The Personal Responsibility and Work Opportunity Reconciliation Act of 1996
On August 22, President Clinton signed into law "The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996," a comprehensive bipartisan welfare reform plan that will
dramatically change the nation's welfare system into one that requires work in exchange for time-
limited assistance. The bill contains strong work requirements, a performance bonus to reward
states for moving welfare recipients into jobs, state maintenance of effort requirements,
comprehensive child support enforcement, and supports for families moving from welfare to work
-- including increased funding for child care and guaranteed medical coverage.
Highlights of "The Personal Responsibility and Work Opportunity Reconciliation Act of
1996" follow.
Making Welfare a Transition to Work
Work requirements.
Under the new law, recipients must work after two years on
assistance, with few exceptions. Twenty-five percent of all families in each state must be
engaged in work activities or have left the rolls in fiscal year (FY) 1997, rising to 50
percent in FY 2002. Single parents must participate for at least 20 hours per week the first
year, increasing to at least 30 hours per week by FY 2000. Two-parent families must work
35 hours per week by July 1, 1997.
Supports for families transitioning into jobs. The new welfare law provides $14 billion in
child care funding -- an increase of $3.5 billion over current law -- to help more mothers
move into jobs. The new law also guarantees that women on welfare continue to receive
health coverage for their families, including at least one year of transitional Medicaid when
they leave welfare for work.
Work Activities. To count toward state work requirements, recipients will be required to
participate in unsubsidized or subsidized employment, on-the-job training, work experience,
community service, 12 months of vocational training, or provide child care services to
individuals who are participating in community service. Up to 6 weeks of job search (no
more than 4 consecutive weeks) would count toward the work requirement. However, no
more than 20 percent of each state's caseload may count toward the work requirement solely
by participating in vocational training or by being a teen parent in secondary school. Single
parents with a child under 6 who cannot find child care cannot be penalized for failure to
meet the work requirements. States can exempt from the work requirement single parents
with children under age one and disregard these individuals in the calculation of
participation rates for up to 12 months.
A five-year time limit. Families who have received assistance for five cumulative years (or
less at state option) will be ineligible for cash aid under the new welfare law. States will be
permitted to exempt up to 20 percent of their caseload from the time limit, and states will
have the option to provide non-cash assistance and vouchers to families that reach the time
limit using Social Services Block Grant or state funds.
Personal employability plans. Under the new plan, states are required to make an initial
assessment of recipients' skills. States can also develop personal responsibility plans for
recipients identifying the education, training, and job placement services needed to move
into the workforce.
State maintenance of effort requirements. The new welfare law requires states to
maintain their own spending on welfare at at least 80 percent of FY 1994 levels. States
must also maintain spending at 100 percent of FY 1994 levels to access a $2 billion
contingency fund designed to assist states affected by high population growth or economic
downturn. In addition, states must maintain 100 percent of FY 1994 or FY 1995 spending
on child care (whichever is greater) to access additional child care funds beyond their initial
allotment.
Job subsidies. The law also allows states to create jobs by taking money now used for
welfare checks and using it to create community service jobs or to provide income subsidies
or hiring incentives for potential employers.
Performance bonus to reward work. $1 billion will be available through FY 2003 for
performance bonuses to reward states for moving welfare recipients into jobs. The
Secretary of HHS, in consultation with the National Governors' Association (NGA) and
American Public Welfare Association (APWA), will develop criteria for measuring state
performance.
State flexibility. Under the new law, states which receive approval for welfare reform
waivers before July 1, 1997 have the option to operate their cash assistance program under
some or all of these waivers. For states electing this option, some provisions of the new
law which are inconsistent with the waivers would not take effect until the expiration of the
applicable waivers in the geographical areas covered by the waivers.
Promoting Responsibility
COMPREHENSIVE CHILD SUPPORT ENFORCEMENT
The new law includes the child support enforcement
measures President Clinton proposed in 1994 -- the most sweeping crackdown on non-paying
parents in history. These measures could increase child support collections by $24 billion and
reduce federal welfare costs by $4 billion over 10 years. Under the new law, each state must
operate a child support enforcement program meeting federal requirements in order to be eligible
for Temporary Assistance to Needy Families (TANF) block grants. Provisions include:
National new hire reporting system. The law establishes a Federal Case Registry and
National Directory of New Hires to track delinquent parents across state lines. It also
requires that employers report all new hires to state agencies for transmittal of new hire
information to the National Directory of New Hires. This builds on President Clinton's
June 1996 executive action to track delinquent parents across state lines. The law also
expands and streamlines procedures for direct withholding of child support from wages.
Streamlined paternity establishment. The new law streamlines the legal process for
paternity establishment, making it easier and faster to establish paternities. It also expands
the voluntary in-hospital paternity establishment program, started by the Clinton
Administration in 1993, and requires a state form for voluntary paternity acknowledgement.
In addition, the law mandates that states publicize the availability and encourage the use of
voluntary paternity establishment processes. Individuals who fail to cooperate with paternity
establishment will have their monthly cash assistance reduced by at least 25 percent.
Uniform interstate child support laws. The new law provides for uniform rules,
procedures, and forms for interstate cases.
Computerized state-wide collections. The new law requires states to establish central
registries of child support orders and centralized collection and disbursement units. It also
requires expedited state procedures for child support enforcement.
Tough new penalties. Under the new law, states can implement tough child support
enforcement techniques. The new law will expand wage garnishment, allow states to seize
assets, allows states to require community service in some cases, and enable states to revoke
drivers and professional licenses for parents who owe delinquent child support.
"Families First." Under a new "Family First" policy, families no longer receiving
assistance will have priority in the distribution of child support arrears. This new policy
will bring families who have left welfare for work about $1 billion in support over the first
six years.
Access and visitation programs. In an effort to increase noncustodial parents' involvement
in their children's lives, the new law includes grants to help states establish programs that
support and facilitate noncustodial parents' visitation with and access to their children.
TEEN PARENT PROVISIONS
Live at home and stay in school requirements. Under the new law, unmarried minor
parents will be required to live with a responsible adult or in an adult-supervised setting and
participate in educational and training activities in order to receive assistance. States will be
responsible for locating or assisting in locating adult-supervised settings for teens.
Teen Pregnancy Prevention. Starting in FY 1998, $50 million a year in mandatory funds
would be added to the appropriations of the Maternal and Child Health (MCH) Block Grant
for abstinence education. In addition, the Secretary of HHS will establish and implement a
strategy to (1) prevent non-marital teen births, and (2) assure that at least 25 percent of
communities have teen pregnancy prevention programs. No later than January 1, 1997, the
Attorney General will establish a program that studies the linkage between statutory rape and
teen pregnancy, and that educates law enforcement officials on the prevention and
prosecution of statutory rape.
Improvements Over the Vetoed Bill
President Clinton vetoed the previous welfare reform bill (H.R. 4) submitted by Congress because
it did too little to move people into jobs and failed to provide the supports -- like child care and
health care -- that families need to move from welfare to work. "The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996" includes several improvements over the vetoed bill,
including:
Guaranteed medical coverage. The new law preserves the national guarantee of health
care for poor children, the disabled, pregnant women, the elderly, and people on welfare.
H.R. 4 would have ended the guarantee of Medicaid coverage for cash assistance recipients.
Increased child care funding and mandatory child care maintenance of effort. The new
law provides $14 billion in child care funding -- an increase of $3.5 billion over 6 years --
allowing more mothers to leave welfare for work. States will receive an initial allotment
each year from a fund of approximately $1.2 billion. To access additional funds, states
must maintain their own spending at 100 percent of their FY 1994 or 1995 spending on
child care (whichever is higher). By contrast, H.R. 4 increased child care funding by just
$300 million over current law, and did not require states to meet child care maintenance of
+ effort requirements to access additional federal child care funding, allowing states to lower
their own spending.
Incentives for states to move people into jobs. The new law includes a $1 billion
performance bonus to reward states that meet performance targets. H.R. 4 did not contain a
cash performance bonus.
Preservation of nutrition programs. H.R. 4 would have given states the option of block
granting food stamp benefits. The bill would have also capped federal food stamp program
expenditures, limiting maximum benefit increases to 2 percent per year, regardless of
growth in need for assistance. The new law maintains the national nutritional safety net by
eliminating the block grant option as well as the food stamp cap.
Current law child protection and adoption. Unlike H.R. 4, the new plan maintains
current law on child protection and adoption, and does not reduce funds for child welfare,
child abuse, foster care and adoption services.
Improved contingency fund. The new law includes a $2 billion contingency fund to
protect states in times of population growth or economic downturn. H.R. 4 included a $1
billion contingency fund.
Current law child care health and safety standards. The new law protects children by
maintaining health and safety standards for day care. H.R. 4 would have eliminated health
and safety protections.
Protection of disabled children. H.R. 4 would have cut SSI by 25 percent for many
disabled children. The new law eliminates this proposed two-tier system.
Optional family cap. Under the new law, states have the option to implement a family
cap. H.R. 4 required states to deny cash benefits to children born to welfare recipients
unless the state legislature explicitly voted to provide benefits.
Necessary Improvements
President Clinton has stated that the new law requires several improvements. Specifically, he has
pledged to fix two provisions of the welfare bill which he believes have nothing to do with welfare
reform.
Food Stamps. According to President Clinton, the new law cuts deeper than it should in
Food Stamps, mostly for working families who have high shelter costs.
Legal Immigrants. The law includes provisions that would deny most forms of public
assistance to most legal immigrants for five years or until they attain citizenship. The
President has said that legal immigrants who fall on hard times through no fault of their own
and need help should get it, although their sponsors should take additional responsibility for
them.
Building on the President's Work to End Welfare as We Know It
Even before Congress passed welfare reform legislation acceptable to President Clinton, states were
acting to try new approaches. With encouragement, support, and cooperation from the Clinton
Administration, 43 states have moved forward with 78 welfare reform experiments. (See factsheet: State Welfare Demonstrations.) The Clinton
Administration has also required teen mothers to stay in school, required federal employees to pay
their child support, and cracked down on people who owe child support and cross state lines. As a
result of these efforts and President Clinton's efforts to strengthen the economy, child support
collections have increased by 40 percent to $11 billion in FY 1995, and there are 1.6 million fewer
people on welfare today than when President Clinton took office. "The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996" will build on these efforts by allowing states
flexibility to reform their welfare systems and to build on demonstrations initiated under the Clinton
Administration.