California Welfare Demonstration
HHS Secretary Donna E. Shalala today approved a welfare demonstration in the state of California which is designed to promote self-sufficiency for recipients of Aid to Families with Dependent Children.
"Providing states with flexibility remains an important part of our broad efforts to encourage creativity in the administration of welfare programs. A key aspect of the California demonstration is to encourage young AFDC recipients to stay in school or work. We will continue to work with California and other states to test ways that recipients can achieve self-sufficiency," Secretary Shalala said.
Major elements of the "Work Pays Demonstration" include:
*Teen-age AFDC parents who maintain at least a "C" grade point average or ultimately graduate from high school will be eligible to receive cash bonuses of $100 and $500, respectively. Conversely, parents who fail to maintain a "D" grade point average could have their monthly AFDC payment reduced by up to $50 for each of two months.
*AFDC families will be allowed to accumulate $2,000 in assets and have $4,500 equity in an automobile. The current asset and vehicle equity limits are $1,000 and $1,500. Additionally, AFDC recipients may deposit up to $5,000 in savings so long as the funds are used to purchase a home, start a business or finance a child's post-secondary education or training.
*Recipients who work but have relatively low AFDC benefits can opt out of the program and still remain eligible for health care under the Medi-Cal program as well as other services -such as child care-which are available to regular AFDC clients.
*Certain AFDC parents with children under the age of three can be required to participate in the Job Opportunities and Basic Skills Training (JOBS) program.
Mary Jo Bane, HHS' assistant secretary for children and families, said the demonstration "contains several innovative policies that are designed to help facilitate the participation of young AFDC parents in the labor force. I look forward to reviewing the results of the demonstration."
The California demonstration will operate for five years. It will include a rigorous evaluation utilizing random assignment to control and experimental groups.
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.
Contact: David Siegel (202) 401-9215
