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Welfare Reform Reauthorization: NCSL bill summary of the " The Making Work Pay Act ", S. 2058 & H.R. 4070, as introduced by Senator Blanche Lincoln (D-AR) in the Senate and Congressman Sander Levin (D-MI) in the House (Adobe Acrobat Required to access pdf version of bill summary)

Human Services Committee Bill Summary S. 2058 & H.R. 4070 

These bills-- S. 2058, introduced in the Senate on March 21, 2002 and H.R. 4070, introduced in the House on March 20, 2002-- establish an employment credit for states that would apply toward the TANF program's work participation rate. The employment credit provision found in these bills is also contained in Senator Rockefeller's comprehensive welfare reform bill, S. 2052.

An employment credit to reward states for families that leave welfare for work would be calculated based on information in the National Directory of New Hires or quarterly wage information. The credit would equal twice the average quarterly number of families that ceased to receive cash TANF during the preceding fiscal year and were employed during the calendar quarter after the quarter in which the payments ceased, divided by the average monthly number of adults receiving TANF in the preceding fiscal year. If a family earned at least 33% of the state's average wage, that family would be counted as 1.5 families. States would have the option of counting those who received a non-recurring short- term benefit (diversion payment) in the calculation. The caseload reduction credit, which decreases a states work participation rate requirement by the percent of caseload declined, would be eliminated. (See below for the state option to phase in the replacement of the caseload reduction credit with the employment credit.)

If a recipient does not participate in work activities for the full 30 hours a week required under the current law during a month, but is participating in such activities an average of at least half of the hours per week required in the month, a state gets partial credit. The credit would be based on the number of hours a recipient actually participated versus the number of hours of participation required.

If a TANF recipient qualifies for SSI benefits during a fiscal year, they would not be part of a state's work participation rate calculation for the fiscal year.

The Secretary of Health and Human Services would establish a threshold-- either a dollar value or for a length of time-- for child care or transportation assistance and states could include those families in the work participation rate. This would not apply to families already counted under the employment credit. States would have to submit data on families receiving child care and transportation assistance counted toward the credit.

The bill eliminates the existing 2-parent family work participation rate. There would be a single all-family work participation rate of 50% (the current single parent rate).

The provisions in the bill would take effect on October 1, 2003. However, states could choose to delay implementation of the elimination of the caseload reduction credit, partial credit for recipients in part-time work, removal of SSI recipients from the participation rate, and inclusion of recipients of child care or transportation. If a state does so, the work participation rate for FY 2004 would be 1/2 of the reduction of the rate that would result from using the employment credit and 1/2 of the rate that would result from applying the existing caseload reduction credit.