[Federal Register Volume 60, Number 158 (Wednesday, August 16, 1995)]
[Notices]
[Pages 42574-42576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20294]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Aid to Families With Dependent Children Program: Demonstration
Projects Under Section 1115(a) of the Social Security Act
AGENCIES: Office of the Secretary; Administration for Children and
Families (ACF), HHS.
ACTION: Public Notice.
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SUMMARY: This public notice invites States to submit demonstration
project applications under section 1115(a) of the Social Security Act
to test welfare reform strategies in various areas. It further advises
that the Department would commit to approving applications that comply
with the demonstration components within 30 days of receipt.
FOR FURTHER INFORMATION CONTACT: Howard Rolston, Administration for
Children and Families, Department of Health and Human Services, 370
L'Enfant Promenade, 7th Floor, West Wing, Washington, DC 20447, (202)
401-9220.
SUPPLEMENTARY INFORMATION:
I. General
Under Section 1115, the Department of Health and Human Services
(HHS) is given latitude, subject to the requirements of the Social
Security Act, to consider and approve demonstration proposals that are
likely to assist in promoting the objectives of titles IV-A and B and
XIX of the Act. The Department believes that State experimentation
provides valuable knowledge that will help lead to improvements in
achieving the purposes of the Act. Since January 1993, HHS has approved
33 welfare reform demonstration projects testing a broad range of
strategies designed to promote the objectives of title IV.
The Department has reviewed the provisions of these projects, as
well as those of prior projects, data from completed and continuing
projects, other literature evaluating the welfare system, and the
welfare reform proposals being considered by Congress. Based on this
review, and our commitment to transform the Aid to Families With
Dependent Children system into one that provides maximum opportunities
and incentives for families to achieve financial independence, we have
identified five strategies for improving the efficacy of the welfare
system in helping recipients become self-sufficient for which we
believe additional experimentation would be especially useful. We have
concluded that demonstrations testing these strategies are likely to
provide important new information on ways to accomplish the objectives
of the Social Security Act more effectively and efficiently. This
information can guide the development of both national and state
policy.
These strategies are: (1) Work requirements, including limited
exemptions from such requirements; (2) time-limited assistance for
those who can work; (3) improving payment of child support by requiring
work for those owing support; (4) requirements for minor mothers to
live at home and stay in school; and (5) public-private partnerships
under which AFDC grants are diverted to private employers to develop
jobs and training programs. These areas, and approvable demonstration
project provisions, are discussed in detail in section II below.
To date, the Department has approved a number of demonstration
projects including components using one or more of these strategies. We
have reviewed comments submitted regarding each of these strategies.
Our overall judgment is that testing additional demonstrations in each
of these areas would likely promote financial security for dependent
children within a stable family and, thus, further the objectives of
the Social Security Act. (Specific rationales justifying demonstrations
in each policy area are set out in section II.) Moreover, in view of
every state's unique circumstances, the Department believes that it is
critically important that each state be given the opportunity to test
combination(s) of these strategies that are designed to address the
needs of the recipients in that state.
Accordingly, we plan to approve within 30 days of receipt
demonstration project applications that States submit which would
implement, on a statewide or substate basis, any (or any combination)
of the provisions discussed in section II. Further, because such
projects may incorporate only the provisions already announced in this
notice, which have been found by the Secretary to further the
objectives of the Social Security Act, the Department will not apply
its ``Federal Notice'' procedures generally applicable to demonstration
projects. 59 Fed. Reg. 49250 (1994). Other policies and procedures
stated in that notice remain applicable, including state public notice
requirements, rigorous evaluation, and cost neutrality, except that the
application and review process with
[[Page 42575]]
respect to the latter two requirements will be modified to facilitate
the faster process.
II. Demonstration Project Areas and Techniques
A. Requiring People on Welfare to Work and Providing Adequate Child
Care to Permit Them To Do It
Since Congress enacted the JOBS program in 1988, a central goal of
the AFDC program has been to move recipients into the labor force,
while ensuring that their children receive necessary child care while
their parents are in activities that promote self-sufficiency. There is
a mounting body of evidence that mandatory activities involving a
connection with the work force can lead to substantial increases in
employment and earnings among welfare recipients. Studies of various
welfare-to-work approaches, conducted over the past decade in different
parts of the country subject to different labor market conditions, have
consistently shown significant gains in earnings. In the most recent
results, from three sites in the Department's JOBS Evaluation, an
approach emphasizing job search, work activity, and short-term
employment-focused training yielded a 23-percent increase in overall
employment and a 22-percent reduction in AFDC expenditures at the two-
year point, and a 39-percent increase in employment with earnings
equivalent to at least $10,000 per year.
Although much is known in general about the effectiveness of such
programs, more study is needed concerning what works and which
approaches are most effective for which individuals. Therefore, we are
inviting demonstrations that test the effects of requiring recipients
to work in subsidized or unsubsidized jobs, to perform community
service, or to engage in rigorous job search and job preparation.
States can narrow the categories of recipients that are exempt from
work requirements. They also can test the effects of progressively
increasing the sanctions for non-compliance, so that work requirements
have more teeth. To protect children, states must ensure that child
care is available for those who are being required to work.
B. Setting Time Limits for Welfare Receipt, to be Followed by Work
Most of the people who enter the welfare system do not stay on AFDC
for many consecutive years. Two out of three persons who enter the
welfare system leave within two years and fewer than one in ten spends
five consecutive years on AFDC. Most recipients use the AFDC program
not as a permanent alternative to work, but as temporary assistance
during times of economic difficulty.
While persons who remain on AFDC for long periods represent only a
modest percentage of all people who ever enter the system, they do
represent a high proportion of those on welfare at any given time.
Finding ways of helping these persons become self-sufficient is
extremely important in promoting their well-being and that of their
children. Although many face serious barriers to employment, others are
able to work but are not moving in the direction of self-sufficiency.
Many analysts believe that time-limited benefits would help to move
employable welfare recipients toward work and away from reliance on
welfare. There is not a large body of research in this area. Several
states have begun demonstrations of various forms of time limits. More
study is needed in order to know the effects of time limits.
For this reason, we are inviting demonstrations that test the
effects of systems of individualized time limits, systems of time
limits followed by work, preferably in the private sector, in
subsidized work or community service if necessary, and systems of
straight time limits, with exemptions from the time limit for those
who, despite good faith efforts, are unable to work or find a job.
Consistent with the objectives of the Act, demonstrations must protect
families where the adult, through no fault of her or his own, is unable
to find employment.
C. Requiring Fathers to Pay Child Support or go to Work to Pay Off What
They Owe
There is substantial evidence that many custodial parents now
receiving AFDC would not need this support if they received child
support from the non-custodial parent. One of the primary reasons for
non-support by some non-custodial parents, especially never-married
fathers, is unemployment and underemployment. Many of these fathers
need both assistance and incentives to obtain employment and pay
support. Without work requirements, job readiness assistance, job
training, and community service, it will be difficult for many of these
fathers to contribute very much to the financial support of their
children.
The available program evaluation research focusing on non-custodial
parents indicates that a number of programs show promise in assisting
these fathers to support their children. The Parents' Fair Share (PFS)
demonstration programs have developed effective procedures to identify
eligible non-custodial parents and have established court-based
processes to require fathers to participate in work-based program
activities and to enforce regular participation. Preliminary data from
PFS shows that the work and training requirements provide states a
promising mechanism to discover previously unreported income of non-
paying, non-custodial parents. Also, in the PFS sites, as well as in
other non-custodial parent demonstration programs, title IV-D agencies
have developed flexible and responsive child support enforcement
systems to complement non-custodial parent work and training
requirements.
Further testing of these requirements will assist us in determining
whether this approach will result in increased child support payments
and will enhance non-custodial parents' overall support of their
children. To build on the knowledge base being developed through PFS
and similar demonstrations, we are inviting demonstrations that require
unemployed or underemployed non-custodial parents who owe child support
to work or participate in work experience, community service, or job
preparation activities.
D. Requiring Minor Mothers to Live at Home and Stay in School
It has become increasingly important to obtain at least a high
school diploma in order to obtain employment and become self-
sufficient. Moreover, a high school diploma may be essential to achieve
a decent standard of living.
A study of teenage childbearing in the 1980's found that in 1986
only 56 percent of women in their twenties who had given birth at age
17 or younger had completed high school, compared with over 90 percent
of those who delayed childbearing until after their teenage years.
Little has changed since then. While we are beginning to obtain more
knowledge of the types of programs that are successful in encouraging
and helping minor mothers finish high school, we need to know
considerably more about what works. Therefore, demonstrations testing
ways of helping minor parents complete schooling are extremely
important.
Congress already has recognized that one means of helping minor
parents complete school and meet the needs of their children is to have
these young parents live with their own families. States now have the
option of requiring minor parents to live at home, provided that this
is a safe environment for them. To facilitate these arrangements, and
to
[[Page 42576]]
ensure that AFDC benefits are spent in a manner that achieves the goals
of the Social Security Act, a number of states are experimenting with
programs that direct the AFDC payment to the responsible adult, rather
than to the minor mother. This strategy recognizes the importance of
promoting general family responsibility.
Another strategy that has had success in Ohio and several other
demonstration sites is setting up incentives and penalties for teen
parents designed to have them stay in school. The recently completed
study of Ohio LEAP found the program to be successful in increasing the
rate at which teens who were already enrolled in school remained
enrolled and in increasing the rate at which those who had already
dropped out of school returned to high school or an equivalent program.
Further testing of this type of strategy should enable us to determine
whether these results can be replicated, and improved upon, in other
settings and through variations in program design.
For these reasons, we are inviting demonstrations that require
minor mothers to live with parents or relatives or in a supervised
living situation, as long as the home is not dangerous to the physical
or emotional health or safety of the minor; that direct the AFDC
payment to the responsible adult, rather than to the minor mother; and
that require minor mothers to stay in school and utilize reasonable
sanctions and incentives tied to school attendance.
E. Paying the Cash Value of Welfare and Food Stamps to Private
Employers as Wage Subsidies When They Hire People Who Leave Welfare and
Go To Work
The effectiveness of subsidized employment in increasing
employment, earnings, and self-sufficiency has been studied over the
last 20 years. A number of rigorously evaluated programs have shown
positive effects on increasing the earnings of welfare recipients who
participated in them. This was also found to be true in the more recent
national evaluation of the Job Training Partnership Act program.
By combining AFDC and Food Stamp benefits, a state could create a
very substantial subsidy that encourages employers to hire AFDC
recipients. This form of wage subsidy has the potential of increasing
the number of recipients who are able to obtain unsubsidized
employment.
Subsidized employment has generally been a very small scale
activity within the JOBS program. Demonstrations using AFDC and Food
Stamp benefits would provide important information on the ability of
this approach, when applied on a larger scale, to increase the
employment, earnings, and self-sufficiency of AFDC recipients. They
also will provide important information regarding the degree to which
employers respond to wage subsidies.
Therefore, we are inviting demonstrations of systems where AFDC and
Food Stamps benefits become wages, paid by employers when recipients
work, as long as the jobs meet minimum standards, and families receive
at least as much total income as they would have from AFDC and Food
Stamps. States can choose to ask employers to pay into an account to
help the recipient make the transition into unsubsidized employment.
Information on Application
The Administration for Children and Families, will be mailing state
welfare departments a ``Welfare Reform Demonstration: Special
Application Form''. This form should facilitate requests for waivers in
the five specified areas. Requests for further information and/or forms
should be addressed to Howard Rolston at the address listed above.
Additionally, by August 21, 1995, states can obtain information on the
waiver process and on electronic filing of waiver applications on the
internet. On the world wide web, the URL (universal resource locator)
is http://www.acf.dhhs.gov. Gopher users can use gopher.acf.dhhs.gov.
(Catalog of Federal Domestic Assistance Program, No. 93562;
Assistance Payments--Research)
Dated: August 11, 1995.
Mary Jo Bane,
Assistant Secretary for Children and Families.
[FR Doc. 95-20294 Filed 8-15-95; 8:45 am]
BILLING CODE 4184-01-P
