not reopen terminated cases for 6
months, and 4 months or less had elapsed when we obtained
post-termination data.)

We obtained data on all cases terminated and in closed status in
Massachusetts for failure to meet work, school attendance, or teen
living arrangement requirements as of the end of June 1996, a total
of 1,292 cases.  We included in our analysis all cases closed for
failure of parents (including teen parents) and caretakers to comply
with these requirements, a total of 936 cases.\64 We obtained data
for these cases as of the end of September 1996 to determine the
number of cases reopened as well as benefits and reported income for
the 636 cases remaining closed. 

We obtained data on all cases terminated in Wisconsin in May 1996 for
failure to enroll in the JOBS program and all cases closed in July
and August for failure to meet work requirements under the program
for 3 consecutive previous months (March through May or April through
June), a total of 759 cases.  We obtained October 1996 data to
determine the number cases reopened as well as benefits and reported
income for the 651 cases remaining closed. 

For cases chosen, we analyzed and matched data from electronic
databases provided to us by the states, as well as from the following
federal databases:  HUD's Multifamily Tenant Characteristics System
and Tenant Rental Assistance Certification System and the Social
Security Administration's SSI database.  State databases matched
included AFDC, food stamps, Medicaid, child support enforcement, and
child protective services.\65 To determine what benefits families had
received before termination, we obtained data for the month preceding
termination.  Although we did not independently evaluate the overall
validity of the databases received from other federal and state
programs, we consulted with state database and program staff to
correct discrepancies in the data, and we reviewed case files for a
sample of cases from Des Moines, Boston, and Milwaukee. 

For benefits and income matches, we obtained data not only for AFDC
recipients, but also for household members not in the AFDC assistance
unit who might have been receiving housing, SSI, or food stamp
benefits or who might have reported income from wages, pensions, or
child support.  For most matches, we used heads' of household and
individual household members' Social Security numbers.  For state
database matches, we also used state identification or case numbers. 

We did our review between April 1996 and April 1997 in accordance
with generally accepted government auditing standards. 


--------------------
\64 We did not include in our analysis the 356 cases closed for
failure of dependent children aged 16 to 18 to comply with work or
school attendance requirements. 

\65 We determined that data obtained from child protective services
on substantiated reports of abuse or neglect and foster care
placements for terminated cases were too limited and inconclusive to
include in the report. 


OVERVIEW OF STATES TERMINATING
BENEFITS UNDER WAIVERS AS OF
DECEMBER 31, 1996
========================================================== Appendix II


                                             AFDC caseload  Cities
                                                in covered  covered with                                           As of June  As of June
                                             jurisdictions  populations                               Month first   30, 1996,   30, 1996,  As of Dec.
                 Date waiver                as of June 30,  over           Population  Basis for       terminated  statewide\    in urban   31, 1996,
State            implemented  Coverage\a              1996  150,000\b       in 1994\b  termination          cases           d     areas\d   statewide
--------------  ------------  ------------  --------------  ------------  -----------  ------------  ------------  ----------  ----------  ----------
Arizona                11/95  Statewide             61,538  Glendale          168,000  Sanction             11/95        66\e          \f       \50\e
                                                            Mesa              314,000
                                                            Phoenix         1,049,000
                                                            Scottsdale        152,000
                                                            Tucson            435,000

Connecticut             1/96  Statewide             56,017  None                   \g  Sanction              6/96        11\h          \g       477\h

Delaware               10/95  Statewide             10,253  None                   \g  Sanction             10/96           0          \g          68

Florida                 2/94  Two                  9,083\j  None\i                 \g  Time limit            4/96          19          \g          74
                              counties\i

Illinois                1/96  Statewide            221,632  Chicago         2,732,000  Sanction              7/96           0          \g           8

Iowa                   10/93  Statewide             28,581  Des Moines        194,000  Sanction             10/94       4,174          \f      \5,288

Massachusetts          11/95  Statewide             82,237  Boston            548,000  Sanction             11/95       1,292         258       1,969
                                                            Worcester         165,000                                                  50

Michigan                4/95  Statewide            174,176  Detroit           992,000  Sanction              4/96         307          56         765
                                                            Grand Rapids      190,000                                                  58

Mississippi            10/95  Six                   11,697  Jackson           193,000  Sanction             11/95         279         118         699
                              counties\k

Missouri                6/95  Statewide             80,426  Kansas City       444,000  Sanction              6/95          73          \f        \279
                                                            St. Louis         368,000

Nebraska               10/95  Five                   2,423  Lincoln           203,000  Sanction              3/96           8           5          59
                              counties\l

North Carolina          7/96  Statewide            110,451  Charlotte         438,000  Sanction              7/96           0          \g          \m
                                                            Greensboro        196,000
                                                            Raleigh           237,000
                                                            Winston-          155,000
                                                            Salem

Ohio                    7/96  Statewide            203,442  Akron             222,000  Sanction           10/96\n           0          \g          \m
                                                            Cincinnati        358,000
                                                            Cleveland         493,000
                                                            Columbus          636,000
                                                            Dayton            179,000
                                                            Toledo            323,000

Oregon                  7/96  Statewide             31,851  Portland          451,000  Sanction            9/96\n           0          \g        60\o

South Dakota            5/94  Statewide              5,891  None                   \g  Sanction              5/94         289          \g         413

Utah                   11/95  Pilot                 14,320  Part of Salt      172,000  Sanction             12/95          62          26         180
                        7/96  sites\p                       Lake City\p
                              statewide

Vermont                 7/94  Statewide              8,965  None                   \g  Sanction              1/96           3          \g           3

Virginia                7/95  Statewide             63,399  Arlington         175,000  Sanction              7/95         985          20        1955
                                                            Chesapeake        181,000                                                  13
                                                            Newport           179,000                                                  27
                                                            News              241,000                                                  43
                                                            Norfolk           201,000                                                  19
                                                            Richmond          430,000                                                  11
                                                            Virginia
                                                            Beach

Wisconsin               3/96  Statewide             52,765  Madison           195,000  Sanction              4/96       2,208          84       5,700
                                                            Milwaukee         617,000                                               1,020

=====================================================================================================================================================
Total                                                                                                                   9,776                  18,047
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a States implementing programs statewide generally phased in
implementation over periods lasting up to a year. 

\b Based on 1994 data from the U.S.  Bureau of the Census, as
published in table no.  46 in Statistical Abstract of the United
States - 1996. 

\c Includes cases terminated in states implementing benefit
termination waiver provisions before passage of the new federal
welfare reform law in August 1996.  In some states, such as
Massachusetts and Wisconsin, data represent cases in terminated
status as of the date shown.  In other states, such as Iowa and
Connecticut, data represent cumulative totals that may include cases
that have subsequently been reopened and may double count some cases. 

\d Data requested as of June 30, 1996, but data provided were from
June 15, 1996, to July 2, 1996. 

\e According to the official surveyed, the most significant reason
for the drop in terminations over time is that many teen parents
become old enough to no longer have to meet living arrangement
requirements. 

\f Breakdown for urban area(s) not available. 

\g Not applicable. 

\h Data do not include those cases terminated for failure to comply
with teen living arrangement requirements (not tracked). 

\i The two Florida counties covered were Alachua and Escambia.  As of
June 1996, seven additional counties were participating, but no
families in these counties could reach their time limits as of Dec. 
31, 1996. 

\j Cohort entering program through June 1994 that could possibly
reach a time limit as of June 1996 comprised 353 cases.  Cohort
entering program through Dec.  1994 that could possibly reach a time
limit as of Dec.  1996 comprised 1,442 cases. 

\k The six Mississippi counties covered included Adams, Harrison,
Jones, Lee, Hinds, and Washington. 

\l The five Nebraska counties included Adams, Clay, Lancaster,
Nuckolls, and Webster. 

\m Entire families' benefits had been terminated, but data system did
not track and no estimate could be provided, according to officials
surveyed. 

\n The first month a family's benefits could be terminated after
waiver was implemented. 

\o Terminations as of Nov.  15, 1996.  Data as of Dec.  31, 1996,
were not available. 

\p The pilot sites in Utah included Kearns office (covering part of
Salt Lake City), St.  George, Roosevelt, Kanab (Kane County), Cedar
City, Beaver, Panguitch, American Fork, and Brigham City. 


FULL-FAMILY SANCTION PROVISIONS IN
STATE WELFARE WAIVERS APPROVED
BETWEEN JANUARY 1987 AND AUGUST
1996
========================================================= Appendix III

                  Basis for full-family sanction
Waiver program    (for cases without good cause for
(approval date)   noncompliance)                      Sanction provisions
----------------  ----------------------------------  ----------------------------------
ARIZONA
----------------------------------------------------------------------------------------
Employing and     Teen living arrangement: Failure    Termination of family's
Moving People     of minor parents to live in an      eligibility for AFDC.
Off Welfare and   adult-supervised setting.
Encouraging
Responsibility
(5/95)


CONNECTICUT
----------------------------------------------------------------------------------------
A Fair Chance     Work: After 24 cumulative months    Assistance unit is ineligible for
(9/94)            of AFDC receipt, failure to comply  an AFDC payment. Case can be
                  with activities required by         reinstated through compliance.
                  employability plans.

                  Work: Voluntarily quitting a job    Assistance unit is ineligible for
                  after 24 months of AFDC receipt     AFDC cash assistance for 3 months.
                  under Pathways.

Reach for Jobs    1. Work: Not cooperating with JOBS  First sanction: AFDC benefit
First (12/95)     requirements; quitting a job.       reduced 20 percent for 3 months.
                  2. Child support: Not cooperating   Second sanction: AFDC benefit
                  with child support enforcement      reduced 35 percent for 6 months.
                  requirements.                       Third and subsequent sanctions: No
                  3. Other: Not cooperating with      AFDC benefit paid for 3 months.
                  quality control programs.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live in a       eligibility for AFDC.
                  supervised setting.

                  Enrollment: Failure to complete     AFDC benefit terminated for
                  redetermination of eligibility.     failure to complete 6-month
                                                      redetermination. AFDC, food stamp,
                                                      and Medicaid benefits terminated
                                                      for failure to complete other
                                                      redeterminations. Families may
                                                      reapply for benefits at any time.


DELAWARE
----------------------------------------------------------------------------------------
A Better Chance   1. Enrollment: Not cooperating in   First sanction: One-third
(5/95)            developing of Contract of Mutual    reduction in AFDC benefit until
                  Responsibility.                     compliance. Second sanction: Two-
                  2. Work: Not cooperating with       thirds reduction in AFDC benefit
                  employment-related provisions of    until compliance. Third sanction:
                  contract.                           Termination of AFDC benefit for
                                                      duration of demonstration.

                  Other: Failure to comply with       AFDC benefit initially reduced by
                  nonemployment-related requirements  $50. Reduction increases by $50
                  of Contract of Mutual               every month until compliance with
                  Responsibility, such as immunizing  requirements if the state finds
                  children and attending parenting    that adult has not taken
                  classes.                            reasonable steps to fulfill the
                                                      requirement.

                  Child support: Failure to comply    AFDC benefit terminated until
                  with child support enforcement      compliance.
                  requirements.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live in adult-  eligibility for AFDC.
                  supervised setting.

Amendments to A   1. Enrollment: Not cooperating in   AFDC benefit initially reduced by
Better Chance     developing Contract of Mutual       $50. Reduction increases by $50
(12/95)           Responsibility.                     every month until compliance with
                  2. Other: Failure to comply with    requirements.
                  nonemployment-related requirements
                  of contract, such as immunizing
                  children and attending parenting
                  classes.

                  1. Work: Not cooperating with       First sanction: One-third
                  employment-related provisions of    reduction in AFDC benefit for 3
                  Contract of Mutual                  months or until compliance,
                  Responsibility.                     whichever is sooner. Second
                  2. Other: Failure of dependent      sanction: Two-thirds reduction in
                  children under age 16 to comply     AFDC benefit for 3 months or until
                  with school attendance              compliance, whichever is sooner.
                  requirements.                       Third sanction: Termination of
                                                      AFDC benefit for duration of
                                                      demonstration. Sanctions for
                                                      failure to meet school attendance
                                                      requirements will not be imposed
                                                      if parent or caretaker is working
                                                      with school officials or other
                                                      agencies to remedy situation.

                  Child support: Failure to comply    AFDC benefit terminated until
                  with child support enforcement      compliance.
                  requirements.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live in adult-  eligibility for AFDC.
                  supervised setting.


DISTRICT OF COLUMBIA
----------------------------------------------------------------------------------------
Project on Work,  Teen living arrangement: Failure    Termination of family's
Employment, and   of unmarried minor parents or       eligibility for AFDC.
Responsibility    pregnant minors to live in adult-
(8/96)\a          supervised setting.


IDAHO
----------------------------------------------------------------------------------------
Temporary         Work: Being fired from a job,       Family is ineligible for AFDC
Assistance for    quitting a job, or turning down a   benefits for 90 days or until
Families in       job offer that would provide        compliance. Eligibility for the
Idaho (8/96)      income equal to or greater than     family may be reestablished during
                  the AFDC benefit.                   the sanction period if the adult
                                                      secures new employment comparable
                                                      in gross wages to the job he or
                                                      she quit, becomes exempt from the
                                                      work requirements, or the adult
                                                      who caused the sanction leaves the
                                                      family.

                  Work: Failure to participate in     First sanction: Entire family's
                  work or JOBS activities.            needs removed in determining the
                                                      amount of AFDC benefits for 1
                                                      month or until compliance,
                                                      whichever is longer. Second
                                                      sanction: Entire family's needs
                                                      removed in determining the amount
                                                      of AFDC benefits for 3 months or
                                                      until compliance, whichever is
                                                      longer. Third sanction: Entire
                                                      family's needs removed in
                                                      determining the amount of AFDC
                                                      benefits until the end of the
                                                      demonstration.

                  Teen living arrangement: Failure    Termination of family's
                  of minor, unmarried parents or      eligibility for AFDC.
                  minors who are pregnant to live in
                  adult-supervised setting.


ILLINOIS
----------------------------------------------------------------------------------------
Work and          Work: Not cooperating with          Sanctions for first three
Responsibility    Targeted Work Initiative            instances of noncooperation are in
(9/95)            requirements, such as               accord with JOBS policy for
                  participation in job search and     noncooperation. Sanction for
                  subsidized work positions; not      fourth and subsequent instances of
                  cooperating with Get a Job          noncooperation is loss of entire
                  Initiative requirements, such as    AFDC benefit for 6 months or until
                  participation in job search,        individual complies, whichever is
                  community work experience, and      longer.
                  short-term training.

                  Work: Failure to accept a full-     Termination of family's AFDC
                  time or part-time job offer.        benefit for 3 months or until
                                                      individual complies, whichever is
                                                      sooner.

                  Enrollment: Failure to cooperate    Termination or denial of AFDC cash
                  in developing and signing a self-   benefits for the entire family
                  sufficiency plan within 30 days of  until compliance.
                  application or redetermination.


INDIANA
----------------------------------------------------------------------------------------
Amendments to     Work: Failure to register for work  Termination of family's AFDC
Indiana Manpower  with local employment and training  benefits until compliance.
Placement and     office.
Comprehensive
Training Program
(8/96)

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents and their          eligibility for AFDC.
                  children to live in an adult-
                  supervised setting.


IOWA
----------------------------------------------------------------------------------------
Family            1. Enrollment: Failure to enter     Family is placed in the Limited
Investment        into a Family Investment            Benefit Plan: For 3 months, the
Program (8/93)    Agreement.                          family is eligible for full
                                                      benefits, followed by a 3-month
                                                      benefit period reflecting the
                                                      needs of the children only. At the
                                                      end of this period, the AFDC grant
                                                      is terminated and the family is
                                                      not eligible to apply for
                                                      assistance for 6 months. During
                                                      the Limited Benefit Plan, the
                                                      state will review the well-being
                                                      of the children. Before
                                                      termination, participants are
                                                      allowed to develop a Family
                                                      Investment Agreement and leave the
                                                      Limited Benefit Plan.

                  1. Work: Failure to comply with     Family is placed in the Limited
                  terms of the Family Investment      Benefit Plan: For 3 months, the
                  Agreement.                          family is eligible for full
                  2. Teen school attendance: Failure  benefits, followed by a 3-month
                  to comply with terms of the Family  benefit period reflecting the
                  Investment Agreement.               needs of the children only. At the
                                                      end of this period, the AFDC grant
                                                      is terminated and the family is
                                                      not eligible to apply for
                                                      assistance for 6 months. During
                                                      the Limited Benefit Plan, the
                                                      state will review the well-being
                                                      of the children. Participants have
                                                      no reconsideration rights, that
                                                      is, they are not allowed to
                                                      redevelop a Family Investment
                                                      Agreement and leave the Limited
                                                      Benefit Plan.

Amendments to     Enrollment: Failure to enter into   Family is placed in the Limited
Family            a Family Investment Agreement.      Benefit Plan: For 3 months,
Investment                                            adults' needs are removed in
Program (2/95)                                        calculating AFDC benefit, followed
                                                      by 6 months of AFDC ineligibility
                                                      for the family. During the Limited
                                                      Benefit Plan, the state will
                                                      review the well-being of the
                                                      children. At any time in the first
                                                      3 months of the Limited Benefit
                                                      Plan, participants are allowed to
                                                      develop a Family Investment
                                                      Agreement and leave the Limited
                                                      Benefit Plan. If a participant
                                                      enters the Limited Benefit Plan
                                                      for a second or subsequent time,
                                                      the family will be immediately
                                                      ineligible for AFDC for 6 months
                                                      with no 3-month period of reduced
                                                      benefits.

                  1. Work: Failure to comply with     Family is placed in the Limited
                  the terms of the Family Investment  Benefit Plan: For 3 months,
                  Agreement.                          adults' needs are removed in
                  2. Teen school attendance: Failure  calculating AFDC benefit, followed
                  to comply with terms of the Family  by 6 months of AFDC ineligibility
                  Investment Agreement.               for the family. During the Limited
                                                      Benefit Plan, the state will
                                                      review the well-being of the
                                                      children. Participants have no
                                                      reconsideration rights, that is,
                                                      they are not allowed to redevelop
                                                      a Family Investment Agreement and
                                                      leave the Limited Benefit Plan. If
                                                      a participant enters the Limited
                                                      Benefit Plan for a second or
                                                      subsequent time, the family will
                                                      be immediately ineligible for AFDC
                                                      for 6 months with no 3-month
                                                      period of reduced benefits.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live in adult-  eligibility for AFDC.
                  supervised setting.


KANSAS
----------------------------------------------------------------------------------------
Kansas Actively   Work: Failure to attend a job       If the noncomplying individual is
Creating          interview if referred, failure to   a parent or spouse, the family
Tomorrow for      accept a bona fide offer of         will not receive AFDC cash
Families (8/96)   suitable employment, or             benefits for 3 months for each
                  termination of employment.          occurrence or until compliance.

                  Work: Failure to comply with JOBS   The needs of a noncomplying parent
                  requirements, including             or spouse are not taken into
                  participation in substance abuse    account in determining the amount
                  screening and treatment when        of AFDC cash benefits for up to 2
                  deemed necessary.                   months. If individual is not
                                                      cooperating after 2 months,
                                                      family's AFDC cash benefits are
                                                      eliminated for 2 months with no
                                                      cure. If individual is not
                                                      cooperating after this additional
                                                      2-month period, family's AFDC cash
                                                      benefits continue to be eliminated
                                                      until individual cooperates.

                  Child support: Failure to           The needs of the caretaker are not
                  cooperate with child support        taken into account in determining
                  enforcement requirements.           the amount of AFDC cash benefits
                                                      for 2 months. If the individual is
                                                      still not cooperating after 2
                                                      months, the family's AFDC cash
                                                      benefits are eliminated until
                                                      compliance.


LOUISIANA
----------------------------------------------------------------------------------------
Individual        Work: Failure to accept a full-     The family's eligibility for AFDC
Responsibility    time job offer.                     benefits is terminated for a
Project (2/96)                                        mandatory 3-month period, after
                                                      which the sanction ends.


MAINE
----------------------------------------------------------------------------------------
Welfare to Work   Teen living arrangement: Failure    Termination of family's
(6/96)            of unmarried minor parents or       eligibility for AFDC.
                  married minor parents not living
                  with their spouses to live in an
                  adult-supervised setting.


MARYLAND
----------------------------------------------------------------------------------------
Family            1. Work: Failure to participate in  Termination of family's
Investment        job search.                         eligibility for AFDC.
Program (8/95)    2. Teen living arrangement:
                  Failure of unmarried minor parents
                  to live in adult-supervised
                  setting.

                  Work: Failure to comply with        Removal of the noncooperating
                  requirements of JOBS program.       individual from the grant. This
                                                      sanction remains as long as the
                                                      cumulative months of sanction for
                                                      noncooperation do not exceed 6
                                                      months. The sanction for
                                                      noncooperation after the sanctions
                                                      have been imposed for 6 cumulative
                                                      months is case closure. Once the
                                                      case has been closed, the family
                                                      may reapply for AFDC and will be
                                                      reinstated after cooperation with
                                                      JOBS requirements for 30 days.
                                                      Families whose cases have been
                                                      closed may receive up to 3 months
                                                      of transitional noncash
                                                      assistance.

Amendments to     Work: Failure to participate in     Case is closed.
Family            job search.
Investment
Program (8/96)

                  Work: Failure to comply with        Case is closed. The family may
                  requirements of the JOBS program.   reapply for AFDC and be reinstated
                                                      immediately upon compliance with
                                                      JOBS requirements in the first
                                                      instance of noncompliance, after
                                                      10 days of compliance in the
                                                      second instance, and after 30 days
                                                      of compliance in the third and
                                                      subsequent instances. Families
                                                      whose cases have been closed may
                                                      receive up to 3 months of
                                                      transitional noncash assistance.

                  Child support: Failure to           Case is closed. Once the case has
                  cooperate with child support        been closed, the family may
                  enforcement requirements.           reapply for AFDC and will be
                                                      reinstated immediately upon
                                                      compliance.

                  Other: Commission of fraud by a     The entire family is ineligible
                  member of the assistance unit.      for cash assistance. The sanction
                                                      period for the first conviction is
                                                      6 months or until full restitution
                                                      is made, whichever is less; for
                                                      the second conviction, 12 months
                                                      or until full restitution is made,
                                                      whichever is less; and for the
                                                      third conviction, the sanction is
                                                      permanent.


MASSACHUSETTS
----------------------------------------------------------------------------------------
Welfare Reform    Work: Failure to comply with        Initial instance of noncompliance
'95 (10/95)       requirements of Employment          results in a warning. If
                  Development Program, including      noncompliance continues,
                  participation in specified JOBS     participant is required to
                  components.                         participate in community service.
                                                      Sanction for failure to
                                                      participate in community service
                                                      is reduction of AFDC benefit by
                                                      portion of benefit attributable to
                                                      participant. Sanction for
                                                      subsequent instances of
                                                      noncompliance is termination of
                                                      AFDC benefit until participant
                                                      complies.

                  Work: Failure of participants in    Participants may be required to
                  the Full Employment Program to      participate in community service.
                  maintain a job after at least       Sanction for failure to
                  three attempts.                     participate in community service
                                                      is reduction of AFDC benefit by
                                                      portion of benefit attributable to
                                                      participant. Sanction for
                                                      subsequent instances of
                                                      noncompliance is termination of
                                                      AFDC benefit until participant
                                                      complies.

                  Work: Failure to participate in     First sanction: Reduction of AFDC
                  community service when required in  benefit by portion of benefit
                  the work program.                   attributable to participant.
                                                      Second and subsequent sanctions:
                                                      Termination of AFDC benefit until
                                                      participant complies.

                  Teen school attendance: Failure of  First sanction: AFDC benefit
                  teen parents to attend at least 75  reduced by teen parent's portion
                  percent of assigned educational     of benefit. If noncompliance
                  activities in any month.            continues for more than 30 days,
                                                      and for any subsequent instances
                                                      of noncompliance, family becomes
                                                      ineligible for AFDC. Sanctions
                                                      will be removed if participant
                                                      demonstrates compliance for at
                                                      least 2 consecutive weeks.

                  Teen living arrangement: Failure    Termination of family's
                  of teen parents to live in adult-   eligibility for AFDC.
                  supervised setting.


MICHIGAN
----------------------------------------------------------------------------------------
Amendments to     Work: Failure to participate in     First sanction: AFDC benefit
Strengthen        job search; failure to meet JOBS    reduced by 25 percent, and if no
Michigan          program requirements.               child in case is younger than age
Families (10/                                         6, food stamp benefit is also
94)                                                   reduced by 25 percent for 12
                                                      months or until individual
                                                      complies, whichever is sooner.
                                                      Subsequent sanction: If
                                                      participant does not comply during
                                                      the 12-month period, the AFDC case
                                                      is closed until the individual
                                                      complies and the food stamp
                                                      sanction discontinued.

Amendments to     Teen living arrangement: Failure    Termination of family's
Strengthen        of minor parents and their          eligibility for AFDC.
Michigan          children to live in adult-
Families (6/96)   supervised setting.

                  Teen school attendance: Failure of  Case is closed for at least 1
                  minor parents who have not          month.
                  completed high school to attend
                  school.

                  Work: Failure to participate in     First sanction: AFDC benefit
                  job search; failure to meet JOBS    reduced by 25 percent, and if no
                  program requirements.               child in case is younger than age
                                                      6, food stamp benefit is also
                                                      reduced by 25 percent for 12
                                                      months or until individual
                                                      complies, whichever is sooner.
                                                      Subsequent sanction: If
                                                      participant does not comply during
                                                      the 12-month period, the AFDC case
                                                      is closed until the individual
                                                      complies and the food stamp
                                                      sanction discontinued.


MINNESOTA
----------------------------------------------------------------------------------------
Work First (8/    Work: Failure to comply with        The entire family's needs are
96)               community work experience program   removed in determining the amount
                  requirements.                       of AFDC benefits for at least 6
                                                      months.


MISSISSIPPI
----------------------------------------------------------------------------------------
Mississippi New   Work: Refusal of a Work First job   AFDC grant terminated until
Direction         placement, termination of a         participant complies.
Demonstration     placement within a 2-week trial
Project (12/94)   period or a pattern of accepting
                  placement but requesting early
                  termination.


MISSOURI
----------------------------------------------------------------------------------------
Missouri          Teen living arrangement: Failure    Termination of family's
Families Mutual   of minor parents to reside in an    eligibility for AFDC.
Responsibility    adult-supervised setting.
Plan (4/95)


NEBRASKA
----------------------------------------------------------------------------------------
Welfare Reform    Work: Continued failure to comply   First sanction: AFDC cash benefit
Demonstration     with terms of the self-             terminated for 1 month or until
Project (2/95)    sufficiency contract.               participant complies, whichever is
                                                      longer. Second sanction: AFDC cash
                                                      benefit terminated for 3 months or
                                                      until participant complies,
                                                      whichever is longer. Third
                                                      sanction: AFDC cash benefit
                                                      terminated for remainder of
                                                      demonstration or until 48-month
                                                      time-limit benefit period expires,
                                                      whichever is sooner.


NEW HAMPSHIRE
----------------------------------------------------------------------------------------
Employment        Work: Failure to comply with JOBS   For the first occurrence of
Program (6/       requirements or work requirements   noncompliance, or for occurrences
96)\b             or, within 60 days of application,  more than 6 months after the end
                  being fired from a job, quitting a  of the most recent sanction
                  job, voluntarily reducing hours,    period, the needs of the
                  or turning down a bona fide offer   noncomplying participant are not
                  of an unsubsidized job.             taken into account in calculating
                                                      the AFDC benefit amount for one
                                                      payment period or until the
                                                      failure to comply ceases,
                                                      whichever is longer. After 3
                                                      months of continued noncompliance,
                                                      the adjusted payment standard (the
                                                      payment standard with the needs of
                                                      the noncomplying participant
                                                      removed) is reduced by one-third
                                                      for one payment period or until
                                                      the failure to comply ceases,
                                                      whichever is longer. After an
                                                      additional 3 months of continued
                                                      noncompliance, the adjusted
                                                      payment standard is reduced by
                                                      two-thirds for one payment period
                                                      or until the failure to comply
                                                      ceases, whichever is longer. After
                                                      an additional 3 months of
                                                      continued noncompliance, the AFDC
                                                      case is closed.

                  Enrollment: Failure to attend the   Termination of AFDC benefits.
                  employability assessment meeting.


NORTH CAROLINA
----------------------------------------------------------------------------------------
Work First        Enrollment: Failure to sign the     Case is closed.
Program (2/96)    personal responsibility contract.


NORTH DAKOTA
----------------------------------------------------------------------------------------
Training,         Enrollment: Failure to sign or      Termination of the family's
Education,        cooperate in developing the social  Training, Education, Employment,
Employment, and   contract within 2 months of         and Management (TEEM) benefit--a
Management        eligibility.                        cash payment constituting the
Project (9/95)                                        family's AFDC, food stamps, and
                                                      Low-Income Home Energy Assistance
                                                      Program (LIHEAP) benefit.
                                                      Households may apply for food
                                                      stamps and LIHEAP benefits under
                                                      the regular programs. If a family
                                                      whose TEEM benefit is terminated
                                                      reapplies for assistance under
                                                      TEEM within 10 months of the month
                                                      of closure, the family would not
                                                      be eligible for TEEM benefits
                                                      until the social contract is
                                                      signed. If a family whose case had
                                                      been closed for failure to
                                                      complete the social contract
                                                      within the 2-month period
                                                      reapplies for assistance under
                                                      TEEM more than 10 months after the
                                                      month of closure, the household,
                                                      if found eligible under TEEM, will
                                                      be allowed another 2-month period
                                                      to develop and sign the social
                                                      contract.

                  1. Work: Failure to comply with     The AFDC portion of the TEEM
                  self-sufficiency requirements of    benefit has the following
                  the social contract.                sanctions: First sanction: The
                  2. Child support: Failure to        needs of the noncomplying
                  comply with child support           individual are removed for a
                  enforcement requirements.           minimum of 1 month; if the
                                                      individual fails to comply for 6
                                                      consecutive months, the entire
                                                      AFDC portion of the TEEM benefit
                                                      is terminated. Second sanction:
                                                      The needs of the noncomplying
                                                      individual are removed for at
                                                      least 2 months; if the individual
                                                      fails to comply for 3 consecutive
                                                      months, the entire AFDC portion of
                                                      the TEEM benefit is terminated.
                                                      Third and subsequent sanctions:
                                                      The needs of the noncomplying
                                                      individual are removed for at
                                                      least 3 months; if the individual
                                                      fails to comply for 3 consecutive
                                                      months, the entire AFDC portion of
                                                      the TEEM benefit is terminated.
                                                      AFDC eligibility can be
                                                      reestablished when the individual
                                                      complies with the original program
                                                      requirement or an alternative
                                                      approved activity.


OHIO
----------------------------------------------------------------------------------------
Ohio First (3/    Work: Failure to comply with JOBS   First sanction: The needs of the
96)               requirements.                       noncomplying individual are
                                                      removed in calculating the AFDC
                                                      benefit for the assistance unit
                                                      for 1 month or until compliance,
                                                      whichever is longer. Second
                                                      sanction: No AFDC cash benefit is
                                                      issued for the assistance unit for
                                                      1 month or until compliance,
                                                      whichever is longer. Third
                                                      sanction: No AFDC cash benefit is
                                                      issued for the assistance unit for
                                                      2 months or until compliance,
                                                      whichever is longer. Fourth and
                                                      subsequent sanctions: No AFDC cash
                                                      benefit is issued for the
                                                      assistance unit for 6 months or
                                                      until compliance, whichever is
                                                      longer.

                  Work: Voluntary termination of      AFDC ineligibility for the
                  employment.                         assistance unit for 6 months.

                  Child support: Failure to           Caretaker relative's needs are
                  cooperate with child support        removed in calculating the AFDC
                  enforcement requirements.           benefit for the assistance unit.
                                                      If the caretaker does not request
                                                      to be added back to the assistance
                                                      unit and does not cooperate with
                                                      the requirements within 2 years of
                                                      the date of being penalized for
                                                      noncooperation, the AFDC cash
                                                      benefit for the remaining
                                                      assistance unit members is
                                                      terminated. The caretaker relative
                                                      may reapply for AFDC at any time.
                                                      However, the assistance unit
                                                      members will not be eligible to
                                                      receive AFDC cash benefits until
                                                      the caretaker relative cooperates
                                                      with child support enforcement
                                                      requirements.

                  Other: Refusal of pregnant          First sanction: Recipient is
                  recipients to cooperate with        ineligible for AFDC cash benefits
                  substance abuse assessment or       for 1 month or until compliance,
                  treatment.                          whichever is longer. Second
                                                      sanction: The entire assistance
                                                      unit is ineligible for AFDC cash
                                                      benefits for 1 month or until
                                                      compliance, whichever is longer.
                                                      Third sanction: The entire
                                                      assistance unit is ineligible for
                                                      AFDC cash benefits for 2 months or
                                                      until compliance, whichever is
                                                      longer. Fourth and subsequent
                                                      sanctions: The entire assistance
                                                      unit is ineligible for AFDC cash
                                                      benefits for the longest of the
                                                      following: 36 months, for the
                                                      remainder of the recipient's 60-
                                                      month time period, or until
                                                      compliance.


OREGON
----------------------------------------------------------------------------------------
Oregon Option     1. Work: Failure to meet JOBS       For individuals who have not been
(3/96)            participation requirements.         previously sanctioned or have been
                  2. Other: Failure to comply with    sanctioned in only 1 previous
                  mental health and substance abuse   month, the first 2 months of
                  diagnosis, counseling, and          noncompliance result in a $50
                  treatment requirements.             decrease in the grant. Individuals
                                                      who have been sanctioned in 2 or 3
                                                      previous months will be removed
                                                      from the grant, except that cases
                                                      including a work-eligible
                                                      alien parent continue to be
                                                      subject to a $50 decrease in the
                                                      grant for this sanction period.
                                                      For individuals who have been
                                                      sanctioned in 4 or more previous
                                                      months, the sanction is the
                                                      closure of the AFDC grant. All
                                                      sanctions are removed, at any
                                                      point in the sanction process,
                                                      when an individual complies.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live with       eligibility for AFDC.
                  their parents or in another safe
                  living environment.


SOUTH CAROLINA
----------------------------------------------------------------------------------------
South Carolina    1. Enrollment: Failure to sign an   First instance of noncompliance:
Self-             Individual Self-Sufficiency Plan.   The caretaker's needs are removed
Sufficiency and   2. Work: Failure to comply with     from the calculation of the AFDC
Parental          the work requirements of the plan.  benefit for a maximum of 30 days,
Responsibility                                        curable at any time by compliance.
Program\c (1/                                         If at the end of 30 days the
95)                                                   caretaker has not complied, he or
                                                      she is notified that at the end of
                                                      the next 30 days, the whole family
                                                      will be removed from AFDC. During
                                                      the second 30 days, the sanction
                                                      can be removed at any time by
                                                      compliance. Second instance of
                                                      noncompliance: The family's AFDC
                                                      grant is terminated for at least
                                                      30 days. After 30 days, the
                                                      sanction can be removed at any
                                                      time by compliance. Third instance
                                                      of noncompliance: The family's
                                                      AFDC grant is terminated for at
                                                      least 90 days, after which the
                                                      caretaker would be given the
                                                      opportunity to comply. At the end
                                                      of 90 days, the sanction continues
                                                      until the caretaker complies.
                                                      Fourth and subsequent instances of
                                                      noncompliance: The family's AFDC
                                                      grant is terminated for at least
                                                      180 days, after which the
                                                      caretaker would be given the
                                                      opportunity to comply. At the end
                                                      of 180 days, the sanction
                                                      continues until the caretaker
                                                      complies.

Family            1. Enrollment: Failure to comply    First instance of noncompliance:
Independence Act  with developing an Individual       The caretaker's needs are removed
(5/96)            Self-Sufficiency Plan.              from calculation of the AFDC
                  2. Work: Failure to comply with     benefit for 30 days, curable at
                  the terms of the plan; refusing an  any time by compliance. If at the
                  offer of employment.                end of 30 days the caretaker has
                                                      not complied, he or she is
                                                      notified that at the end of the
                                                      next 30 days, the family's AFDC
                                                      grant will be terminated, curable
                                                      when the adult demonstrates
                                                      compliance for 30 days. Second and
                                                      successive instances of
                                                      noncompliance: The family's AFDC
                                                      grant is terminated, curable when
                                                      the adult demonstrates compliance
                                                      for 30 days.


SOUTH DAKOTA
----------------------------------------------------------------------------------------
Strengthening     Work: Voluntarily quitting a job    The family's AFDC benefit is
South Dakota      of 20 hours or more per week.       terminated for 3 months or until
Families                                              the participant complies with the
Initiative (3/                                        requirement to find a job
94)                                                   comparable to the one quit,
                                                      whichever is sooner.


TENNESSEE
----------------------------------------------------------------------------------------
Families First    Work: Refusal or failure to         First sanction: The assistance
(7/96)            participate in employment,          unit is ineligible for an AFDC
                  training, or other work             payment until compliance. Second
                  preparation activities.             and subsequent sanctions: The
                                                      assistance unit is ineligible for
                                                      AFDC for 3 months or until
                                                      compliance, whichever is longer.
                                                      The state will take action to
                                                      monitor and protect the safety and
                                                      well-being of the children in
                                                      families whose benefits are
                                                      terminated. If the state certifies
                                                      that AFDC assistance is needed to
                                                      prevent a child's loss of housing,
                                                      heat, light, or water or to
                                                      prevent removal of the child from
                                                      the custody of a parent, a cash or
                                                      vendor payment will be issued to
                                                      meet the child's needs.

                  Work: Voluntarily quitting a job.   The assistance unit is ineligible
                                                      for AFDC for 3 months. AFDC
                                                      eligibility may be reestablished
                                                      during the disqualification period
                                                      if the caretaker secures new
                                                      comparable employment, becomes
                                                      exempt from work requirements, or
                                                      leaves the assistance unit. The
                                                      state will take action to monitor
                                                      and protect the safety and well-
                                                      being of the children in families
                                                      whose benefits are terminated. If
                                                      the state certifies that AFDC
                                                      assistance is needed to prevent a
                                                      child's loss of housing, heat,
                                                      light, or water or to prevent
                                                      removal of the child from the
                                                      custody of a parent, a cash or
                                                      vendor payment will be issued to
                                                      meet the child's needs.

                  1. Child support: Failure to        Ineligibility for the entire
                  comply with child support           assistance unit until compliance.
                  enforcement requirements.
                  2. Enrollment: Failure to sign a
                  Personal Responsibility Plan.


UTAH
----------------------------------------------------------------------------------------
Amendment to      1. Work: Failure to participate in  AFDC benefit is reduced by $100
Single Parent     JOBS or other Single Parent         per month until individual
Employment        Employment Demonstration            complies. However, if individual
Demonstration     activities.                         is a child aged 16 to 18 who is
Project (8/95)    2. Child support: Failure to        not in school or working full
                  cooperate with child support        time, the needs of the child will
                  enforcement requirements.           instead be removed from the grant
                                                      calculation until the individual
                                                      complies. In instances where the
                                                      $100 sanction has been applied for
                                                      2 months and nonparticipation
                                                      continues, the case may be closed.
                                                      The case will be reopened
                                                      immediately upon compliance.


VERMONT
----------------------------------------------------------------------------------------
Welfare           1. Work: Failure to participate in  AFDC benefits are issued in the
Restructuring     community service jobs program;     form of vendor payments for the
Project (8/94)    quitting, failing to accept, or     assistance unit's expenses for
                  being fired from an unsubsidized    housing, food, fuel, and other
                  job; or failure to participate in   utilities, and any undisbursed
                  required job search.                balance is issued to the
                  2. Teen school attendance: Failure  assistance unit. Failure to comply
                  of pregnant or parenting minors to  with any of the requirements under
                  attend school or participate in an  the penalty, such as monthly
                  alternative education or training   reporting on the individual's
                  activity.                           circumstances, results in
                                                      termination of all AFDC benefits
                                                      until the individual complies with
                                                      work requirements for 2 weeks.

                  Teen living arrangement: Failure    Termination of family's
                  of pregnant or parenting minors     eligibility for AFDC.
                  who are not living in a supervised
                  setting to attend meetings with
                  caseworkers on 3 separate days
                  each month, at least 1 of which
                  must take place at teen's place of
                  residence.


VIRGINIA
----------------------------------------------------------------------------------------
Virginia          Enrollment: Refusing to sign an     AFDC cash benefit terminated for
Independence      agreement of personal               entire case until case head of
Program (11/93)   responsibility.                     household complies.

                  Teen living arrangement: Failure    Termination of family's
                  of minor parents to live in adult-  eligibility for AFDC.
                  supervised setting.

                  Work: Failure to participate in     First sanction: AFDC cash benefit
                  required work program activities.   terminated for 1 month, or until
                                                      compliance, whichever is longer.
                                                      Second sanction: AFDC cash benefit
                                                      terminated for 3 months, or until
                                                      compliance, whichever is longer.
                                                      Third and subsequent sanctions:
                                                      AFDC cash benefit terminated for 6
                                                      months, or until compliance,
                                                      whichever is longer.

                  Child support: Failure to           AFDC cash benefit terminated for
                  cooperate with efforts to           at least 1 month and until
                  establish paternity.                caretaker relative cooperates with
                                                      paternity establishment.


WEST VIRGINIA
----------------------------------------------------------------------------------------
Joint             Work: Failure of a nonexempt adult  First sanction: Adult's needs are
Opportunities     in AFDC-Unemployed Parent case to   removed in determining the amount
for Independence  participate in the alternate work   of the AFDC cash benefit for 3
(8/95)            experience program.                 months or until the failure to
                                                      comply ceases, whichever is
                                                      longer. Second sanction: The AFDC
                                                      cash benefit is terminated for 6
                                                      months or until the failure to
                                                      comply ceases, whichever is
                                                      longer. The AFDC cash benefit is
                                                      reinstated upon successful
                                                      participation in the alternate
                                                      work experience program for 10
                                                      consecutive days.


WISCONSIN
----------------------------------------------------------------------------------------
Pay for           Enrollment: Failure of active       Termination of a family's
Performance (8/   cases to enroll in the JOBS         eligibility for AFDC.
95)               program as assigned.

                  Work: Failure to complete assigned  The AFDC grant is reduced by the
                  hours of JOBS activities.           hourly federal minimum wage for
                                                      each hour of assigned activity a
                                                      recipient fails to complete
                                                      without good cause. The food stamp
                                                      allotment is reduced by the
                                                      minimum wage for each uncompleted
                                                      hour of assigned JOBS activity
                                                      that has not been taken into
                                                      account in reducing the AFDC
                                                      grant. If a recipient fails to
                                                      complete at least 25 percent of
                                                      hours assigned to JOBS activities,
                                                      he or she receives no AFDC payment
                                                      and the food stamp payment is $10.
                                                      Parents responsible for the care
                                                      of a child under 6 years of age do
                                                      not have their food stamp
                                                      allotment reduced due to failure
                                                      to complete their assigned hours
                                                      of JOBS activity.
----------------------------------------------------------------------------------------
\a In September 1996, HHS withdrew approval for the work requirement
and time limit components of the District of Columbia's Project on
Work, Employment, and Responsibility but let stand the teen parent
component. 

\b The waiver terms and conditions stipulate that New Hampshire may
choose not to implement this provision or choose to discontinue it
once implemented. 

\c South Carolina chose not to implement program. 

Source:  GAO analysis of the terms and conditions of approved state
waivers supplemented by information obtained from the states and HHS. 


TIME-LIMIT PROVISIONS IN STATE
WELFARE WAIVERS APPROVED BETWEEN
JANUARY 1987 AND AUGUST 1996
========================================================== Appendix IV

                  Type of time
                  limit (amount of
                  time before
Waiver program    limit is                                       Provisions for extending
(approval date)   reached)          Time-limit provisions        time limit
----------------  ----------------  ---------------------------  ------------------------
ARIZONA
-----------------------------------------------------------------------------------------
Employing and     Benefit           Nonexempt adults are         Extensions for 6-month
Moving People     reduction         limited to 24 months of      periods can be granted
Off Welfare and   (24 months)       AFDC receipt during a        to those who demonstrate
Encouraging                         consecutive 60-month         good cause for not being
Responsibility                      period. After time limit is  able to find and accept
(5/95)                              reached, family's benefits   work with a specified
                                    are reduced by adult's       level of earnings. Up to
                                    portion of grant.            two 4-month extensions
                                                                 may be granted to allow
                                                                 for completion of an
                                                                 education or training
                                                                 program.


CALIFORNIA
-----------------------------------------------------------------------------------------
California Work   Work trigger      Mandatory JOBS participants  None
Pays              with sanctions    are required to participate
Demonstration     (22 months)       100 hours per month in the
Project                             Community Work Experience
Amendment (9/                       Program (CWEP)(or if less,
95)                                 the number of hours equal
                                    to the AFDC grant divided
                                    by the federal minimum
                                    wage) if they have received
                                    AFDC for 22 of the last 24
                                    months, are unemployed or
                                    employed fewer than 15
                                    hours per week, have
                                    received the services to
                                    meet their employment
                                    goals, and have completed
                                    CWEP or are participating
                                    in CWEP for less than 100
                                    hours per month.


CONNECTICUT
-----------------------------------------------------------------------------------------
A Fair Chance     Work trigger      After receiving benefits     None
(9/94)            with full-        for the first 24 cumulative
                  family sanction   months under Pathways,
                  (24 months)       assistance units may
                                    continue to receive
                                    benefits only if nonexempt
                                    participants comply with
                                    the activities required by
                                    their employability plans.
                                    Noncompliance results in
                                    the assistance unit being
                                    ineligible for AFDC.

Reach for Jobs    Benefit           AFDC receipt for all         Extensions for 6-month
First (12/95)     termination       assistance units with a      periods can be granted
                  (21 months)       mandatory JOBS participant   to those who have been
                                    is limited to 21 months,     unable to obtain or
                                    except for units where       retain employment
                                    minor parents are heads of   despite a good faith
                                    household. After time limit  effort to substantially
                                    is reached, assistance       comply with all JOBS
                                    units' benefits are          requirements.
                                    terminated.

DELAWARE

A Better Chance   Work trigger      After receiving benefits     Extensions to the 4-
(5/95)            with sanctions    for 24 months, nonexempt     year time limit may be
                  up to full-       households headed by         granted if the state has
                  family sanction   employable adults age 19     failed to provide
                  (24 months)       and older may continue to    services specified in
                                    receive AFDC only if adults  recipients' contracts;
                  Benefit           participate in a work        no suitable unsubsidized
                  termination       experience program and job   employment is available
                  (48 months)       search or are working and    in the local economy,
                                    the household's income is    despite recipients' good
                                    below 75 percent of the      faith efforts to obtain
                                    federal poverty level.       employment; or other
                                    Sanctions for noncompliance  unique circumstances
                                    without good cause are       prevent recipients from
                                    increasing reductions in     obtaining employment.
                                    grant, followed by
                                    termination of families'
                                    benefits. After receiving
                                    AFDC for 4 years, household
                                    benefits are terminated if
                                    the adult is determined to
                                    be employable.


FLORIDA
-----------------------------------------------------------------------------------------
Family            Benefit           AFDC receipt is limited to   Extensions for up to two
Transition        termination       36 months in any 72-month    4-month periods can be
Program (1/94)    (24 or 36         period for nonexempt         granted if the state has
                  months)           families that have a         substantially failed to
                                    caretaker relative or adult  provide services, the
                                    under age 24 who does not    recipient would benefit
                                    have a high school diploma   from additional
                                    or equivalent, is not in     education or training
                                    high school and has little   regarding immediate
                                    work history in the past     employment prospects, or
                                    year, or has received AFDC   the recipient has
                                    for 36 of 60 months before   encountered
                                    entering the program. AFDC   extraordinary
                                    benefit receipt for other    difficulties in
                                    nonexempt families is        obtaining employment or
                                    limited to 24 months in any  completing his or her
                                    60-month period. If the      plan.
                                    state determines that
                                    benefit termination would
                                    most likely result in
                                    children being placed in
                                    emergency shelter or foster
                                    care, only the parent's or
                                    caretaker's needs will be
                                    removed from grant.
                                    Transitional employment
                                    program provides private-
                                    sector employment
                                    possibilities for
                                    recipients who have
                                    diligently completed their
                                    employment plans but have
                                    been unable to obtain
                                    employment.


GEORGIA
-----------------------------------------------------------------------------------------
Work for Welfare  Work trigger      After receiving AFDC for 24  None
(10/95)           with sanctions    of the last 36 months,
                  (24 months)       nonexempt adult recipients
                                    and noncustodial parents
                                    under court order are
                                    required to participate in
                                    up to 20 hours of work per
                                    month at an assigned
                                    agency. Sanction for
                                    failure to participate
                                    without good cause is
                                    withholding of individual's
                                    portion of grant for
                                    increasing lengths of time.


HAWAII
-----------------------------------------------------------------------------------------
Pursuit of New    Benefit           AFDC receipt limited to 60   Extensions for 3-month
Opportunities     termination       months for all nonexempt     periods may be granted
(8/96)            (60 months)       families.                    if recipients who have
                                                                 not found employment
                                                                 have made a good faith
                                                                 effort to find a job and
                                                                 satisfactorily fulfilled
                                                                 approved employment
                                                                 training activity
                                                                 requirements.


ILLINOIS
-----------------------------------------------------------------------------------------
Work and          Work trigger      After 12 months in the       Extensions to the 24-
Responsibility    with sanctions    Targeted Work Initiative     month time limit can be
(9/95)            (12 months)       program, participants who    granted if recipients
                                    are unemployed and have      cannot find or maintain
                  Benefit           completed approved JOBS      full-or part-time
                  termination       activities are required to   employment at least
                  (24 months)       participate in subsidized    equal to the maximum
                                    work positions. Sanction     AFDC benefit for a
                                    for failure to participate   family of that size,
                                    without good cause is        plus the appropriate
                                    nonpayment of wages by       work expense deductions.
                                    employer. Nonexempt cases
                                    that receive a total of 24
                                    months of AFDC are
                                    ineligible to reapply for
                                    assistance for 24 months.


INDIANA
-----------------------------------------------------------------------------------------
Indiana Manpower  Benefit           For any family that          Extensions can be
Placement and     reduction         includes an adult in the     granted to individuals
Comprehensive     (24 months)       placement track, the amount  who have cooperated with
Training Program                    of AFDC cash benefits        the JOBS program and
(12/94)                             taking into account the      substantially complied
                                    needs of the adult is        with the requirements of
                                    limited to 24 months from    their self-sufficiency
                                    the time of entry to this    plans if (1) a temporary
                                    track, followed by a 36-     physical or mental
                                    month period of the adult    condition prevents the
                                    not receiving AFDC.          individual from
                                                                 attaining and
                                                                 maintaining employment
                                                                 that would provide the
                                                                 family at least a
                                                                 specified level of
                                                                 income; (2) the state
                                                                 has substantially failed
                                                                 to provide services
                                                                 specified in self-
                                                                 sufficiency plans; (3)
                                                                 despite all appropriate
                                                                 efforts, the person has
                                                                 been unable to find, or
                                                                 has lost without cause,
                                                                 employment that would
                                                                 provide at least a
                                                                 specified level of
                                                                 income; or (4) other
                                                                 unique circumstances
                                                                 prevent obtaining or
                                                                 retaining employment.

Amendments to     Benefit           AFDC receipt for adults who  An individual's
Indiana Manpower  reduction         are not exempt from JOBS is  assistance unit may earn
Placement and     (24 months)       limited to 24 months in the  1 month of AFDC benefits
Comprehensive                       demonstration period.        beyond the time limit
Training Program                                                 for each period of 6
(8/96)                                                           consecutive months
                                                                 during which an
                                                                 individual was employed
                                                                 full time. Renewable
                                                                 extensions of up to 1
                                                                 year can be granted to
                                                                 individuals who have
                                                                 cooperated with the JOBS
                                                                 program and
                                                                 substantially complied
                                                                 with the requirements of
                                                                 their self-sufficiency
                                                                 plans if (1) the state
                                                                 has substantially failed
                                                                 to provide services
                                                                 specified in self-
                                                                 sufficiency plans; (2)
                                                                 despite all appropriate
                                                                 efforts, the person has
                                                                 been unable to find, or
                                                                 has lost without cause,
                                                                 employment that would
                                                                 provide at least a
                                                                 specified level of
                                                                 income; or (3) other
                                                                 unique circumstances
                                                                 prevent obtaining or
                                                                 retaining employment.


LOUISIANA
-----------------------------------------------------------------------------------------
Individual        Benefit           Nonexempt families are       Extension can be granted
Responsibility    termination       limited to 24 months of      for up to 1 year to
Project (2/96)    (24 months)       AFDC cash benefits in a 60-  enable adults to
                                    month period. After time     complete employment-
                                    limit is reached, families'  related education or
                                    benefits are terminated.     training.


MARYLAND
-----------------------------------------------------------------------------------------
Family            Work trigger      Nonexempt recipients may     Extensions can be
Investment        with sanctions    not receive more than 3      granted if a recipient
Program (8/       up to full-       months of AFDC benefits      cannot find necessary
95)\a             family sanction   unless they meet a work      and adequate child care,
                  (3 months)        requirement: full-time       has a verified illness,
                                    unsubsidized employment, 30  or is attending an
                                    hours of subsidized          educational or training
                                    employment, a minimum of 20  program that will
                                    hours of community service,  substantially improve
                                    or a minimum of 20 hours of  his or her prospects of
                                    community service combined   obtaining a job.
                                    with employment. Sanctions
                                    for noncompliance are
                                    removal of noncooperating
                                    person from grant, followed
                                    by case closure after 6
                                    cumulative months.


MASSACHUSETTS
-----------------------------------------------------------------------------------------
Welfare Reform    Work trigger      Nonexempt adults whose       None
'95 (10/95)       with sanctions    child is of mandatory full-
                  up to full-       time school age are
                  family sanction   required to work at least
                  (60 days)         20 hours per week after
                                    receiving AFDC for 60 days.
                                    Requirement may be met
                                    through working 20 hours
                                    per week in unsubsidized
                                    employment, working full
                                    time in a subsidized
                                    employment program,
                                    participating 20 hours per
                                    week in the community
                                    service program, or
                                    combining work and
                                    participation in the
                                    community service program
                                    for 20 hours per week.
                                    Sanction for noncompliance
                                    without good cause is
                                    reduction in benefit
                                    payment equal to adult's
                                    portion of benefit. For
                                    recipients required to
                                    participate in the
                                    community service program,
                                    the sanction for repeated
                                    failure to participate is
                                    termination of the family's
                                    AFDC benefit.


MINNESOTA
-----------------------------------------------------------------------------------------
Work First (8/    Work trigger      If, at the end of the        None
96)               with full-        required 60 days of job
                  family sanction   search, a participant
                  (60 days)         assigned to the immediate
                                    employment track has not
                                    been hired for at least 32
                                    hours per week or does not
                                    earn a net income from
                                    self-employment equal to
                                    his or her AFDC grant, the
                                    individual is required to
                                    participate in CWEP and
                                    continue job search. If
                                    participants do not comply
                                    with CWEP requirements
                                    within the time specified
                                    in their conciliation
                                    conference, the entire
                                    family's needs are removed
                                    in determining the amount
                                    of AFDC benefits for at
                                    least 6 months.


MISSOURI
-----------------------------------------------------------------------------------------
Missouri          Work trigger      After reaching the 24-       The 24-month time limit
Families Mutual   with sanctions    month time limit specified   can be extended an
Responsibility    (24 months)       in their self-sufficiency    additional 24 months
Plan (4/95)                         agreements, JOBS-mandatory   when necessary to allow
                  Benefit           individuals may be required  individuals to complete
                  reduction (36     to participate in a job      their self-sufficiency
                  months)           search or CWEP.              agreements.
                                    Noncompliance without good
                                    cause is subject to
                                    sanctions in accord with
                                    federal regulations.
                                    Individuals who reapply for
                                    benefits after completing a
                                    self-sufficiency agreement
                                    entered into after July 1,
                                    1997, will be denied AFDC
                                    if they received benefits
                                    for at least 36 months;
                                    however, other eligible
                                    family members may receive
                                    AFDC.


MONTANA
-----------------------------------------------------------------------------------------
Families          Work trigger      Nonexempt single-parent      None
Achieving         with sanctions    families have a 24-month
Independence in   (18 or 24         time limit and nonexempt
Montana (4/95)    months)           two-parent families have an
                                    18-month time limit after
                                    which adult recipients are
                                    required to participate an
                                    average of 20 hours a week
                                    in community services
                                    program activities if such
                                    activities are available.
                                    The sanction for
                                    noncompliance is removal of
                                    the adult's needs from the
                                    grant for increasing
                                    periods of time.


NEBRASKA
-----------------------------------------------------------------------------------------
Welfare Reform    Benefit           AFDC receipt for families    Benefits will not be
Demonstration     termination       assigned to the time-        terminated if (1) no job
Project (2/95)    (24 months)       limited program is limited   that provides at least a
                                    to 24 months in a 48-month   specified level of
                                    period. After the time       income is available to a
                                    limit is reached, benefits   recipient, (2)
                                    are terminated.              termination would result
                                                                 in the family's
                                                                 experiencing extreme
                                                                 hardship, (3) adult
                                                                 family members can no
                                                                 longer meet the
                                                                 conditions of their
                                                                 self-sufficiency
                                                                 contracts, or (4) the
                                                                 state has failed to meet
                                                                 the terms of a
                                                                 recipient's self-
                                                                 sufficiency contract.


NEW HAMPSHIRE
-----------------------------------------------------------------------------------------
Employment        Work trigger      After 26 weeks of job        None
Program (6/96)    with sanctions    search, adults nonexempt
                  up to full-       from JOBS who are able to
                  family sanction   work are required to work
                  (26 weeks)        for 26 weeks, provided that
                                    work is available. The work
                                    requirement may be
                                    fulfilled by unsubsidized
                                    work, subsidized work, on-
                                    the-job training, community
                                    service, alternative work
                                    experience programs, work
                                    supplementation, or other
                                    approved employment-
                                    related activities.
                                    Sanctions for noncompliance
                                    without good cause are
                                    increasing reductions in
                                    AFDC grant, culminating in
                                    case closure.


NORTH CAROLINA
-----------------------------------------------------------------------------------------
Work First        Benefit           AFDC receipt for families    Extensions may be
Program (2/96)    termination       in the Work First            granted if recipients
                  (24 months)       employment and training      have substantially
                                    program is limited to 24     complied with their
                                    months. After the time       personal responsibility
                                    limit is reached, families   contracts (or have good
                                    are ineligible for benefits  cause reasons for not
                                    for 36 months.               doing so) and through no
                                                                 fault of their own have
                                                                 been unable to obtain or
                                                                 maintain employment to
                                                                 provide a specified
                                                                 level of subsistence.


NORTH DAKOTA
-----------------------------------------------------------------------------------------
Training,         Work trigger      Nonexempt families are       Not specified
Education,        with sanctions    required to sign a social
Employment, and   (24 months, 42    contract that sets an
Management        months, or 43     expected time limit for
Project (9/95)    months or         self-sufficiency based on
                  longer)           factors related to
                                    employability: 24 months,
                                    42 months, or 43 months or
                                    longer. Individuals not
                                    employed full time in
                                    unsubsidized employment by
                                    end of time limit are
                                    placed in a work experience
                                    position or granted an
                                    extension.


OHIO
-----------------------------------------------------------------------------------------
Ohio First (3/    Benefit           AFDC receipt for nonexempt   None cited
96)               termination       assistance units headed by
                  (36 months)       adults is limited to 36
                                    months out of any 60-month
                                    period. After the time
                                    limit is reached,
                                    assistance unit's benefits
                                    are terminated.


OKLAHOMA
-----------------------------------------------------------------------------------------
Mutual            Work trigger      After 36 cumulative months   Extensions may be
Agreement--A      with sanctions    of AFDC receipt out of 60    provided to individuals
Plan for Success  (36 months)       months for recipients        who are making
(3/95)                              nonexempt from JOBS,         satisfactory progress in
                                    participation in workfare    the program and are
                                    (or other JOBS components    within either one
                                    leading to employment if     semester of completing
                                    workfare positions are       an educational program
                                    unavailable) becomes         or 4 months of
                                    mandatory. JOBS sanctions    completing a training
                                    may be imposed on            program expected to lead
                                    individuals who fail to      directly to employment.
                                    meet the minimum hourly
                                    requirement.


OREGON
-----------------------------------------------------------------------------------------
Oregon Option     Benefit           Nonexempt families are       Extensions can be
(3/96)            termination       limited to 24 cumulative     granted to the following
                  (24 months)       months of AFDC receipt in    recipients: (1) a
                                    any period of 84             dependent child in a
                                    consecutive months.          two-parent household in
                                                                 which the primary wage
                                                                 earner has died; (2) a
                                                                 dependent child living
                                                                 with a person other than
                                                                 the parent(s) with whom
                                                                 the child lived at the
                                                                 time the child was
                                                                 receiving AFDC; or (3) a
                                                                 parent of a dependent
                                                                 child receiving AFDC,
                                                                 and his or her dependent
                                                                 children, if the state
                                                                 determines that the
                                                                 parent is making good
                                                                 faith efforts to obtain
                                                                 permanent employment.


SOUTH CAROLINA
-----------------------------------------------------------------------------------------
Family            Benefit           Nonexempt families are       An extension of up to 6
Independence Act  termination       limited to 24 months of      months may be granted if
(5/96)            (24 months)       AFDC receipt.                an individual is
                                                                 involved in a training
                                                                 program that will not be
                                                                 completed by the 24th
                                                                 month. An extension of
                                                                 up to 12 months can be
                                                                 granted if an individual
                                                                 has completed training
                                                                 and has diligently
                                                                 complied with the self-
                                                                 sufficiency plan but
                                                                 cannot obtain or
                                                                 maintain employment that
                                                                 provides at least a
                                                                 specified level of
                                                                 subsistence. When the 6-
                                                                 or 12-month extensions
                                                                 expire, month-by-month
                                                                 extensions may be
                                                                 granted if an individual
                                                                 has complied with the
                                                                 self-sufficiency plan
                                                                 and the county
                                                                 determines either that
                                                                 benefit termination will
                                                                 have detrimental effect
                                                                 on the welfare of the
                                                                 children or that the
                                                                 family has no other
                                                                 source of financial
                                                                 support sufficient to
                                                                 provide at least a
                                                                 specified level of
                                                                 subsistence.


SOUTH DAKOTA
-----------------------------------------------------------------------------------------
Strengthening     Work trigger      Nonexempt adults assigned    An extension can be
South Dakota      with sanctions    to the employment track are  granted if the state
Families          (24 or 60         limited to 24 months of      fails to make available
Initiative (3/    months)           AFDC receipt. Nonexempt      services it agreed to
94)                                 adults assigned to the       provide as part of an
                                    education track are limited  individual's self-
                                    to 60 months of AFDC         sufficiency plan and
                                    receipt. When the time       determines that an
                                    limits are reached, adults   individual needs
                                    who are not working 30       additional time to
                                    hours per week are required  complete his or her
                                    to perform 30 hours per      plan.
                                    week of approved volunteer
                                    service. Noncompliance is
                                    subject to either a JOBS
                                    sanction or the grant being
                                    reduced in any month of
                                    noncompliance to an amount
                                    equal to what the family
                                    would receive if the
                                    adult's needs were not
                                    taken into account.


TENNESSEE
-----------------------------------------------------------------------------------------
Families First    Benefit           Receipt of AFDC cash         The 18-month eligibility
(7/96)            termination (18   benefits by an assistance    period may be extended
                  months and 60     unit is limited to 60        for an additional 6
                  months)           months, and periods of       months for families in
                                    eligibility within the 60    which the caretaker is
                                    months are limited to 18     living in an economic
                                    months. An assistance unit   hardship county and is
                                    whose benefit is terminated  in substantial
                                    after receiving AFDC cash    compliance with the
                                    assistance for 18 months     Personal Responsibility
                                    within an 18-month period    Plan. The 18-month and
                                    of eligibility is eligible   60-month periods can
                                    to reapply for AFDC no       also be extended on a
                                    sooner than 3 months from    case-by-case basis if
                                    the last month of receipt    good cause exists or the
                                    of AFDC, with the following  state has failed to
                                    exception. The assistance    provide timely services.
                                    unit will not be subject to  Good cause exists when
                                    the 3-month waiting period   all of the following
                                    if the caretaker was         criteria are met: (1)
                                    employed when the case was   the participant is in
                                    terminated, loses the job    compliance with the
                                    through no fault of his or   plan, (2) the
                                    her own, and the assistance  participant has been in
                                    unit meets all other AFDC    substantial compliance
                                    eligibility requirements.    with the plan during the
                                    The state will act to        entire current period of
                                    monitor and protect the      eligibility, (3) the
                                    safety and well-being of     assistance unit's income
                                    the children in families     is less than the payment
                                    whose benefits are           standard plus $90 (or a
                                    terminated. If the state     higher amount), and (4)
                                    certifies that AFDC          the participant is not
                                    assistance is needed to      currently refusing
                                    prevent a child's loss of    employment or
                                    housing, heat, light, or     voluntarily quitting
                                    water or to prevent removal  employment without good
                                    of the child from the        cause.
                                    custody of his or her
                                    parent, a cash or vendor
                                    payment will be issued to
                                    meet the child's needs.


TEXAS
-----------------------------------------------------------------------------------------
Achieving Change  Benefit           On the basis of              Extensions of no longer
for Texans (3/    reduction (12,    availability of JOBS         than 6 months at a time
96)               24, or 36         positions, AFDC receipt is   can be granted upon
                  months)           time limited for             request if the
                                    caretakers, second parents   individual lives in an
                                    in AFDC-Unemployed Parent    area of economic
                                    cases, and teen parents      hardship or experiences
                                    certified as caretakers.     severe personal hardship
                                    The length of the time       and has complied with
                                    limit--12, 24, or 36         all work-related
                                    months--depends on the       requirements.
                                    extent of the individual's
                                    education and work
                                    experience. After the time
                                    limit is reached, a
                                    family's benefits are
                                    reduced by the individual's
                                    portion for 5 years.


VERMONT
-----------------------------------------------------------------------------------------
Family            Work trigger      Nonexempt parents who have   None
Independence      with sanctions    not accepted an
Project (4/93)    (15 or 30         unsubsidized job will be
                  months)           required to participate in
                                    community service jobs
                                    after 30 months (single-
                                    parent families and two-
                                    parent families with
                                    incapacitated adults) or 15
                                    months (other two-parent
                                    families). The sanction for
                                    failure to participate is a
                                    reduction of the AFDC
                                    benefit based on the number
                                    of hours the parent was
                                    required to work under the
                                    community service jobs
                                    component.

Welfare           Work trigger      Nonexempt parents who have   None
Restructuring     with sanctions    not accepted an
Project (7/94)    up to full-       unsubsidized job or who are
                  family sanction   working in an unsubsidized
                  (15 or 30         job for fewer than the
                  months)           required hours will be
                                    required to participate in
                                    community service jobs
                                    after 30 months (single-
                                    parent families and two-
                                    parent families with
                                    incapacitated adults) or 15
                                    months (other two-parent
                                    families). The sanction for
                                    failure to participate is
                                    issuance of the AFDC
                                    benefit in the form of
                                    vendor payments for
                                    housing, food, fuel, and
                                    utilities (with any
                                    remaining balance paid in
                                    cash). Failure to comply
                                    with any requirements while
                                    under the sanction will
                                    result in termination of a
                                    family's AFDC benefit.


VIRGINIA
-----------------------------------------------------------------------------------------
Virginia          Work trigger      Within 90 days of signing    Hardship exceptions to
Independence      with sanctions    personal responsibility      the 24-month time limit
Program (7/95)    up to full-       agreements, nonexempt        can be granted for up to
                  family sanction   recipients are required to   1 year if factors
                  (90 days)         participate in work          relating to job
                                    activities such as           availability are
                  Benefit           unsubsidized employment,     unfavorable or an
                  termination       subsidized employment, or    exception would enable a
                  (24 months)       CWEP. The sanction for       caretaker to complete
                                    noncompliance is             employment-related
                                    termination of families'     education or training.
                                    benefits for increasing      Hardship exceptions can
                                    periods of time. In          also be granted for up
                                    addition, cases headed by    to 90 days if an
                                    nonexempt caretakers are     individual has been
                                    limited to 24 cumulative     actively seeking
                                    months of AFDC cash          unsubsidized employment
                                    benefits.                    and cannot find a job
                                                                 that pays at least a
                                                                 specified amount or the
                                                                 individual demonstrates
                                                                 extreme hardship because
                                                                 of a job loss resulting
                                                                 from factors unrelated
                                                                 to job performance.
                                                                 Extensions to hardship
                                                                 exceptions may be
                                                                 granted in very limited
                                                                 circumstances.


WASHINGTON
-----------------------------------------------------------------------------------------
Success Through   Benefit           Assistance units in which    None
Employment        reduction (48     adults have received AFDC
Program (10/95)   months)           for 48 months in any 60-
                                    month period will have
                                    benefits reduced by 10
                                    percent. Until an
                                    assistance unit has been
                                    off assistance for 1 month
                                    or more, benefits will be
                                    reduced by an additional 10
                                    percent for each additional
                                    12 months of AFDC receipt.


WISCONSIN
-----------------------------------------------------------------------------------------
Work Not Welfare  Work trigger      After the first month,       Extensions to the 24-
(11/93)           with sanctions    nonexempt recipients are     month time limit can be
                  up to full-       required to earn their       granted to those who (1)
                  family sanction   benefits through education,  cannot work for reasons
                  (1 month and 12   training, or work            such as personal
                  months)           activities; after 12 months  disability or
                                    of AFDC receipt, they must   incapacity, (2) need to
                  Benefit           engage in work activities.   care for a disabled
                  termination (24   The sanction for             dependent, or (3) have
                  months)           noncompliance without good   made all appropriate
                                    cause is a reduction of the  efforts to find work but
                                    combined AFDC/food stamp     cannot find work because
                                    grant based on the number    local labor market
                                    of hours of assigned         conditions preclude a
                                    activity not completed.      reasonable job
                                    Nonexempt cases are limited  opportunity.
                                    to 24 months of AFDC
                                    receipt within a 48-month
                                    period. After this time
                                    limit is reached, families'
                                    benefits are terminated for
                                    36 months.


WYOMING
-----------------------------------------------------------------------------------------
New               Benefit           Nonexempt individuals who    One 6-month extension
Opportunities     reduction         complete an associate's or   may be granted to
and New           (varies)          bachelor's program while     individuals to update an
Responsibilities                    receiving AFDC will be       expired certification,
(9/93)                              eligible for no more than 6  take a licensing or
                                    additional months of         certification
                                    benefits. In addition,       examination, or obtain a
                                    nonexempt individuals will   license or certificate
                                    be ineligible for AFDC if    to practice the trade or
                                    they are pursuing a          profession for which
                                    bachelor's degree beyond a   they have been trained.
                                    sixth year; a vocational or
                                    associate's degree beyond a
                                    fourth year; or a second
                                    associate's or bachelor's
                                    degree or any kind of
                                    graduate degree.
-----------------------------------------------------------------------------------------
Note:  The District of Columbia's Project on Work, Employment, and
Responsibility, approved Aug.  19, 1996, contained a time-limit
provision.  HHS withdrew approval for this provision in Sept.  1996. 

\a The time-limit provision was eliminated when Maryland's Family
Investment Program was amended in Aug.  1996. 

Source:  GAO analysis of the terms and conditions of approved state
waivers, supplemented by information obtained from the states and
HHS. 


REASONS FOR EXCLUDING CASES FROM
COVERAGE IN SELECTED STATES
=========================================================== Appendix V


                                                                                Age-of-
                                                                                youngest-
                                                                                child
State                           Number             Percent    Number   Percent  exemption    Number   Percent    Number   Percent    Number   Percent
------------------  ------------------  ------------------  --------  --------  ---------  --------  --------  --------  --------  --------  --------
Arizona                         61,538               100.0         0         0  (none)        1,100       1.8         0         0    60,438      98.2
Connecticut                     56,017               100.0   7,595\c      13.6  1 year        1,900       3.4  24,110\d      43.0    22,412      40.0
Delaware                        10,253               100.0     1,161      11.3  3 months      1,676      16.3   5,353\d      52.2     2,063      20.1
Florida\e                        9,083               100.0     1,499      16.5  6 months      3,732      41.1     826\f       9.1     3,026      33.3
Illinois                       221,632               100.0     575\g       0.3  13            5,694       2.6         0         0  215,363\      97.2
                                                                                 years\h                                                  i
Iowa                            28,581               100.0     6,777      23.7  6 months        918       3.2         0         0    20,886      73.1
Massachusetts                   82,237               100.0  57,109\c      69.4  6 years       1,692       2.1   7,976\d       9.7    15,460      18.8
Michigan                       174,176               100.0    46,806      26.9  4 months     12,888       7.4         0         0   114,482      65.7
Mississippi                     11,697               100.0     5,248      44.9  3 years       1,297      11.1         0         0     5,152      44.0
Nebraska                         2,423               100.0       319      13.2  6               878      36.2         0         0     1,226      50.6
                                                                                 months\j
Utah                            14,320               100.0       0\k         0  none          5,230      36.5      32\l       0.2     9,058      63.3
Vermont                          8,965               100.0        61       0.7  18 months     3,545      39.5         0         0     5,359      59.8
Virginia                        63,399               100.0     5,600       8.8  18 months     3,000       4.7         0         0    54,800      86.4
Wisconsin                       52,765               100.0     9,424      17.9  1 year          675       1.3   3,306\m       6.3    39,360      74.6
-----------------------------------------------------------------------------------------------------------------------------------------------------

\a Typical categories of exemptions to work requirements under
states' waiver programs were similar to those provided under the JOBS
program:  having a disability, caring for a young child or a disabled
household member, or household headed by caretaker relatives (also
referred to as "ineligible grantees") with no legal obligation of
support.  Some states provided exemptions for seniors (aged 62 or
older), for those in their last 3 or 4 months of pregnancy, or for
those lacking transportation or child care.  Categories of exemptions
for other types of requirements leading to full-family sanctions
varied by the requirements.  For example, exemptions relating to the
teen living arrangement requirement generally dealt with conditions
in the teens' parents' homes, and exemptions relating to child
enforcement requirements generally dealt with the unavailability, or
risk to the child of providing, information on the absent parent. 

\b As a standard condition of obtaining HHS approval for a waiver,
states were required to provide for an evaluation based on a
comparison of those subject to the waiver provisions (treatment
group) versus those subject to previous program provisions (control
group).  Cases were to be randomly assigned to the control groups in
each state, generally to be spread incrementally through the first
few years of implementation.  As a result, the number of cases
excluded as control cases in each state depended on the number of
waivers being implemented and how long the state had been
implementing each of its waiver programs.  Under the new federal
welfare reform law, states are no longer required to evaluate their
waiver programs, and they may discontinue maintaining their control
groups for study.  As of April 1997, 16 states had requested HHS
funding to continue evaluations of their waivers, including
maintenance of control groups.  Of these, 10 were states that had
implemented benefit termination waiver provisions. 

\c The exemption data included here represent those who were not
subject to a nonmandatory work requirement; exemption data are
different for other requirements in which noncompliance can result in
full-family sanction, such as the teen living arrangement and teen
school attendance requirements. 

\d Pending review for conversion to new program. 

\e Data included here are for Alachua and Escambia counties only, the
two pilot counties where all terminations as of Dec.  31, 1996, had
taken place. 

\f Nonvolunteers in Alachua County where participation was voluntary. 

\g Represents the number exempt among the 15,000 cases otherwise
subject to work requirements under the Targeted Work Initiative and
Get a Job components of Illinois's Work and Responsibility waiver. 

\h Age-of-youngest-child exemption among those subject to work
requirements.  No exemptions provided for requirement to sign
self-sufficiency plan. 

\i Of the total caseload, about 14,425 cases were subject to
provisions potentially leading to benefit termination on the basis of
noncooperation with work requirements; and the entire caseload
(except control cases) was subject to provisions potentially leading
to benefit termination on the basis of noncooperation with signing a
self-sufficiency plan. 

\j However, cases with the youngest child age 12 weeks to 6 months
must participate part time in activities such as family nurturing or
pre-employment skills. 

\k According to the waiver, no one over age 15 was exempt.  However,
according to a May 1996 report prepared by the Utah Department of
Human Services, approximately 4 to 5 percent of families are at any
one time temporarily excused from active participation because of a
recent birth, personal illness, or unforeseen circumstance. 

\l Seasonal fluctuation. 

\m Represents cases in other waiver demonstration projects, such as
Work Not Welfare, Parental and Family Responsibility, and Learnfare. 


OVERVIEW OF WAIVER PROGRAMS IN
IOWA, MASSACHUSETTS, AND WISCONSIN
========================================================== Appendix VI


   IOWA'S FAMILY INVESTMENT
   PROGRAM
-------------------------------------------------------- Appendix VI:1

Iowa was the first of the three case study states to implement
benefit termination provisions statewide under its waiver, called the
Family Investment Program.  The goal of the program, as stated in
Iowa's waiver application, was to transform its welfare system from
one of income maintenance to one of self-sufficiency.  The program
was designed to make welfare a transition to work by requiring
participants' involvement in some work or training activity and
providing consequences for those not participating.  Iowa began
implementing some provisions under this waiver in October 1993 but
did not begin implementing its benefit termination provisions
statewide until April 1994. 

At the core of Iowa's program was the Family Investment Agreement, an
individualized plan designed to help each family achieve
self-sufficiency.  This plan generally called for entry into the
workforce as soon as possible, with state assistance in job search
activities and child care provision.  In some cases, however, a
recipient's plan may have called for a period of education, training,
rehabilitation, or work experience to prepare the recipient for the
job market.  As circumstances changed, the plan, including a time
table for achieving self-sufficiency, could be altered on the basis
of client and caseworker consultations.  Recipients who failed to
sign the agreement, or who signed it but failed to subsequently
fulfill the terms of the agreement, had their benefits phased out
under a Limited Benefit Plan.  Initially, the Limited Benefit Plan
consisted of 3 months of full benefits, followed by 3 months of
reduced benefits (eliminating the adult portion of the grant), then
benefit termination.  In February 1996, the state shortened the
phase-out period by eliminating the 3 months of full benefits. 
Before termination, recipients in the Limited Benefit Plan who had
not previously signed a Family Investment Agreement could request
having their full benefits reinstated by signing an agreement.  Once
a case had been terminated, however, families were required to wait 6
months before reapplying for benefits. 

Iowa contracted with Mathematica Policy Research, Inc., and the
Institute for Social and Economic Development to evaluate its program
as required under the waiver.  At the time of our review, the
evaluators were conducting a study including (1) a flow analysis to
obtain data on the number of and reasons why recipients entered and
exited the Limited Benefit Plan program and (2) a survey of
recipients whose benefits have been terminated to determine what
happened to them after termination.  For the survey, the evaluators
contacted 137 of the 172 recipients whose benefits had been
terminated between November 1995 and January 1996.  The state
received the draft report summarizing the results of this study in
October 1996, but the final report had not yet been released as this
report went to press.  In addition, a request for funding from HHS to
continue the evaluation of Iowa's waiver program was pending at the
time of our review. 


   MASSACHUSETTS'S WELFARE REFORM
   '95 PROGRAM
-------------------------------------------------------- Appendix VI:2

As stated in Massachusetts's waiver application, the underlying goal
of its program, called Welfare Reform '95, was to replace traditional
cash assistance with work or community service requirements for all
able-
bodied AFDC recipients with school-aged children.  At the core of
this program was the expectation that recipients would assume
responsibility for moving toward self-sufficiency.  Ongoing
recipients as well as new applicants had to appear for an eligibility
assessment under the new program requirements.  Similar to Iowa's
Family Investment Agreement, Massachusetts required caseworkers to
develop an Employment Development Plan for each recipient subject to
the work requirement and for each teen parent. 

Recipients subject to the work requirement had 60 days for job search
activities before the requirement was imposed.  If recipients did not
find employment after 60 days, or if they subsequently lost their
job, their plans required participation in community service to meet
the 20 hours per week mandatory work requirement, and caseworkers
provided a list of community service work sites.  Teen parents' plans
required enrollment in high school (or an equivalent program) and at
least 75-percent attendance; caseworkers provided referrals to
programs as needed.  For both adults and teens, the plans also
allowed recipients to request support services such as transportation
or child care.  If recipients failed to comply with their plans,
their benefits were reduced (removal of the adult portion of the
grant); continued noncompliance meant benefit termination for the
entire family.  The state could reopen cases and restore full
benefits retroactively if recipients demonstrated compliance with
plan requirements for 2 consecutive weeks.  The waiver explicitly
eliminated any formal reconciliation process before notifying
recipients of or implementing sanctions. 

Although required under the waiver, the state had not yet contracted
with evaluators to study its program before the new federal welfare
reform law was enacted.  At the time of our review, the state was
developing plans to evaluate the program under the new law; however,
the state did not intend to continue to maintain its control groups
for study. 


   WISCONSIN'S PAY FOR PERFORMANCE
   PROJECT
-------------------------------------------------------- Appendix VI:3

Wisconsin implemented its benefit termination provisions statewide in
March 1996 as part of the waiver demonstration project called Pay for
Performance.  This project had two major components:  provisions for
diverting AFDC applicants from ever receiving benefits and provisions
for requiring AFDC recipients to work in exchange for benefits. 

The diversion component was designed to help applicants become self-
sufficient without going on welfare.  Applicants met with a financial
planning resource specialist who would explain the alternatives to
going on welfare and the services available to help them find a job,
secure child care, or address other barriers to self-sufficiency. 
Those seeking further assistance had to enroll in Wisconsin's JOBS
program and begin looking for work.  If applicants completed 60 hours
of JOBS participation and were still not self-sufficient, they then
became eligible to receive welfare benefits.  Although statewide data
on the effectiveness of these provisions were not yet available, the
number of applicants diverted from the welfare rolls due to these
provisions was significant, according to state and county officials. 
Data compiled in one county revealed that 46 percent of 880
applicants deemed likely to have gone on AFDC between March and July
of 1996 were diverted from receiving benefits. 

The work-in-exchange-for-benefits component was designed to replicate
working-world situations for those receiving benefits by reducing
benefits proportionately to the number of required hours not worked. 
The program required recipients to work 20 to 40 hours per week. 
Each month, caseworkers determined hours of participation in assigned
JOBS activities and calculated a monetary sanction for any missed
hours by multiplying the number of missed hours by the federal
minimum wage.  If a recipient's participation fell below 25 percent
of the scheduled hours, the entire AFDC grant was reduced to zero,
and, because the AFDC and food stamp work requirements were linked,
food stamps were reduced to $10 for those who had no basis for
exemption under the food stamp employment and training program (such
as having a child under 6 years old).\66 Because calculating these
sanctions is difficult, sanctions were not to be imposed until the
second month after the month in question to allow a 30-day period for
data processing and for the recipient to request adjustments based on
good cause for failure to participate or on reporting and processing
errors.  The state closed cases if the recipient failed to enroll in
the Pay for Performance JOBS program or received a full sanction (for
participation below 25 percent) for 3 consecutive months.  Once the
state closed a case, a recipient would generally have to meet the
program requirements for new applicants in the diversion
component--60 hours of participation in JOBS--before becoming
eligible to receive benefits again. 

Wisconsin had contracted with MAXIMUS to conduct the required
evaluations of the Pay for Performance waiver program.  Although the
contract was canceled after passage of federal welfare reform, a
request for funding from HHS to continue the evaluation was pending
at the time of our review.  In addition, a broader study group,
including the University of Wisconsin, had been formed to evaluate
the state's comprehensive reform effort, called Wisconsin Works, of
which Pay for Performance is one part.  Phased-in implementation of
Wisconsin Works began in October 1996, and officials expected to have
the program fully implemented by September 1997. 


--------------------
\66 Under the new federal welfare reform law, Wisconsin was allowed
to lower the age-of-youngest-child exemption for the food stamp
sanction from 6 years to 1 year of age for 3 years because the state
had previously submitted a waiver request to do so that had been
denied. 


BASES FOR TERMINATIONS NATIONWIDE,
BY STATE
========================================================= Appendix VII



                                       Table VII.1
                         
                             Terminations as of June 30, 1996



                                                     Teen        Teen
                                          Child    parent      parent
                                        support    school      living
                  Enrollmen            enforcem  attendan  arrangemen              Due to
                          t      Work       ent        ce           t     Other  reaching
            Tota  requireme  requirem  requirem  requirem  requiremen  requirem    a time
State          l        nts      ents      ents      ents          ts      ents     limit
----------  ----  ---------  --------  --------  --------  ----------  --------  --------
Arizona       66                                                   66
Connecticu  11\b                    2         7                    \b       2\c
 t
Florida       19                                                                     19\d
Iowa        4,17    3,756\e     418\e
               4
Massachuse  1,29                1,036               217\f        39\g
 tts           2
Michigan     307                  307
Mississipp   279                  279
 i
Missouri      73                                                   73
Nebraska       8                    8
South        289                  289
 Dakota
Utah          62                   59         3
Vermont        3                    3
Virginia     985        191       390       362                    42
Wisconsin   2,20      1,634       574
               8
=========================================================================================
Total       9,77      5,581     3,365       372       217         220         2        19
               6
-----------------------------------------------------------------------------------------

\a In some states, such as Massachusetts and Wisconsin, data
represent cases in terminated status as of the date shown.  In other
states, such as Iowa and Connecticut, data represent cumulative
totals that may include cases that have subsequently been reopened
and may double count recipients in some cases. 

\b Data do not include those cases terminated for failure to comply
with teen living arrangement requirements, which are not tracked,
according to the state official surveyed. 

\c Terminations for failure to comply with fingerprinting
requirements. 

\d Of the 19 cases terminated upon reaching their time limit, 10 had
complied and 9 had failed to comply with program requirements. 

\e Based on state official's estimates. 

\f Does not include the 25 cases in which closure was for failure to
comply with living arrangement requirement as well as failure to
attend school. 

\g Includes the 25 cases in which closure was for failure to attend
school as well as failure to comply with living arrangement
requirement. 



                                       Table VII.2
                         
                           Terminations as of December 31, 1996



                                                     Teen        Teen
                                          Child    parent      parent
                                        support    school      living
                  Enrollmen            enforcem  attendan  arrangemen              Due to
                          t      Work       ent        ce           t     Other  reaching
            Tota  requireme  requirem  requirem  requirem  requiremen  requirem    a time
State          l        nts      ents      ents      ents          ts      ents     limit
----------  ----  ---------  --------  --------  --------  ----------  --------  --------
Arizona       50                                                 50\b
Connecticu  477\                  460        12                    \c       5\d
 t             c
Delaware      68                 15\e        40                   0\f      13\g
Florida       74                                                                     74\h
Iowa        5,28    4,691\i     597\i
               8
Illinois       8          0         8
Massachuse  1,96              1,708\j               235\k        26\l
 tts           9
Michigan     765                  765
Missouri     279                                                  279
Mississipp   699                  699
 i
Nebraska      59                   59
North         \m         \n
 Carolina
Ohio          \m                   \n        \n
Oregon      60\o                 60\o
South        413                  413
 Dakota
Utah         180                177\p       3\q
Vermont        3                    3
Virginia    1,95      704\r     390\s     810\t                    51
               5
Wisconsin   5,70      2,577     3,123
               0
=========================================================================================
Total       18,0      7,972     8,477       865       235         406        18        74
              47
-----------------------------------------------------------------------------------------

\a In some states, such as Massachusetts and Wisconsin, data
represent cases in terminated status as of the date shown.  In other
states, such as Iowa and Connecticut, data represent cumulative
totals that may include cases that have subsequently been reopened
and may double count recipients in some cases. 

\b Data do not include those cases terminated for failure to comply
with teen living arrangement requirements, which are not tracked,
according to the state official surveyed.  The most significant
reason for the drop in terminations over time is because many teen
parents become old enough to no longer have to meet living
arrangement requirements. 

\c Data do not include those cases terminated for failure to comply
with teen living arrangement requirements (not tracked). 

\d Terminations for failure to comply with fingerprinting
requirements. 

\e Of the 15, 6 cases terminated until the end of the demonstration
project; 9 cases could still be reopened on the basis of compliance
with requirement. 

\f According to the official surveyed, provisions for terminating
cases for failure to comply with teen living arrangement requirement
predated implementation of the waiver.  Although the number of cases
terminated for this reason has not been tracked, the official
believed it was probably zero. 

\g Other reasons included nine cases for failure to attend parenting
classes; three cases for failure to provide proof that children had
been immunized; and one case for failure to attend a family planning
session. 

\h Of the 74 cases terminated upon reaching their time limit, 43 had
complied and 31 had failed to comply with program requirements. 

\i Based on state official's estimates. 

\j Includes a partial estimate for terminations due to noncompliance
by dependent children aged 16 to 18. 

\k Does not include the 16 cases in which closure was for failure to
comply with living arrangement requirement as well as failure to
attend school. 

\l Includes the 16 cases in which closure was for failure to attend
school as well as failure to comply with living arrangement
requirements. 

\m According to the official surveyed, families have had benefits
terminated under waiver provisions, but the number of cases
terminated has not been tracked.  Efforts are under way to begin
collecting such data. 

\n State's waiver included provisions for terminating benefits on
this basis, and, according to the official surveyed, cases have been
terminated.  However, the number of cases terminated on this basis
has not been tracked. 

\o Number of cases terminated as of Nov.  15, 1996.  According to the
official surveyed, data as of Dec.  31, 1996, were not yet available
as this report went to press. 

\p May include some cases terminated for failure to comply with child
support enforcement requirements (see table note q). 

\q Number of cases terminated for failure to comply with child
support enforcement requirements as of June 30, 1996; data not
tracked and could not be updated through Dec.  31, 1996, according to
the official surveyed. 

\r Does not include 23 cases that also had failed to comply with work
requirements. 

\s State officials could not update the number of terminations based
on failure to comply with work requirements past June 30, 1996. 

\t Does not include three cases that also had failed to comply with
work requirements. 


DEMOGRAPHIC PROFILE OF TOTAL
CASELOAD COMPARED WITH TERMINATED
CASES STUDIED IN IOWA,
MASSACHUSETTS, AND WISCONSIN
======================================================== Appendix VIII



                                                 Statewide                                      Statewide                                   Statewide
                                                         -                                              -                                           -
                 Total                                  no                                             no       Total                              no
             statewide                            benefits          Total                        benefits   statewide                        benefits
                  AFDC                                  or      statewide                              or        AFDC                              or
              caseload                            reported  AFDC caseload  Statewid              reported    caseload  Statewid  Milwauke    reported
              (1995)\a   Statewide  Des Moines    income\b       (1995)\a         e    Boston    income\b    (1995)\a         e         e    income\b
----------  ----------  ----------  ----------  ----------  -------------  --------  --------  ----------  ----------  --------  --------  ----------
Number of       36,435         408          77          56        100,852       936       196         138      72,366       759       280         123
 cases

Household characteristics -percent\c of cases with
-----------------------------------------------------------------------------------------------------------------------------------------------------
Number of
 children         48.4        39.7        44.2        46.4           45.5      53.4      61.7        68.1        40.8      39.1      38.6        51.2
 0 -1             32.1        34.8        26.0        30.4           31.3      29.0      21.0        19.6        28.9      29.9      28.2        26.8
 2                13.5        16.7        18.2         7.1           15.7      11.4      12.2         6.5        17.0      19.5      21.4        15.4
 3                 6.0         8.8        11.7        16.1            7.6       6.2       5.1         5.7        13.3      11.5      11.8         6.5
 4 or more
Youngest          12.1         6.6         2.6        10.7            9.6       3.6       3.1         5.1        18.4       2.6       2.9         4.1
 child            24.6        30.2        39.0        32.1           25.3      22.0      19.9        38.4        28.2      32.0      30.4        22.8
 under age        24.2        29.7        23.4        26.8           26.6       7.1      10.7        11.6        21.0      29.8      27.1        26.0
 1                25.4        24.5        28.6        19.6           24.0      37.0      31.1        26.8        21.1      23.2      24.3        23.6
 age 1-2           9.6         6.6         3.9         8.9           11.8      18.5      20.9         8.7         7.8       8.8      11.1        13.0
 age 3-5           3.9         2.4         2.6         1.8            2.6      11.8      14.3         9.4         3.6       3.6       4.3        10.6
 age 6-
 11
 age 12-
 15
 age 16-
 18
Length of         25.4         0.7         0.0         0.0           17.0      45.7      45.9        46.4        24.9      30.7      32.5        30.9
 current          12.9        21.3        22.1        19.6           11.9      16.9      16.8        13.0        11.6      20.2      16.4        31.7
 stay             18.5        23.0        22.1        17.9           15.1      13.9      12.7        20.3        20.6      19.0      17.1        18.7
 0-6 mos.          9.1        14.9         7.8        16.1           13.4       5.6       4.6         5.8        12.4      12.1      11.0         8.9
 7-12              7.0        15.7        11.7        10.7           10.4       3.2       2.6         2.2         7.7       6.6       7.9         5.7
 mos.              5.9        24.3        36.4        35.7            9.2       3.5       4.1         3.6         7.0       4.3       5.7         0.0
 13-24            21.3         0.0         0.0         0.0           23.0      11.2      13.3         8.7        15.8       7.1       9.3         4.1
 mos.
 25-36
 mos.
 37-48
 mos.
 49-60
 mos.
 over 60
 mos.

Head-of-household characteristics -percent\c of cases with head of household
-----------------------------------------------------------------------------------------------------------------------------------------------------
Under age          6.7         6.4         5.2         5.4            5.7      18.9      19.9        38.4         6.2       2.4       1.4         2.4
 20               48.5        51.7        48.0        62.5           43.8      19.8      16.8        25.4        50.6      50.1      49.6        43.9
 age 20-          36.1        33.8        42.9        32.1           37.1      39.8      38.8        23.2        32.4      36.2      36.0        37.4
 29                8.8         8.1         3.9         0.0           13.5      21.5      24.5        13.0        10.7      11.3      12.9        16.3
 age 30-
 39
 40 and
 over
Female            85.7        84.3        89.6        82.1           90.5      87.8      85.7        88.4        88.5      92.2      90.4        83.7
Nonwhite          16.7        12.1        21.1         5.4           55.0      57.6      82.7        55.8        56.6      45.6      80.4        45.6
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a These data are from Characteristics and Financial Circumstances of
AFDC Recipients - Fiscal Year 1995, HHS (Washington, D.C.:  June
1996).  Number of children data are from table 6.  Age of youngest
child data are from table 11.  Length of current stay data are from
table 12.  Age of head-of-household percentages calculated on the
basis of combined figures from table 21.1 (mothers aged 11-17), table
22 (adult female recipients), and table 25 (adult male recipients). 
Sex of head-of-household percentages calculated on the basis of
combined figures from tables 22 and 25.  Race of head-of-household
data are from table 10 (race of natural or adoptive parent). 

\b Data on demographic characteristics not broken down for "No
benefits or reported income" category for cases studied in selected
urban areas due to the small number of cases in the category:  Des
Moines, 16; Boston, 37; and Milwaukee, 50. 

\c Percentages exclude unknowns, which were generally less than 1
percent, except for race.  Unknown percentages for race ranged from 0
to 8.4 percent. 


MASSACHUSETTS DATA ON HIGH SCHOOL,
WORK EXPERIENCE, AND PRIMARY
LANGUAGE
========================================================== Appendix IX



                Total
             statewid
               e AFDC
             caseload            Noncomplianc            Noncomplianc            Noncomplianc
                (Feb.       All   e with work       All   e with work       All   e with work
                1996)   reasons  requirements   reasons  requirements   reasons  requirements
-----------  --------  --------  ------------  --------  ------------  --------  ------------
Number of      87,945       936           680       196           138       138            67
 cases

Percent of cases with head of household
---------------------------------------------------------------------------------------------
Not              49.6      65.3          54.1      65.8          52.9      71.0          46.3
 completing
 high
 school or
 equivalent
Not working      41.5      47.4          42.4      51.0          43.5      45.7          34.3
 in last 10
 years
Primary          18.4      21.9          23.5      23.5          25.4      27.5          31.3
 language
 not
 English
---------------------------------------------------------------------------------------------

REPORTED INCOME AND BENEFITS
RECEIVED BY TERMINATED CASES
STUDIED IN IOWA, MASSACHUSETTS,
AND WISCONSIN
=========================================================== Appendix X


                                                                    Total                                         Total
                   Total cases    Des Moines       Rest of      statewide        Boston   Rest of state       statewide       Milwaukee       Rest of
                     statewide         cases   state cases          cases         cases           cases           cases           cases   state cases
----------------  ------------  ------------  ------------  -------------  ------------  --------------  --------------  --------------  ------------
Number of                  408            77           331            936           196             740             759             280           479
 terminated
 cases
Number of cases             \a            \a            \a            300            65             235             108              70            38
 reopened
Number of cases            408            77           331            636           131             505             651             210           441
 remaining
 closed

Of cases remaining closed, percent with reported income from\b
-----------------------------------------------------------------------------------------------------------------------------------------------------
Wages                     30.4          24.7          31.7           23.0          22.9            23.0          31.5\c          27.1\c        33.6\c
Pensions\d                  \e            \e            \e           16.0           6.1            18.6              \e              \e            \e
Child support             19.1          14.3          20.2           16.4           9.9            18.0            24.0            13.8          28.8
Of cases
 remaining
 closed, percent          42.9          33.8          45.0           48.3          38.2            50.9            47.2            38.1          51.5
 with any of the
 above reported
 income

Of cases remaining closed, percent receiving other non-AFDC benefits from
-----------------------------------------------------------------------------------------------------------------------------------------------------
Food stamps               60.8          55.8          61.9           25.6          20.6            26.9            39.3            34.8          41.5
SSI                        9.8          18.2           7.9           12.7          10.7            13.3            12.6            10.5          13.6
Housing                   27.2          24.7          27.8           26.4          33.6            24.6            22.1            16.7          24.7
General                     \f            \f            \f            0.3           0.0             0.4              \g              \g            \g
 assistance
Percent                   71.8          71.4          71.9           47.3          50.4            46.5            57.6            51.9          60.3
 receiving any
 of the above
 non-AFDC
 benefits
Of cases                  54.4          45.5          56.5           58.5          52.7            60.0            53.5            44.8          57.6
 remaining
 closed, percent
 with active
 Medicaid status
Percent                   74.3          74.0          74.3           75.5          73.3            76.0            75.4            69.0          78.5
 receiving any
 of the above
 non-AFDC
 benefits,
 including
 Medicaid
Percent with any          86.3          83.1          87.0           78.3          73.3            79.6            81.1            76.2          83.4
 of the above
 non-AFDC
 benefits,
 including
 Medicaid, or
 reported income
Percent with              13.7          16.9          13.0           21.7          26.7            20.4            18.9            23.8          16.6
 none of the
 above non-AFDC
 benefits or
 reported income
-----------------------------------------------------------------------------------------------------------------------------------------------------
Note:  See app.  I for details on scope and time frames of cases
studied in each state. 

\a Not applicable, as data analysis was conducted before 6 months had
elapsed, the minimum time period required in Iowa before an AFDC case
could be reopened. 

\b Families not applying for, or receiving, AFDC or other benefits
were not required to report their wages or other income.  In
addition, once no longer receiving AFDC, some families may receive
child support payments privately, which they are not required to
report to the state and local offices of Child Support Enforcement,
where we obtained our data.  For these reasons, the figures on wage,
pension, and child support income are likely to be understated. 

\c These figures may include other income, such as from pensions. 

\d Includes Social Security, Veterans' Benefits, and
employment-related pensions. 

\e No data available. 

\f In Iowa, the general assistance program was administered at the
county level, and statewide data were not available. 

\g Not applicable.  Wisconsin discontinued its statewide general
assistance program in Jan.  1996, though some counties have programs. 


AVERAGE BENEFITS, CHILD SUPPORT
PAYMENTS, AND UNEMPLOYMENT RATES
IN STATES TERMINATING BENEFITS
UNDER WAIVERS
========================================================== Appendix XI

                                                Housing        Fuel
                   AFDC      Food            assistance  assistance     Child
                average     stamp       SSI     average     average   support
                monthly   average   average     maximum      annual   average
                  grant   monthly   monthly     monthly   household   monthly  Unemployme
                 amount   benefit   benefit     benefit     benefit   payment     nt rate
State          (1995)\a  (1995)\b  (1996)\c    (1996)\d    (1995)\e  (1995)\f    (1995)\g
------------  ---------  --------  --------  ----------  ----------  --------  ----------
Arizona            $293      $202      $347        $508        $163      $235         5.1
Connecticut         523       141       355         730         411       266         5.5
Delaware            301       187       328         549         194       169         4.3
Florida             263       178       342         518          92       194         5.5
Illinois            317       172       378         407         267       235         5.2
Iowa                371       154       310         401         197       290         3.5
Massachusett        551       152       342         701         348       334         5.4
 s
Michigan            413       165       372         442         182       334         5.3
Mississippi         122       174       308         363         150       156         6.1
Missouri            273       172       332         361         187       288         4.8
Nebraska            317       150       318         377         173       283         2.6
North               243       159       299         435          80       199         4.3
 Carolina
Ohio                313       155       369         427          97       292         4.8
Oregon              394       155       342         493         215       268         4.8
South Dakota        331       181       300         401         394       207         2.9
Utah                371       173       346         446         219       246         3.6
Vermont             510       146       300         533         281       272         4.2
Virginia            273       163       319         493         174       138         4.5
Wisconsin           465       161       334         424         300       226         3.7
=========================================================================================
National            378       172       339          \h         172       238         5.6
 average
-----------------------------------------------------------------------------------------

\a Average monthly AFDC payment for a family with two children. 
(Source:  Table 34 in Characteristics and Financial Circumstances of
AFDC Recipients - Fiscal Year 1995, HHS (Washington, D.C.:  June
1996)). 

\b Average monthly value of the food stamp benefit in dollars. 
(Source:  Table 6 in Characteristics of Food Stamp Households: 
Fiscal Year 1995, (Advance Report) U.S.  Department of Agriculture
(Washington, D.C.:  Oct.  1996)). 

\c Average monthly federal SSI payment, Dec.  1996.  (Source:  Social
Security Administration, Office of Research and Statistics.)

\d The unweighted average of the fair market rent for a two-bedroom
unit as of Feb.  22, 1996, established by Department of Housing and
Urban Development (HUD) housing authorities for each county in the
state.  HUD will pay up to the fair market rent for a subsidized
family, less the "total tenant payment," which is based on the
family's gross income, less specified deductions.  (Deductions
include $480 for each dependent, $400 for any elderly family or a
person with a disability, and some medical deductions.) The formula
used in determining the tenant payment is the highest of (1) 30
percent of monthly income (including AFDC cash payments) less
deductions; (2) 10 percent of monthly income; (3) welfare rent, if
applicable; or (4) a $25 minimum rent or higher amount (up to $50)
set by the housing authority.  Therefore, a family losing AFDC
benefits with no other income would fall into this last category and
be eligible to receive a housing subsidy up to the amount of the fair
market rent minus the minimum rent payment set by the housing
authority. 

\e Generally includes only heating assistance provided during winter
months under the Low-Income Home Energy Assistance Program (LIHEAP)
during fiscal year 1995.  The program also provides cooling
assistance, and winter and summer crisis assistance.  According to
the program official contacted, income standards for the program are
fairly high, and AFDC families were likely to receive amounts greater
than the amounts indicated here.  (Source:  HHS, Administration for
Children and Families, Fiscal Year 1995 Summer LIHEAP Telephone
Survey Results, Mar.  1996.)

\f Based on preliminary data reported by the states:  total
collections divided by total cases with collections, monthly average. 
(Source:  Child Support Enforcement FY 1995 Preliminary Data Report,
HHS (Washington, D.C.:  May 1996)). 

\g Percent unemployed in the civilian labor force in 1995.  (Source: 
Statistical Abstract of the United States - 1996, U.S.  Department of
Commerce, Bureau of the Census (Washington, D.C.:  Oct.  1996)). 

\h According to a HUD Issue Brief, HUD Reinvention From Blueprint to
Action, HUD (Washington, D.C.:  Mar.  1995), the average cost of
serving families through housing certificates nationwide was $440 per
month; and the average cost of a public housing subsidy nationwide
was $481 per month based on fiscal year 1995 appropriations. 


AFDC CASELOAD PARTICIPATION IN
SELECTED PROGRAMS IN STATES
TERMINATING BENEFITS UNDER WAIVERS
========================================================= Appendix XII


                                            Percent                   Percent     Percent
                                          receiving     Percent     receiving   receiving
                                               food   receiving       housing       child
State                Number     Percent      stamps       SSI\a  assistance\b   support\c
--------------  -----------  ----------  ----------  ----------  ------------  ----------
Arizona              69,609         100        92.1         3.1          15.1         0.2
Connecticut          60,985         100        88.7         3.2          33.0        10.7
Delaware             10,775         100        83.6         3.1          36.4        11.4
Florida             230,807         100        93.6         6.0          15.4         2.0
Illinois            236,205         100        93.7         8.5          19.5         0.5
Iowa                 36,435         100        88.3         5.1          26.8        11.8
Massachusetts       100,852         100        78.6         4.9          33.7         8.7
Michigan            201,696         100        94.4        10.4          10.5         1.6
Mississippi          52,528         100        93.5        13.4          22.5        12.3
Missouri             89,289         100        89.9         6.8          25.3         8.6
Nebraska             14,828         100        86.4         6.5          36.6         1.2
North Carolina      125,503         100        77.7        10.9          23.7        12.0
Ohio                228,171         100        91.3         9.2          25.3         8.4
Oregon               39,264         100        91.1         1.4          17.5         9.7
South Dakota          6,286         100        83.7         6.9          27.5         8.8
Utah                 16,648         100        85.9         0.7          25.6        11.9
Vermont               9,648         100        97.7         0.7          21.7        11.2
Virginia             72,147         100        86.6         7.7          28.9         7.5
Wisconsin            72,366         100        85.5         9.8          15.1         4.1
=========================================================================================
U.S. total        4,873,398         100        89.8         5.4          20.1         4.8
-----------------------------------------------------------------------------------------
\a Data for SSI also include workers compensation. 

\b Data include families in public housing or receiving a HUD rent
subsidy.  Families receiving other rent subsidies were not included. 

\c At the time of our review, states were required to pass through to
AFDC recipients up to $50 per month of child support collected by the
state from absent parents.  This pass-through requirement was
eliminated under the new federal welfare reform law. 

Source:  Characteristics and Financial Circumstances of AFDC
Recipients - Fiscal Year 1995, HHS (Washington, D.C.:  June 1996). 
Food stamps data are from table 5; housing assistance data are from
table 4; and child support data are from table 42; SSI data are from
tables 33 and 42.  According to the program official contacted, table
42 includes only adults on SSI and must be combined with the number
of children on SSI from table 33 for the approximate total number of
families with an SSI recipient. 


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
======================================================== Appendix XIII

GAO CONTACTS

David P.  Bixler, Assistant Director, (202) 512-7201
Margie K.  Shields, Evaluator-in-Charge, (415) 904-2228

STAFF ACKNOWLEDGMENTS

The following individuals also made important contributions to this
report:  Donald J.  Porteous conducted the analysis of automated
data, led the fieldwork in Wisconsin, and coauthored the draft;
Andrew Sherrill conducted the analysis of waivers; and Christina L. 
Warren led the fieldwork in Iowa. 


BIBLIOGRAPHY
============================================================ Chapter 1

Bane, Mary Jo, and David T.  Ellwood.  Welfare Realities:  From
Rhetoric to Reform.  Cambridge, Massachusetts:  Harvard University
Press, 1994. 

Beebout, Harold, and others.  The Number and Characteristics of AFDC
Recipients Who Will Be Affected by Policies to Time-Limit AFDC
Benefits.  Paper presented at the Annual Research Conference of the
Association for Public Policy and Management.  Chicago, October 29,
1994. 

Bloom, Dan, and David Butler.  Implementing Time-Limited Welfare: 
Early Experiences in Three States.  New York:  Manpower Demonstration
Research Corporation, November 1995. 

Brodkin, Evelyn Z.  "The State Side of the Welfare Contract: 
Discretion and Accountability in Policy Delivery." Washington, D.C.: 
Social Security Administration Working Paper, November 1995. 

Collins, Ann, and J.  Lawrence Aber.  State Welfare Waiver
Evaluations:  Will They Increase Our Understanding of the Impact of
Welfare Reform on Children?  New York:  National Center for Children
in Poverty, 1996. 

Dollars and Sense:  Diverse Perspectives on Block Grants and the
Personal Responsibility Act.  Joint publication of The Finance
Project and the American Youth Policy Forum and the Policy Exchange
of the Institute for Educational Leadership.  Washington, D.C.: 
September 1995. 

Duncan, Greg J., and others.  "Does Childhood Poverty Affect the Life
Chances of Children?" Unpublished paper presented at the annual
meeting of the Population Association of America, Washington, D.C.: 
May 9, 1996. 

Edin, Kathryn.  Single Mothers and Absent Fathers:  The Possibilities
and Limits of Child Support Policy.  New Brunswick, N.J.:  Center for
Urban Policy Research, Rutgers University, March 1994. 

Greenberg, Mark, and Steve Savner.  Waivers and the New Welfare Law: 
Initial Approaches in State Plans.  Washington, D.C.:  Center for Law
and Social Policy, November 1996. 

_______ and Rebecca Swartz.  Limits on Limits:  State and Federal
Policies on Welfare Time Limits.  Washington, D.C.:  Center for Law
and Social Policy, 1996. 

Gueron, Judith, and Edward Pauly.  Summary:  From Welfare to Work. 
New York:  Manpower Demonstration Research Corporation, 1991. 

Holcomb, Pamela A.  Welfare Reform:  The Family Support Act in
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1993. 

Jencks, Christopher, and Kathryn Edin.  "The Real Welfare Problem,"
The American Prospect, No.  1 (1990), pp.  31-50. 

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Mead, Lawrence.  The New Politics of Poverty:  The Nonworking Poor in
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Olson, Krista, and LaDonna Pavetti.  Personal and Family Challenges
to the Successful Transition From Welfare to Work.  Washington, D.C.: 
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Pavetti, LaDonna.  The Number and Characteristics of Families Who
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_______, and others.  Designing Welfare-to-Work Programs for Families
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Wilson, William Julius.  When Work Disappears:  The World of the New
Urban Poor.  New York:  Knopf, 1996. 



RELATED GAO PRODUCTS
============================================================ Chapter 2

Welfare Reform:  Three States' Approaches Show Promise of Increasing
Work Participation Rates (GAO/HEHS-97-80, forthcoming report). 

Welfare Waivers Implementation:  States Work to Change Welfare
Culture, Community Involvement, and Service Delivery
(GAO/HEHS-96-105, July 2, 1996). 

Employment Training:  Successful Projects Share Common Strategy
(GAO/HEHS-96-108, May 7, 1996). 

Welfare to Work:  Approaches That Help Teenage Mothers Complete High
School (GAO/HEHS/PEMD-95-202, Sept.  29, 1995). 

Welfare to Work:  Child Care Assistance Limited; Welfare Reform May
Expand Needs (GAO/HEHS-95-220, Sept.  21, 1995). 

Welfare to Work:  State Programs Have Tested Some of the Proposed
Reforms (GAO/PEMD-95-26, July 14, 1995). 

Welfare to Work:  Most AFDC Training Programs Not Emphasizing Job
Placement (GAO/HEHS-95-113, May 19, 1995). 

Welfare Dependency:  Coordinated Community Efforts Can Better Serve
Young At-Risk Teen Girls (GAO/HEHS/RCED-95-108, May 10, 1995). 

Welfare to Work:  Participants' Characteristics and Services Provided
in JOBS (GAO/HEHS-95-93, May 2, 1995). 

Welfare to Work:  Measuring Outcomes for JOBS Participants
(GAO/HEHS-95-86, Apr.  17, 1995). 

Child Care:  Recipients Face Service Gaps and Supply Shortages
(GAO/HEHS-95-96, Mar.  1, 1995). 

Community Development:  Comprehensive Approaches Address Multiple
Needs but Are Challenging to Implement (GAO/RCED/HEHS-95-69, Feb.  8,
1995). 

Child Care:  Child Care Subsidies Increase Likelihood That Low-Income
Mothers Will Work (GAO/HEHS-95-20, Dec.  30, 1994). 

Welfare to Work:  Current AFDC Program Not Sufficiently Focused on
Employment (GAO/HEHS-95-28, Dec.  19, 1994). 


*** End of document. ***