Background

The Welfare-to-Work program, enacted as part of the Balanced Budget Act of 1997, has provided states and local governments funds from the U.S. Department of Labor (DOL) in move the hardest to employ welfare recipients and noncustodial parents of children on welfare to self-sufficiency. Almost $2 billion has been allotted by formula to the states in FY 1998 and 1999 and DOL has awarded 190 competitive grants to local communities totaling more than $690 million. Because of the restrictive eligibility in the current program, a significant portion of the welfare population, many of whom reside in our nation's cities, are excluded from participation in this program. A recently released Urban Institute study of the existing program found that eligibility requirements were a primary barrier to enrollment. This led to the bipartisan effort to enact eligibility changes. The changes are summarized below.

Welfare-to-Work Amendments of 1999

Title VIII of H.R. 3224, the Departments of Labor, Health, and Human Services, and Education, and Related Agencies Appropriations Act, 2000, contains the "Welfare to Work and Child Support Amendments of 1999."

New Eligibility Requirements. Under current law, at least 70 percent of grant funds must be expended to provide services to long-term TANF recipients who meet two of three specified barriers to employment and to noncustodial parents who meet two of the three specified barriers and whose children are long-term TANF recipients. The amendments remove the requirement that the long-term TANF recipients must meet additional barriers to employment. Therefore, TANF recipients are eligible if they have received assistance for at least 30 months, or if they are within 12 months of becoming ineligible for TANF due to time limits.

In addition, under the amendments, noncustodial parents are eligible if: (1) they are unemployed, underemployed, or having difficulty making child support payments; (2) their minor children are eligible for, or receiving TANF benefits (with a priority for parents with children who are long-term recipients), received TANF benefits during the preceding year, or are eligible for, or receiving assistance under the Food Stamps program, the Supplemental Security Income program, Medicaid, or the Children's Health Insurance Program; and (3) they enter into a personal responsibility contract under which they commit to establishing paternity, pay child support, and participate in services to increase their employment and earnings, and to support their children. The amendments also require grantees to consult with domestic violence organizations in developing these projects.

Under current law, projects may also spend up to 30 percent of grant funds on TANF recipients and noncustodial parents who have characteristics associated with long-term dependency. The amendments delete the noncustodial parents from this category, and add to the 30 percent category youth who have aged out of foster care, custodial parents with incomes below the poverty level, and TANF recipients who face barriers to self-sufficiency under criteria established by the local workforce investment board.

Pre-Employment Vocational Education and Job Training. The amendments add as an allowable activity under WTW, pre-employment vocational education and job training, which may be provided to a participant for up to 6 months.

Effective Dates. Competitive grantees may begin serving the newly eligible individuals and providing job training as early as January 1,2000. Formula grantees may begin serving the newly eligible individuals, and providing job training, as of July 1, 2000, except that federal formula funds may not be expended for these purposes until October 1, 2000. Thus, during the July - September 2000 quarter, states may use state matching funds for these purposes, or may incur obligations for payments, provided that federal formula funds are not used to pay such obligations before October 1.

Other Changes to the Program. The amendments also: allow competitive grantees who are not Private Industry Councils or Workforce Investment Boards to directly provide job readiness, job placement and post-employment services (under current law such services could only be provided through a contract or voucher); repeal the current participant and financial reporting requirements and authorize the Secretary of Labor, in consultation with the Secretary of HHS and States and localities, to establish streamlined and simplified reporting requirements; and permit state child support enforcement agencies to share certain information relating to noncustodial parents with Workforce Investment Board to assist in carrying out WTW projects. These amendments take effect upon the bill's enactment. The amendments require the Department to issue regulations by January 1, 2000 implementing the eligibility changes, and to issue final regulations 90 days after enactment for all changes.

For further information, contact Joan Crigger of the Conference staff at 202/861-6726.