s* ****************************** · 2014. 4. 9. · this report presents the national...

DOCUMENT RESUME

ED 339 866 CE 059 804

TITLE Coordinating Federal Assistance Programs for theEconomically Disadvantaged: Recommendations andBackground Materials. Special Report No. 31.

INSTITUTION National Commission for Employment Policy (DOL),Washington, D.C.

PUB DATE Oct 91NOTE 82ePUB TYPE Information Analyses (070)

EDRS PRICE MF01/PC04 Plus Postage.DESCRIPTORS Bureaucracy; *Cooperative Programs; *Coordination;

*Economically Disadvantaged; *Eligibility; EmploymentPrograms; Federal Aid; *Federal Programs; FinancialSupport; Grants; Cob Training; LeadershipResponsibility; Medical Services; Poverty Programs;State Agencies; Welfare Agencies; *We)fareServices

ABSTRACTThis special report from the National Commission for

Employment Policy on coordinating federal assistance programs for theeconomically disadvantaged contains two parts. Part 1 includesrecommendations for improving public assistance coordination programsin general and employment and training programs in particular. Eightrecommendations focus on the following: (1) leadership; (2) aneconomic empowerment task force; (3) eligibility criteria andtechnology grants; (4) reorganization; (5) simplifying oversightprocelures and committee structures; (6) eligibility criteria andpoverty levels; (7) state human resource councils; and (8) publicassistance impact analysis. Part 2 is a background paper, "FederalPublic Assistance Programs" (Neal S. Zank), that contains informationon coordination and eligibility issues. After a program history, thefollowing sections are included: coordination and management in thefederal government; coordination and management in the states; andprogram eligibility criteria. Thirty references and three appendicczare included: (1) descriptions of federal programs for theeconomically disadvantaged--cash assistance, medical assistance, foodassistance, education assistance, employment and training assistance;(2) poverty thresholds and other measures; and (3) income eligibilitytests used in programs for the economically disadvantaged. (NLA)

***************************************************************S*******Reproductions supplied by EDRS are the best that can be made

from the original document.************************************************************.*****0****

Coordinating Feder'alAssistap,g2 Programs for ,the4.ebnomical1y Disadvantaged:

Recomthendations randBackground _Materials

SPECIAL REPO9T

\Y.fay"

National Commission for Employment Policy

Coordinating FederalAssistance Programs for the

Economically Disadvantaged:Recommendations andBackground Materials

Special Report No, 31

October 1991

National Commission for Employment Policy

3

PREFACE

This report presents the National Commission for Employment Policy's recommendations for

improving coordination in public assistance programs in general and employment and trainingprograms in particular. Following the recommendations, we present the Commission's back-ground paper on the coordination issues associated with these programs.

Approximately two years ago, the Commission became aware that the efficient provision ofemployment and training services was being somewhat hampered by a number of coordinationand eligibility criteria problems. To address these problems, the Commission instituted amulti-phase project designed to improve coordination in employment and training programs.The Commission's "coordination project" is strongly in keeping with the Commission's focus onbroad public policy issues while simultaneously enabling the Commission to examine issuesvital to the provision of employment and training services. During the course of the project, weheard from almost 200 people involved at all levels of the public assistance system: those who

develop nationwide policies in Washington, those who coordinate assistance programs in the

states, and those who deliver services at the local level.

The first three phases of the coordination project involved information collection and analysis.The Commission's initial activities under this project entailed preparation of two reports thatprovided the Commission with information on program coordination and streamlining at thefederal and state level. The Commission's background report described how employment andtraining programs and their associated coordination and eligibility problems fit into the largerpicture of all federal assistance programs. Next, the Commission focused specifically on the

range of strategies used by the states to coordinate employment and training programs. State-

level policy coordination issues were addressed in a study examining employment and trainingprograms in Rhode Island.

Interested in hearing from individuals and organizatiorts directly involved in the publicassistance system, the Commission held a series of seminars across the country addressingcoordination issues at the national, state, and local levels. These seminars were held in Wash-ington, D.C., San Antonio, and San Diego during the spring and summer of 1991. Papers

prepared for these seminars addressed a wide range of topics related to coordination.

This information phase helped the Commission to paint a picture of an uncoordinated $200

billion public assistance system th3t was overloaded with regulations, procedures, definitions,and terminology. That canvas was crowded with varying funding formulas, administrativeprovisions, eligibility criteria, planning and operating timetables, bureaucratic territoriality, and

conflicting regulations.

Based on the information collected during the activities noted above, the Comnfission thensought to develop recommendations on improving coordination. Letters containing theCommission's recommendations on coordination were sent to the President and the Congressin the Fall of 1991. Our findings led us to recommend that both the President and the Congressmust make coordination of public assistance programs a top domestic priority if change is goingto occur

We believe that under the President's leadership and direction the appropriate agencies willundertake actions to improve coordination in these programs. These actions will result inimproved service delivery to low income individuals and considerable administrative costsavings to Federal, State, and local governments.

In attempting to legislate programs to assist various special groups, the Congress has estab-lished a broad array of some 75 programs costing approximately $200 billion. The Commissionbelieves that the Congress should restructure some of its committees to enhance its capabilitiesand enable it to develop a mole coordinated approach to public assistanceprograms.

Finally, the Commission has sought to disseminate its findings and recommendations. Thisreport contains the letters to the President and Congress (Part I of this report) and the backgroundpaper on coordination (Part II of this report).

A book on coordination issues, to be published in the Spring of 1992, will address national,state, and local coordination issues and techniques for resolving coordination problems, and willinclude revised versions of papers prepared for the three coordination seminars and originalresearch not presented at the seminars. This book will enable the Commission to provide itsresearch and background materials to a wide audience of policymakers, academics, practition-ers, and others interested in public policy and public administration, public assistance programs,and federal/state relations. It can also help to build a broader base of support for the ideas thatare being encouraged by the Commission.

The Commission hopes that by calling attention to ....le coordination problem and making theserecommendations, there will be significant improvements in Federal public assistance programs.We believe that adoption of our recommendations should lead to program improvements thatresult in more efficient and effective service delivery with lower costs, more reasonable accessto a streamlined and more comprehensive range of potential services, and a better use ofhard-earned tax dollars.

John C. GartlandChairman

ii

PART I

Recommendations onCoordhiation

Letter to the President

NATIONAL COMMISSION FOR EMPLOYMENT POLICY1522 K Street, NW, Suite 300

Washington. D.C. 20005

12021 724-1645

Chairmen

September 30, 1991

The PresidentThe White HouseWashington, D.C. 20500

Dear Mr. President:

Almost two years ago, the National Commission for Employment Policy initiated an

examination of the coordination problems in government-sponsored programs for the

economically disadvantaged. Our findings have led us to conclude that the coordination ofpublic assistance programs should be one of your top domestic priorities. We believe that under

your leadership and direction the appropriate agencies would undertake actions to improve

coordination in these programs which would result in improved service delivery to low income

individt!als and considerable administrative cost savings to Federal, State, and localgovernments.

As you are aware, the Commission is an independent agency established under Title IV(f)

of the Job Training Partnership Act. It is charged with making recommendations to you and the

Congress on national employment and training issues and, juita Alia, assessing the extent towhich public assistance policies represent a consistent, integrated, and coordinated approach inmeeting the Nation's employment goals and needs. The Commission's 15 Members, who areappointed to these voluntary positions by you, also serve as business and labor leaders, human

resource professionals, and State and local elected officials.

Over the past 21 months, the Commission has heard from almost 200 people involved

at all levels of the public assistance system, including those who develop national policies in

Washington, those who coordinate assistance programs in the states, and those who deliverservices at the local level. We have sponsored conferences around the country, held hearings,

gone on site visits, and conducted research on the coordination problems in these programs.

The approximately $200 billion public assistance system is seen by many who workwithin it, and many who rely upon it, as inefficient, costly, and confusing. They believe, as do

we, that the present system is overloaded with a multitude of regulations, procedures,

documentation requirements, and terminology. This has the unintended effect of discouraging

coordination. In addition, the many players and interminable procedures compound the difficulty

of comprehensive reform.

At your disposal are a great many remedies to the coordination malady. Yet, the mostpowerful remedy you possess is the prestige, visibility, and strong leadership that you couldprovide to support initiatives -- to effect changes -- that would enhance coordination in publicassistance programs. We encourage you to send a message for improved coordination to your

Coordinating Federal Assistance Programs

2

Cabinet and sub-Cabinet officials, and to political appointees and career civil servants, the firstlevel at which program coordination must be addressed.

We believe that taking concrete action today is better than waiting for numerouscoordination study groups whose work could stretch far into the future. We recognize that amessage alone will not improve coordination among public assistance programs. Therefore, theCommission also recommends that you:

expand the authority of the Economic Empowerment Task Force to resolveproblems that affect the design and implementation of Federal public assistanceprograms.

direct the agencies that administer public assistance programs to develop acommon framework for streamlining eligibility requirements, formulatingstandard definitions and poverty measures, and easing administrative anddocumentation requirements.

combine the many programs that provide employment and training services to theeconomically disadvantaged into one agency operating under the same policyleadership and direction.

A detailed discussion of these recommendations is presented in Tab A. A list ofrecommendations that we have compiled for the Congress is included in Tab B.

We believe that adoption of our recommendations should lead to program improvementsthat would result in more efficient and effective service delivery with lower costs, morereasonable access to a streamlined and more comprehensive range of potential services, and abetter use of hard-earned tax &liars. The Commission beheves that you share this goal withus.

As your appointees, we stand ready to help you address the coordination problem. TheCommission would welcome the opportunity to meet with you or your designee to offer ourviews on coordination issues and to explore ways in which we could help improve coordinationof federal programs for the economically disadvantaged.

vi

Sincerely,

, Gartland

Letter to the President

DETAILED RECOMMENDATIONS ON COORDINATION FOR TIIE PRESIDENTNATIONAL COMMISSION FOR EMPLOYMENT POLICY

Commission grcommendgtion Number l: Lenguship

The most powerful remedy that the President possesses to the coordination malady is the

prestige and visibility that could support initiatives to effect changes that would enhance

program coordination. The Commission recommends that the President carry the coordination

message to his Cabinet and sub-Cabinet officials, and to political appointees and career civil

servants, the first level at which program coordination, efficiency, and responsiveness must be

addressed.

The Commission recommends that the President build on this initiative by promoting a

public information campaign to bolster the prospects of his own creative public assistance ideas,

such as Economic Empowerment Areas and State-led innovations, by vigorously advocating

these approaches among the public, social service professionals, and political leaders.

The Commission recommends that the President expand the authority and mission of his

Economic Empowerment Task Force (EETF) to resolve problems that affect the design and

implementation of Federal programs for the economically disadvantaged. This will help expand

the role of state governments by providing them with greater freedom to develop innovative

welfare strategies within legal constraints. The EETF's predecessor, the Low Income

Opportunity Board, helped to bridge a gap that existed between the Federal Government and the

States in the implementation of inno ative coordination approaches for programs that serve the

economically disadvantaged.

The EETF can build upon that platform by: ( I) systematically reviewing and

coordinating all public assistance programs; (2) granting broad waivers from Federal rules that

establish state procedures for implementing public assistance programs; (3) creating a Federal-

level information clearinghouse that would enable States to share more readily their program

innovations with other States, and to learn from each other4s successes and failures; and (4)

developing a uniform reporting system to track the outcomes of state-level public assistance

innovations.

Commission itecommefidation Number 3 ttgibility_rriterig and Technolazy Gnints

The Commission recommends that the President take hiild administrative actions to

improve coordination of federal programs for the economically disadvantaged. For example.

regulatory modifications should be made to eliminate conflicting terms and definitions among

public assistance programs. Although many of the terms and definitions are legislatively rather

than administratively based, Executive Branch agencies should seek to develop a framework for

9vii

Coordinating Federal Assistance Program

2

streamlining eligibility requirements, formulating standard definitions and poverty measures, andeasing administrative and documentation requirements in programs that serve the disadvantaged.

Other issues that need to be addressed include various planning and operating timetables,conflicting Federal and State regulations and reporting requirements governing differentprograms, overlapping but not identical goals and performance measures, and administrativedifferences in operating procedures for processing clients, contracting, and reporting.

Consistent with the President's initiatives of advancing the States as laboratories andmanaging for integrity and efficiency, the Commission recommends that the Federal Governmentmake available to States a grant program to modernize their assistance programs through thedevelopment of expert-systems eligibility software for program coordination. Even the smallestassistance programs should take advantage of recent technological developments and cqmputers.The use of expert-systems eligibility software might also serve as an alternative to reducing theproblems caused by the many different terms and definitions of various programs. Suchsoftware -- coupled with some simplification in data and documentation requirements and a widerange of hardware -- offers the best hope of creating "seamless* interagency service networksto (I) help state and local programs cope more effectively and efficiently with conflictingcriteria; (2) reduce client burden; and (3) facilitate program access.

Commission grcommendation Nomber 4: Reorganizatkm

The Commission recommends that the U.S. Department of Agriculture's Food StampsEmployment and Training Program, the Department of Labor's Job Training Partnership Actprogram (Title II), the Department of Health and Human Services' Job Opportunities and BasicSkills (JOBS) program, and other relevant job training programs be mergod into one agencyoperating under the same policy leadership and direction. Ideally, that agency should combinethe best aspects of these programs, e.g., state, local, and private sector participation, and tyingwelfare to work.

There is a great deal of overlap within the Executive Branch in providing job trainingservices: each of the agencies noted above administers separate employment and trainingprograms, serving essentially the same target grlups. Although there appears to be littleenthusiasm in either the Executive or Legislative Branches for combining all employment andtraining programs under a more logical policy and organizational structure, the benefits of thisapproach are compelling. Reorganization should minimize conflicting, overlapping, andduplicative provisions and regulations; identify funding disparities; improve programmanagement, administration, and coordination at the federal level; reduce administrative costs;and enable States to deal with fewer contact points in Washington.

ATM

I 0

Letter to the Congress

NATIONAL COMMISSION FOR EMPLOYMENT POUCY1622 K Street. NW. Sults 300

Washington, D.C. 20006

ChairmanOctober 1, 1991

The Honorable Thomas P. FoleySpeaker of the HouseU.S. House of Representatives11-204 Capitol BuildingWashington, D.C. 20515

Dear Mr. Speaker:

1202) 724.1545

Almost two years ago, the National Commission for Employment Policy initiated an

examination of the coordination problems in government-sponsored programs for the

economically disadvantaged. Our findings have led us to conclude that the coordination ofpublic assistance pmgrams should be one of the Congress' top domestic priorities. We believethat the Congress should work with the President to encourage the appropriate agencies toundertake actions to improve coordination in these programs which would result in improved

service delivery to low income individuals and considerable administrative cost savings to

Federal, State, and local governments.

The National Commission for Employment Policy is an independent agency esulolishedunder Title IV(f) of the Job Training Partnership Act. It is charged with makingrecommendations to the President and the Congress on national employment and training issues

and, inter alia, assessing the extent to which public assistance policies represent a consistent,

integrated, and coordinated approach in meeting the Nation's employment goals and needs. The

Commission's 15 Members are appointed to these voluntary positions by the President while they

serve as business and labor leaders, human resource professionals, and State and local elected

officials.

Over the past 21 months, the Commission has heard from almost 200 people involved

at all levels of the public assistance system, including those who develop national po!icies in

Washington, those who coordinate assistance programs in the states, and those who deliverservices at the local level. We have sponsored conferences around the country, held hearings,

gone on site visits, and conducted research on the coordination problems in these programs.

Congress represents the voice of widely divergent constituencies, In attempting to

legislate programs to resolve or assist various specials needs, the Congress has established a

broad array of some 75 programs costing approximately $200 billion to help the needy. State

and local public assistance practitioners, public interest group representatives, and policy analysts

who work in ano observe the public assistance system have identified Congressional action as

integral to solving the coordination problem. They claim, and we agree, that the problemsassociated with inconsistent programs and the lack of cohesion and coordination are the

responsibility of Congress to correct.

This letter was also sent to other Members of Congress, including the leadership in both houses and the chairmen and

ranking minority memberii of the relevant committees and subcommittees.

Coordinating Federal AssistancePrograms

-2-

Undoubtedly, Congress has the power to do so and Lhould exercise that power in orderto see that many of its well-intended programs be melded together into a more successfulnational effort to eradicate poverty. Therefore, the Commission believes that it would be usefuland important to look at how Congress could restructure itself and enhance its capabilities toaddress and develop a intszt coordinated approach to public assistance programs.

We believe that taking concrete action today is better than waiting for numerouscoordination study groups whose research could stretch far into the future. Therefore, theCommission also recommends specifically that the Congress:

Assign responsibility for legislation and oversight over public assistance programsto a single Committee on Public Assistance in each chamber.Work with Executive Branch agencies to develop a common framework forstreamlining eligibility requirements, formulating standard definitions and povertymeasures, and easing administrative and documentation requirements.Enact legislation to establish human resource or investment councils at the statelevel to foster coordinated program approaches in such key functions as planning,operations, and oversight.Require that an economic, fiscal, and institutional analysis be conducted for eachcongressionally authored institutional reform or adjustment in federal assistanceprograms.

Although the Commission has presented some of these recommendations in testimony tothe Congress, we present them here as part of a comprehensive program for Congressionalconsideration. A detailed discussion of these recommendations is presented in Tab A. A listof recommendations that we have compiled for the President is included in Tab B.

We believe that adoption of our recommendations should lead to prog.am improvementsthat would result in more efficient and effective service delivery with lower costs, morereasonable access to a streamlined and more comprehensive range of potential services, and abetter use of hard-earned tax dollars. The Commission believes that the Congress shares thisgoal with us.

The Commission stands ready to help the Congress address the coordination problem.The Commission would welcome the opportunity to meet with you or your designee to offer ourviews on coordination issues and to explore ways in which we could help improve coordinationof federal programs for the economically disadvantaged.

Sincerely,

2


DETAILED RECOMMENDATIONS ON COORDINATION FOR THE CONGRESSNATIONAL COMMISSION FOR EMPLOYMENT POLICY

. , I ! 1 . t 11/2,

Conunittee Structures,

Since congressional oversight most often occurs through the committee structure, the

effectiveness of committee work is the most important task in assuring proper congressional

oversight over public assistance programs. Currently, jurisdiction for the initiation and review

of anti-poverty policy is split among a number of different committees. This splintered structure

of decision making is an obstacle to effective program implementation because it does not allow

the committees to consider the full scope of all related policies, programs, and needs. In

addition, the division of responsibility on the Hill leads to multiple points of access for members

of Congress, interest groups, affected publics, and the executive branch, as well as multiple

opportunities for enhanced coordination. A well-coordinated national anti-poverty program

would be more likely to result if the oversight committees of Congress could be reorganized to

allow a broader view by fewer committees.

The responsibility for legislation and oversight over public assistance programs should

be delegated to a single Committee on Public Assistance in each chamber. All food and

nutrition, job training, housing, health, and income security programs targeted at economically

disadvantaged would be the responsibility of this committee. In this sense, the Committee

system would reflect the clientele of the programs it is to review, Issues relating to the tax

treatment of the poor and the finance of these programs would still have to be directed through

the Senate Finance and House Ways and Means Committees, but eliminating overlapping

jurisdictions with the other Committees would eliminate much of the paralysis in the existing

system. The concept of a single congressional entity responsible for public assistance programs

is consistent with Commission iecomirendations addressing coordination in the Executive Branch

and at the State level.

If Congress is unable to adopt the preceding recommendation, then the Commission

recommends that Congress establish a new Joint Committee on Public Assistance that would

conduct oversight hearings and studies on the broad range of public assistance programs and

provide staff resource for committees involved in public assistance programs. Although this

proposed Joint Committee would not have the authority to draft legislation, it would be able to

serve as a staff resource to committees that do have legislative authority for different public

assistance programs, better enabling these committees to work out the details in statutory design

that will facilitate rather than hinder the coordination of public assistance programs. Its role

would be similar to that played on taA legislation by the Joint Committee on Taxation.

1 3xi


-2-

Commission Recommendation Number 2: Eligibility Criteria and Poverty Level5

The criteria for eligibility for each public assistance program are naturally related in somerational way to the purpose of that program. Considered as a system, however, the differencesin eligibility criteria for the different programs cause frustration and confusion, and increase theadministrative burdens upon both recipients and program staff. Although there are some cross-eligibility and duplication problems among programs, the divergent array of eligibility criteriafor federal assistance programs has made implementation difficult for States and undulycomplicated and confusing for potential aid recipients. As many of the eligibility rules andkocedures are set by statute rather than by administrative action, only Congress can unify theeligibility rules.

The Commission recommends that the Congress enact legislative remedies to eliminateconflicting terms and definitions among public assistance programs. The Congress should alsowork with Executive Branch agencies to develop a framework for streamlining eligibilityrequirements, formulating standard definitions and poverty measures, and using administrativeand documentation requirements in programs that serve the disadvantaged.

In this context, the Federal Government employs several different poverty "lines" or"thresholds" in its public assistance programs. Although it makes sense to haveindividuals/families eligible for differing service levels depending on the extent of their poverty(e.g., below 100, 133 or 185 percent of poverty) as is the case today, the different povertylevels used in these programs increase the administrative burden upon both recipients andprogram staff and have a deleterious effect upon coordination. The Joint Economic Committeeheld hearings on this subject in April 1990, yet no action has been taken to da:e on makingchanges in the poverty measures.

The Commission recommends that the Congress seek to unify (and, thereby, simplify)the poverty levels used in public assistance programs. Two strategies are available. Onestrategy would be to create a split standard for poverty with one applicable at the federal leveland another at the state level. The other strategy would eitail the establishment of a nationalstandard for welfare, including both Aid to Families with Dependent Children (AFDC) and FoodStamps. A national welfare standard would eliminate the current system of state-developed needand payment standards for AFDC which give rise to wide inter-state variations in support and(some argue) resulting distortions in locational and labor market decisions.

xii! LI


-3-

Commission Recommsndation Number 3: State Human_ Resource Councils.

All States have initiated efforts to improve coordination among the Federal and State

public assistance programs that they administer in order to increase beneficiary access and

improve program administration. Although all States have integrated different aspects of public

assistance programs at the operational stages, only a few States have attempted to coordinate

public assistance at the policy or decision making level. Congress should enact legislation to

establish human resource or investment councils at the state level to foster coordinated program

approaches in such key functions as planning, operations, and oversight.

The Commission further recommends that terms of office for members of these state

councils be set as follows: The term of each member of the council appointed by the Governor

shall be three years, except that - (I) any such member appointed to fill a vacancy shall serve

for the remainder of the term for which his predecessor was appointed, and (2) of such members

first taking office - (a) onizt third serve for terms of one year; (b) one third serve for terms of

two years; and (c) one third serve for terms of three years; as designated by the Governor at the

time of appointment. The Chairman shall be selected by the Governor.

In I . ii I'Lti tt bl A. 1- 1st

Congress should require that an economic, fiscal and institutional analysis be conducted

for each congressionally authored institutional %form or adjustment in federal assistance

programs. The Committee staff or the Congressional Budget Office should be required to fully

justify the particular reform and explain its economic, fiscal, and institutional impacts on

implementation of the amended assistance program as well as such impacts on other assistance

programs affected by the amendment, and its anticipated effect on clients of the program. Such

an approach should lead to greater forethought and discussion on most proposals. The public

assistance impact analysis would be similar to the new fiscal impact analyses that are required

to accompany budget proposals. For changes made in program administration without

congressional approval, the Commission recommends that the Congress should require such a

statement from the head of the relevant department or agency.

1 5

PART II

Coordinating Federal AssistancePrograms for the Economically

Disadvantaged:Backivound Paper

I f;

Federal Public AssistancePrograms:

Coordination and Eligibility Issues

Neal S. ZankNational Commission for Employment Policy

March 1991

Table of Contents

I. Introduction 1

IL Scope and Approach 3

IIL A Brief History of Federal Assistance Programs for theEconomically Disadvantaged and Coordination Efforts 5

IV. Coordination and Management in the Federal Government 9

Congress 9

Executive Branch Coordination and Management 9

Conclusion 13

V Coondination and Management in the States 15

State Policy Coordination 15

Management and Coordination for Implementation 16

Conclusion 19

VI. Program Eligibility Criteria 21

Poverty Levels 21

Income Eligibility Criteria 22

Assistance Units Eligibility Criteria 25

Conclusion 25

REFERENCES AND BIBLIOGRAPHY 27

APPENDIX A: Descriptions of Federal Programs for theEconomically Disadvantaged 33

1. Introduction 33

2. Cash Assistance Programs 33

3. Medical Assistance Programs 41

4. Food Assistance Programs 46

5. Education Assistance Programs 53

6. Employment and Training Assistance Programs 55

7. Other Services Programs 58

APPENDIX B: Poverty Thresholds and Other Measures 61

APPENDIX C: Income Eligibility Tests Used in Programs forthe Economically Disadvantaged 67

I. Introduction

In a series of discussions, the NationalCommission for Employment Policydetermined that it wanted to examineselected coordination issues vital to theprovision of employment and trainingservices. Therefore, this background paperaddresses two issues related to thecoordination of federal assistance programsthat serve the economically disadvantaged.

The first coordination issue addressed isinstitutional reform (organizational,administrative, and process) at the federaland state levels. The Commissionersexpressed great interest in the pioblemsposed by a system that was percdved asfragmented, uncoordinated, and difficult toadminister, as well as overloaded with amultitude of regulations, procedures,definitions, and terminology.

The second issue addressed is thestreamlining of eligibility criteria. AJanuary 1990 report issued by theCommission, Training Hispanics:Implications for the TIPA System (NCEP1990a), found that in parts of the countrywith a low cost of living the incomeeligibility criteria for Job TrainingPartnership Act (JTPA) programs washigher than the same criteria for the FoodStamps program, although JTPA intendedto make its training available to qualifiedindividuals in a family receiving FoodStamps. This difference was found to beimportant to Hispanics, many of whom didnot use Food Stamps even though theyqualified for them. Therefore, theCommission recommended that "A study

should be conducted to determine thefeasibility of coordinating/consolidatingthe income-based eligibility requirements offederal progranis to assist the economicallydisadvantaged, including JTPA." This issueprovided the initial impetus for conductitgthis study.

Enhanced coordination should result insignificant improvements in federalprograms that serve the economicallydisadvantaged. For program administratorsand service providers, this means moreefficient and effective resource managementand service delivery; potentially lower costsby utilization of improved procedures andrealization of economies of scale in servicedelivery; and ac:ess to a broad range ofinformation and evaluations on programadministration successes. For programbeneficiaries and recipients, this meanseasier er more reasonable access to astreamlined and more comprehensive rangeof potential services.

Nevertheless, improving policy andprogram coordination is not easy. There aremany obstacles. Improving coordination Lsa time consuming process that requirescontinuous attention to coordinatedoperations and may result in some loss ofdecision-making autonomy while requiringincreased interagency activity. In addition,the benefits gained from coordination areoften realized downstream and are counterto bureaucratic behavior (i.e., biggerbudgets are rewarded while cost-cuttinggenerally results in smaller budgets).

II. Scope and Approach

This backgrou.al paper examinesalternative strategies for improvingcoordination as well as streamlining andrationalizing the eligibility and relatedcriteria of federal programs toassist the economically disadvantaged.*Implementation of these alternativestrategies should help to (a) facilitate accessof the poor to these programs and (b) makefederal, state, and local implementation ofthese programs more efficient. Over time,these strategies should lead to anadministrative environment that allows forincreased program participation and theallocation of savings from programadministration and towards assistanceactivities.

There are 75 federal programs providingassistance to the economicallydisadvantaged. These programs providemedical care, cash aid, food aid, housing andenergy assistance, education aid, jobs andtraining aid, and "other" services. The 75

programs accounted for over $173 billion inassistance expenditures in Fiscal Year 1988;

70 percent from the Federal Governmentand 30 percent from state and local fundingsources. Of the 75 programs, 54 involvedirect or indirect federal funding only; two

0*

involve state funding only; and 19 involveboth federal and state funding. The typeand size of assistance categories and thenumber of programs in each category arepresented in Table 1.**

Two additional factors about theseprograms should be noted. First, thecomposition of these programs has changedover the years. In 1960, 75 percent of allpublic assistance came in the form of cash;by 1985, only 25 percent was in the form ofcash. The remainder was in the form ofnon-cash benefits such as food aid, medicalcare, and housing.

Second, most of these programs aregenerally considered entitlement programsor means-tested programs (i.e., there is sometest of individual need for assistance). Theprograms within each assistance categoryserve a variety of groups. Some programsaddress broad population groups. Otherprograms are directed at special groups ofbeneficiaries, such as migrant workers orveterans. For the most part, the morespecialized programs are also smaller thanthose serving large groups.

For the purposes of this study, an economically disadvantaged person is defined as a member of

a family that receives cash payments or whose annual income in relation to family size does not

exceed the poverty level determined in accordance with criteria established by the US. Office of

Management and Budget (OMB).

Dollar references in this report are based upon data presented in Cash and Noncash Benefits for

Persons With Limited Income: Eligibilitv Rules, Recipient and Expenditure Data, FY 1986-88,

compiled by Vee Burke, Congressional ResearchService (CRS), Library of Congress, October 24,

1989 (Burke 1989). Although dollar amounts maydiffer from budget numbers or other published

sources in some instances, the CRS dollar amounts are used throughout the report for the purpose

of consistency.

3

2 0

Coordinating Federal Assistance Pmgrams

TABLE ISIZE AND TYPES OF FEDERAL ASSISTANCE PROGRAMS FOR

THE ECONOMICALLY DISADVANTAGED

ASSISTANCECATEGORY

NUMBEROF

PROGRAMS

FUNDING SOURCE ANDAMOUNT(1)

PERCENTOF

FUNDINGFEDERAL STATE COMBINEDMedical Aid

8 $ 38,466 $ 27,997 $ 66,463 38%Cash Aid

12 32,276 15,448 47,724 28%Food Aid

11 20,246 1243 21,489 12%Housing/Energy Aid

15 16,465 182 16,647 10%Education Aid

17 9,966 540 10,506 6%jobs/Training Aid

6 3,655 62 3,717 2%Other Services Aid

6 4,492 1,980 6,472 4%

TOTAL 75 $125,566 $ 47,452 $173,018 100%

(I )Funding data generally represent Fitical Year 198$ expenditures in millions of dollars. Some funding data may reflectprogram year or other reporting period.

This background paper describes thehistory of federal assistance programs forthe economically disadvantaged; theorganization, management, andadministration of these programs, and theconflicts that exist among povertymeasuremen ts and eligibility criteria used inthem. Programs providing cash aid,medical care, food aid, education aid, jobsand training aid, and "other" services werefocused upon in conducting this report.

4

womm

Following that discussion, threeappendices are presented. Appendix Acontains information on 60 of the 75 federalassistance programs. Appendix B presentsthe primary poverty thresholds and otherpoverty measures used by the FederalGovernment in the major programs.Appendix C describes the income eligibilitytests used in the 60 programs. Programsproviding housing and energy assistanceare not examined in the appendices.

2 1

A Brief History of Federal AssistancePrograms for the Economically Disadvantaged

and Coordination Efforts

The primary objective of federal programsto assist the economically disadvantagedhas been to reduce the incidence of poverty.The three ways followed historicallyto accomplish this objective have been:(a) transferring income to the poor toprovide them with a federally-recognizedminimum standard of living, (b)providingthe poor with in-ldnd benefits that enablethem to reach that minimum standard ofliving, and/or (c) providing the poor withthe services and tools that enable them tobecome self-supporting and reach, on theirown, that minimum standard of living.(ACIR 1987b)

The present system of public assistancearose, in part, from the rapid expansion offederal involvement in a broad range ofpublic welfare* programs during the 1960s(due to the New Frontier and the GreatSociety). New programs (such as FoodStamps) were initiated and the eligibility forolder programs (such as Aid to Familieswith DeperKient Children, or AFDC) wasexpanded. The Federal Governmentexpanded its role as an initiator of programsas well as a policy innovatorwilling to applyvarious forms of pressure on States andlocalities in order to get them to conform tofederal expectations. This federal expansiontook place for a variety of reasons, includingthe desire on the part of advocates for thepoor to obtain better and more secure

federal assistance for the poor, and theurging of state and local governments whowanteo the Federal Government to createnew programs for the poor and assumemore of the costs of these assistanceprograms. (ACIR 1987b, GAO 1987a)

Several welfare-to-work programsemerged during this period as well.Amendments to the Social Security Act in1962 and 1967 established, respectively, aCommunity Work and Training Programand the then-voluntary Work IncentiveProgram (WIN). The EconomicOpportunity Act of 1964 included the WorkExperience and Training Program. (Grubbet. al. 1990)

Public assistance programs experiencedsizeable spending increases throughout the1970s although structural changes occurredonly in the early part of the decade (mostnotably through the use of grant programsand differing program approaches by theNixon Administration). In December 1978,the Carter Administration initiated aninteragency "Eligibility SimplificationProject" to make recommendations on thesimplification of client eligibility criteriaamong major public assistance programs.The project's completion in October 1980,shortly before the 1980 election, precludedany direct action on the report'srecommendations by that Administration.

The use of the words "welfare," "welfare program," and "public assistance" in this report refers tothe broad range of federal welfare or assistance programs rather than to the AFDC system or anyother cash payment system in particular, unless specifically mentioned,

0

5


Public assistance programs experiencedgreat structural change again in the 1980s.The Reagan Administration proposed abroad welfare reform program that wasbased upon targeting aid to the "trulyneedy"; reducing fraud, waste, and abuse;promoting competition (e.g., throughvouchers); and eliminating programsbelieved to be ineffective (e.g., public serviceemployment under the ComprehensiveEmployment Training Act program, orCETA). Eligibility standards weretightened in some programs, stronger workrequirements were authorized by law, andsome progress was made in improvingprogram administration (through therequirement that all States establish incomeand eligibility verification systems for themajor welfare programs).

The new system of public assistanceprograms was intended to rely upon blockgrants and increased federalism (i.e.,increased authority was delegated to theStates for program administration). As aresult, most Governors Pnd States adoptedentirely new approaches to themanagementof their welfare programs. Theseapproaches entailed overhauling theirwelfare programs, attracting high-qualityadministrators, and experimenting withnew approaches for designing, managing,and administering these programs.

Job training programs took on a specialsignificance during the ReaganAdministration. Early in theAdministration, the Department of Healthand Human Services issued a series ofwaivers that allowed States to establishexperimental welfare-to-work programs. In1982, Congress passed the Job TrainingPartnership Act (JTPA). This innovativeemployment and training legislation notonly assigned to States and localitiesa majorresponsibility for implementing job trainingprograms but brought the private sector intoa new partnership with State and localofficials in implementing the law.

6

PTA also addressed the coordinationissue. JTPA emphasizes coordinationbetween state governments and the businesscommunity, and between JTPA programsand programs provided by state and localeducation and training agencies, publicassistance agencies, the employmentservice, rehabilitation agencies, economicdevelopment agencies, and other agenciesinvolved in employment and training andhuman resource utilization. It also providesfor an 8-percent set-aside of each State'sJTPA allocation to facilitate coordination ofeducation and training services throughcooperative agreements between state andlocal education agencies and ServiceDelivery Areas (SDAs).

The Reagan Administration initiated aWhite House review of welfare policy in1986. Managed by a Low IncomeOpportunity Working Group of theDomestic Policy Council, this review led tothe publication of Up from Dependency,which was presented as a new nationalpublic assistance strategy. The strategy thatgrew out of that review was welfare reformthrough State-sponsored, locally-controlleddemonstrations of innovations in publicassistance programs with the aim ofreducing dependency.

Congress also focussed on coordinationissues in the late 1980s. In September 1987,the Domestic Task Force of the House SelectCommittee on Hunger held a hearing on"Continuing Efforts to Coordinate andSimplify Major Federal AssistancePrograms." Although that hearing did notproduce immediate results, efforts weremade in the subsequent years to enactchanges in welfare, vocational education,and food stamps legislation.

First, the Congress enacted the FamilySupport Act of 1988. This major piece ofwelfare reform legislation established theJob Opportunities and Basic Skills Training(JOBS) Program, which provided funding

for a new welfare-to-work program tied toAFDC with the goal of helping familiesavoid long-term welfare dependence. JOBSreplaced the WIN and WIN Demonstrationprograms of earlier years. This legislationalso provided some guidance to theExecutive Bra nch on coordination of welfareand employment and training programs.

Coordination was also an issue in publicassistance legislation passed by theCongress in 1990. In educational assistance,the Carl D. Perkins Vocational and AppliedTechnology Education Act established anInterdepartmental Task Force on VocationalEducational and Related Programs toexamine common objectives, definitions,measures, and standards for programsfound in the Adult Education Act, JTPA, theRehabilitation Act of 1973, theWagner-Peyser Act, and the Perkins Actitself. The Task Force, composed of thesecretaries of Education, Health and HumanServices, and Labor, is to report its findingsto Congress every two years.

A major issue that was addressed in the1990 Food Stamp reauthorization processwas whether changes should be made in theFood Stamp eligibility criteria to make thatprogram more consistent with AFDC. Someminor changes were made to address someof the complaints about the conflicts andduplications that existed between the twoprograms, and several demonstrationprojects were established on individualeligibility criteria (such as vehicle exclusionlimits) and AFDC/Food Stampsimplification. The Food Stampreauthorization legislation also included aprovision for a Welfare Simplification andCoordination Advisory Committee. Thisadvisory committee was tasked to examinethe significant policy differences in the FoodStamps and AFDC statutes and regulationsand to make recommendations for commonor simplified programs and policies thatwould substantially reduce difficulties inapplying for and receiving benefits from

History of Federal Assistance Programs

more than one program and significantlyincrease the ability of programadministrators to efficiently provide timelyand appropriate assistance to eligiblerecipient& The Commission's final report isdue to the appropriate committees ofCongress and the secretaries of Agriculture,Health and Human Services, and Housingand Urban Development by July 1, 1993.

For the most part, the Federal Governmenthas tried to lessen its role in program designand implementation. This approach wassupported in a 1988 examination of federalwelfare reform efforts by the NationalAcademy of Public Administration(NAPA). NAPA identified the practicallimitations on the power of Congress andthe Federal Government to designprograms. These limitations were;

The labor market in the variousStates cannot absorb welfarerecipients at the same rate becauseofdifferent economies.

The dominant characteristics ofwelfare recipients vary so much thatsomeStates will find it easier to placerecipients in jobs than others.

The capacity of state governments toimplement complex programsdiffer.

The motivation of taxpayers andstate governments to fund expensiveprograms differ.

The administrative structure in thevarious States means that federallyprescribed service linkages willwork in some States but not inothers. (GAO 1988)

To overcome these limitations, afederal/state system for the administrationof public assistance programs has evolvedthat is, in reality, composed of federalprograms shaped increasingly by the States.

'34


The structure of most assistance programs,once implemented, is a product of planningand operational decisions madeby state andlocal agencies, rather than federallegislation. The differences between Statesargue for maximum State discretion indesigning certain welfare programs,although most States would still look to theFederal Government for leadership on theintegration of thesP services and programs.(GAO 1988)

The extent of Federal or State involvementin a particular program ranges fromdetermining program guidelines toadministering the program to just providinga resource transfer to implementingjurisdictions. For most public assistanceprograms, however, management oradministrative guidelines are determinedby the Federal Government and theprogram is administered or implemented bythe state and local governments. TheFederal Government generally oversees thetransfer of funds and audits their use, butrarely interferes with the operations of theseprograms. In many instances, the Statesdetermine the extent to which they will beinvolved.

Most of the large programs (such as AFDC,Food Stamps, and Medicaid) rely on thisfederal-state administrative network forexample, the Federal Government providesbroad guidelines and programrequirements for the AFDC programthrough the Family Support Administrationof the Department of Health and HumanServices. The States are responsible forprogram formulation, benefitdeterminations (the size of cash welfarepayments), eligibility criteria, andadministration. A State may elect to havethe program administered centrally (stateadministered) or locally (state supervised).

8

The Food Stamp program provides asecond example of this federal-stateadministrative network. The U.S.Department of Agriculture's Food andNutrition Service gives direction to welfareagencies through federal regulations thatdefine eligibility requirements, benefitlevels, and administrative rules. Statewelfare agencies are responsible for theday-to-day administration of the FoodStamp program. Most often, the program isoperated through the sameagrncy and staffthat runs the AFDC and Medicaidprograms. These agencies determineeligibility, calculate benefits, and issue foodstamp allotments following federal rules.Joint food stamp/cash welfare applicationand interview procedures are the generalrule. (GAO 1987a, APWA 1990)

Two other programs provide usefulexamples on different ways in which thisnetwork operates. In 31 States and theDistrict of Columbia, an application forAFDC or SSI also constitutes an applicationfor Medicaid, so most local administrationof Medicaid overlaps those two programs.In the case of the Social Services Block Grant,the Federal Government provides funds tothe States and the state governmentdetermines how the funds are to be spent.

In contrast, this federal-stateadministrative network does not apply formost elderly or disabled persons, whose SSIcash assistance is typically administeredthrough Social Security Administrationdistrict and branch offices. Although thesefederal offices do not administer the FoodStamp Program, they do perform some jointprocessing of applications. In addition, theFederal Government determines guidelinesand administers the Supplemental SecurityIncome and the Earned Income Tax Creditprograms.

IV. Coordination and Management inthe Federal Government

Discussed below are the major FederalGovernment participants in oversight,management, and administration of publicassistance programs.

Congress

Eleven congressional committees exerciseprimary authorization, appropriations, andoversight responsibilities over federalpublic assistance programs. Theagriculture, tax writing, and laborcommittees are the major Sena:e and Housecommittees with authorizationresponsibility for the most broad-basedpublic assistance programs (see Table II).Within each committee, there are numeroussubcommittees that address differentaspects of these programs. Also, eachprogram receives its funds from Senate andHouse appropriations committees (and therelated subcommittee).

Committees on veterans affairs, interiorand insular affairs, science and technology,and Indian affairs also exercise oversightover the assistance programs that are moretargeted on particular groups. In additionto these authorizing and appropriatingcommittees, many of these programs aresubject to oversight hearings held by specialor select committees responsible for aging;hunger; and children, youth, and families.

9

Executive BrandiCoordination andManagement

There are many agencies in the ExecutiveBranch that administer public assistanceprograms. Most of these programs, targetedat broad population groupings, aremanaged by the Departments ofAgriculture, Health and Human Services,Labor, and Treasury. Related programs,targeted at specific groups of beneficiaries,are operated by the Departments ofEducation, Housing and UrbanDevelopment, Interior, and VeteransAffairs. The Executive Branch Departmentsand agencies that manage the mostbroad-based public assistance programs arelisted in Table III,

There are four primary approachesavailable to achieve coordination at thefederal level. They are discussed below.

Legislativerandate. The first approach tocoordination is through legisla ti ve ma ndate.Congress has included provisions in somepieces of legislation that require ceratinagencies to coordinate with other agencies.For example, the Family Support Actrequires theSecretary of Health and HumanServices to consult with the Secretaries of


Education and Labor on a continuing basisto ensure coordination of education andtraining services. As noted earlier, the CarlD. Perkins Vocational and AppliedTechnology Education Act addressedcoordination issues as well, establishing an

Interdepartmental Task Force onVocational Educational and RelatedPmgrams to examine common objectives,definitions, measures, and standards for awhole host of programs.

TABLE IICONGRESSIONAL OVERSIGHT OF SELECTED FEDERAL PROGRAMS FOR


PROGRAM SENATE COMMITTEE HOUSE COMMITTEEMedicaid Finance Energy and Commerce

Ways and MeansAFDC Finance Ways and Means

SSI Finance Ways and Means

Earned Income Finance Ways and MeansTax Credit

AFDC Work Finance Ways and MeansIncentive Program

Food Stamps Agriculture, Nutrition, and AgricultureForestry

School Breakfast and Agriculture, Nutrition, and Education and LaborLunch Progr Rms Forestry

WIC Agriculture, Nutrition, and Education and LaborForestry

Housing Assistance Banking, Housing, and Banking, Finance, andPayments (Section 8) Urban Affairs Urban Affairs

Head Start Labor and Human Education and LaborResources

JTPA Pro gams Labor and Human Education and LaborResources

Social Services Finance Ways and MeansBlock Grant

0 0,

10

Coordination and Management in Federal Government

TABLE IIIEXECUTIVE BRANCH MANAGEMENT OF SELECTED FEDERAL PROGRAMS FOR


DEPARTMENTAol......

AGENCY PROGRAM

Agriculture Food and Nutrition Service Food StampsSchool Breakfast and School

Lunch ProgramsWIC

Health and Family Support Aid to Families withHuman Services Administration* Dependent Children (JOBS)

Health Care Financing MedicaidAdministration

Office of Human Head StartDevelopment Services* Social Services Block Grant

Social Security Supplemental SecurityAdministration Income

Housing and Urban Office of Public and Indian Housing AssistanceDevelopment Housing Payments-Section 8

Labor Employment and Training JTPA ProgramsAdministration

Treasury Internal Revenue Service Earned Income Tax Credit

,* The Family Support Administration and the Office of Human Development Services were merged in an RHS reorganizationin April, 1991.

Another statutory approach is to providefunding for coordination. As noted earlier,JTPA provides for an 8-percent set-aside ofeach State's JTPA allocation for the explicitpurpose of coordination. These funds aremeantinter alia, to facilitate coordination ofeducation and training services throughcooperative agreements between state andlocal education agencies and SDAs. Studieshave reported that the track record of suchset-asides in promoting coordination hasbeen mixed. (Bains 1989)

The third legislative requirement forcoordination involves joint preparation orreview of certain programs. For example,

11

MIMMEIMk

the Carl D. Perkins Act requires that a stateplan for vocational education be furnishedto the JTPA State Job Training CoordinatingCouncil (SJTCC) for review and comment.Similarly, the Wagner-Peyser Act requiresthat Employment Ser vice plans be reviewedand certified by the syrcc.

A review of the literature on coordinationhas led analysts to conclude thatcoordination provisions, such as thosedescribed above, are helpful in promotingcoordination but are not sufficient enoughby themselves to insure a mayimum level ofcoordination.

I )


Administrative action. The second federalapproach to coordination is throughadministrative action. For example, theDepartments of Education, Health andHuman Services, and Labor entered into aninteragency agreement in November 1989 toprovide jointly technical assistance to Statesand localities to help them operate orimprove their JOBS programs. Through aseparate conftact, those three departmentsare jointly sponsoring a conference to takeplace in July 1991 on the coordination ofvocational-technical education, adulteducation and literacy, JTPA, and JOBS

Reorganization. The third approach toimproving coordination is through thereorganizing or restructuring of agencies orprograms to eliminate overlap orduplication. There appears to be a great dealof overlap within the Executive Branch inproviding job training services. TheEmployment and Training Administrationadministers JTPA, the Employment Service,and other rrograms. The Department ofHealth and Human Services' FamilySupport Administration administers the JobOpportunities and Basic Skills Trainingprogram under AFDC. The Food andNutrition Service (FNS) of the U.S.Department of Agriculture administers anEmployment and Training (Urn programas a component of the Food Stampsprogram.

There are several historical reasons for thisapparent overlap. First, a major componentof the Reagan Administration's welfarereform program was to link AFDCprograms with employment and trainingassistance as a way of enhancing thecapabilities of AFDC recipients to graduatefrom the cash assistance program. Second,the FNS took responsibility for its own E&Tprogram in 1982 as a result of itsdissatisfaction with the job search servicesbeing provided to food stamp recipients bythe Employment Service, which hadoperated this program for FNS under

contract. Finally, there was growingcongressional dissatisfaction with ETAworkfare programs. This was reflected inthe early establishment of the WINdemonstration program that allowedseveral state welfare agencies to operate jobtraining programs and the laterestablishment of the JOBS program in theDepartment of Health and Human Servicesin 1988.

There appears to be little enthusiasm ineither the Executive or Legislative Branchesfor combining either all federal assistanceprograms or all employment and trainingprograms under a more logicalorganizational structure. The time and costsinvolved in Executive Branchreorganization are great although such anapproach may minimize conflicting oroverlapping provisions; identify fundingdisparities; improve program management,administration, and coordination at thefederal level; reduce administrative costs;and enable States to deal with fewer contactpoints in Washington. In addition, thejurisdictional issues associated withcongressional committees and ExecutiveDepartments, historical reasons, and theproblems of responding to different specialinterest groups present formidable obstaclesto reorganization.

White House policy coordination. Thefinal approach to coordination is throughthe use of a White House coordinatingorganization. Since its creation in 1987, theLow Income Opportunity Board (LIOB), asubsidiary organization of the White HouseOffice of Policy Development, helped tobridge a gap that existed between theFederal Government and the States forprograms that serve the economicallydisadvantaged. The LIOB was composed ofOMB and all the departments and agenciesthat administer programs for theeconomically disadvantaged, including theDepartments of Agriculture, Education,Health and Human Services, Housing and

Coordination and Management in Federal Government

Urban Development, Interior, Justice, andLabor.

Prior to LIOB's creation, State efforts toobtain waivers from many programs weresporadic and quite limited. For those Statesthat did attempt such changes, it could takeyears for a State to design a new programand gain the necessary federal approvals.The LIOB expedited welfare reform byproviding "one stop shopping" to States,allowing them to try new approaches toproviding welfa,e and to treat the myriadwelfare programs as a system. The LIOBacted as a single point of contact for Stateswishing to obtain waivers from those federalstatutes and regulations that frustratedinnovative welfare reform at the state andlocal level.

Instead of dealing with the many federalwelfare programs and agencies in apiecemeal manner, a State would haveapplied to the LIOB for waivers on a broadrange of programs at one time. LIOB thenassisted a State in its efforts to obtain therequired waivers from fly.. appropriatefederal agencies. Most of thestate-sponsored, locally controlleddemonstrations of innovations in publicassistance programs reviewed by the LIOBduring its first two years were for the AFDC,Food Stamp, Medicaid, and Child SupportEnforcement programs.

LIOB helped States launch many differentkinds of experiments or restructure theirwelfare systems. For example, a Wisconsin"learnfare" program that linked AFDCbenefits with high school attendance bychildren in the family and a New jersey planto turn hundreds of welfare beneficiariesinto family day care providers (therebyincreasing day care services while reducingthe welfare roles) are two examples of thetypes of programs implemented as a resultof LIOB actions. Among the benefits of theLIOB system was that under its principle ofcost neutrality the savings from a change in

13

one program can be used to offset increasedspending in another, as long as there is nonet increase in federal cost. Thirteen stateprojects had been authorized through theLIOB as of mid-1990.

Beyond its one-stop shopping function, theLIOB's other stated functions includedidentifying major problems (present andprospective) in public assistance programs;working with agencies and outside groupsin reviewing policy alternatives with respectto public assistance matters; and monitoringthe implementation of approved publicassistance policies.

In late 1990, the LIOB was replaced by theEconomic Empowerment Task Force. TheTask Force will build on the LIOB's work bypursuing new initiatives that promoteenhanced coordination. One idea beingexamined is "Empowerment OpportunityAreas." Empowerment Opportunity Areasare geographic concentrations of poorpeople or target groups that would beeligible to receive special waivers fromfederal public assistance programrequirements.

There are other Executive Branch actionsdesigned to address the coordination issue.For example, a Cabinet-level Literacy TaskForce (which includes the Departments ofEducation, Health and Human Services, andLabor) works on issues such as thedevelopment of common definitions andmore uniform reporting.

Conclusion

Some characteristics of federal programspresent barriers to the efficientimplementation of the broad range ofprograms at the State level. For example,one discovers a multitude of programdifferences when one looks at the entirerange of employment and training andvocational education programs run by the

3


Federal Government. Under the problem ofvarying funding formula, one finds someprograms that are 100 percent Federallyfunded, such as JTFA, while others requirea match between Federal and State funding,such as JOBS. Other barriers includediffering administrative provisions,eligibility criteria, planning and operatingtimetables (some activities operate on aprogram jear schedule while others utilizethe fiscal year), and definitions andterminologies. Almost all of therespondents in a 1987 GAO survey of States'views believed that federal efforts to makeuniform definitions, terminology, andeligibility requirements would help $tate

14

efforts to achieve service integration. (GAO1987b)

The lack of coordination at the federal levelis another obstacle to the States' ability topursue program integration. Surveysindicate that many States believe that thesheer number of agencies, organizations,and congressional committees involved inadministering and overseeing publicassistance program makes coordinationextremely difficult States believe that theirefforts to increase integration would begreatly helped if the Federal Governmentcould improve coordination amongcongressional committees, federal agencies,and levels of government (Delfico 1987)

3Ii

Coordination and Management in the States

V. Coordination and Managementin the States

Discussed below are the variouscoordination approaches followed in thestates.

State Policy Coordinafion

All States have initiated some efforts toimprove the coordination between thedifferent Federal and State public assistanceprograms that they currently administer inorder to increase beneficiary access andimprove program administration. ManyStates have attempted to coordinate publicassistance at the policy or decisionmakinglevel. They have sought to bring togetheremployment and training programs (whichrely on the legislatively mandated SJTCCs)with other public assistance programs.

For example, in early 1990, New Jerseyexpanded and revised its SJTCC to cover theState's entire employment and trainingsystem, not just JTPA. The primary goals ofthe new panel, called the New Jersey StateEmployment and Training Commission(NISETC), are to streamline employmentand training services to clients and eliminateduplicative systems. During 1990, theNJSETC reviewed all of New Jersey'semployment and training programs todevelop a system that will lead to increasedjoint planning among agencies, avoidduplication, and offer a process to deal withspecific system problems. In the NJSETC'sfirst report to New Jersey Governor JamesFlorio, it recommended consolidating jobtraining programs in three statedepartments, rather than the six in whichthey are currently housed, and merging theState's 64 PTA, vocational education, andwelfare training programs into 15 programs.

15

NJSETC believes that the elimination,consolidation, or transfer of the 64 programswill result in $6 million in savings to theStateover 18 months. (ETR 1990b, NCEP 1990b,ETR 1991a)

As an extension of this effort, the roleof theJTPA's Private Industry Councils (PICO haschanged as well. The PICs now have theadditional responsibility to plan and setgoals for all local employment and trainingprograms, not just JTPA, and to preventobstacles to coordination. An existing NewJersey program, Realizing EconomicAchievement (REACH), specifies the rangeof services to be provided, but allows countyand other local government agencies todecide on the appropriate nature andsequence of employment and trainingprograms. (ETR 1990a)

In another example, the Governor of Mainecreated a Human Resource DevelopmentCouncil to promote a multi-agency,cooperative approach to the delivery ofeducation, skills training, andemployment-related activities.

Other variations on this approach includethe appointment of all relevant agencyheads (i.e., those involved in employmentand training programs) to theSJTCCs (suchas in Arkansas, Tennessee, Wisconsin, andother States); use of SJTCCs as a singlepolicyforum for all statewide employment andtraining activities (as in California, Maine,and New Hampshire); and use of a cabinet"cluster" or an ad hoc committee onemployment and training subgroup tocoordinate policy (as in Ohio, Pennsylvania,and Wisconsin). (Jennings 1989)

eP")


Regional coordination is another approachto improving program effectiveness. In thisapproach, a substate entity receives andmakes decisions about funding from avariety of federal and state sources,including JTPA, the Perkins Act, AFDC, andthe Employment Service. In terms ofadvantages, regional entities may be morefamiliar with local employment conditionsthan state offices, better aware of thecharacteristics of the local population inneed of employment and training, andknowledgeable about the strengths andweaknesses of local providers. A regionalentity differs from the JTPA SDAs becausethe regional entity has control over moretypes of funds. It has been reported that thisapproach is being tried in the Hartford areain Connecticut and with regionalemployment boards in Massachusetts.(Grubb etal. 1990)

Of course, some States are more successfulthan others at this type of coordination. Forexample, Maryland officials from the statedepartments of employment and training,housing, health and human services, andeducation participated in putting togetherthat State's JOBS plan. The Governor'sSJTCC was used as a base for coordination.In contrast, Ohio officials developed theirJOBS plan by relying on representativesfrom that State's departments of educationand human services. No JTPArepresentatives were included in the initialplanning effort. (ETR 1990c)

Management andCoordination forImplementation

The critical feature of State involvement inprograms for the economicallydisadvantaged is its policy linkage betweenthe rules governing the distribution ofbenefits and the services designed to helpwelfare recipients become self-supporting.

16

State and local governments have significantroles in delivering benefits and, in manycases, a great deal of flexibility in how theyorganize and manage the agencies thatprovide these benefits. (ACIR 1987a, GAO1987a)

State governments usually rely upon theirhealth, welfare, and employment andtraining agencies to manage and implementthese programs. Local governments utilizelocal agencies, county and district welfareoffices, schools, food banks, and privateorganizations to implement most programs.Programs such as housing are administeredby local governments or private landlords.State and local governments often strive forgreater efficiency by using one local agencyto administer many programs.

Some States have integrated differentaspects of ali public assistance programs atthe operational stages as a way of reducingprogram complexity and thereby improvingrecipient access to these programs,eliminating needless bureaucracy, andreducing administrative costs. States alsouse one-stop shopping to provide services torecipients in all assistance areas cash aid,food aid, medical aid, and job training.Reports from some State demonstrationprojects have indicated that providingintegrated services could increase recipientaccess and participation and decrease bothFederal and State administrative costs (incomparison to having many agenciesimplement many programs using differentcriteria).

Other States have experimented with waysto increase cooperation at theimplementation stage between employmentand training programs. Although one-stopshopping appears common for most cashaid and food aid programs (and theirassociated employment and trainingprograms), that technique is used less oftenfor integrating cash and food aid programswith independent job training programs

33

such as JTPA. Therefore, some Statespursue a two-stop shopping program: aone-stop shopping system for cash and foodaid supplemented by an additional orparallel one-stop shopping system thatbrings together the many Federal and Statejob training and employment services foundin each State. This two-stop shoppingsystem is being tested in New Hampshire,Minnesota, Indiana, and other States.(iennings 1989)

The five primary techniques to improveadministration of and access to federalprograms for the economicallydisadvantaged are administrative action,co-location, one-stop eligibilitydeterminations, multi-purpose appliattionforms, and integrated case management.These techniques are used separately or inconjunction with each other, dependingupon the State. A 1987 GAO study of States'views on coordination found that Stateservice delivery units were integrated fullyor partially for cash and food aid byco-location in 49 States, by co-eligibilitydetermination in 40 States, by multi-purposeapplication forms in 41 States, and by asingle case manager in 43 States. (GAO1987b)

Administrative action. There are a varietyof ways that administative actions can beused to facilitate coordination of pubIicassistance programs. For example, it isfairly common for State and localadministrators of AFDC and Food Stampprograms to utilize JTPA, through acontractual relationship or memorandum ofunderstanding, to administer theirrespective employment and trainingprograms, with local JTPA offices providingdedicated staff to work with welfarerecipients. In Maine's TOPS (TrainingOpportunities in the Private Sector)program, the state welfare agency providesinitial recruitment, client assessment, andwork experience before referring people toJTPA for placement in on-the-job training


positions. Similarly, the JTPA andEmployment Service programs in NewJersey share job development activities andjob search classes. In fact, a November 1988survey by the Interstate Conference ofEmployment Security Agencies found thatEmployment Service agencies in 31 Stateshad some administrative ties to JTPA.

A second form of administrative action isthrough reorganization. In January 1988,the Massachusetts Division of EmploymentSecurity and Office of Training andEmployment Policy merged to form aDepartment of Employment and Trainingthat oversees JTPA, ES, unemploymentinsurance, and other state employmentservice programs. In May 1990, the State ofSouth Carolina created an Employment andTraining Division to oversee ES and PTA.(ETR 1991b)

Co-location. Programs should have onegeographical point of entry (co-location) toease clients' access to a wide range ofprograms and to improve service delivery.Access would remain difficult for therecipient if the intake procedures werecommon to all programsbut the entry pointsfor the different programs were spread overa wide geographical area.

One-stop eligibility determination. Insome States, each agency orservice providercurrently makes its own financial eligibilitydetermination for potential recipients. Incontrast, other States have initiated one-stopshopping systems for eligibilitydeterminations, individual assessments,and referral to the appropriate publicassistance program. Also called coeligibilitydetermination for services, these systemsprovide for a single, centralized review ofapplication forms for two or more programshaving different eligibility requirements.These systems allow for centralized (a)collection of an applicant's financial data forall programs and (b) determination offinancial eligibility for more than one


program. The computer support thatgenerally accompanies centralization alsoinsures greater accuracy.

For program administrators, one-stopshopping for eligibility determinationsreduces administrative costs. Records aremore accessible, eligibility determinationand verification needs to be done only once,the likelihood of error is reduced, andeligibility redetermination can be made tocoincide. For program recipients orbeneficiaries, one-stop shopping minimizestravel inconveniences (which is especiallyimportant for the elderly and the disabled)and utilizes less burdensome applicationprocedures. This approach should alsoencourage the use of a single purposeapplication form rather than manyindividual forms.

In Pennsylvania, the Single Point ofContact (SPOC) effort places JTPA, JOBS,and job Service staff in the county offices ofthe State Public Welfare Department, whichalso administers the State's welfareprogram. The four programs also have anintegrated intake process. (Fa Ills 1990)Indiana, Minnesota, New Hampshire, andSouth Dakota also have established one-stopshopping systems bringing together allemployment and training activities.

Multi-purpose application form.Multi-purpose application forms (urcoapplication for service) provide anapplicant with the opportunity to recordsufficient data on one form to permit thedetermination of his or her eligibility forseveral programs. Although a single form isused, some questions on the form may applyto all programs, while others may apply tospecific programs with specificrequirements. Multi-purpose applicationforms also offer benefits to programadministrators: faster application time, lesspaperwork, and potentially reducedadministrative costs. (OMB 1980)

18

Some States use a common intake form ora single document to determine and verifyeligibility for different public assistanceprograms. A 1977 study by the FederalPaperwork Commission found thatcross-program eligibility determinationcosts could be reduced significantly in thismanner. In 1989, for example, New Jerseyinitiated an effort to develop a commonintake form for its JTPA and EmploymentService clients. (GAO 1987a)

Under the Michigan Opportunity System,that State has been testing differentprocesses in several demonstration projectsto enhance coordination among severalhuman service agencies. The Michigansystem utilizes a common intake assessmentprocedure for its employment and trainingprograms and provides each client of theprograms used in the demonstrations with aMichigan Opportunity Card. Shaped like acredit card, the use of the card allows stafffrom any education or training agency toaccess eligibility determination and otherinformation on clients through a centralizedautomated database in each service deliveryarea. It saves the clients from having to fillout new forms for each program, whileproviding them access to an array ofservices. (Jennings 1989, ETR 1990c)

The use of a multi-purpose applicationform appears common with the use ofone-stop shopping. For example, the NorthDakota Job Service (which administers JobService, Unemployment Insurance, andJTPA) developed and implemented in 1989an intake system that allows clients toregister for work, file a claim forunemployment insurance, and apply forJTPA benefits in one visit. This new systemreplaced three different intake points andthree sets of application procedures. Amajor factor in consolidation of intakeservices was that the three programs wereadministered by the same State agency. Thethree programs also shared a commoncomputer system which increased efficiency

3

and cut costs. Administration of the JOBSprograms was integrated into this system.(ETR 1990b)

Uniform use of a multi-purposeapplication form is dependent upon theresolution of three issues. First, definitionsshould be generally standardized amongthe programs utilizing the form. Second, theFederal Government would need tosimplify or standardize its policyrequirements. Third, the State should makeIts data requests to applicants reawnableand understandable.

Integrated case management. Integratedcase management means that an applicantwho applies for benefits under two or moreprograms would deal with only one casemanager from the beginning of theapplication process through the provision ordenial of benefits. Integrated casemanagement may also be a first steptowards integrating the eligibility criteria,rules, and regulations of some programs,although this level of integration mayrequire federal action to change the rules forother programs (such as AFDC and FoodStamps). A 1980 U.S. Government

19


interagency report, the EligibilitySimpllfictlon Projea found thatimplementing integrated case managementwith automated eligibility features wouldsave substantial administrative costs andlead to reduced error rates, improvedservices to clients, and reducedadministrative workloads. (OMB 1980)

Conclusion

State management of programs is thepreferred way of providing assistance. Inorder to increase beneficiary access andimprove program administration, it isimperative to overcome barriers tocoordination such as bureaucraticterritoriality, different philosophicalperspectives on the causes of and solutionsto poverty, conflicting Federal and Stateregulations and reporting requirementsgoverning different programs, overlappingbut not identical goals and performancemeasures, and administrativedifferences inoperating procedures for processing clients,contracting, and reporting. (AC 1989,Burbridge and Nightingale 1989)

2 f;

Program Eligibility Criteria

VI. Program Eligibility Criteria

There is a multitude of regulations,procedures, definitions, and teimine)logyused in federal public assistance programs.This has contributed to an assistance systemthat is fragmented, uncocidinated, anddifficult to administer. Operating rules ofthe various governmental levels involved inrunning the programs also vary by programand state. The assistance delivery system isseen by many who work within it and manywho wish to benefit from it as inefficient,costly, and confusing. A review of theliterature addressing these issues andconversations with those involved in theseprograms allows three conclusions to bedrawn about the present system of aid to theeconomically disadvantaged:

program recipients or beneficiariesfind these programs difficult tounderstand and access, andarbitrary and duplicative in theirrequirements;

state and local programadministrators and implementersfind the paperwork requirementsburdensome and the differingprogram requirements difficult toadminister; and

taxpayers find the programs to bewasteful and inefficient. (OMB 1980,LIOWG 1986)

Federal assistance programs utilize avariety of methods for determining whethera person is eligible for benefits under theseprograms. In general, the criteria foreligibility for an individual program arerelated in some rational way to the purposeof the individual program. Considered as asystem, however, the differemes in

eligibility criteria for the different programsmultiply administrative burdens upon bothrecipients and program statf. In fact, a majorproblem in addressing system reform andstreamlining policies and procedures is thatmany of the eligibility rules and proceduresare set by statute rather than byadministrative action.

The factors that are generally employed todetermine eligibility include the particularpoverty level used, income eligibilitystandards, and definitions of "assistanceunits." A 1987 GAO study of states' viewson coordination revealed that over 80percent of the states responding founddifferent programs using differentdefinitions, terminoloio , anu engibilityrequirements concerning a client's financialstatus and other factors (e.g., definition ofhousehold) as "very great" or "great"obstacles to coordination. (GAO 1987b)

Poverty Levels

The Federal Government employs severaldifferent poverty "lines" or "thresholds."The Federal Government's statisticaldefinition, developed by the Census Bureau,is widely used in general discussions aboutpoverty and was adopted to meet theinterests of the public, Congress, andExecutive Branch agencies in knowing thenumber, characteristics, and location of thepoor. (GAO 1987a)

However, different poverty measures areused for administrative, legislative, orprogrammatic purposes. Althoughfrequently related to the statisticaldefinition, poverty measures for thesepurposes are not general in nature and have

21 37


features designed to reach a specificsubpopulation of the poor or low-incomegroups. The most commonly usedguidelines for administrative purposes arethe federal poverty income guidelines, asimplified version of the Census Bureau'sstatistical thresholds, which are developedby the Department of Health and HumanServices. (HEW 1976)

In addition, two sets of programs use theirown poverty measures in determiningeligibility. In addition to the federal povertyincome guidelines, JTPA programs employthe Lower Living Standard Income Level(LISIL), one of the few poverty measuresthat takes into account regionalcost-of-living differences in the UnitedStates. There is some question, however,over the relative accuracy of this standard.Also, many Department of Educationprograms rely upon eligibility standardsthat are determined by one of severalcongressionally mandated needs analysissystems that are included in these programs'authorizing legislation.

The 1986 Domestic Policy Council welfarereform review discovered that seven of the59 programs that it examined used 100percent of the poverty income guidelines todetermine eligibility, while 20 programs setlimits at some multiple of those guidelines(such as 130 percent or 185 percent). Theremaining programs used such measures asthe median income of a state or county, astate-determined eligibility level, or someother measure. (LIOWG 1986)

Overall eligibility criteria within the sevenmajor assistance categories are generallyuniform. For example, all of the cash aidprograms rely on a "dollar amount"eligibility standard, an "income deemedneedy" income eligibility standard, or acombination of the two. Most of the food aidprograms rely on either the "poverty incomeguidelines" standard or enrollment inanother program.

22

The use of a variety of incomv eligibilitytests within assistance categories is not asmuch of a problem as one might Initiallybelieve. Most of the differences come inprograms where recipients would not beunder conflicting program requirements.For example, individuals who availthemselves of the Indian Health Servicesprogram are not eligible for Medicaid.Similarly, individuals receiving medical aidfor refugees and Cuban or Haitian entrantswould not apply for aid from communityhealth centers.

Two major criticisms of the povertymeasures currently used have surfaced inrecent years. First, it is believed that thecomposition of the items used to measurepoverty are not relevant to the poor familytoday. Second, most poverty measures areadjusted only for inflation or price changes.Congress' Joint Economic Committee heldhearings on this subject in April 1990. Asmaking changes in the poverty measureswould be very controversial, no action hasbeen taken to date.

Income Eligibility Criteria

The two major issues with respect toincome eligibility criteria are how theincome eligibility requirements are definedand how income levels are determined.How income and kts components aredefined obviously affects the extent to whicha family is above or below the poverty lineand its eligibility for benefits. (GAO 1987a)The different program definitions andeligibility standards approach income froma variety of directions.

It has been reported that the varieties inincome maximums themselves, andespecially what is counted as income andwhat is not (exclusions or disregards), createthe worst problems of the public assistancesystem. Sometimes only cash income isconsidered, other times in-kind or non-cash

benefits are added to cash. Also, someprograms count the income of other familymembers when they determine eligibilitylevels, while others do not.

As a general rule, programs withsubstantial monthly benefits (AFDC, SSI,Medicaid, and Food Stamps) have detailedrules about what must be counted as incomeand what must be disregarded. AFDC, SSI,and Medicaid also tend to have the lowestincome eligibility levels and generally limiteligibility to those with "cash" income belowthe offidal poverty line. These programsalso require recipients to document theirincome and report income changes to thewelfare agency. Smaller programsgenerally have less strict standards andrequire less documentation. (UOWG 1986)

The reasons for exclusions or disregardsalso serve to illustrate the difficulty indeveloping a more uniform system. TheDomestic Policy Council's Low IncomeOpportunity Working Group identifiedseveral reasons. Some income may beexcluded to encourage recipients to seekandkeep employment Some may be excludedbecause it is not considered available forbasic needs (such as unusual medical care).Some, and in significant amounts, must beexcluded because of other federal laws, suchas statutes that do not allow non-cashwelfare benefits to be counted as income byother welfare programs. (LIOWG 1986) Inaddition, the fact that criteria other thanincome can provide a basis for eligibilitymeans that an individual eligible for oneprogram may not be eligible for another.

The fact that income eligibility standardsvary among programs and are not tieddirectly to the poverty line makes it difficultto target benefits to families in "poverty."This situation has created difficulties forboth assistance program administrators andassistance redpients. In fact, it may meanthat many who would not normally beconsidered "poor" receive assistance, while

23

Program Eligibility Criteria

many others who should be considered verypoor are prevented from receiving benefits.Also, many recipient incomes, after welfarebenefits, exceed poverty thresholds becausemost recipients participate in severalprograms simultaneously and becausebenefits of the various programs are notfully coordinated. Complicating thispicture even more is the fact that manyprograms have objectives aside fromtargeting the poor.

Standard or common definitions, usable byall programs, must serve two purposes.First, the definitions must identify whatconstitutes income and resources. Second,common definitions should indicatewhether the income or resource is to becounted or included in determiningeligibility. (OMB 1980)

Standard definitions relating to incomeand assets, when combined with commonverification standards among agencies,would allow for (a) an applicant's financialsituation to be gathered and recorded in anidentical manner for all programs, therebyreducing the need for multiple forms; (b) asingle verification by one program thatshould suffice for others; and (c) centralizeddetermination of financial eligibility for allprograms. Standard definitions and datacollection would help in the implementationand monitoring of programs in the future.Michigan and other States have developedcommon definitions of terms andquantifiable outcomes across humaninvestment programs. (Jennings 1989)

There is a great deal of cross-eligibilityamong specific assistance programs. Underthe AFDC program and its establishedfederal guidelines, States define need andestablish income and resource limits.Medicaid, the largest federal assistanceprogram, relies upon AFDC criteria as oneof its primary mechanisms for determiningprogram beneficiaries. Head Start uses thepoverty income guideline; 90 percent of


program recipients must be poor. Althoughboth the Food Stamp and JTPA programsmaintain their own standards, bothprograms use AFDC standards as one oftheir criteria. (AFDC recipient families areautomatically eligible to receive FoodStamps.) Several other cash programs use

the income eligibility levels of AFDC and SSIas well, including Foster Care, AdoptionAmistance, Refugee Assistance, and IndianGeneral Assistance. The eligibility criteriafor 14 of the larger programs aresummarized in Table IV.

TABLE IVINCOME ELIGIBILITY TESTS FOR SELECTED PROGRAMS FOR


Limit related to:

LowerLiving State/ Enrollment

Official standard area Income Area inpoverty income median Dollar deemed of other

Program measure level income Amount needy residence Form Other

AFDC X

SSI X X2

Earned IncomeTax Credit X

Work IncentiveProgram X

Medicaid X X1 X

Food Stamps X X3

SchoolBreakfast and X X4Lunch Programs

WIC X X

Head Start X

ITPA Programs Xs X X

Social ServicesBlock Grant

1 income deemed needy by State or locality.:States decide need for optional State Sulement to 581.

Households composed wholly of AFDCor 551 recipients automatically are eligible for Food Stamps.Food stamp eligibility is accepted as documentation of eligibility for this program.

s The federal poverty income guideline is used if higher than 70 percent of the LLSIL.

24

Assistance UnitsEligibility Criteria

The coverage of a program depends onwho is included in the assistance unit as wellas on the income eligibility levelsthemselves. Depending upon the particularprogram, the assistance unit may be definedas a family, household, individual, orcouple.

Althoit6h the Food Stamp grid AFDCprograms are both designed to assistlow-income households, the programs'standards for determining which householdmembers are eligible to participate differconsiderably. The Food Stamp Program'shousehold definition generallyencompasses all household members thatprepare and eat meals together, but theAFDC uses the family ag the eligibility unitwhich generally includes only dependentchildren, their siblings, and their parents orother caretaker relatives. The income of amember of a household could be included indetermining Food Stamp eligibility if heprepares and eats meals with householdmembers out is not responsible fordependent children. The AFDC programdoes not assume so wide a responsibility asFood Stamps of all household members forthe others, so the household member maynot qualify for AFDC eligibility.

As is the case with so malty other rules, thedefinition of a household is very subjective.The development of a household definitionfor the food stamp program illustrates thispoint. Starting with the Food Stamp Act of1964, Congress has amended periodicallythe household definition to meet a variety ofsocial needs. In 1964, the household was

Program Eligibi!hy Criteria

defined as an economic unit consisting of agroup of related or nonrelated individualswho lived together, shared commoncooking facilities, and customarilypurchased food together. In 1971amendments to the Food Stamp Act,household eligibility was expanded toinclude households receiving other forms ofpublic assistance, such as AFDC; however,some groups were precluded from receivingbenefits, such as unrelated individualsliving together. Between 1972 and 1974,Congress again modified the householddefinition to provide benefits to theinstitutionalized and the elderly. After aseries of successful court challenges to theFood Stamp program, Congress redefined ahousehold in the Food Stamp Act of 1977.That definition was expanded in 1979 and1980 amendments to the Food Stamp Act.The Omnibus Budget Reconciliation Acts of1981 and 1982 again redefined thehousehold by putting limitations on thedefinition. In 1987, the definition of ahousehold was again expanded, this time toheip combat the problems of the homeless.Parents with minor children living withanother sibling or parent were permitted toapply for benefits as a separate household ifthey purchased food and prepared theirmeals separately.

Conclusion

Although there exists some cross-eligibilityand duplication among programs, thevariety of poverty levels as well as the arrayof eligibility criteria for federal assistanceprograms has made implementationdifficult for States and potential aidrecipients.

REFERENCES AND BIBLIOGRAPHY

AC 1989. Job Training Partnership Act Advisory Committee to the Secretary of Labor. WorkingCapital: Coordinated Human Investment Directions for the 90s. Final Report. October 1989.

ACIR 1987a. Advisory Commission on Intergovernmental Relations. Docket Book, Ninety-FifthMeeting. December 4, 1987.

ACIR 1987b. Advisory Commission on Intergovernmental Relations. Docket Book, Ninety-ThirdMeeting. June 5, 1987.

Bailis 1989. Lawrence Neil Baths, James Bell Associates, Inc. An Assessment of the TWA Role inSt#te and Local Coordination Activities, Report on the Literature Review. January 1989.

Burbridge and Nightingale 1989. Lynn C. Burbridge and Demetra Smith Nightingale, "LocalCoordination of Employment and Training Services to Welfare Recipients" in Evaluation Forum,A Special Edition: Issues #5 and #6, Poverty and the Underclass. Fall 1989.

Burke 1989. Cash and Noncash Benefits for Persons With Limited Income: Eligibility Rules,Recipient and Expenditure Data, FY 1986-88. Compiled by Vee Burke. CRS Report 89-595 EPW.Congressional Research Service, Library of Congress. October 24, 1989.

Delfico 1988. Joseph F. Delfico. Testimony before the Domestic Task Force of the Select Committee

on Hunger, U.S. House of Representatives. September 30, 1987.

ETR 1990a. Employment and TraininLReporter. "N.J. Expands Panel to Coordinate Employmentand Training Programs." February 28, 1990.

ETR 1990b. Employment and Training Reporter. "Minot, N.D., Office Merges Intake for JobService, UI, JTPA Programs." February 21, 1990.

ETR 1990c. Employment and Training Reporter. "State Methods for Coordination Vary,According to Conference Panel." August 1, 1990.

ETR 1990d. Employment and Training Reporter. "New Jersey Commission Begins Effort toBuild/Integrate Service Network." August 22, 1990.

ETR 1990e. Employment and Training Reporter. "Funding for Michigan's Opportunity SystemUnsure Under New Governor." November 28, 1990.

ETR 199 ia Fmployment and Training Reporter. "New Jersey, Texas Work on Plans to IntegrateJob Training Systems." January 23, 1991.

ETR 1991b. Employment and Traininl Reporter. "Several States Consider MergingAdministration of JTPA, Job Service." February 27, 1991.

27


Fa Ills 1990. Phone interview with Mary Lou Fallis, National Association of Counties. February1990.

GAO 1987a. US, General Accounting Office. Welfare: Issues to Consider in Assessing_Proposalsfor Reform. HRD-87-51BR. February 1987.

GAO 1987b. U.S. General Accounting Office. Welfare Simplification: States' Views onCoordinating Services for Low-Income Families. HRD-87-110FS. July 1987.

GAO 1988. U.S. General Accounting Office. Welfare: Experts Panels' Insights on Major ReformProposals. HRD-88-59. February 1988.

Grubb et al 1990. W. Norton Grubb, Cynthia Brown, Phillip Kaufman, and John Lederer. OrderAmidst Complexity: The Status of Coordination Among Vocational Education, Job TrainingPartnership Act, and Welfare-to-work Programs. National Center for Research in VocationalEducation August 1990.

HEW 1976. U.S. Department of Health, Education, and Welfare. The Measure of Poverty.Technical Paper Administrative and Lezislative Uses of the Terms "Poverty," "Low-Income,"and other Related Items. Poverty Studies Task Force. September 1976.

Jennings 1989. Edward T. Jennings, Jr. Job israinM Issues mina id A proaches. Reportprepared for the Missouri Division of Job Development and Training. June 1989.

LIOWG 1986. Low Income Opportunity Working Group. Up From Dependency, A New NationalPublic Assistance Strategy. Report to the President by the Domestic Policy Council. Also,Supplements 1,4, and 5.

NCEP 1990a. National Commission for Employment Policy. Training Hispanics: Implications forthe nAlutm_n. Report Number 27. January 1990.

NCEP 1990b. National Commission for Employment Policy. Workforce Futures: StrategicPlanningin the States. Report Number 89-06. February 1990.

OMB 1980. U.S. Office of Management and Budget. Eligibily Simplification Project, aninteragency study with recommendations for simplifying client eligibility among major publicassistance programs. October 1980.

Other reports and documents used preparing this report include:

American Federalist; A View from the States. Daniel J. Elazar. Thomas Y. Crowell Company.New York 1972.

AFDC, FP0d Stamps, and Work Historyj Rules, and Research. Emmett Carson, Carolyn Merck,Joe Richardson, and Carmen D. Solomon. CRS Report 87-599 EPW. Congressional ResearchService, Library of Congress. July 17, 1987.

Background Material and Data on Programs Within the lurisdiction of the Committee on Waysand Means, 1989 Edition. Committee on Ways and Means, US. House of Representatives. March15 1989.

1328

Refemrences and Bibliography

How the Food Stamp Program Works: llth Edition. Joe Richardson. CRS Report 897496599 EPW.Congressional Research Service, Library of Congress. March 24, 1989.

Federal Food Assistance Legislation, 1935-1988: Chrynology and Brief Description. jean YavisJones. Congressional Research Service, Library of Congress. June 19, 1909.

Aid to Families with Dependent Children (AFDC): Need Standardsf Payment Standards, andMaximum Benefits for Families with No Countable Income. Carmen D. Solomon. CRS Report89-626 EPW. Congressional Research Service, Library of Congress. November 21, 1989.

Fact Sheets supplied by various departments and agencies.

14

APPENDIX ADescriptions of Federal Programs

for the EconomicallyDisadvantaged

The information presented in this appendix (text and tables) is derived primarily from foursources: Cash and Noncash Benefits for Persons With Limited Income: EIWbility Rules,Recipient and Expenditure Data, FY 1986-88, compiled by Vee Burke, CRS Report 89-595 EPW,Congressional Research Service, Library of Congress, October 24, 1989; Background Materialand Data on Programs Within the Jurisdiction of the Committee on Ways and Means, 1989Edition, Committee on Ways and Means, U.S. House of Representatives, March 15, 1989; 1,..1p

From Dependency., Supplement 1, The National Public Assistance System, Volumes 2 and 3,Interagency Low Income Opportunity Advisory Board, September 1987; and Fact Sheetssupplied by various departments and agencies.

APPENDIX ADescriptions of Federal Programs for the

Economically Disadvantaged

1. Introduction

This appendix presents information on 60federal public assistance programs. First,funding and general eligibility informationis presented for the six a. istance categoriesof cash aid, medical aid, food aid, educationaid, jobs and training aid, and "other"services. Detailed information is thenpresented on the purpose, administration,and eligibility requirements for 14 specificprograms within those categories that wereused to assess the eligibility criteria andprospects for change in federal publicassistance programs. Housing and energyassistance programs are not examined here.

These 14 programs were selected becausethey serve broader groupings of theeconomically disadvantaged and either (a)account for over $1 billion in federalexpenditures or (b) account for less than $1billion in federal expenditures but areintimately tied to other programs (such asthe School Lunch and Food Stampsprograms). These 14 programs accountedfor approximately $122 billion, or 78% of thetotal expenditures for all federal programsfor the economically disadvantaged in FiscalYear 1988. The funding for these programsand the percent of the assistance categoryfunding for which they account arepresented in Table A-I.

Job training programs that are part oflarger assistance programs, such as theAFDC/JOBS and Food Stamps

33

Employment & Training programs, arediscussed with their parent programs ratherthan in the section on Employment andTraining Assistance Programs becauseparticipation in the former programs is oftena condition of participation in the largerprogram.

2. Cash AssistancePmgrams

Funding and General EligibilityInformation

There are 12 programs providing someform of cash assistance orcash benefits to theeconomically disadvantaged. These 12programs provide over $47 billion ofassistance: 68 percent of the funds comefrom the Federal Government, and 32percent from State and local governments(according to Fiscal Year 1988expenditures). These programs arepresented in Table A-II.

Programs for the Aid to Families withDependent Children (including AFDCWork Incentive Program), SupplementalSecurity Income, and the Earned Income TaxCredit are examined below. Theseprograms total $38.7 billion, or 81% of thetotal available for cash assistance. Five ofthe remaining eight programs account forless than one percent of the cash assistancetotal and the other three deal withspecialized groups or special problems.

4 6


TABLE A-ISELECTED FEDERAL PROGRAMS FOR THE ECONOMICALLY DISADVANTAGED

(by Size of Program in Millions of Dollars and by Percent of Assistance Category)

Program

Total Federal/StateExpenditures

(Fiscal Year 1988)

Percent ofAssistance Category

Represented

AFDC $ 18,997

Supplemental Security Income 14,687 81% of cash aid

Earned Income Tax Credit 4,927

AFDC Work Incentive Program 103

Medicaid 54,304 82% of medical aid

Food Stamps 14,369

Sdiool Lunch Program 3A)57 92% of food aid

WIC 1,802

School Breakfast Program 463

Head Start 'INS 14% of education aid

JTPA Programs 3,244 87% of jobs and training

Social Services Block Grant 4,680 72% of other services

78% of total forTOTAL $122,141 all six categories

The 12 programs providing cash assistanceto the economically disadvantaged rely oneither a dollar amount eligibility test (3programs) or an income deemed needy (bythe State) eligibility test (6), or a combinationof the two (3). The four programs that arethe focus of this chapter represent all threeof the eligibility tests.

Aid to Families with DependentChildren

Purpose and AdministrationThe primary purposes of the Aid to

Families with Dependent Children (AFDC)program are to (a) provide temporary andimmediate financial assistance (throughStates) to needy families with dependent

34

children, and (b) help parents in thesefamilies become self-sufficient. Federal andstate governments share in its cost.

The Federal Government provides broadguidelines and program requirementsthrough the Family Support Administrationof the Department of Health and HumanServices. The States are responsible forprogram formulation, benefitdeterminations, and administration. Toreceive federal funding for AFDC, a Statemust enter into an agreement, via a stateplan, with the federal government. A Statemay elect to have the program administeredcentrally (state administered) or locally(state supervised).

Appendix A

TABLE A-IIFUNDING FOR CASH ASSISTANCE PROGRAMS FOR

THE ECONOMICALLY DISADVANTAGED(In millions of dollars, Fiscal Year 1988)

INIMINIM,IMEM14

PROGRAM

FUNDING DATA

FEDERALEXPENDITURES

STATEEXPENDITURES

FEDERAL/STATE TOTAL

PERCENT OFTOTAL'

Aid to Families with $10,302 $ 8,695 $18,997 40%Dependent ChildrenSupplemental Security 11,663 3,024 14,687 31%IncomeEarned Income Tax Credit 4,927 0 4,927 10%rt asions for Needy 3,862 0 3,862 8%Veterans, theirDependents, and SurvivorsGenend Assistance 0 2,700 2,7® 6%Foster Care 888 831 1,719 4%Adoption Assistance 114 92 206 <1%Emerpncy Assistance 96 96 192 <1%Assistance to Refugeesand Cuban/Haitian

163 0 163 <1%

EntranbWork Incentive Program 93 10 103 <1%

Dependency and 101 0 101 <1 %Indemnity Compensationand Death Compensationfor Parents of VeteransGeneral Assistance to 67 0 67 <1%Indians

CASH AID TOTAL $32,276 $15,448 $47,724 100%

I Percent totals slightly higher than 10091, due to rounding.

The determination of eligibility for AFDCis conducted at the local level, in response toa request from a parent or relative withwhom the child is living. The request forassistance initiates the application process.Applications are made in writing on anapplication form developed by the stateagency. The local agency is responsible forreviewing, verifying, and documenting allfactors affecting eligibility. AFDC programrequirements vary from state to state.

35

The original Social Security Act permittedStates to provide AFDC only to needychildren in one-parent homes, unless thesecond parent was incapacitated. Then, asnow, most AFDC children lived in fatherlesshomes. For the first 25 years of the program,State AFDC programs were forbidden tohelp the family if a father lost his job and hisfamily became needy, but he continued tolive at home. Starting in May 1961, Congressallowed States to provide AFDC to the


needy children of unemployed fathers whowere still living at home (AFDC-UP).Federal regulations specify that the AFDCparent who is the principal earner mustwork fewer than 100 hours a month to beclassified as unemployed. (This waschanged to unemployed "parents" pursuantto the U.S. Supreme Court decision inCalifornia v. Westcott in 1977). Althoughsome States resisted establishing anAFDC-UP program because of the addedcosts, the Family Support Act of 1988required all States to operate an AFDC-UPprogram rkl of October 1, 1990.

Eligibility RequirementsEligibility in each State is based on a need

standard established by that State as well asthe income and resources available to therecipient. The AFDC legislation doesn'tdefine either "need" or a minimum standardof need. Each State sets its own needstandard and determines the extent to whichit is willing and able to meet that need (inorder to determine eligibility and benefitamounts). The need standard is the amountof money a State determines essential tomeet a minimal standard of living in thatState for a family of a specified size. Ingeneral, the standard provides for basicconsumption items such as food, clothing,shelter, fuel and utilities, personal careitems, and household supplies that areessential to recipients.

The need standard may also provide forspecial (onetime or recurrent) needs, such asspecial dietary requirements, pregnancyexpenses, household equipment orfurnishing, or moving expenses. States canestablish their need standard as a singleamount covering a group of items (fullyconsolidated standard), or as severalamounts, each covering a group of items(partially consolidated standard), or as anindividual amount for each item.

Some States vary the amount of moneyassociated with an item to reflect local costs

36

rather than average costs within the State;for example, some States vary the shelterallowance to reflect local price differentials.Regardless of the method used to expressthe need standard, the standard must beuniformly applied within the State orlocality to all families in similarcircumstances. Although participatingStates must comply with the terms of thefederal legislation, the AFDC program isvoluntary, and States have traditionallybeen at liberty to pay as little or as much asthey choose.

To be eligible for AFDC, a child must be ina specified kind of family with incomebelow an amount specified by the State andthe family caretaker is subject to workrequirements. To qualify for AFDC benefits,a family must pass primarily four tests:family structure, counted "net" income,gross income, and work requirements.

Family Structure. States provide AFDCcash to needy children (and their parents orother caretaker relatives) who have beendeprived of support or care of one parentbecause that parent is absent from homecontinuously, incapacitated, deceased, orunemployed. Other requirements includethat the dependent child is living in thehome of a parent or other close relative, aresident of the State, and a U.S. citizen oralien permanently residing in the UnitedStates. Caretaker relatives must cooperatein establishing paternity and in acquiringthird-party medical support and mustassign rights to support.

Eligibility for federally aided AFDC endson a child's 18th birthday, or at State optionupon a child's 19th birthday if the child is afull-time student in a secondary or technicalschool and may reasonably be expected tocomplete the program before he or shereaches age 19.

In 1984, Congress established a standarddefinition of the AFDC assistance unit: the

.19

parent(s) in the home and all minor relatedsiblings (except SR recipients). The lawrequires States to consider as available to theAFDC child of a minor parent, part of theincome of the mother's parents, if in thesame home. For all assistance units, the first$50 of monthly child support is disregardedwhen determining eligibility and benefits.

Income Tests. To qualify for AFDCbenefits, a family must pass two incometests: a gross income eligibility test and acounted C'net") income test.

Cross Income El_Wbility Test. The AFDCgross income limit (set by the DeficitReduction Act of 1984 or PL 98-369) is 185percent of the need standard for the relevantfamily size. This means that a family withincome that exceeds 185 percent of the needstandard, with very limited disregards,cannot receive AFDC.

Congress set a counted resource limit in1981 of $1,000 (equity value) per family.Excluded are the home (by law); an auto(limited by regulation to $1,500 in equityvalue, or a lower State limit); and items ofpersonal property deemed essential to dailyliving (by regulation and at State option).The disregards may include the first $50 permonth of child support received by thefamily and optional earned incomedisregards for certain students.

Although AFDC rules require differenttreatment of AFDC applicants and AFDCrecipients, both are subject to the grossincome eligibility test. For applicants,eligibility is limited to families whose grossincome (minus child care costs and a flatsum for other work expenses) is below theState's need standard. Applicants areineligible for AFDC's earned incomedisregard, which is described below. Forrecipients, eligibility is limited to familieswhose gross income (minus a flat sum forwork expenses and dependent care costs,and the earned income disregard) is below

Appendix A

the State's "payment" standard for therelevant family size.

Counted Income Test. The family'scountable income is measured against theState's payment standard to determine theactual amount of benefits. All earned andunearned income must be counted indetermining the family's needs unlessexpressly disregarded by federal statute.

The State disregards earned income taxcredits and the following amounts of earnedincome: (a) $90 per month for workexpenses for individuals employed full orpart-time; (b) actual expenses for dependentcare up to $175 per month for eachdependent child who is at least age two oreach incapacitated adult, and up to $200 permonth for each dependent child who isunder age two for full-time workers (a lesseramount may be applicable at State option forpart-time workers); and (c) $30 per monthand one-third of a person's remainingincome for the first four consecutive monthsof a job, and $30 for each of the eightsubsequent months of the job. States mustalso consider as available to an AFDC childpart of the income of a stepparent who liveswith him or her.

Work Program Requirements. The JobOpportunities and Basic Skills Training(JOBS) Program, one of the key pieces of thewelfare reform legislation passed in 1968, isestablished under Title II of the FamilySupport Act, which amends the SocialSecurity Act. It provides funding andcreates a set of requirements upon StateAFDC agencies to assist applicants for andrecipients of AFDC to obtain theemployment, education, training, child careand other supportive services that will helpthem avoid long-term welfare dependence.

Targeting those who are long-term orpotentially long-term welfare dependent,JOBS shifts the focus of the AFDC systemtoward providing transition to


self-sufficiency and away from simpleproviding income maintenance. Theprogram replaces the WIN and WINDemonstration programs as well as thework programs available under Title IV-Aof the Social Security Act.

Under JOBS, States are required to offer(a) educational activities (high school orequivalent, basic and remedial education toattain a basic literacy level, and education inEnglish proficiency), (b) job skills training,(c) job readiness activities, and (d) jobdevelopment and job placement. Inaddition, States must offer at least two of thefollowing; (a) job search, (b) on-the-jobtraining, (c) community work experience,and (d) work supplementation. States mayallow individuals to continue inself-initiated higher education or vocationaleducation and also may providepostsecondary education as a JOBS activity.

Unless determined by the State to beexempt by such reasons as age, incapacity,school attendance, remoteness, or caring foryoung children, AFDC recipients are subjectto JOBS when child care is available. Thoseindividuals determined to be exempt mayvolunteer for the program. The child careexemption is extended to the parent or otherrelative personally providing care for a childunder the age of three or, if provided in theapproved State JOBS plan, to such personcaring for a child under age three but notunder age one. Providing only for rareexceptions, States must require non-exemptcustodial parents underage 20 (regardless ofthe age of the child) who have not completedhigh school or the equivalent to completetheir education, and may require them to doso on a full-time basis. States may requireJOBS participants to perform up to eightweeks of job search a year and also mayrequire AFDC applicants to engage in jobsearch.

The new law requires each State to involvethe private sector in JOBS planning and

program design to assure that participantsare trained for jobs that are availablJ in thecommunity. It requires the Governor ofeach State to determine whether the JOBSprogram is consistent with the criteria forcoordinating activities included in the JTPAprogram. The State also is required toengage the education sector in planning andcoordinating the program, particularly theState agency for programs under the AdultEducation Act and the Carl D. PerkinsVocational Education Act. In addition, theState is required to coordinate with agenciesfor child care, public housing, and theemployment service. The Secretary ofHealth and Human Services is required toconsult with the Secretaries of Educationand Labor on a continuing basis to ensurecoordination of education and trainingservices.

The Family Support Act required all Statesto have a JOBS program in place by October1, 1990, and to be statewide in the operationof the program (unless a waiver is obtained)by October 1, 1992. States must discontinuetheir WIN programs upon implementationof JOBS.

Supplemental Security Income

Purpose and AdministrationSupplemental Security Income (SSD is a

federally administered income assistanceprogram that provides monthly cashpayments under uniform, nationwideeligibility requirements to needy aged,blind, and disabled persons. SSI 'sadministered by the Social SecurityAdministration of the Department of Healthand Human Services.

States may provide additional payments(called state supplementary payments) toSSI recipients at their own expense. Thesepayments can be paid directly by the Stateor, by agreement with the Secretary ofHealth and Human Services, along with thefederal SSI check. In addition, a

"grandfather" clause requires States toprovide supplements to a small number ofpersons, previously enrolled in the pre-SSIprograms for needy aged persons and blindor disabled adults, whose income otherwisewould fall short of its December 1973 level.

Eligibility RequiremenbTo qualify for SI payments, a person must

satisfy the program criteria for age,blindness or disability. The aged aredefined as persons 65 years and older. Theblind are individuals with 20/200 vision orless with the use of a correcting lens in theparson's better eye, or those with tunnelvision of 20 degrees or less. Disabledindividuals (including children) are thoseunable to engage in any substantial gainfulactivity by reason of a medically determinedphysical or mental impairment expected toresult in death or that has lasted, or can beexpected to last, for a continuous period ofat least 12 months. A person must reside inthe United States or the Northem MarianaIslands and be a U.S. citizen, an alienlawfully admitted for permanent residence,or an alien who the Immigration andNaturalization Service acknowledges ispresent in the United States and whosedeparture the INS does not contemplateenforcing.

The maximum federal benefit rates are$386 monthly per individual and $579 percouple (in 1990). These payments arereduced by countable income received bythe recipient. Not all income is counted,there are a variety of income disregards.Earned income is treated more favorablythan unearned income to provide anincentive to work. People who live in Statesthat supplement the federal payment mayhave more income and still qualify. For statesupplementary payments, countableincome limits are higher, ranging up to $717monthly per individual (livingindependently) in Alaska.

39

Appendix A

Countable resources may not exceed $2,000per individual and $3,000 per couple. Notall expenses count; excluded assets include,but are not limited to, a home; the first $2,000in equity value of household goods andpersonal effects; the full value of an auto ifneeded for employment, medical treatment,or essential transportation, or if modified foruse by a handicapped person, otherwise, thefirst $4,500 in market value of the auto; a lifeinsurancepolicy not exceeding $1,500 in facevalue; and burial plots and funds, subject toa limit.

Earned Inconv Tax Credit

Purpose and AdministrationThe Earned Income Tax Credit (EITC)

provides a refundable tax credit to workingparents who support children, maintain ahousehold, and have relatively low totalincomes. EITC offsets some or all of afamily's tax liability and yields directpayments f:om the government whenever afamily's tax credits exceed its tax liability.EITC was intended to provide a workincentive and to offset the burden of SocialSecurity taxes on low income workers. Inaddition, EITC was intended to providefinancial assistance to the working poor whohad no tax liability. E1TC was developed asa result of interest in the plight of theworking poor, families that remain inpoverty despite having members in thework force.

The credit equals 14% of an individual'sannual earned income up to aninflation-adjusted figure now set at $6,807for 1990. The maximum credit ($953 for1990) is phased out at a 10% rate for earnedincome (or, if higher, adjusted gross income)in excess of an inflafion-adjusted level set at$10,734 for 1990. Although the EITCprovides significant aid to working poorfamilies, it is not adjusted for family size.


Studies have claimed that the tax creditapproach has three major advantages. Itfunnels money directly to those in need, itrelies on the existing administrative systemof the federal income tax, and its associationwith the tax system avoids the stigma ofwelfare-type grant programs. Analyses alsoreport two disadvantages. First, the taxcredit approach's inclusion in the tax systemmakes the resultant income redistributionhighly visible, thereby setting politicalconstraints on the extent that tax credits canprovide assistance. Second, the higher thebenefit amounts, the greater must be thephaseout rate in order to excludehigher-income families from eligibility. Thephaseout rate adds to the effective tax ratesof eligible families in the affected incomerange.

The EITC is operated through the InternalRevenue Code, and is administered by theInternal Revenue Service of the Departmentof the Treasury. An individual claims thecredit on his federal income tax return. Awage earner may also receive advancepayment of the credit from his employerduring the year. The employer may claimcred:t for advance payments of EITC toemployees on the Employees Quarterly TaxReturn (Form 941). State and localgovernments have no role in administeringthe program.

Eligibility RequirementsAn individual's eligibility for the EITC is

determined during the individual's taxableyear (in the case of EITC filers, this isvirtually always the calendar year) butreceipt of the credit is generally in thefollowing year when a return is filed to claimthe credit. Only a small percentage ofeligible individuals actually take advantageof the advance payment feature during thetax year.

EITC is available to a parent (or parents)with earned income whose annual earnedincome (or, if higher, adjusted gross income)

40

is not above $20,264 (1990 limit), whose childlives with him, and who files a federal taxreturn using either "manied filing jointly,""qualifying widow(er)," or Mead ofhousehold" filing status. Parents who areeither married and who file joht returns orare widow(er)s who file as survivingspouses must be able to claim a dependencyexemption for the child. An unmarriedparent who files as "head of household"need not be able to claim a dependencyexemption for the child. Parents who mustfile as single or as "married filing separately"cannot claim the credit.

To receive the credit, a parent need not oweor pay any income tax. However, an eligibleparent must apply for the credit by filing anincome tax ref at the end of the tax year.An eligible pareilt may receive advancepayments of the credit through his employerduring the year by rJviding an earnedincome credit eligibility certificate to theemployer. Parents who receive advancepayments of the credit during a tax yearmust file tax returns for that tax year.

AFDC funds may not be counted as theparent's contribution toward maintaining ahousehold or for supporting the cost ofmaintaining the household during the taxyear. Thus, a single-parent AFDC family isineligible for the credit if more than half ofthe cost of maintaining the householdduring the tax year is paid with AFDCfunds. Similarly, a married couple isineligible for the credit if more than half oftheir child's support is paid with AFDCfunds during the tax year. Generally, theparent's earnings must exceed the AFDCbenefit to qualify for the EITC.

The amount of a tax credit can be affectedby receipt of other types of assistance. EITCis reduced as adjusted gross incomeincreases over its phasedown incomeranges. Some public benefits are counted inadjusted gross income and serve to reducethis credit. For example, all unemployment

5 3

benefits and half of social security benefitsabove certain income levels are included inadjusted gross income. On the other hand,need-based aid (such as AFDC and FoodStamps), as well as other types of aid (suchas workers' compensation and veterans'benefits) are not included in adjusted grossincome and do not count against tax credits.

Need-based assistance programs treat taxcredits in a variety of ways, depending onthe program, the credit, and how it isreceived. As of October 1, 1989, the AFDCand Medicaid programs did not count EITCas income except under the 85 per cent test.The Food Stamp program disregards EITCif it is received as an advanced payment, butEITC is counted as a liquid asset (therebypotentially affecting Food Stamp eligibility)if it is received as a tax refund. Otherassistance programs have no rules fordisregarding EITC.

3. Medical AssistancePrograms


There are eight federal and state programsdesigned to provide medical assistance tothe economically disadvantaged. Theseprograms provide over $66 billion ofassistance: 58 percent of the funds comefrom the Federal Government, and 42percent from State and local governments(according to Fiscal Year 1988expenditures). These programs arepresented in Table A-III.

Medicaid, which accounts for over $54billion, or 82% of the total available formedical assistance, is examined below. Ofthe remaining seven programs, three totalless than 1 percent, with the others beingdirected at specialized groups or activities.

41

Appendix A

The eight programs providing medicalassistance to the economicallydisadvantaged rely on five different incomeeligibility standards. These standards arethe official poverty measure (4 programs),dollar amount (1), area of residence (2),income deemed "needy" by the State (3), orenrollment in another program (2). Three ofthe programs rely on combinations of theseeligibility tests.

Medicaid

Purpose and AdministrationMedicaid, authorized thwier Title XIX of

the Sodal Security Act is a Federal-Statematching entitlement program providingmedical assistance for low-income personswho are aged, blind, disabled, members offamilies with delmndent children, membersif certain federal poverty level-relatedgroups, and certain other pregnant womenand children whose income and resourcesare insufficient to meet the costs of necessarymedical services. Mandatory servicesprovided by all States include inpatient andoutpatient hospital care, labmatory andX-ray services, skilled nursing facility carefor persons under age 21, family planningservices other than abortion, physiciansservices, rural health clinic services, homehealth services, and nurse mid-wideservices. Medicaid is the most expensiveprogram providing assistance to theeconomically disadvantaged,ard is the onlyone that has grown significantly over thepast decade.

Federal oversight of the Medicaid programis the responsibility of the Health CareFinancing Administration of theDepartment of Health and Human Services.At the State level, Medicaid is administeredby a designated single state agency, asrequired by federal law. Genelally, thatagency is either the state welfare agency, thestate health agency, or the umbrella human

5 4


TABLE A-IllFUNDING FOR MEDICAL ASSISTANCE PROGRAMS FOR

THE ECONOMICALLY DISADVANTAGED(in millions of dollars, Fiscal Year 19118)

PROGRAM

FUNDING DATA

FEDERALEXPENDITURES

STATEEXPENDITURES

FEDERAL/STATE TOTAL

PERCENT OFTOTALI

Medicaid $30,567 $21737 $54,304 82%Medical Care for Veteranswithout Service-Connected

5,855 0 5,855 9%

DisabilityGeneral Assistame 0 3,927 3,927 6%Indian Health Services 1,006 0 1,006 2%Maternal and Child Health 527 333 860 1%Services Block GrantCommunity Health Centers 395 0 395 <1%Medical Assistance to 73 0 73 <1%Refugees and Cuban/Haitian EntrantsMigrant Hcalth Centers 43 0 43 <1%

MEDICAL AID TOTAL $38,466 $27,997 $66,463 100%

1 Percent totals slightly higher than 100% due to rounding.

resources agency. The state agency maycontract with other State entities to conductsome program functions. Further, Statesmay process claims for reimbursementthemselves or contract with fiscal agents orhealth insuring agencies to process theseclaims.

Within federal guidelines, each Statedesigns and administers its own program.Thus, there is substantial variation amongthe States in terms of persors covered,eligibility requirements, type and scope ofbenefits offered, and amounts of paymentsfor services. States are also responsible forassuring the qu:. :ity of medical careprovided under Medicaid.

Local agencies may be responsible foreligibility leterminations and other

42

casework duties, depending upon the State.In most cases, applications to Medicaid arehandled by the same State or local welfareoffice that handles AFDC applications. Infact, an application for AFDC constitutes anapplication for Medicaid in all States and, inmost States, an application for SSIconstitutes an application for Medicaid.Hospitals and other public and privatesector institutions frequently makeMedicaid referrals for medically needypersons.

Eligibility RequirementsEligibility for Medicaid is generally linked

to actual or potential receipt of cashassistance under the federally assistedAFDC and SSI programs. There is no singleincome limit prescribed for potentialbeneficiaries of this program. Also, the

Medicaid statute does not prescribe a singleset of rules regarding disregards of earnedincome. Instead, States are required to usethe AFDC rules or, in most States, SSI rules,as appropriate. Changes to AFDC or SSIwould carry over into Medicaid.

Although a connection to cash assistance isstill the primary way to establish Medicaideligibility, recent legislation has expandedthe population groups eligible for programcoverage. States are now required to coverall pregnant women meeting the States'income and resources requirements,whether or not they are receiving cashassistance. They are also required tophase-in coverage of all children under age7 or 8 who meet such income and resourcesstandards. Further, States have been giventhe option of extending their programs tocover additional low-income target groups.Beginning July 1989, States were required tophase-in Medicaid coverage for pregnantwomen and infants below the poverty line.Beginning January 1, 1989, States were-:quired to phase-in coverage of Medicare

cost-sharing charges for the Medicarepopulation with incomes below poverty.Effective April 1, 1990, the range of servicesthat must be provided to children under theEarly and Periodic Screening, Diagnosis,and Treatment (EPSIDT) program have beenexpanded by the Omnibus BudgetReconciliation Act of 1989.

In extending coverage to pregnant womenand children, Congress was reacting toconcern over the incidence of infantmortality and ether unfavorable outcomesof pregnancy and to the growth in thenumber of Americans without healthinsurance coverage.

In addition to these new target groupsmandated by Congress, there are two classesof eligibility under Medicaid: "categoricallyneedy" and "medically needy." All Statesparticipating in Medicaid are required tocover certain categorically needy persons

43

Appendix A

(mandatory categorically needy) and mayextend categorically needy coverage' tocertain additional persons (optionalcategorically needy). Coverage of themedically needy is optional with the States.

Categorically needy. All States (exceptArizona, which is involved in a separatedemonstration project) cover thecategorically needy under their Medicaidprograms. The categorically needy includethose persons receiving assistance underAFDC and SSI and certain low incomepregnant women and children.

Coverage of families and children. A Stateis required to cover under Medicaid allpersons receiving cash payments under itsAFDC program. States are also required toextend categorically needy coverage toadditional groups though they are notactually receiving a cash payment.Coverage must be extended for thefollowing groups for an unlimited period,provided the individuals continue to meetthe requisite criteria: persons whose cashpayment would be less that $10; personswhose AFDC payments are reduced to zerobecause of recovery of overpayment ofAFDC funds; certain work supplementationparticipants; certain children for whomadoption assistance agreements are in effector foster care payments are being madeunder Title IV-E of the Social Security Act;individuals ineligible for AFDC because of arequirement prohibited under Medicaid;and individuals eligible for Medicaid exceptfor the 1972 Social Security increase.

States must provide Medicaid coverage forcertain additional pregnant women andchildren. They are required to cover underMedicaid all pregnant women from themedical verification of pregnancy and allchildren under age 7 or 8 meeting AFDCincome and resources requirements, or withfamily income at or below 133% of thefederal poverty level. A woman who waseligible for and received Medicaid while


pregnant remains eligible for allpregnancy-related and postpartum servicesunder the plan through the end of the monthin which the 60-day period (beginning onthe last day of pregnancy) ends.

States are also required to provideMedicaid for pregnant women and forchildren under age 6 with income up to133% of the federal poverty level and mayprovide Medicaid, at their option, forchildren born after September 30, 1983, whohave attained age 6, but not yet ages either 7or 8, as chosen by the State. States also havethe option to provide Medicaid to pregnantwomen and infants with family income upto 185% of the federal poverty level. Inaddition, States have the option to provideMedicaid coverage throughout thepregnancy and postpartum period withoutregaid to changes in income. States are notrequired to have a resource test for thepregnant women and children whoseeligibility is related to the poverty level.Finally, States have the option to providecoverage for a limited period to a pregnantwoman who, based on a simple income test,is determined to be presumptively eligible.This enables a woman to receive care whileregular eligibility is being established.

Effective April 1, 1990, States are requiredto extend Medicaid coverage for up to 12months to families who lose cash assistancedue to earnings or loss of the earned incomedisregard. During the first six months theyare required to provide each family the sameMedicaid coverage that it had while on cashassistance. States have a "wrap around"option. During the second six months theStates are required to provide coverage tofamilies that have met certain incomereporting requirements. During this second6-nwnth period, States have the followingoptions: (a) limiting the scope of Medicaidcoverage to acute benefits; (b) imposing amonthly premium (not to exceed 3 percentof gross income) on those with incomesabove poverty line; or (c) offering families

44

the choice of basic Medicaid coverage(which may be limited to acute benefits) orone or more types of alternative coverage.During the entire period, States have theoption of offering "wrap around" coverageinstead of basic Medicaid coverage. Underthis option, a State may use Medicaid fundsto pay a family's expenses for premiums,deductibles and coinsurance foremployer-based health care coverage.

When families lose AFDC eligibility,categorical Medicaid eligibility alsofrequently ends, except under certaincircumstances. The Deficit Reduction Act of1984 (PL 98-369) required States to provide9 months of Medicaid coverage to familieswho lose eligibility for AFDC due to thetermination of the $30 disregard, or the $30plus one-third disregard. States had theoption of extending this coverage for anadditional six months in the case of a familythat would be eligible for AFDC if the $30plus one-third disregard were applied.Families who lose AFDC due to an increasein earnings continue to be eligible for foumonths of Medicaid benefits. In addition,States must provide four months ofMedicaid coverage to AFDC families wholose eligibility due to receipt of child supportpayments.

Effective October 1, 1990, States arerequired to extend Meeirlid coverage totwo-parent families whcie the principalbreadwinner is unemployed. Thisprovision expires October 1, 1998.

Coverage of the aged, blind, and disabled.States have three options as to how they treat551 recipients in relation to Medicaideligibility. Section 1634 of SSI law allows theSocial Security Administration to enter intoagreements with States to coverautomatically all SSI recipients withMedicaid eligibility. SSI recipients are notrequired to make a separate application forMedicaid under this arrangement.Thirty-one States and the District of

Columbia have chosen this option, and SSIrecipients in these States account forapproximately 75 percent of all SSIrecipients nationwide.

Under the second option, States elect to useSSI eligibility criteria for Medicaid eligibilityfor all SSI recipients but require a separateapplication with the state agency thatadministers the Medicaid program. Sixstates have elected this option.

The third and most restrictive option isblown as the "209(b)" option, under whichStates may impose Medicaid eligibilitycriteria that are more restrictive than SSIcriteria, so long as the criteria are not morerestrictive than those in the State's approvedMedicaid state plan in January 1972. 209(b)States may be more restrictive in definingblindness or disability, or more restrictive intheir financial requirements for eligibility.However, aged, blind, and disabledMedicaid applicants must be allowed tospend-down (deduct medical expensesfrom income not including SSI or optionalstate supplementary payments indetermining eligibility) in 209(b) States,regardless of whether or not the State has amedically needy program. Thirteen Statesuse the 209(b) option for Medicaid coverageof aged, blind, and disabled SSI recipients.

An amendment included in the 1986 SSIdisability amendments (The EmploymentOpportunities for Disabled Americans Actof 1986 or PL 99-643) required effective July1, 1987, that 209(b) States continue Medicaidcovel ige for those SSI recipients who wereeligible for Medicaid under a State's morerestrictive criteria beginning with the timethe individual becomes eligible underSection 1619.

The same legislation required States toprovide for continued Medicaid coveragefor those individuals who lose theireligibility for SSI when their incomeincreases because they become newly

Appendix A

eligible for social security benefits as anadult disabled child or because of anincrease in their benefits as an adult disabledchild (sle page 39). Protection against lossof Medicaid is also provided for certainblind or disabled individuals who lose their&SI benefits when they qualify for SocialSecurity early aged widow's or widower'sbenefits beginning at age 60. The 1987Budget Reconciliation Act provided thatsuch individuals, who othenvise qualify forSSI on the basis of blindness or disability,will be deemed to be an SSI recipient forpurposes of Medicaid eligibility until theybecome eligible for Medicare. Thisprovision has been effective since July 1,1988.

Further, the law requires coverage of"qualified severely impaired" individuals.Specifically, these are persons who in themonth preceding application of theprovision were eligible for Medicaid andreceived SSI, state supplementary payments(SSP), or special &SI payments. Further, theSecretary must determine for these personsthat they continue to be blind or continue tohave a disabling physical or mentalimpairment; except for earnings, theycontinue to meet all nondtiability relatedrequirements for SSI eligibility; they do nothave enough unearned income to makethem ineligible for SSI payments; the lack ofMedicaid eligibility would seriously inhibitability to continue or obtain employment;and they io not have earnings that arereasonably equivalent to the benefits (SSI,SSP if provided, Medicaid, and publiclyfunded attendant care services) that wouldbe available in the absence of earnings.

States may provide Medicaid coverage toadditional groups of persons includingrecipients of State-only supplementary cashpayments; certain institutionalizedindividuals whose income, beforedeductions, does not exceed a specialincome level (which may not exceed 300percent of the SSI benefit amount payable to

45 53


an individual in his own home with no otherincome and resources); and certainnoninstitutionalized disabled children whowould be eligible if they were in aninstitution.

Recent legislative changes have expandedMedicaid eligibility to include, in additionto pregnant women and children, otherindividuals whose eligibility is based on thefederal poverty levels. These groupsinclude Qualified Medicare Beneficiaries(QMBs), Qualified Disabled and WorkingIndividuals (QDWIs) (both of whoseeligibility depends on eligibility forMedicare Part A), and an optional aged anddisabled individuals group. While the fullrange of Medicaid benefits is available to thelast group, benefits are limited for QMBsand QDWIs. For QMBs, benefits are limitedto payment of Medicare Part A and Part Bpremiums, coinsurance, and deductables.Benefits for QDWIs are limited to paymentof Part A premiums.

Medically needy. Thirty-five States andjurisdictions provide medically needycoverage. States also cover the medicallyneedy under their Medicaid programs.These are persons: (a) who, except forincome and resources, fall into one of thecategories covered by the State (i.e., aged,blind, disabled, families with dependentchildren, pregnant women, and children);and (b) whose income and/or resources arein excess of the standards for categoricallyneedy coverage. A State having a medicallyneedy program must, at a minimum,provide coverage to children who would beeligible as mandatory categorically needy,and to pregnant women who would beeligible as either mandatory or optionalcategorically needy except for their incomesand resources. As a minimum, the State isrequired to offer ambulatory services tothese children and prenatal and deliveryservices to ihe pregnant women. However,most States that offer medically needy

46

programs also cover additional categories ofpersons.

States having medically needy programsestablish income and resources standards.They must be based on family size, uniformfor all individual in a covered group, andreasonable. Further, for purposes of federalmatching payments, the income standardafter spend down can not exceed 133 1/3percent of the maximum payment forsimilarly sized families under the State'sAFDC program.

Many persons who become medicallyneedy do so only after they have reducedtheir incomes and/or resources to therequisite level. The process by whichindividuals reduce their income to thestandard is laiown as the "spend down." Forexample, if an applicant has a monthlyincome of $400 and the State's incomestandard is $350, the applicant would berequired to incur $50 in medical expenses(i.e., spend down) before he would beeligible for Medicaid.

4. Food AssistancePrograms


Federal food assistance is provided toindividuals in basically two ways: directlythrough issuance of food (or couponsredeemable for food) for at-homeconsumption, and indirectly though theprovision of cash and/or commodities formeal service programs. Programsproviding food for at-home consumptioninclude the food stamp program and thespecial and commodity supplemental foodprograms for women, infants and children.Eligibility for programs that provide foodfor at-home consumption is limited to those

who are needy, with need normallydetermined by income. Meal serviceprograms include most child nutritionprograms (school lunch, breakfast, childcare food, summer food and special milkprograms) and the elderly nutritionprogram.

Eleven programs pmvide some form offood assistance to the economicallydisadvantaged. These programs provideover $21 billion of assistance: 94 percent ofthe funds or equivalent in commoditiescomes from the Federal Government, andsix percent from State and local governmentsources (according to Fiscal Year 1982expenditures). These programs arepresented in Table A-IV.

The Food Stamp program; School LunchProgram; Special Supplemental FoodProgram for Women, Infants and Children(WIC); and the School BreakfastProgram are examined below. Theseprograms total almost $20 billion, or 92% ofthe total made available for food assistance.Of the remaining seven programs, fouraccount for one percent or less of the totalamount available for food assistance. Eachprogram deals with a particular group orcommodity.

The 11 programs providing foodassistance to the economicallydisadvantaged rely on four differenteligibility tests. The four programs that arefocus of this chapter rely on an officialpoverty measure limit as well as enrollmentin another program (such as AFDC); threeothers rely on only an official povertymeasure limit; and four others on one of fourdifferent standards.

Food Stamp Program

Purpose and AdministrationThe Food Stamp Program is designed to

increase the food purchasing power ofeligible low income households to a point

Appendix A

where they can buy a nutritionally adequatelow-cost diet. For most personsparticipating in the Food Stamp Program,food stamp aid represents a second or thirdform of government payment. Fewer than20 percent of food stamp households relysolely on nongovernmental sources for theircash income, although nearly 30 percenthave some income from these sources (e.g.,earnings,private retirement income). TheAFDC program contributes to the income ofabout 38 percent of Food Stamp households,and for two-thirds of them AFDC is theironly cash income. SSI benefits go to some 18percent of Food Stamp households, andalmost one-third have no other income.About 20 percent of Food Stamp householdsreceive social security or railroad retirementbenefits. And over 15 percent are paidgeneral assistance, unemploymentinsurance, or workers' compensationbenefits.

The regular Food Stamp program operatesin all 50 States, the District of Columbia,Guam, and the Virgin Islands. The FederalGovernment is responsible for virtually allof the rules that govern the program; theserules are nationally uniform with limitedvariations. States, the District of Columbia,and the territories may choose to offer theprogram or not. However, if they do offerfood stamp assistance, it must be madeavailable throughout the jurisdiction andcomply with federal rules.

At the federal level, the program isadministered by the AgricultureDepartment's Food and Nutrition Service(FNS). The FNS gives direction to welfareagencies through federal regulations thatdefine eligibility requirements, benefitlevels, and administrative rules. Statewelfare agencies are responsible for theday-to-day administration of the FoodStamp program. Most often, the program isoperated through the same welfare agencyand staff that runs the AFDC and Medicaidprograms.

47 60


TABLE A-IVFUNDING FOR FOOD ASSISTANCE PROGRAMS FOR

THE ECONOMICALLY DISADVAN"TAGED(In millions of dollars, Fiscal Year 1988)

.

PROGRAM

,FUNDING DATA

FEDERALEXPENDITURES

STATEEXPENDITURES

FEDERAI/STATE TOTAL

PERCENT OFTOTAL1

Food Stamps $ 13,289 $1,080 $14,369 67%School Lunch Program 3,057 N.A.2 3,057 14%Special Supplemental Food 1,802 NA. 1,802 8%Program for Women,Infanb and Children (WIC)Temporary Emergency 588 N.A. 588 3%Food Assistance ProgramNutrition Program for the 424 163 587 3%ElderlySchool Breakfast Program 463 N.A. 463 2%Child Cue Food Program 378 NA. 378 2%Summer Food Service 139 0 139 1%Program for OtidrenFood Distribution Programon Indian Reservations

64 N.A. 64 <1%

Commodity Supplemental 41 N.A. 41 <1%Food ProgramSpecial Milk Program 1 N.A. 1 <1%

FOOD AID TOTAL $ 20,246 $1,243 $21,489 100%

,

P ercent totals slightly higher than 100% due to rounding.NA means data Not Available.

Those state agencies determine eligibility,calculate benefits, and issue food stampallotments following federal rules. Theyalso have significant say about carrying outthe Food Stamp Employment and Training(E&T) program and some administrativefeatures of the program (e.g., the extent towhich verification of householdcircumstances is pursued, and the methodby which food stamps are issued).

Applicants of AFDC or SSI are informed ofthe availability of food stamp benefits. AllAFDC applicants may apply jointly forAFDC and Food Stamps. SSI applicants can

48

apply for Food Stamps when they apply forSSI if they live alone or with other SSIrecipients. Some States use an applicationform with information needed for thevarious programs for jointly processed caseswhile other States require separate forms foreach program.

Eligibility RequirementsThe Food Stamp Program has financial,

employment/training-related, and"categorical" tests for eligibility. Its financialtests require that most of those eligible 'havemonthly income and liquid assets belowlimits set by food stamp law. Under the

G 1

employmentitraining-related tests, certainhousehold members must register for work,accept suitable job offers, and fulfill work ortraining requirements (such as looking ortraining for a job) established by Statewelfare agencies. The limited number ofcategorical eligibility rules (at least incomparison to AFDC, SSI, and Medicaid)make some automatically eligible for foodstamps (most AFDC and SSI recipients), andcategorically deny eligibility to others (e.g.,strikers, illegal and temporarily residentaliens, those living in institutional settings).

Income Eligibility Requirements. Exceptfor households composed entirely of AFDCor SSI recipients (who generally are exemptfrom Food Stamp income requirements),monthly cash income is the primary foodstamp eligibility determinant.

In establishing eligibility for householdswithout an elderly or disabled member, theFood Stamp program uses both thehousehold's basic (or "gross") monthlyincome and its counted (or "net") monthlyincome. When judging eligibility forhouseholds with elderly or disabledmembers, only the household's countedmonthly income is considered; in effect, thisapplies a more liberal income test to elderlyand disabled households.

Basic (or gross) monthly income includesall of a household's cash income, onlyexcepting the following "exclusions" (ordisregards): (a) payments made to thirdparties (rather than directly to thehousehold; (b) unanticipated, irregular, orinfrequent income, up to $30 a quarter;(c) loans (deferred repayment student loansare treated as student aid, see below);(d) income received for the care of someoneoutside the household; (e) nonrecurringlump-sum payments such as income taxrefunds and retroactive lump-sum socialsecurity payments (these are insteadcounted as liquid assets); (1) energyassistance; (g) expense reimbursements that

Appendix A

are not a "gain or benefit" to the household;(h) income earned by schoolchildren; (i) thecost of producing self-employment income;(j) Federal postsecondary stuckmt aid (e.g.,Pell grants, student loans) to the extent thatit is used for tuition, mandatory school feesor expenses, loan origination fees, andmiscellaneous education-related expenses;(k) non-federal postsecondary student aid(e.g., State or private scholarships) andfederal aid under provisions other than TitleIV of the Higher Education Act to the extentthat it is used for tuition, mandatory schoolfees or expenses, and loan origination fees;(I) advance payments of earned income taxcredits; (in) "on-the-job" training earnings ofdependent children under 19 in JTPAprograms, as well as JTPA morthl"allowances;" and (n) payments required tobe disregarded by provisions of federal lawoutside the Food Stamp Act (e.g., variouspayments under laws relating to Indians).

Counted (or net) monthly income iscomputed by subtracting certain"deductions" from a household's basic (orgross) monthly income. It recognizes thatnot all of a household's income is equallyavailable for food purchases bydisregarding a standard portion of income,plus amounts representing work expensesor excessively high non-food livingexpenses. The counted (net) monthlyincome cannot exceed the federal povertyguidelines.

Households without an elderly or disabledmember must also have basic (gross)monthly income that does not exceed 130percent of the inflation-adjusted federalpoverty guidelines. For these households,counted monthly income equals their basic(gross) monthly income less the followingdeductions:

an inflation-indexed (each October)"standard deduction" set regardlessof household size;


20 percent of any earned income, inrecognition of taxes and workexpenses;

out-of-pocket dependent careexpenses, when related to work ortraining, up to $160 a month perdependent; and

any shelter expenses, to the extentthey exceed 50 percent of countedincome after all other deductions, upto an inflation-indexed (eachOctober) ceiling set each fiscal year.

For households with an elderly or disabledmember, counted monthly income equalstheir basic (gross) monthly income less thefollowing deductions:

the same standard, earned income,and dependent care deductionsnoted above;

any shelter expenses, to the extendthey exceed 50 percent of countedincome after all other deductions,with no limit; and

any out-of-pocket medical expenses(other than those for special diets) tothe extent that they exceed a"threshold" of $55 a month.

Allowable Assets. Except for thosehouseholds that are exempt from FoodStamp asset requirements because they arecomposed entirely of AFDC or SSIrecipients, eligible households must havecounted "liquid" assets that do not exceedfederally prescribed limits. Householdswithout an elderly or disabled membercannot have counted liquid assets above$2,000. Households with an elderly ordisabled member cannot have countedliquid assets above $3,000.

Counted liquid assets include cash onhand, checking and savings accounts,savings certificates, stocks and bonds,

50

individual retirement accounts (IRAs) and"Keogh" plans (less any early withdrawalpenalties), and non-recurring lump-sumpayments such as income tax refunds.Certain "less liquid" assets are also counted:a portion of the value of the first nonexemptvehicle that exceeds a "fair market value" of$4,500 and the greater of the portion thatexceeds $4,500 or the equity value of all othernonexempt vehicles and the equity value ofproperty not producing income consistentwith its value (e.g., recreational property).Counted assets do not include the value ofthe household's residence (home andsurrounding property), business assets,personal property (household goods andpersonal effects), burial plots, the cash valueof life insurance policies and pension plans(other than Keogh plans and IRAs), andcertain other resources whose value is notaccessible to ate household or are requiredto be disregarded by other federal laws.

Employment-related Requirements. Statesmust operate a Food Stamp Employmentand Training (E&T) program under whichthose work registrants not exempt by law orby the State must fulfill employmentrequirements as established by each State.In order to maintain eligibility, certainnonworking employable adult householdmembers must register for employment andaccept a suitable job if offered one. Failureto fulfill any E&T program requirementgenerally disqualifies the entire household,if the household head fails to comply. Insome cases, failure to comply disqualifiesthe violating household member only.

States are given considerable flexibility indesigning these E&T programs and indeciding who will be subject to theirrequirements. Exceptions are provided for:those caring for dependents (disabled orunder age six); those already subject toanother program's work requirement suchas AFDC; those at least 30 hours a week orearning the minimum-wage equivalent; thelimited number of postsecondary students

1; 3

who are otherwise eligible; rmidents of drugaddiction and alcoholic treatmentprograms; the disabled; and those under 16or age 60 or older (those between ages 16 and18 are also exempt if they are not head of ahousehold or if they are attending school ora training program). FNS maintains a rolein this process by reviewing and approvingthe provisions in the State plan.

Separately or as part of their E&Tprograms, States and localities may operateworkfare programs. A State's programmust include one or more of the followingcomponents: (a) programs designed toimprove employability thrJugh workexperience, training, or both; (b) projects,programs, or experiments aimed ataccomplishing the purpose of anemployment and training program, such asa supported work program, a JTPAprogram, or other State or local program;(c) job search training programs; and (d) jobsearch programs with terms and conditionscomparable to those prescribed for theAFDC program.

States must also accommodate the currentparticipation-based performance standard(50 percent of mandatory participants mustbe placed in a component during the year)and the comparatively low funding levels(federal expenditures totalled $110 millionin Fiscal Year 1989, including amountsmatched by States.

An important pending change in the E&Tprogram is replacement of theparticipation-based standard with anoutcome-based performance system onApril 1, 1991.

Legislation currently before Congresswould expand the E&T program to includeinitiatives that help recipients becomeself-employed.

Categorical Eligibility Rules and OtherLimitations. SS beneficiaries may qualify

Appendix A

for food stamps if they meet the food stampincome and assets requirements, except inCalifornia and Wisconsin. In these twostates, the food stamp is "cashed out." Inother wonis, these States have chosen toincrease state supple.nental payments inlieu of food stamps.

Few food stamp rules deny food stampeligibility for reasons other than financialneed (limited income or liquid assets) orcompliance with work registration or otherE&T program requirements. These rulesare:

(a) The household's eligibility isbarred for 90 days where the head ofhousehold has voluntarily quit a jobwithout good cause;

(b) Households containing memberson strike are ineligible, unlesseligible prior to the strike;

(c) Postsecondary students (inschool half-time or more) who arephysically and mentally fit for workand between ages 18 and 60 areineligible unless they are assigned toschool by a JTPA program or as partof an AFDC JOBS program, areemployed at least 20 hours a week orparticipating in a federally financedwork-study program, or area parentwith responsibility for the care ofdependent child under age 6 or anAFDC recipient;

(d) Eligibility is barred to illegal ortemporarily resident aliens:

(e) Eligibility is denied personsliving in institutional settings, exceptfor those in special SSI-approvedsmall group homes for the disabled,persons living in drug addiction oralcoholic treatment programs, andpersons in shelters for batteredwomen and children or shelters forthe homeless;

451


(f) Boarders are ineligible unless theyapply together with the householdthey are boarding with;

(g) Eligibility is denied those whotransfer assets for the purpose ofqualifying for food stamps;

00 Those who intentionally violatefood stamp rules are disqualified forspecific time periods ranging from 6months (on first violation) topermanently (on a third violation);and

(1) Those failing to provide socialsecurity numbers, or to cooperate inproviding information needed toverify eligibility or benefitdeterminations, are ineligible.

School Lunch and BreakfastPrograms

Purpose and AdministrationThe National School Lunch Program

(NSLP) and the School Breakfast Program(SBP) provide federal cash and commoditysupport to assist states to providesubsidized school lunch and breakfastprograms for participating schoolchildren.All meals must meet nutritionalrequirements specified in federalregulations.

At the federal level, the program isadministered by the FNS. Within broadfederal requirements, state educationalagencies generally administer the programsthrough agreements with local schools orschool districts. (On occasion, the programis administered by an FNS regional office orby an alternate state agency.) School boardsand local school administrations performeligibility determinations, meal counting,and financial record keeping for bothprograms. Any public school or privatenonprofit school of high school grade orunder is eligible to participate in the

52

programs, as are public or private licensedand nonprofit residential child careinstitutions (such as orphanages).

Eligibility RequirementsSchool breakfast and lunch authorities are

required to determine a family's eligibilityon the basis of its current rate of income.Countable income limits per family of fourfor the 1989-90 school year are $15,730 forfree breakfast and lunch, and $22,385 forreduced-price breakfast and lunch.Corresponding limits in the 1988-89 schoolyear were $15,145 and $21,550. Incomeeligibility guidelines are annually adjustedfor inflation.

Each program has a three-tieredreimbursement system that allows childrenfrom households with incomes at or below130 percent of the poverty line to receive treemeals, permits children with incomesbetween 130 percent and 185 percent ofpoverty to receive meals at a reduced price,and provides a small subsidy for the mealsof children with incomes above 185 percentof poverty.

Children in households receiving AFDC orfood stamps are eligthle to receive freebreakfast and lunch. An estimated 49percent of households receiving AFDC alsoreceive free or reduced-price meals

Special Supplemental FoodProgram for Women, Infants,

and Children

Purpose and AdministrationThe Special Supplemental Food nogram

for Women, Infants, and Children (WIC)provides food assistance; nutritionaleducation and counseling and adjudicativehealth services to low-income pregnant,breastfeeding, and postpartum women andtheir infants, as well as to low-incomechildren up to age 5. Eligible personsreceive supplemental foods that contain

nutrients thought to be lacking in their diets.The program is targeted to specific groupsduring critical periods of growth anddevelopment and is intended to prevent theoccurrence of health problems and toimprove the health states of persons at riskby supplementing their diets.

The WIC program is the responsibility ofthe FNS. The program is administered byState and local agencies. State agenciesparticipating in the program may includestate health departments or Indian tribalauthorities serviced by Indian HealthService of the Department of Health andHuman fiarvices or recognized by theDepartment of the Interior. Local agenciesmust be public health or welfare agencies ornonprofit private agencies that contract toprovide ongoing health services t9substantial numbers of pregnant aridlactating women, infants, and chi1d7,en.Local agencies screen and certify MICparticipants, and provide nutririonalassessments, food vouchers, nviritioneducation, and health referrals toparticipants.

Eligibility RequirementsTo be eligible for WIC, persons must: (a)

meet a State residency requirement; (b) meetan income standard; and (c) be individuallydetermined to be at nutritional risk by ahealth professional. The maximum federalstandard is 185 percent of the U.S. povertyincome guidelines. However, States may setlower standards (i.e., between 100 and 185percent of the federal guidelines) thatcorrespond to income limits used in theirother health care delivery programs. SomeStates set lower income limits than thenational standard for all or part of their WICpopulations.

Under the Child Nutrition Act of 1966,nutritional risk is defined as detectableabnormal nutritional conditions;documented nutritionally-related medicalconditions; health-Impairing dietary

53

Appendix A

deficiencies; or conditions that predisposepeople to imdequate nutrition ornutritionally related medical problems.

5. Education AssistancePrograms

Funding and General Eligibilityinformation

There are 17 progams providing someform of educational assistance. Theseprograms provide almost $10 billion ofassistance: 95 percent of the funds comefrom the Federal Government, and fivepercent from State and local governments(according to Fiscal Year 1988expenditures). These programs arepresented in Table A-V.

The Head Start program is examinedbelow. Funded at approximately $1.2billion, it accounts for 14% of the Federal/State/local funds available for federaleducation assistance programs. Fouradditional education programs providetraining to the economically disadvantaged.Totalling only $516 million, these programsare 'Vocational Education Opportunities,Disadvantaged" ($332 million), SpecialPrograms for Students from DisadvantagedBackgrounds, or 'TRIO" programs ($176million), "Follow Through" ($7.2 million),and "Childhood Development AssociateScholarship Program ($1.4 million).

Six of the 17 programs (including HeadStart and the four training programs notedin the paragraph above) providingeducation assistance rely on an officialpoverty measure limit. Nine programsutilize a standard for "income deemedneedy" that is determined by one of severalcongressionally mandated needsanalysissystems that are included in theseprograms' authorizing legislation. Otherprograms utilize a variety of tests.

,f;


TABLE A-VFUNDING FOR EDUCATION ASSISTANCE PROGRAMS FIDR


FUNDING DATA

PROGRAMFEDERAL

EXPENDITURESSTATE

EXPENDITURESFEDERAL(

STATE TOTALPERCENT OF

TOTAL1

Pell Grants $4,187 $0 $4,187 40

Stafford Loans 2,664 0 2,664 25%Head Start 1,206 0 1,508 14%College Work-Study 588 0 588 6%ProglainSupplemental Educational 408 0 408 4%OpporttmityGranbVocational Education 166 166 322 3%Opportunities,Disadvantaged ActivitiesChapter l Migrant 269 0 269 3%Education ProgramPerkins Loans 186 0 186 2%Spedal Programs for 176 0 176 2%Students from Dis-advantaged BackgroundsState Student Incentive 73 73 146 1%Grant ProgramsSeven Other Programs 43 0 43 <1%

EDUCATION AID TOTAL $9,966 $21,489 100%

..

1 Percent totals slightly higher than 100% due to rounding.

Head Start

Purpoue and AdministrationHead Start is a comprehensive preschool

program that operates year-round. HeadStart provides a wide range of services(educational, health, nutritional, and socialservices) to low-income children primarilyages 3 to 5, and their families. Its goals arediverse and include both helping thechildren and their families with their presentcircumstances and lessening thedisadvantages faced subsequently by manysuch children in school and work. Theservices provided include cognitive

54

languagedevelopment; medical, dental, andmental health services (including screeningand immunizations); and nutritional andsocial services. Parental involvement isextensive, through both volunteerparticipation and employment of parents asHead Start staff. Formal training andcertification as child care workers isprovided to some parents through the ChildDevelopment Associate program.

Head Start is administered by the Office ofHuman Development Services of theDepartment of Health and Human Services.States have only a modest advisory role,

f; 7

although local governments are sometimesselected to operate Head Start programs.

Eligibility RequirementsChildren from low-income families are

eligible for participation in Head Start istheir families' incomes are below thepoverty line, or if their families are eligiblefor public assistance. Head Start does nothave asset rules restricting eligibility. Nomore than 10 percent of the children,including handicapped children, in eachHead Start program can be from nonpoorfamilies (in other words, 90 percent mustcome from families with incomes at or belowthe federa naverty guidelines or fromfamilies receiang public assistance such asAFDC). At least 10 percent of total HeadStart enrollment opportunities are to beavailable for handicapped children in eachState.

Certain small, remote communities arepermitted to establish their own eligibilitycriteria as long as at least half of the familiesare eligible under the income guidelinm. Toqualify for this authority, communities musthave a population no greater than 1,000; bemedically underserved; and lack otherpreschool programs or medical serviceswithin a reasonable distance.

In Fiscal Year 1988, approximately 47percent of Head Start children were infamilies receiving AFDC benefits. At least90 percent of the Head Start children arefrom families that have incomes at or belowthe poverty level or are receiving AFDCbenefits.

55

Appendix A

6. Employment andTraining AssistancePrograms

Funding lnd General EligibilityInformation

The six programs in this categoryproviding a range of assistance to theeconomically disadvantaged (otheremployment and training programs that arepart of a larger assistance program arepresented with that larger program). Thesesix programs total approximately $3.7billion of assistance (in Fiscal Year 1988expenditures): 98 percent of the funds comefrom the Federal Government, and 2 percentfrom State and local government sources.

The training for Disadvantaged Adults andYouth program, the Summer YouthEmployment Program, and the Jobs Corp(Titles II-A, 11-B, and IV-B of the Job TrainingPartnership Act, or JTPA) are examined:aelow. These three programs account forover $3.2 billion, or 87% of the combinedFederal/State expenditures for jobs andtraining assistance. Funding for all six jobsand training assistance programs ispresented in Table A-V1.

The six programs providing assistancein this category utilize four differenteligibility tests. The three JTPA programsexamined in depth in this paper each usethree standanis: official poverty measure,Lower Living Standard Income Level

f; S


TABLE ANIFUNDING FOR EMPLOYMENT AND TRAINING ASSISTANCE PROGRAMS FOR


PROGRAM

FUNDING DATA

FEDERALEXPENDITURES

STATEEXPENDITURES

FEDERAL,STATE TOTAL

PERCENT OFTOTAL1

Training for $1,810 $0 $1,810 49%Disadvantaged Adults andYouthSununer Youth 718 0 718 19%Employment Programjob Corps 716 0 716 19%Senior Community Service 331 37 368 10%Employment ProgramFoater Grandparents 57 17 74 2%Senior Companions 23 8 31 1%JOBS AND TRAINING $3,655 $62 $3,717 100%AID TOTAL

Pereem totals slightly higher than 100% due to rounding.

(LLSIL), and enrollment in anotherprogram. The JTPA programs are the onlyfederal programs that also include the use ofthe LLSIL in their eligibility determinations.The LISIL is one of several market-basketestimates of living standards formerlyproduced by the Bureau of Labor Statisticsthat varies by region and within regions byurban areas according to cost of living.

Job Training Partnership ActPrograms

Purpose and AdministrationJTPA provides employment and training

services for economically disadvantagedadults and youth, and others who facesignificant employment barriers. The aid isintended to increase participants' futureemployment and earnings and reduce theirdependence on welfare. Title III of UFA(the Economic Dislocation and WorkerAdjustment Assistance Act), which

56

provides assistance for dislocated workers,is not addressed in this report.

Training for disadvantaged adults andyouth under JTPA Title II-A provides blockgrants to States to fund training and relatedservices for economically disadvantagedyouths and adults. The Summer YouthEmployment Program (Title II-B) provideseducation and training services during thesummer months for economicallydisadvantaged youths, usually jobs at publicinstitutions such as schools or parks.Services authorized under Title II includebasic and remedial education (classroominstruction), on-the-job training, job searchassistance, counseling, and otherwork-related assistance.

JTPA emphasizes coordination betweenstate governments and the businesscommunity in order to producepartnerships between those who administerthe Act and those who know about private

sector job requirements. The coordinationincludes the following elements:

State lob Training CoordinatingCouncils (SITCCs) - formed bygovernors to providerecommendations on JTPA trainingcomponents. Members includerepresentatives from business andindustry, local government, and thebroader community, education, andlabor; State legislators; and Stateagency personnel;

Service Delivery Arga (SDA) -designated by governors to receivefederal job training funds. Amongthe areas automatically eligible to beSDAs are units of local governmentwith populations of 200,000 or more;and

Private Industry Councils (PICs) -appointed by local elected officials toplan job training and employmentprograms at the SDA level. PICsserve as key mechanisms forbringing representatives fromvarious segments of the privatesector into the active management ofjob training programs. PICmembership includes repre-sentatives from business,educational agencies, organizedlabor, rehabilitation agencies,community-based organizations,economic development agencies,and public employment services.The majority of a PIC's membersmust represent the private sectorwithin the SDA, and the PICchairperson must be a businessrepresentative.

At the federal level, JTPA is theresponsibility of the Employment andTraining Administration (ETA) of the US.Department of Labor. Title II-A and II-Bactivities are administered by States and

57

Appendix A

SDAs/PICs. States are responsible forallocating funds to SIDAs and for overseeingthe planning and operation of localprograms. The SDAs/PICs selectparticipants and design projects withinfederal guidelines.

Governors have approval authority overlocally developed plans and are responsiblefor monitoring program compliance. TheGovernor of each State is responsible formost of the initial program administrativedecisions and, therefore, has potentially avery powerful role in overseeing theadministration of Title II-A programs. TheGovernor's responsibilities include:

determining the State agency thatwill administer JTPA at the Statelevel, including operating programsand services in single-SDA States;

certifying the membership of localprivate industry councils andappointing the members of theSJTCC;

preparing an annual statement ofJTPA goals and objectives to assistSDAs in planning their programs;and

preparing a Governor'scoordination and special servicesplan describing the use of allprogram funds and establishingcriteria for coordinating JTPA withactivities of other State and localagencies that have an interest inemployment and training.

The Job Corps program is a smallerprogram ($716 million, funded under TitleIV) that serves "economicallydisadvantaged" youths aged 14 through 21who live in a "disorienting" environmentand are in need of additional education,vocational training, and related supportiveservices to accomplish regular school work,qualify for other suitable training programs,

70


satisfy Armed Forces requirements, orwicure and hold "meaningful employment."Jol) Corps enrollees are served primarily inraidential centers where they receive basiceaucation, vocational skills training,counseling, work experience, and healthservices. Job Corps enrollees receivepersonal allowances while participating inthe program and readjustment allowancesupon successful completion of the program.Job Corps programs are administered by thefederal Government.

Eligibility RequirementsEligibility requirements for the three JTPA

programs are essentially the same. The lawrequires that at least 90 percent of JTPAparticipants in Title II-A be "economicallydisadvantaged." It defines an economicallydisadvantaged person as one who(a) receives cash welfare (AFDC) or is amember of a family that receives cashwelfare; (b) receives food stamps; (c) hasfamily income for the preceding 6 monthsthat was not in excess of OMB's federalpoverty guidelines or 70 percent of theLLSIL, whichever is higher; (d) is a fosterchild on behalf of whom State or localgovernment payments are made; or (e) is ahandicapped adult whose own incomemeets the program limit but whose family'sincome exceeds it. There are no rulesregarding assets in this program.

With respect to eligibility criteria (c), theLLSIL standard is always higher thanOMB's federal poverty guidelines. TheOMB guideline for a family of four is$12,100. T only one area, thenonmetropolitan South, does 70 percent ofthe LLS1L approach the OMB level (at$12,170 for a family of four). In thecontinental United States, the highest LLSILlevel is $15,690, found in the Washington,D.C./Maryland/Virginia StandardMetropolitan Statistical Area.

58

7. Other Services Pmgrams

Funding and General Eligibilityinformation

There are 6 programs in this categoryproviding a range of services from legal aidto emergency food for the economicallydisadvantaged. These six programs totalalmost $6.5 million of assistance: 69 percentof the funds come from the FederalGovernment, and 31 percent from State andlocal government sources (according toFiscal Year 1988 expenditures).

The Social Services Block Grant programunder Title XX of the Social Security Act isexamined below. Title XX programsaccount for almost $4.7 billion, or 72% of thecombined Federal/State expenditures forother services. None of the other programsis this category accounts for a billion dollarsin expenditures. The other servicesprograms and their expenditure data arepresented in Table A-VU.

The six programs providing services in thisca tegory utilize four different eligibility teststo determine their respective recipients. TheTitle XX program relies on an incomedeemed "needy" standard decided by theStates or localities.

Title XX Social ServicesBlock Grant

Purpose anti AdministrationThe purposes of the Title XX Social Services

Block Grant (SS 3G) program are toconsolidate federal assistance to States forsocial services into a single grant, increaseState flexibility in using social servicesgrants, and encourage each State to furnishservices directed at the goals of:

Appendix A

TABLE A-VIIFUNDING FOR OTHER SERVICE ASSISTANCE PROGRAMS FOR


PROGRAM

FUNDING DATA

FEDERALEXPENDITURES

STATEEXPENDITURES

FEDERAL/STATE TOTAL

PERCENT OFTOTAL1

Social Services Block Grant $2700 $1,980 $4,680 72%(Title XX)

State Legislative Impact 930 N.A.2 718 14%GrantsCommnunity Services 377 N.A. 716 6%Sleek GrantsLegal Services 306 N.A. 368 5%Emagenty Food and 114 N.A. 74 2%Sbelta ProgramSodal Services for 65 N.A. 31 1%Refugees andCuban/Haitian EntrantsOTHER SERVICES $4,492 $1,980 $3,717 100%AID TOTAL

1,Percent totals slightly higher than 100% due to rounding.N.A. means data Not Available.

achieving or maintaining economicself-support to prevent, reduce, oreliminate dependency;

achieving or maintainingself-sufficiency, including reductionof prevention of dependency;

preventing or remedying neglect,abuse, or exploitation of childrenand adults unable to protect theirown interests, or preserving,rehabilitating or reuniting families;

preventing o r reducinginappropriate institutional care byproviding for community-basedcare, home-based care, or otherforms of less intensive care; and

securing referral or admission forinstitutional care when other formsof care are not appropriate, or

providing services to individuals ininstitutions.

States are given wide discretion as to theservices to be provided and the groups whomay be eligible for services, usually lowincome families and individuals. Inaddition to supporting social services, thelaw allows States to use their allotment forstaff training, administration, planning,evaluation, and purchasing technicalassistance in devaloping, implementing, or,idministering the State social serviceprogram. States decide what amount of thefederal allotment to spend on services,training, and administration.

Some restrictions are placed on the use ofSSBG funds. Funds cannot be used for thefollowing: most medical care except familyplanning; rehabilitation and certaindetoxification services; purchase of land,


construction, or major capitalimpm ements; most room and board exceptemergency short-term services; educationalservices generally provided by publicschools; most social services provided inand by employees of hospitals, nursinghomes, and prisons; cash payments forsubsistence; child day care services that donot meet State and local standards; andwages to individuals as a social serviceexcept wages of welfare recipientsemployed in child day care.

The SSBG program is administered at thefederal level by the Office of HumanDevelopment Services of the Department ofHealth and Human Services. In order toqualify for funding, the state governmentmust submit a preexpenditure report to theDepartment of Health and Human Servicesthat describes the services and activities tobe supported and the categories orcharacteristics of individuals to be served.

Eligibility RequirementsStates are free to establish their own

eligibility criteria for Title XX social services.States decide what individuals and groupsto serve and what fees, if any, to charge.Although States no longer have to seteligibility standards or target funds withincertain statutory parameters, many Stateshave chosen income eligibility criteria lower

60

than the federal maximum income eligibilitylimits under the old Title XX law, i.e., 80 to115 percent of median income. Currently,all States make all services available to allAFDC recipients, while making mostservices available to SSI recipients.Therefore, a Ferson becomes eligible forSSBG aid by (a) having an income that fallsbelow the State's eligibility level, (b) beingan AFDC or SSI recipient, or (c) being therecipient of a service provided withoutregard to inzome (such as protective servicesto address abuse and neglect).

Reports for Fiscal Year 1988 indicate thatthe services provided in most States includehome-based services (50+ States), child daycare services (45 States), protective andemergency services for children (38 States),and employment education and training (38States).

In Fiscal Year 1980 (the last year for whichdata under the previous Title XX programwas available), 27 percent of those receivingservices were AFDC recipients; 11 percentwere &SI recipients; 4 percent were medicaidrecipients who were not AFDC or SSIrecipients; 21 percent of the recipientsreceived services provided without regardto income or welfare status; and 37 percentwere ligible according to inceine criteria.

0.4 ,

a

APPENDIX BPoverty Tluesholds And Other

Measures

The information presented in this appendix is derived primarily from Cash and NoncashBenefits for Persons With Limited Income Eligibility Rules, Recipient and Expenditure Data,FY 1986-88, compiled by Vee Burke, CRS Report 89-595 EPW, Congressional Research Service,Library of Congress, October 24, 1989.

74

61

Appendix B

POVERTY THRESHOLDS AND OTHER MEASURES

BUREAU OF THE CENSUS STATISTICAL POVERTY THRESHOLDS: 1988

Estimated weighted averagethreshold: 1988*

1 person (unrelated individual) $ 6,017Under 65 years 6,153

65 years and over 5,672...

2 persons 7,703

Householder under 65 years 7,957

Householder 65 years and over 7,156

3 persons 9,4314 peisons 12,0915 persons 14,3056 persons 16,1517 persons 18,3798 persons 20,3229 persons or more 24,061

'acky used to update 1986 thresholds: 1.04137 (representing the percent change in the average annual Consumer Price Indexbetween 1986 atW 1987).Source Census Bureau press release, january 19. 1989.

7563


POVERTY THRESHOLDS AND OTHER MEASURES (CONTINUED)

OFFICE OF MANAGEMENT AND BUDGET1989 FEDERAL POVERTY INCOME GUIDELINES

Poverty guidelines for all States (except Alaska and Hawaii)and the District of Columbia

Size of family unit Guideline

1

234

56

78

For family units with more than 8 members,

$ 5,9808,020

10,06012,10014,14016,18018,22020,260

add $2,040 for each additional member.

Poverty guidelines for A laska

Size of family unit Guideline

1

2345

6

78

For family units with more than 8 members,

$ 7,48010,03012,58015,13017,68020,23022,78025,330

add $2,550 for each additional member.

Poverty guidelines for Hawaii

Size of family unit Nonfarm family guideline

1

2

3

4

5

6

78

For famil units with more than 8 m mbers

$ 6,8709,22011,57013,92016,27018,620

20,97023,320

add $2 350 for ach additional member.

Source: Federal Repster, v. 54, no. 31. Feb. 16, 1989, p. 7097-7098. 04

Appendix B

POVERTY THRESHOLDS AND OTHER MEASURES (CONTINUED)

USDA FOOD STAMPS ELIGIBILITY LEVELS

Maximunt Income levels

Family size

Free meals130 Federal poverty

income guidelines

Reduced-price meals185% Federal poverty

income guidelines

48 States, District of Columbia, Guam, and Territories

$ 7,774 $11,0632 10,426 14,8373 13,078 18,6114 15,730 22,3855 18,382 26,1596 21,034 29,9337 23,686 33,7078 26,338 37,481

Each additional family member 2,652 3,774

Alaska9,724 13,838

2 13,039 18,5563 16,354 23,2734 19,669 27,9915 22,984 32,7086 26,299 37,4267 29,614 42,1438 32,929 46,861

Add for each additional member 3,315 4,718

Hawaii1 8,931 12,7102 11,986 17,0573 15,041 21,4054 18,096 25,7525 21,151 30,1006 24,206 34,4477 27261 38,7958 30,316 43,142

Add for each additional member 3,055 4,347

Source: Federal Register, v. 54, no. 72, Apr.rf, 1989, p. 15241 - 15242.

7 765


POVERTY THRESHOLDS AND OTHER MEASURES (CONCLUDED)BLS LOWER LIVING STANDARD INCOME LEVEL (LLSIL) FOR

A FAMILY OF FOUR: EFFECTIVE MAY 4, 1990 (for determining JTPA

Area 1989 adjusted LLSIL 90 percent of LLSIL

No ( ,Metropolitan $20,820 $14,570

Nonmetropolitan 20,470 14,330

North CentralMetropolitan 19,670 13,770


SouthMetropolitan 18,680 13,080

1 .onmetro,olitan 17,380 12,170

WestMetropolitan 20,600 14,420

Nonnwtropolitan 20,360 14.250

AlaskaMetr 4.. 24510 18,560


Hawaii/GuamM tan 26,890 18,820

N , tan 24580 18,610

Standard Metro olitan Statist: -al AreaAnchorage, AK 24510 18,560

Atlanta, CA 18,950 13,270

Baltimore, MI) 19,980 14990

Boston, MA 22,260 15,580

Buffalo, NY 18,950 13,270

Chi o, IL/Northwestern IN 20,410 14,290

Minnea. ,

Philadelphia.. .

San .10.

St. Louis, MO/1L

Washin : on, DC/MD/VA

*The job Training Partnership Act (JTPA) and the Targeted Jobs Tax Credit provide that an "economically disadvantaged"person may have family income up to 70 percent of the LISIL or (in the case of JTPA programs) 100 percent of the Federalpoverty income guideline, if higher.

Source: Federal Register, v. 54, no. 63, Apr. 4, 1989, p. 13575 - 13577. 7S

APPENDIX C

Income Eligibility Tests Used InProgams For The Economically

Disadvantaged

The information presented in this appendix is derived primarily from Cash and NoncashBenefits for Persons With Limited Income; Eli ibilit Rules Red ient and Ex enditure DataFY 1986-88, compiled by Vee Burke, CRS Report 89-595 EPW,Congressional Research Service,Library of Congress, October 24, 1989.

67

Appendix C

INCOME ELIGIBILITY TESTS USED IN PROGRAMS FORTHE ECONOMICALLY DISADVANTAGED

Medicaid

Limit related to:.

Lowerliving Enrollment

Official standard Income Area inpoverty income Dollar deemed of othermeasure level amount needy residence program Other

Medkal care for veterans withoutservice-connected disability

General insistence (medical)

Indian Health services

Maternal and child health servi

Community health centers X

Medical aid for refugees andCuban/Haitian entrants

Migrant health centess

CASH AIDAFDC X

X

Earned income tax credit X

Veterans' pensions

General assistance

Foster can X2

Adoption aS9iS' ante X2

Emergency asSastance X2.11

Aid to refugees and Cuban/Haitian X2entrants

D1C (veterans' parents)

General assistance to Indians

FOOD BENEFITSFood Stamps xto

School lunch (free and reduced-pricemeals)

x"

WIC x"Temporary emergency foodassistance program

Nutrition program for the eldisly(ne InCOme te90

School breakfast (free andteduced-price meals)

Child care foodprograrn

Summer food service

Food distribution projrarn X

Conimoditp supplemental food X

Adapted from Cash and Noncash likniefits for Persons with Limited Inmine Eliglbtht, Rules, Recipient and EspenidturePata. FY1986A by Vee Ourke, Report No. 09-595 EPW, Congressional Research Service, Washington, D.C. October 24, 1989.

S69


INCOME ELIGIBILITY TESTS USED IN PROGRAMS FORTHE ECONOMICALLY DISADVANTAGED (CONTINUED)

Limit related to;

PMI'sEDUCATION

Pell &rants

1 Lowerliving Enrolhnent

Official standard Income Area inpoverty income Dollar deemed of othermeasure level amount needy residence pro

Stafford loans (formerly guaranteedstudent toms)

iS

Headstart

work-stud

Supplemental educationalopporbmiturantsVocational opporhmities,disadvantale_activities

X

Chap.1 migrant education(no income test)

Perkins loans

TWO programs

State student incentive grants

Fellowships for graduate andprofessional study

x"

41,Migrant high school e9tivalency x"

Follow duo*Health professions student loans and XII

Blender fellowships

Child development assodatescholarship program

College assistance migrant projram

TOES ANDTraining for disadvantaged adults X

ancjicthSummer youth employment

Job corps X

Senior commtmity service X

employment

Work incentive program (WIN)

Foster grandparents

Senior companions

SERVICESTitle XX social services

Community services block grant

Legal services

Emergency food and shelter

Social services for refugeesand Cuban /Haitian entrants

State legslafion impact assistancegrants

+.-Appendix C

INCOME ELIGIBILITY TESTS USED IN PROGRAMS FORTHE ECONOMICALLY DISADVANTAGED (CONCLUDED)

2For certain gniurs fplegnent WOITICA. young chitiren, the aged, the blind, and the disabled/States have the toadopt the .Federal poverty income guideline (or multiple of it) as an income limit. Starting in 1 9, States must n tophew in use of the prnerty income guiddinr tor these groups.

2Need is decided by State (or locality).

'Dollar income test was begun April 1, 1986. Veterans receiving veterans' pensions or eligible for Medicaid areautomatically eligible.

4The stated pwpose of the Maternal and Child Health (MCH) Services ock Grant law is to enable States to assure accessto quality M I services to mothers and children, particularly those with low income (or limited availability of healthservices). The law defines low income in terms of the FedoW poverty income guidelines. This block grant, which tookeffect in FY 1981, includes funding for aippled cluldren's services.

5The law limits free care to those below the Federal poverty ircome guidelines.

'All residents of the area served are eligible, but fees must be charged the nonpoor.?For

bask Federal SSI payment.

5States decide need for an optional State supplemental to SSL

4For a blind or disabled child,

"'Households composed wholly of AFDCor SSI recipients automatieally tue eligible for food stamps.

n Food stamp eligibility is accepted as documentation of eligibility for the free schcol lunch and free school breakfastPro8rams.

12Regulations provide that Meanie limits shall not be lower than those for free or reduced-price health care, providedthese limits are between 1(X) and 185 percent of poverty.

"The law requires preference for those withgreatest economic or social need.

"Need is decided by a needs analysis system set forth in the Higher Education Act (HEA), as revised by the HigherEducation Ammendments of 1986, P.L. 99-498, and the Higher Education Technical Amendments of 1987, Pl. 10)150.

"Need is decided by a needs analysis system known as the 'Congressional Methodology," which is set forth in title IV,part F of P.L. 99-498.

"Iliere is no income test. Migratory children are presumed to be needy.

17For forgiveness of loans made to needy students who fall to comple studies.

18Need for loans is decided by the educational institution, by use of a needs analysis system approved by the Secretary ofEducation -in combination with other information" about the studenrs finances. For all health professional scholarshipsand for loans to students of medicine and osteopathy, Federal regulations define the required "exceptional financial need."

ISRegulations require the educational institution to determine that migratory students need the in cli as.sistance

provided.

"Law makes eligible secondary students who arc "eiconomically disadvantaged," but does not define the term. There areno regulations.

21The Federal poverty income guideline is used if higher than 70 percent of the lower living standard ircome level of theDepartment of Labor.

72ln States that provide SSl supplements, income limits can exceed 125 percent in poverty.

23Before P. L. 97-35, Federal law set an outer eligibility limit related to State mecuan income and required one-half ofFederal matching funds to be used for welfare recipients.

"Need is decided by voluntary agencies administering the benefits.

25Income tct applies only to cash and medical aid provided with these funds. There is no income test for educationalbenefits.

26El1gible are persons enrolled in State/local public assistance programs that provide oish or health benefiei to needy

I op

* S GaVERNVIVRffilTING OFFICE' /991 3 1 2 4 1 2 5 4 6 5 971 4w

s******* ************************************ · 2014. 4. 9. · this report presents the national...

Documents

s* ****************************** · 2014. 4. 9. · this report presents the national...