HHS News Release

HHS Secretary Donna E. Shalala approved a welfare demonstration today that will operate in the state of Virginia. Under the terms of the demonstration, the state will encourage businesses to hire or train recipients of Aid to Families with Dependent Children (AFDC) for future employment.

"The Virginia demonstration contains a number of positive features which will help AFDC families to learn skills to enter and remain in the workforce," Secretary Shalala said. "In addition, a separate pilot project will test an important new approach to the state's child support enforcement program."

The Virginia demonstration involves four components, two of which would be implemented statewide. In the statewide projects, the state will work with employers throughout Virginia to hire or train AFDC recipients for jobs that pay between $15,000 and $18,000 a year. Welfare recipients who participate in the plan will be paid a training wage equal to their previous month's AFDC benefit. Employers who provide jobs can be reimbursed for 20 percent of the wages paid to AFDC clients during the first year and 10 percent during the subsequent year of employment.

A second statewide project will enable AFDC families to accumulate up to $5,000 in savings which can be used to pay for educational programs or the purchase of a home. Under normal rules, AFDC families can accumulate no more than $1,000 in assets.

In four counties, the state will pilot a project that extends transitional benefits for child care and Medicaid for up to 36 additional months for AFDC recipients who successfully leave welfare for work.

In one location, Virginia will offer a child support "insurance" payment. Under this component, child support payments will be guaranteed to AFDC families who leave welfare because of employment even if the funds have not actually been collected from the non-custodial parent. In these cases, the amount of the payment from the state will be equal to the average child support order issued for AFDC families in Virginia.

Mary Jo Bane, HHS' assistant secretary for children and families, noted that the demonstration "will provide a number of innovative tools to enable families to become self-sufficient and move off welfare. We look forward to working with the state as this demonstration proceeds."

The demonstration will be carefully evaluated and will operate for a period of four years.

HHS also approved a waiver today to allow Illinois 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