HHS News Release

HHS Secretary Donna E. Shalala today approved a welfare reform demonstration in Illinois which seeks to encourage adults receiving welfare to become employed or increase their existing earnings while receiving benefits under the Aid to Families with Dependent Children (AFDC) program.

The demonstration is intended to "encourage welfare families to work by letting them keep more income than is generally allowed under existing AFDC rules and regulations," Secretary Shalala said. "This represents a key goal, shared by the Clinton administration, to make work pay for low-income families. We are committed to working closely with the state to make this effort a success."

The demonstration will enable the state to continuously disregard two-thirds of the income earned by a working AFDC recipient when monthly AFDC benefits are calculated. The current rules disregard $30 and one-third of such income for a maximum period of four months and $30 for eight additional months. Support services such as child care and transportation will be included in the demonstration to facilitate a recipient's work effort.

Mary Jo Bane, HHS' assistant secretary for children and families, said, "The effect of this demonstration will be to let working AFDC families keep more of their earned income, increasing the benefits of work. I look forward to reviewing the results of the Illinois demonstration in the days ahead."

The Illinois demonstration will operate for a period of four years and will include a rigorous evaluation utilizing random assignment to control and experimental groups.

HHS also approved a waiver today to allow Virginia to conduct an AFDC demonstration. Since Jan. 20, the department has approved seven AFDC and Medicaid waivers, including approvals for Wisconsin, Georgia, Wyoming, Iowa and Vermont.

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