SENATE BILL REPORT

ESSB 6232

BYSenate Committee on Children and Family Services (originally sponsored by Senators Anderson, Smitherman, Barr, Stratton, Lee, Wojahn, Bailey, Kiskaddon, Patterson, McCaslin, Smith, Fleming, Johnson and Conner)

Seeking federal waivers for self-employed persons receiving aid to families with dependent children.

Senate Committee on Children & Family Services

Senate Hearing Date(s):January 25, 1988; January 26, 1988

Majority Report:  That Substitute Senate Bill No. 6232 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Kiskaddon, Chairman; Bailey, Vice Chairman; Craswell, Fleming, Garrett, McDonald, Stratton.

Senate Staff:Jean Soliz (786-7755)

                  February 15, 1988

AS PASSED SENATE, FEBRUARY 12, 1988

BACKGROUND:

Recipients of Aid for Dependent Children are allowed to be employed and remain on assistance if they report their income monthly.  Their income is then deducted from their monthly grant.  Persons who are self-employed may deduct certain business expenses from their income, but federal law prohibits them from deducting certain business expenses including those for capital expenditures or payments on business loans.  These expenditures may not be deducted from personal income so they are deducted from the AFDC grants.

SUMMARY:

The secretary of the Department of Social and Health Services is instructed to seek waivers from federal law to allow AFDC recipients who are self-employed to separate business assets from personal assets for a period not to exceed two years.

If the waivers are obtained, DSHS is required to adopt rules to evaluate businesses of recipients.  Recipients may be required to prove why they continue to need assistance if it appears to the department that the business income is sufficient to allow the owner to go off of AFDC.

The secretary is also instructed to seek waivers to modify the manner in which an employed AFDC recipient's wages are offset against the eligibility test for AFDC and against the payment standard which determines the amount of grant.  Net income, defined as excluding involuntary payroll deductions and taxes, is to be deducted from the grant, instead of gross income.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 18, 1988

Effective Date:July 1, 1988

Senate Committee - Testified: Miryam Gordon and Dierdre Godfrey, Fair Budget Action Campaign; Gerry Reilly, Department of Social and Health Services; Arnie Whedbee, Evergreen Legal Services