SENATE BILL REPORT
SB 6232
BYSenators 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)
January 27, 1988
AS REPORTED BY COMMITTEE ON CHILDREN & FAMILY SERVICES, JANUARY 26, 1985
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.
EFFECT OF PROPOSED SUBSTITUTE:
Provisions are added 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.
The Department of Social and Health Services is instructed to seek waivers from the federal government to make these changes, as well as the changes regarding self-employed recipients.
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