HOUSE BILL REPORT
HB 448
BYRepresentatives Brekke, Winsley, Braddock, Dellwo, H. Sommers, P. King, Wang, Holm, B. Williams, Haugen, Fuhrman, Heavey, L. Smith, Miller and Barnes; by request of Governor Gardner
Establishing the family independence program.
House Committe on Human Services
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. (9)
Signed by Representatives Brekke, Chair; Scott, Vice Chair; Leonard, Moyer, Padden, H. Sommers, Sutherland, Wang and Winsley.
House Staff:Jean Wessman (786-7132)
Rereferred House Committee on Ways & Means
Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass. (21)
Signed by Representatives Grimm, Chair; Bristow, Vice Chair; Appelwick, Basich, Braddock, Ebersole, Fuhrman, Grant, Hine, Holland, Madsen, McLean, McMullen, Peery, Rust, Sayan, L. Smith, H. Sommers, Sprenkle, B. Williams and Winsley.
Minority Report: Do not pass. (5)
Signed by Representatives Allen, Belcher, Brekke, Locke and Nealey.
House Staff: Sandi Gray (786-7154)
AS REPORTED BY COMMITTEE ON WAYS & MEANS MARCH 5, 1987
BACKGROUND:
The Aid to Families with Dependent Children Program (AFDC) was created by the Social Security Act of 1935 partly as a response to the continuing levels of nationwide poverty created by the Depression, but also because the federal government had decided that there should be an ongoing source of support for those who were unable to support themselves.
During the 1950's, AFDC caseloads began to rise dramatically and the federal government began to take an interest in changing the focus of who should receive assistance and who should be required to work. The Aid to Families with Dependent Children Program was beginning to be seen as a policy that had not helped to alleviate poverty and perhaps was contributing to increased dependency.
By the early 1980's the federal government, while not successful in passing national legislation requiring work in exchange for benefits, had passed legislation allowing the states to develop their own work and training programs.
Interest remains high among most of the states and at the national level to develop programs that successfully encourage AFDC recipients to seek self-sufficiency and economic independence. Consensus has yet to be reached on the best approach to be taken or on how success should be defined or measured.
The Reagan administration has been soliciting proposals from a number of states for five year demonstration projects which will encourage welfare recipients to become self-sufficient. The Office of the Governor, Department of Social and Health Services and Employment Security Department have proposed the Family Independence Program to meet that goal.
SUMMARY:
SECOND SUBSTITUTE BILL: The Family Independence Program (FIP) is intended to aid in breaking the "cycle of poverty" and provide needy families with opportunities for economic independence. A five-year demonstration project is established within the framework of Title IV-A of the Social Security Act as an alternative to the current Aid to Families with Dependent Children (AFDC), Food Stamps and Medicaid programs.
Objectives of the program are: 1) a reduction in number of children in poverty; 2) the opportunity for enrollees to enter the economic mainstream; 3) the provision of a basic level of financial and medical assistance for those unable to participate; and 4) the provision of financial incentives for participants in education, training and work programs.
An executive committee is established consisting of five members, the secretary of the Department of Social and Health Services (DSHS), the commissioner of the Employment Security Department (ESD), the senior official from each of those agencies responsible for the program and an official from the Office of Financial Management (OFM). An advisory committee of from ten to twenty members is established for the executive committee. The executive committee is responsible for directing DSHS and ESD to do the following: 1) promulgate rules and procedures; 2) determine eligibility and sanction criteria; 3) manage the program within legislative funding levels; 4) carry out job development and employment subsidization activities; 5) establish due process procedures; 6) determine social service, child care and health benefit provisions; 7) determine administrative methods; 8) determine implementation of the program; and 9) establish job creation conditions, terms and contracts.
Training and education activities will be available, within funding limitations, for basic remedial education, vocational or skills training and higher education. Receipt of a financial incentive for education and training will be determined by the Department of Social and Health Services and Employment Security Department.
Due process rights are to be no less than that presently conferred upon recipients in AFDC, Food Stamps and the WIN Program and shall include written notice guidelines on changes in benefits, fair hearing rights, and timely processing of applications and assistance.
When a family ceases to be eligible for FIP cash benefits due to income exceeding the maximum level, child care and medical benefits shall continue to be provided for one year. Copayments, not to exceed twenty-five percent of the cost of the benefit or twenty-five percent of the amount the family's income exceeds the maximum, which ever is less, may be required.
Fair labor guarantees and practices are included in the Family Independence Program to preclude displacement of current workers, provide employee protection and benefits, protect the rights of current workers, and compliance with personnel procedures and collective bargaining agreements. Compensation for enrollees placed in employment is guaranteed at the highest of the following, minimum wage, prevailing rate of pay, minimum entrance rate, or prevailing rate for similar positions with the same employer.
Cash assistance levels are pegged to a bench mark standard established by the legislature. The bench mark standard is equal to the AFDC payment for that size family plus the cash equivalent of Food Stamps for which a family of that size would be eligible. Those enrollees in training or education would receive 105 percent of the bench mark standard. Those enrollees working half-time would receive 115 percent. Enrollees working full-time would receive 135 percent. Those enrollees who are exempt from participation in work or training due to good cause shall receive 100 percent of the bench mark standard. Those persons who fail to cooperate with mandatory requirements without good cause, shall be sanctioned and their needs deleted from the Family Independence Program benefit payment. Protective payees may be established by the Department of Social and Health Services. The executive committee may increase or decrease the incentive payments but in no case lower than 100 percent of the bench mark.
The client's right to receive no less under the Family Independence Program than under the Aid to Families with Dependent Children and Food Stamp Program in effect January 1, 1988 is protected. The treatment of certain types of income is enumerated similarly to current AFDC regulations.
Enrollees in the Family Independence Program are required to register for work, training or education activities unless they are exempt. Persons are exempt as follows:
1) One parent with a child under six months of age;
2) Persons under sixteen or, over sixty-four;
3) Persons over sixteen who are in high school;
4) Persons who are incapacitated, temporarily ill or are needed at home to care for an impaired person;
5) Persons in the third trimester of pregnancy.
Required registrants shall be assessed and a jointly developed employability plan written subject to the approval of the Department of Social and Health Services. Appropriate child care and other supportive services shall be available. Good cause criteria for failure to participate is enumerated.
SUBSTITUTE BILL COMPARED TO ORIGINAL: The intent section has been amended to shorten and clarify the legislature's intentions. The state establishes as policy the goal that economic independence for employable adult public assistance recipients be assisted through employment, training and education. Poverty limits a family's opportunities and the current program often does not assist in improving these families' situations. The Family Independence Program is established to assist these families. Federal protections and partnerships as an entitlement program are to be maintained and the statement is included that FIP is not to be a block grant approach to welfare. The difficulties of participation in the work force of mothers with preschool children and those who have been absent from the labor force for long periods of time, is recognized. The specific objectives of the program are shortened to exclude the staff role, parenting function and administrative procedure reference.
The definition of bench mark standard is amended to clarify that the amount of Food Stamps shall be the full cash equivalent per family size.
The preamble in the eligibility for benefits section is amended to state that all public assistance applicants shall be enrolled in FIP upon implementation. Subsection (c) limits FIP eligibility to those new applicants who would have been eligible for AFDC under the payment level in effect at the time of application. A new applicant is defined as someone who has not received AFDC or FIP for ninety days prior to application.
Establishes the Executive Committee and its procedures and is amended to include the open meetings requirement.
The powers and duties of the executive committee are amended to exclude from registration and assessment activities, those persons exempt from participation, such as a parent with a child under six months of age, or a person under sixteen years of age. The mandatory trigger mechanism is deleted. Participation shall be mandatory unless the executive committee determines that a voluntary approach is effective. The executive committee's evaluation shall include the availability of training and job resources in relation to the number of participating enrollees. Suspension of mandatory participation may occur but specific groups of enrollees may be excluded from that suspension. The exemption from participation requirement is expanded to include the person who has not been notified in writing of his/her requirements to participate.
Rule-making authority is given to the executive committee.
The training and education section is amended to include vocational or skill training including programs at a vocational training institute or community college. An expanded assessment section is added for determining appropriate training and education for an enrollee. A section is added regarding payment of support services for enrollees in education and training and requiring the continuance of funding subject, to annual review, for the duration of the participation in those activities. The Department of Social and Health Services is required to provide the maximum feasible training opportunities to enrollees.
Due process procedures are amended to include the provision of advance, as well as, adequate notice to an enrollee when changing their benefit amount. Assistance received pending a hearing is not automatically an overpayment if the decision is against the enrollee. The timeliness of all benefits including Food Stamps is required.
The copayment requirement for noncash benefits after exceeding the maximum income level is clarified to be the lesser of twenty-five percent of the cost or twenty-five percent of the amount by which a family's income exceeds the maximum.
The section on employment positions and displacement is amended to specifically include both subsidized and unsubsidized positions in all references to employment positions. Coverage of enrollees by Unemployment Compensation is clarified and strengthened. Displacement is broadened to include authorized positions in addition to currently employed workers. The affected union shall concur before filling a subsidized job.
The report section is amended to request inclusion of creative solutions to child care arrangements in the child care plan. An additional plan is added requiring the executive committee to work with the Superintendent of Public Instruction to assist teen parents or, pregnant teens to stay in school The annual report by the executive committee is directed to the appropriate committees instead of the legislature as a whole.
The incentive benefit section is amended to modify the ability to change the original levels at which the incentives are set. The levels are expanded to include a floor of not less than eighty percent of the standard of need for training or education, ninety percent for part-time employment and one-hundred percent for full-time employment. The sanction section for failure to cooperate is revised to allow medical benefits for sanctioned individuals, to reduce FIP benefits by the amount of the needs of the sanctioned individual, to allow the sanctioned individual to remain the payee if no other can be found and to allow for reinstatement when he or she again participates.
The current program benefits section is amended to require that all FIP enrollees and AFDC recipients first get one-hundred percent of the bench mark from federal funds before incentive payments and additional services are provided.
The implementation section is amended to require implementation only by specific authorization of the legislature after ratification of the plan outlining the federal/state agreements which must be submitted no later than February 7, 1988. Language clarifications are made from "contract" to "agreement" for internal consistency. The ability to adopt by rule federal changes after implementation is deleted. If the federal/state agreements are not completed by February 1, 1988, an implementation plan shall be submitted to the legislature for authorization of continued interdepartmental agreements for implementation processes. The language on conversion back to AFDC, Medicaid Programs, and Food Stamps, if the FIP agreements are cancelled, is simplified. The expiration date of the act is June 3, 1988, with the amendment that it may be extended by law.
SECOND SUBSTITUTE BILL COMPARED TO SUBSTITUTE: The limits for modification of incentive benefit levels are removed. The executive committee may raise or lower these levels based on availability of funds. Child care provided under this program must be consistent with statutory licensure requirements and care by family members must be an option considered in the child care plan. Quarterly reports covering expenditures and caseloads are required.
CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS: Second substitute proposed.
Fiscal Note: Attached.
House Committee ‑ Testified For: (Human Services) Mr. Jule Sugarman, Secretary, Department of Social and Health Services, Mr. Isiah Turner, Commissioner, Employment Security Department, Mr. Ernest LaPalm, Deputy Commissioner, Employment Security Department; Barbara Flaherty, Assistant Commissioner, Employment Security Department; Mr. Gerald Reilly, Assistant Secretary, Economic and Medical Services Administration, Department of Social and Health Services; Nona Johnson, Independent Business Owner; Audrey Gruger, Seattle; Tom Dixon, Tacoma Urban League; Joanne Asaba, Family and Youth Services, City of Seattle; Kathleen Clark, Washington State Dietetic Association; Linda Evans, Pierce County Coalition; Cecilia Funkhouser, Washington Women's Employment and Education of Tacoma/Pierce County, Inc.; and Nona M. Brazier, Northwest Recovery Systems, Inc.
(Ways & Means) Jule Sugarman, Secretary, Department of Social and Health Services; Isiah Turner, Commissioner, Employment Security Department.
House Committee - Testified Against: (Human Services) Ann Rogers and Linda Averill, Seattle Radical Women; Jan Thorsteinson, Citizen; Margie Reeves, Washington Association for the Education of Young Children; Pat Thibaudeau, Washington Women United; Karen Patjens, Olympia Child Care Center; Candy Patayar, Snohomish County Welfare Rights; Kathleen Karimi, Mary deRosas, Deborah Williams, Barbara Green, Holly Nordahl, Welfare Rights Organizing Coalition; Betty Leonard and Thom O'Connor, Neighborhood House; Karne Fleming, Cathy Campbell and Judy Graham, Tacoma Head Start; Steve Bauck, Ecumenical Metropolitan Ministry; Nancy Niccum, AFDC Recipient; Jan Secor, Pierce County Coalition for Welfare Reform; Lonnie Johns-Brown, Washington State Chapter of the National Organization for Women; Carol Steckler, Fair Budget Action; Liz Schott, Evergreen Legal Services; and Ivy Alston, Central Area Human and Welfare Rights Organizing Committee.
(Ways & Means) Sean Black, Evergreen Legal Services; Carol Steckler, Fiar Budget Acation Campaign; Pat Thibaudeau, Washington Women United.
House Committee - Testimony For: (Human Services) The current federal programs such as Aid to Families with Dependent Children (AFDC), Medicaid and Food Stamps do not assist in helping families become economically independent and may increase dependency. The Family Independence Program (FIP), by radically restructuring the federal programs through an emphasis on employment, education and training programs and the provision of incentive payments and supportive services above the regular, and in addition to, the AFDC grant for participants in those programs will encourage increased self-sufficiency and shorten the length of time families receive public assistance. Opportunities for abusing the current system are reduced, under-funded benefit levels are raised, the taxpayers' burden is reduced along with the dependency on a degrading inefficient and administratively complex system, and the lot of many children below the poverty level will be improved. By increasing child support collections and placing people into jobs more rapidly, the Family Independence Program will not require any additional funds beyond the funding level for the current programs. The Family Independence Program will increase opportunities to improve skills through education and training. It will increase the number of jobs in the state. It will provide quality, and the quantity needed, child care and provide continued health care benefits for one year after a family is at the maximum incentive level. It will not be a block grant program but remain within the framework and protections of Title IV-A of the Social Security Act. The legislature will have the opportunity to approve the federal/state agreements that are made.
(Ways & Means) Although there are risks that caseload or employment projections may not occur, there are many ways to manage the program within funding levels, most notably through controlling the number of subsidized jobs, or reducing incentive payments.
House Committee - Testimony Against: (Human Services) It is felt that the FIP program should remain a voluntary program throughout the five year life of the demonstration project. The six month age of child requirement for participating is too low and does not allow for proper nurturing. It should be raised to three years or left at six years of age. It should stay part of the federal entitlement system. Child care must be reimbursed at an adequate rate. There are not adequate child care slots available for FIP Enrollees. The Department of Social and Health Services has underestimated the cost of child care. The economy will not be able to provide adequate numbers of jobs for FIP enrollees. The jobs provided will not get a family out of poverty or provide any chances for advancement. The jobs may result in displacement of current employees and job seekers, as well as, creating a two-tier system whereby the current employee has less disposable income than the FIP enrollee. When the non-cash benefits, child care and medical care, cease after one year, these families may re-cycle back on public assistance because of inadequate wages to provide these benefits for themselves. Not enough training and education is guaranteed. More than short-term job skill training is necessary to acquire a job that will pay enough to get out of poverty. It is questionable whether the program can remain budget neutral. The end goal of this program is seen as continued poverty for these families but no longer at government expense.
(Ways & Means) The program should remain voluntary. Additional training should be provided. If caseload reductions predicted for this program are not attained, the ultimate price of the program will be much greater than now envisioned.