Personal Responsibility and Work Opportunity Reconciliation Act of 1996

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Personal Responsibility and Work Opportunity Reconciliation Act of 1996

An HHS Fact Sheet

Pamphlet

By: United States Department of Health and Human Services, Administration for Children and Families

Date: August 22, 1996

Source: United States Department of Health and Human Services, Administration for Children and Families. "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996: An HHS Fact Sheet." August 22, 1996. <http://www.acf.dhhs.gov/programs/ofa/prwora96.htm> (accessed June 18, 2006).

About the Author: The Administration for Children and Families is a section of the United States Department of Health and Human Services. Its overall mission is to oversee the safety and welfare of children and their families. Through a variety of federal programs, it aids in assuring that family groups are able to achieve economic independence. It is also engaged in facilitating the growth and empowerment of healthy and productive communities.

INTRODUCTION

President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act, also called the PRWORA, or P.L. 104–193, on August 22, 1996. It was designed as a sweeping reform of current welfare policies, with the goal of creating a social service and financial assistance program that was time-limited and required that participants engage in work-related activities, to include education, training, or actual employment. As is typical of federal programs, it was administered on a state and local level, and the individual states were provided incentives for successfully moving welfare recipients off of the rolls and into successful employment. It also required that the states create systems for maintenance of due diligence regarding decreasing the rolls and managing employment and training opportunities, ascertaining that child-support payment systems were overseen and enforced in order to avoid undue hardship for single-parent (typically single-mother) families. The bill also added some additional support mechanisms for single parents and for mothers returning to the work-force: funding assistance of various types for affordable, quality childcare during the workday, and guaranteed federally funded medical coverage (an enormous expense, particularly for low wage earners or part-time employees).

The PRWORA was considered by many to be controversial because of the time-limited nature of the benefits, as well as the requirement that recipients either work or engage in the transition to a gainful employment process. The bill, like its unsuccessful predecessors (unsuccessfully legislated, but successfully defeated), was strongly opposed by civil rights, women's rights, community activist, and religious groups, as well as other human rights advocacy groups. The core of this opposition believed that the changes to the previous program, called Aid to Families with Dependent Children, or AFDC, were so stringent as to minimize positive outcomes for those most in need of the economic and social supports, as well as the life transition safety net, provided by the welfare system as it was then designed.

Among the incentives for the program offered by the Clinton administration were the promise of up to one million newly created jobs by the start of the twenty-first century, financial incentives and tax credits for companies that actively engaged in the process of hiring former welfare recipients, and a program for using monies saved by decreased social-service programming to fund new job opportunities.

PRIMARY SOURCE

THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

MAKING WELFARE A TRANSITION TO WORK

An HHS Fact Sheet

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.

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.

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.

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:

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.

NECESSARY IMPROVEMENTS

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. 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.

SIGNIFICANCE

One of the cornerstones of the PRWORA is the movement of welfare funding from the federal government to each of the states by means of federal block funding. Because the states had control of the funding, they were then free to structure the programs in the ways that were most efficacious for their demographics and socioeconomics.

One of the central tenets of the welfare reform program was a requirement that the head of every family in the system be gainfully employed within two years. There was also a two-year cap on individual benefits for any particular time period, as well as a five-year lifetime maximum for receipt of welfare assistance. Many states structured their protocols so as to require that all eligible heads of households must be engaged in the employment process within sixty days of commencing benefits, or they would be assigned to perform some type of employment-related community service. However, this was entirely optional and not a mandatory part of the benefit requirements. The individual states were given caps on their maximum welfare benefit funding; generally expenditures had to be kept at not more than seventy-five percent of that spent in 1994 (at the time the bill was legislated in 1996). States that failed to remain within their allotted budgets or meet their employment quotas would be penalized by having their block grant funding cut by five percent in the first year—with the cuts steadily increasing during each year of noncompliance, up to a maximum of twenty-one percent during the ninth year after the legislation was enacted. In contrast, states that met their employment and welfare roll-off rates were eligible to receive financial incentives.

It was anticipated that the welfare-to-work programs could trigger fairly significant increases in the populations labeled the working poor, as many people transitioning from welfare to work were likely to be earning very low wages. Based on the demographics of welfare applicants and recipients, many are very young, most are poorly educated, and many have one or more infants or very young children for whom they are the primary caregivers. There were a disproportionately large number of single mothers and unmarried teenaged parents applying for or receiving social services relative to the percentages found in the general population. In an effort to minimize some of the challenges attendant with a programmatic change of such magnitude, several safety nets were put into place. Food stamp programs were anticipated to be more widely used by the working poor, many states were given special set-aside funds in order to meet unexpected service or funding gaps, and provisions were created in which approximately one-fifth of the families on welfare would be exempted from the five-year cap, as it would constitute an untenable hardship for them. Single custodial parents, or mothers with children who were below school age would only be required to work half time. Special provisions were made for those who could either find no available childcare or could not find affordable, safe, high-quality childcare providers. Depending upon the state in which they resided, single mothers with infants or with babies who were less than twelve months old could be exempted from the requirement to secure gainful employment for a period of up to twelve months. Finally, special set-aside block grant funds could be utilized by individual states in order to provide various choices for funding or programs used on an emergent basis for families or individuals who have reached the maximum time limits for welfare, and are being rolled off of the programs without having first established viable safety nets (employment, food stamps, and the like) for themselves. Medicaid funding was not cut commensurate with the welfare changes, enabling many of those living at or below poverty to retain health care and prescription benefits. Although the purported intent of the program changes was to increase the size of the available workforce and to decrease the number of individuals and families dependent upon public service programs in order to subsist, there was enormous concern expressed by social service agencies that the programs would have an effect opposite of that which was intended. It was the contention of those groups that the most effective means of increasing financial independence among welfare recipients was to provide incentives for their move into the workforce by providing support for extended education, vocational and technical training, and encouraging them to make individual choices about when the time is most right for them to make major life changes. By allowing people to make major lifestyle changes based on their own needs and decision processes, it was anticipated that they would be far more likely to achieve long-term success: to garner employment that would permit them to earn a living wage (one in which they could safely support self and family), to be able to provide for ancillary services such as childcare, to be able to feed their families in a healthy and adequate way, either with or without the supplemental support provided by food stamps and similar nutrition programs, and to ensure adequate health, dental, and medical care and coverage for the family. Forcing people to leave welfare supports after two or fewer years with no real personal choice often does not allow sufficient time to acquire the skills or training needed to rise permanently out of poverty.

FURTHER RESOURCES

Books

Gooden, Susan. Washington Works: Sustaining a Vision of Welfare Reform Based on Personal Change, Work Preparation, and Employer Involvement. New York: Manpower Demonstration Research Corporation, 1998.

Greenberg, Mark. Welfare-to-Work Grants and Other TANF-Related Provisions in the Balanced Budget Act of 1997. Washington, D.C.: Center for Law and Social Policy, 1997.

Greenberg, Mark, and Steve Savner. A Brief Summary of Key Provisions of the Temporary Assistance for Needy Families Block Grant of H.R. 3734. Washington, D.C.: Center for Law and Social Policy, 1996.

Pavetti, LaDonna. How Much More Can They Work? Setting Realistic Expectations for Welfare Mothers. Washington, D.C.: The Urban Institute, 1997.

Pavetti, LaDonna, and Gregory Acs. Moving Up, Moving Out, or Going Nowhere? A Study of the Employment Patterns of Young Women and the Implications for Welfare Mothers. Washington, D.C.: The Urban Institute, 1997.

The Transition from Welfare to Work: Processes, Challenges, and Outcomes, edited by Sharon Telleen and Judith V. Sayad. New York: The Haworth Press, 2002.

Welfare Reform, 1996–2000: Is There a Safety Net?, edited by John E. Hansan and Robert Morris. Westport, Conn.: Auburn House, 1999.