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....._--"T..;H;;..;;;.E STATE OF AMERICA'S CHILDREN YEARBOOK 1998 Cutoffs offood stamps and Medicaid continue to accompany the loss ofcash aid in other states as the 1996 federal law is implemented. Why the big drolHlff? In part, families accustomed to getting cash aid, food stamps, and Medicaid as a package may not understand that they are still eligible. For some, going to the welfare office every three months to certify continuing eligibility is a difficult hoop to jump through. Parents who are working may be unable to get to welfare offices open only during regular business hours; others may fmd transportation expensive or unavailable. During the debate surrounding passage ofthe 1996 welfare law, proponents argued that although cash aid would be limited, families would be able to count on food stamps and Medicaid as their safety net. For significant numbers of families, the net is in tatters. Immigrants. The 1996 federal welfare law denied Supplemental Security Income and food stamps to most legal immigrants until they become citizens, and gave states the option of continuing Medicaid and TANF for immigrants here legally at the time the law passed. Immigrants who entered the country later (after August 1996) were barred from receiving TANF or Medicaid for five years. States could opt to provide these benefits after five years, but they were also free to deny them permanently (even to those immigrants who had entered the country before the law was enacted). By calling attention to the plight ofelderly and disabled immigrants who had no hope of making up their lost SSI or food stamp income, advocates succeeded in reversing some of the cuts in 1997. Immigrants in the country legally as of August 1996 can now receive SSI if they were receiving it then or if they subsequently develop a disability. They remain ineligible for food stamps. Advocates pushing for legislation to change this have been encouraged by a partial restoration proposed in the President's FY 1999 budget. All states except Alabama have opted to continue TANF for legal immigrants. Twelve states (California, Florida, Illinois, Massachusetts, Maryland, Minnesota, Nebraska, New Jersey, New York, Rhode Island, Texas, and Washington) are also providing aid in some form to at least some of the legal immigrants denied food stamps under federal law. Children with disabilities. The 1996 federal law made it more difficult for poor children with disabilities to qualify for Supplemental Security Income. About 288,000 case reviews were required to determine whether children receiving SSI under the older standards would still qualify. As states have conducted these reviews under rules established by the Social Security Administration, they have denied assistance to large numbers of children. As of December 1997 about 263,000 cases (more than 90 percent) had been reviewed, resulting in the cutoff of benefits for more than half-about 135,000 children. The denial rate has varied widely among states, with nine states terminating assistance in 70 percent or more of the reviewed cases. New applicants for SSI have even greater problems. Although the eligibility criteria emphasize matching a child's condition to those on an official medical list, the new law expressly allows the Social Security Administration to assess whether the limitations of a child's functioning are equivalent to conditions on the official list. The Clinton Administration was interpreting this provision so restrictively that between August 1996, when the law passed, and October 1997, only 32.2 percent ofthe children applying were approved. This was below the 42.8 approval rate in 1989, when an even more stringent eligibility standard was in effect. One indication of the overzealous restriction ofbenefits is that as of fall 1997, children in the first phase of appealing their denials succeeded 58 percent ofthe time. Prior to the new law, only about 10 percent of denials were reversed in the flfSt stage ofappeal. In a victory for children with disabilities, Social Security Administration Commissioner Kenneth Apfel agreed to review the agency's implementation ofthe new law. He concluded in December 1997 that procedures were flawed, especially in mental retardation cases. The agency announced that it would review all of those denials, plus other cases with a high likelihood of error, including 12 CHILDREN'S DEFENSE FUND

FAMILY INCOME rejections of new applications. About 45,000 cases will be reviewed in all. In addition, families who may have been discouraged from appealing their child's denial will be given an extended period in which to do so. The Social Security Administration anticipates that of the 135,000 children who lost SSI, about 35,000 will have their benefits restored. Inadequate Child Support ensus Bureau data for 1992 show that across Cthe country, 11.5 million parents were raising children with an absent parent. Of those 11.5 million, only 54 percent had child support orders. Moreover, of the 5.3 million parents who had child support awarded and due, only half received the full amount due. About a quarter received partial payment, and a quarter received nothing at all. That's a terrible record for children. And the problem cuts across race and income lines, affecting children in every co=unity. Jointly funded federal-state child support agencies are supposed to help families collect child support-both families on welfare and other families who ask for help. In some states the system works well; in others, poorly. Nationally, though, the record is disheartening; some child support was collected in only 19 percent of all state agency cases in FY 1995 (the last year for which there are nationally reported data). Over five years this collection rate has remained virtually unchanged, although states have improved the rate at which they establish paternity-a vital first step for children born to unmarried parents. Some additional help is on the way. In 1997 state legislatures dealt with child support changes required by the 1996 welfare law. They streamlined the process for establishing paternity and set up registries of newly hired employees to track down missing noncustodial parents and begin wage withholding quickly. They also devised new strategies to help collect support, such as revoking professional or driver's licenses and seizing bank accounts when child support is not paid. These are promising measures, modeled on successes in pioneering states. At the same time, a number of states failed to meet an October I, 1997 deadline to have automated systems up and running. Automation is important because it can help states stretch scarce resources and speed up the child support process. Most of the states that missed the deadline are close, but a few may be years away. Congress will be monitoring this problem carefully in the coming year. It is also expected to take up legislation that would reward states for better child support outcomes. An Effective State Initiative: Making Work Pay in Illinois One painful lesson of the welfare-to-work movement is that even full-time work at or near the minimum wage is not enough to pull families with children out of poverty. If the goal of ending poverty is to be achieved (especially when education and training are restricted), then parents' earnings must be supplemented from other sources. When child support and/or the Earned Income Tax Credit do not provide sufficient help, partial cash assistance benefits can be effective in boosting low wages. Many states are making it easier for families with low earnings to receive small amounts of supplemental cash aid. But a dilemma has arisen in the new world of time limits. Families receiving even small sums use up a month ofassistance, just as do those receiving full benefits. Parents may therefore be inclined not to combine welfare and work, even though the extra income could provide a margin of stabiHty. Illinois has found a creative solution, choosing to use state funds to offer an incentive for longterm employment. If a parent works at least 20 hours per week at pay low enough to qualify for partial assistance, the family's benefits are paid out ofstate dollars, which do not have to count toward the federal time limit. Illinois combines this approach with its Work Pays program, which allows partial benefits until earnings reach the federal poverty line. The Work Pays program, the centerpiece ofthe state's welfare CHILDREN'S DEFENSE FU D 13

FAMILY<br />

INCOME<br />

rejections of new applications. About 45,000 cases<br />

will be reviewed in all. In addition, families who<br />

may have been discouraged from appealing their<br />

<strong>child</strong>'s denial will be given an extended period in<br />

which to do so. The Social Security Administration<br />

anticipates that of the 135,000 <strong>child</strong>ren who lost<br />

SSI, about 35,000 will have their benefits restored.<br />

Inadequate Child Support<br />

ensus Bureau data for 1992 show that across<br />

Cthe country, 11.5 million parents were raising<br />

<strong>child</strong>ren with an absent parent. Of those 11.5<br />

million, only 54 percent had <strong>child</strong> support orders.<br />

Moreover, of the 5.3 million parents who had <strong>child</strong><br />

support awarded and due, only half received the<br />

full amount due. About a quarter received partial<br />

payment, and a quarter received nothing at all.<br />

That's a terrible record for <strong>child</strong>ren. And the<br />

problem cuts across race and income lines, affecting<br />

<strong>child</strong>ren in every co=unity. Jointly funded<br />

federal-state <strong>child</strong> support agencies are supposed<br />

to help families collect <strong>child</strong> support-both families<br />

on welfare and other families who ask for help. In<br />

some states the system works well; in others,<br />

poorly. Nationally, though, the record is disheartening;<br />

some <strong>child</strong> support was collected in only 19<br />

percent of all state agency cases in FY 1995 (the<br />

last year for which there are nationally reported<br />

data). Over five years this collection rate has remained<br />

virtually unchanged, although states have<br />

improved the rate at which they establish paternity-a<br />

vital first step for <strong>child</strong>ren born to unmarried<br />

parents.<br />

Some additional help is on the way. In 1997<br />

state legislatures dealt with <strong>child</strong> support changes<br />

required by the 1996 welfare law. They streamlined<br />

the process for establishing paternity and set up<br />

registries of newly hired employees to track down<br />

missing noncustodial parents and begin wage<br />

withholding quickly. They also devised new strategies<br />

to help collect support, such as revoking professional<br />

or driver's licenses and seizing bank accounts<br />

when <strong>child</strong> support is not paid. These are<br />

promising measures, modeled on successes in<br />

pioneering states.<br />

At the same time, a number of states failed to<br />

meet an October I, 1997 deadline to have automated<br />

systems up and running. Automation is important<br />

because it can help states stretch scarce<br />

resources and speed up the <strong>child</strong> support process.<br />

Most of the states that missed the deadline are<br />

close, but a few may be years away. Congress will<br />

be monitoring this problem <strong>care</strong>fully in the coming<br />

year. It is also expected to take up legislation that<br />

would reward states for better <strong>child</strong> support<br />

outcomes.<br />

An Effective State Initiative:<br />

Making Work Pay in Illinois<br />

One painful lesson of the welfare-to-work movement<br />

is that even full-time work at or near the<br />

minimum wage is not enough to pull families<br />

with <strong>child</strong>ren out of poverty. If the goal of ending<br />

poverty is to be achieved (especially when education<br />

and training are restricted), then parents' earnings<br />

must be supplemented from other sources.<br />

When <strong>child</strong> support and/or the Earned Income Tax<br />

Credit do not provide sufficient help, partial cash<br />

assistance benefits can be effective in boosting low<br />

wages.<br />

Many states are making it easier for families<br />

with low earnings to receive small amounts of supplemental<br />

cash aid. But a dilemma has arisen in the<br />

new world of time limits. Families receiving even<br />

small sums use up a month ofassistance, just as do<br />

those receiving full benefits. Parents may therefore<br />

be inclined not to combine welfare and work, even<br />

though the extra income could provide a margin of<br />

stabiHty.<br />

Illinois has found a creative solution, choosing<br />

to use state funds to offer an incentive for longterm<br />

employment. If a parent works at least 20<br />

hours per week at pay low enough to qualify for<br />

partial assistance, the family's benefits are paid out<br />

ofstate dollars, which do not have to count toward<br />

the federal time limit.<br />

Illinois combines this approach with its Work<br />

Pays program, which allows partial benefits until<br />

earnings reach the federal poverty line. The Work<br />

Pays program, the centerpiece ofthe state's welfare<br />

CHILDREN'S DEFENSE FU D 13

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