You asked for a legislative history of welfare reform in Connecticut since 1992.

This report focuses on the main elements of the reforms we believe to be most important. We have omitted state legislation regarding the federal Workforce Investment Act. That act provides significant funding to states for job training opportunities for low income individuals, including welfare recipients.

Finally, we do not include the Temporary Assistance for Needy Families (TANF) High Performance Bonus funds. The federal TANF law, which includes the federal block grant that pays for a significant share of the state's welfare to work programs, has provided bonuses to states since 1996 for performing well in a number of areas, including successful job entries and retention. Connecticut has used the bonuses it received to enhance services to the TANF-eligible population.

SUMMARY

The legislature has made numerous changes to the state's welfare-to-work program since 1992. That year, the legislature created a task force to study the possibility of restructuring the state's public assistance system. The task force made a series of recommendations designed to make welfare work better for those needing it by offering more work incentives and fostering self sufficiency and personal responsibility.

The 1993 legislature passed many of these recommendations. PA 93-418 included a number of reforms, such as removing disincentives to marriage and increasing the amount of assets and income participants could retain without losing eligibility. Since many of the proposals were contrary to federal law, the act directed the then-Department of Income Maintenance (DIM) to seek a federal waiver of the then-Aid to Families with Dependent Children (AFDC) program (now TANF). DIM received the waiver and began implementing the reforms in 1994. (Many states were doing similar experiments with their welfare to work programs at this time. )

In 1995, Governor Rowland initiated his own set of reforms, including a generous earnings disregard, but also measures that some considered more punitive. PA 95-194 included: (1) for the first time, a time limit (21 months) for cash assistance, with exemptions for certain individuals; (2) increasing the amount of earnings recipients could receive before losing cash assistance eligibility; (3) reducing cash assistance for people receiving housing assistance; (4) providing financial incentives to employers to hire welfare recipients; and (5) capping a family's benefit when its size grew while receiving assistance. These provisions also required federal approval through an amendment to the existing waiver.

In the summer of 1996, Congress passed its own version of welfare reform, the TANF provisions of the Personal Responsibility and Work Opportunities Reconciliation Act. Connecticut, like many other states, had already begun its own reforms; the federal law acknowledged these reforms and allowed them to continue.

The TANF law included a five-year lifetime limit for assistance and stringent work requirements. In response, the 1997 legislature re-named the welfare to work program the Jobs First program and designated its cash assistance part as Temporary Family Assistance (TFA). As required by the federal law, Connecticut submitted a TANF plan to the federal government; this is updated periodically. (The federal law was due to expire in 2002 but Congress has been working on re-authorization since then and continuing its funding. )

The legislature has amended the Jobs First law several times since 1997. Notably, it limited the number of time limit extensions participants could receive, while acknowledging that that those who remain on the TFA caseload have multiple barriers to finding and keeping jobs that will make them self-sufficient and need additional time to do so. Most recently, the legislature reduced the amount of time someone transitioning off the TFA program can receive Medicaid.

EARLY WELFARE REFORM IN CONNECTICUT, 1992-1995

The Response to Perceived Shortcomings—1992 Task Force

PA 92-16, May Special Session, established a 15-member task force to study methods of “restructuring” the state's public assistance programs to further self sufficiency. It was believed that (1) the welfare-to-work system, as it was then-structured, did little to foster economic self sufficiency and (2) noncustodial parents' ability to support their children caused these children to need state assistance. Thus, the legislation required the study to include, among other things, methods of providing job training for noncustodial parents of children receiving AFDC and extending the time for which recipients could continue to receive assistance once they began working.

The task force met during the summer and fall of 1992 and issued a final report, which included dozens of recommendations, in January 1993. The task force adopted essential guiding principles for a successful welfare-to work program and final recommendations were organized by these principles.

1. All parents should support their children.

2. Government programs should support the preservation of families.

3. People who work should be better off financially than if they do not.

4. Government programs should not replace or lessen the responsibility of individuals.

5. Government programs should be efficient and accessible.

6. Access to quality child care, quality educational opportunities, adequate health care, and decent housing are essential to supporting self-sufficiency.

Some of the recommendations included:

1. exploring a time-limited cash assistance program,

2. guaranteed child support for families receiving assistance and strengthened enforcement of support orders,

3. counting less of a stepparent's income in eligibility determinations,

4. increasing the AFDC asset and motor vehicle limits, and

5. using fill-the-gap budgeting for working recipients as a financial incentive to work.

Legislative Response

As part of a larger, budget implementation bill, the 1993 legislature passed a welfare reform law (PA 93-418) that incorporated many of the task force's recommendations. Because federal law governed state welfare-to-work programs, and its often inflexible rules were contributing to the program's failure to help families, the act directed DIM to get a federal waiver to remove some of those impediments. The waiver was to include:

1. removing disincentives for single parents to marry;

2. providing greater flexibility in determining which family members received assistance;

3. increasing, to $ 3,000 from $ 1,000, the cash assets a family could keep to pay for emergencies and work-related expenses;

4. increasing the permitted $ 1,500 automobile equity value to provide recipients with reliable transportation to seek and get to jobs;

5. disregarding the earnings of dependent children who were students;

6. doubling the amount of child support a recipient could keep (child support “disregard”) from $ 50 to $ 100 per month without affecting the benefit;

7. rewarding excellence in school attendance and performance through private donations;

8. simplifying the complex eligibility rules and better coordinating the AFDC and Food Stamp programs to enable DIM staff to devote more time to self-sufficiency plans; and

9. requiring DIM to establish a client advisory board, which would meet and report to the DIM commissioner twice a year.

The legislation also required DIM to use a special type of budgeting to insure that working recipients were allowed to keep a greater portion of their benefit. Previously, the law essentially reduced the benefit by one dollar for every dollar earned.

The act directed the DIM commissioner to establish a “standard of need” (the amount of money a family needed to subsist for a one month period) for both the AFDC and the former General Assistance program. At that time, the federal law required states to have an AFDC standard of need and a payment standard (the actual AFDC payment). In Connecticut, the two numbers were the same. We believe the intent was to come up with a more realistic, current standard that reflected actual living costs. Although the act increased the need standard, it froze the payment standard, which has remained frozen since 1992.

The state secured federal approval of the waiver and the new “A Fair Chance” program went into effect in fall 1994.

Oversight Council. In 1994, the legislature created a 12-member council to monitor the Department of Social Services' (DSS, DIM's successor) implementation of the waiver. The DSS commissioner was directed to update the council monthly. The council was charged with making recommendations to DSS regarding numerous aspects of the program, including the availability of child care, effectiveness of child support enforcement, and the waiver's evaluation. (The waiver included a control group, who were subject to the old AFDC rules and whose outcomes were to be compared to those in the new waiver group, when it was evaluated. )

Rowland Changes

Governor Rowland made further welfare changes a hallmark of his first administration. In early 1995, just a few months after the 1993 reforms actually began, he proposed sweeping reforms, including the strictest time limits in the nation. After months of negotiations, the legislature approved most of his plan. (The plan included a provision allowing people to get a lump sum payment in lieu of ongoing cash assistance to “divert” them from the welfare rolls. Few families took advantage of this option. ) It also included a provision providing “opportunity certificates” (tax credits) which AFDC recipients could use to negotiate jobs. The state needed another waiver to implement many of its provisions, which went into effect in January 1996, except a reduction in the cash benefits, which occurred on July 1, 1995. The following table compares some of the more significant features of welfare reform before and after the 1995 changes.

Table 1: Comparison of Welfare Programs

Time Limit Exemptions. The following people were exempted from the 21-month time limit and work participation requirements. Those:

Limiting Allowable Work Related Activities. Until 1995, the state provided support services to AFDC recipients enrolled in community colleges and working towards an associate's degree. PA 95-194 limited this practice only to those individuals attending such colleges on July 1, 1995. The act required this restriction until a task force evaluated the effectiveness of such programs, issued a report, and the legislature acted on it.

CONNECTICUT'S RESPONSE TO FEDERAL WELFARE REFORM

Federal Welfare Reform—TANF

The same year that Connecticut began its latest series of reforms, 1996, Congress passed federal welfare reform. TANF eliminated the AFDC program and replaced it with a non-entitlement, federal block grant. It essentially turned over control of welfare programs to the states, with an expectation that they contain certain features as a condition of ongoing funding. For example, legal immigrants who came into the country after the federal law passed would be ineligible for TANF for their first five years here. States that were running welfare reform waiver programs, such as Connecticut, were allowed to continue them and when the TANF law conflicted, state laws prevailed.

Some of TANF's major provisions include (1) a five-year lifetime limit on “assistance,” with a 20% maximum number of recipients states can exempt from the limit; (2) a requirement that parents or caretaker relatives receiving TANF work once the state determines they are ready

but no later than 24 months after receiving assistance; and (3) work participation rates (25% in FFY 1997, rising to 50% in FFY 2002) for all families, with higher rates for two parent families and financial penalties for failure to meet these rates.

Because TANF shifted welfare to a “work first” program, it required cash assistance recipients to be connected to the work force quickly (currently 30 hours per week within the first two years of receiving TANF-funded assistance). At the same time it limited the types of work-related activities in which people receiving assistance could be engaged and still satisfy the federal work participation requirements. In general, 12 categories of work and work-related activities count towards meeting the requirements, but education and training do not typically fall into these categories. (The Department of Labor's (DOL) Jobs First Employment Services manual explicitly prohibits enrollment in two- or four-year college degree programs as allowable activities, hence not eligible for work supports, such as child care, unless (1) the participant has enrolled on her own and is within six months of getting a degree and (2) her case manager ensures that her employment plan does not interfere with getting the degree. )

PA 97-2, June 18 Special Session. The 1997 General Assembly passed legislation in response to TANF. PA 97-2, June 18 Special Session, officially renamed the cash assistance portion of welfare-to-work Temporary Family Assistance (TFA) and re-codified those provisions (e. g. , income disregard) that were previously tied to a federal waiver. (The umbrella name for welfare to work became Jobs First, with TFA representing the cash portion of the program and Employment Services the work portion. )

The legislature opted to provide coverage for certain convicted drug felons provided they had completed a drug sentence, served a probation period, or participated in a mandatory substance abuse treatment or drug testing program. (The federal law permitted states to bar these individuals from receiving TANF assistance. )

To respond to TANF's five year wait for new immigrants, the legislation created a state-funded, TFA-type cash assistance (and Medicaid) program for otherwise eligible immigrant families.

The act permitted families to petition the DSS commissioner for a six-month extension to the 21-month time limit. It required her to grant extensions indefinitely if a family could show that it had made a good

faith effort to comply with the TFA requirements, but could not earn more than $ 90 above the the TFA benefit or had encountered circumstances that prevented them from working, such as domestic violence.

The act also created a safety net program for those families who lost, or were at risk of losing, cash assistance. Assistance was to be made available even if a family was ineligible for a six month time limit extension because it received two sanctions during the 21-month period for failing to make a good faith effort to find and keep a job. (Compliant families who used up their 21 months could not get safety net services but would likely qualify for extensions. ) The program consists of services, including food, shelter, clothing, and employment assistance, provided through the state's existing community services delivery network. Families at risk of losing assistance due to Employment Services sanctions must complete individual performance contracts in order to qualify for an extension. Those successfully completing these contracts are considered to have made a good faith effort and qualify for extensions.

The act more clearly defined the roles of DSS and DOL in moving clients from welfare to work. It required the agencies to establish a memorandum of understanding to enhance service delivery to clients, including studying the feasibility of providing services using a one-stop process, in which the agency offices would be co-located throughout the state.

The act continued to require an oversight council and directed DSS and DOL to update the council monthly on TFA and Employment Services.

PA 97-295. This act repealed the 1995 opportunity certificate pilot program and replaced it with a permanent tax credit. The law provides a credit against the state's corporation business tax to employers who hire TFA recipients who work at least 30 hours per week and have been receiving TFA for more than nine months. The credit is equal to $ 125 for each full month the employee works for the business. (Businesses can also receive federal tax credits for hiring welfare recipients. )

Subsequent Changes

1999. The legislature has modified the Jobs First laws several times since 1997. In 1999, it permitted TFA households that became temporarily ineligible for assistance because a family member was receiving worker's compensation to disregard earnings up to the federal poverty level if the injured person returned to work as soon as she stopped collecting the compensation. Prior law allowed only the first $ 90 to be disregarded if the amount of worker's compensation received had made her ineligible for TFA for more than four consecutive months (PA 99-279).

This same act codified DSS's Transitionary Rental Assistance Program (T-RAP). The program provided 12 months of rental assistance for private housing to families leaving TFA due to the time limit, provided they had income exceeding the monthly TFA benefit. The act required DSS to run the program within available appropriations.

2000. In 2000, the legislature directed the DOL, in cooperation with DSS and within available appropriations, to provide state-funded work-study slots to TFA recipients and other needy individuals in (1) training programs certified under the Workforce Investment Act and (2) training and education programs at public higher education institutions The programs were to be designed so that (1) individuals would not need TFA by the end of the TFA time limit and (2) participants' ability to become economically self sufficient increased (PA 00-204).

2001. In 2001, the legislature made some fairly significant changes in the welfare-to-work system. Most importantly, PA 01-2, June Special Session, limited to three the number of six-month extensions allowed to the TFA time limit. Previously, extensions were indefinite. But the act allowed the DSS commissioner to grant a fourth or additional extension in certain circumstances, such as the adult in the household having two or more substantiated barriers to work. It also established an absolute maximum five-year limit on assistance and specified that assistance provided by another state counted toward that limit. It also extended the requirement for an exit interview to families with extensions.

The act made several changes in the Employment Services portion of Jobs First. It required DSS to terminate the benefits for non-exempt families if a family member failed, without good cause, to attend any scheduled assessment appointment or interview related to developing an employment services plan. But benefits were to be reinstated if the individual attended a re-scheduled appointment or interview within 30 days of being notified of the termination. DSS also had to terminate benefits when a mandatory Employment Services participant in a six-month extension failed to comply with program requirements.

The act (and a related clarifying act) prohibited an unmarried minor parent who did not have a high school diploma or its equivalent and who had a child who was at least 12 weeks old from receiving TFA unless she participated in educational activities directed at earning the diploma or its equivalent. Previously, these women were exempt from the Employment Services requirement if they were attending school.

It increased from 20% to 25% the penalty (reduction of TFA benefit) for the first incident of noncompliance with an Employment Services requirement. (DSS deducts 35% for a second incident and eliminates benefits altogether for subsequent incidents. ) This change was made to conform to federal law.

The act also reduced the amount of child support disregarded from income from $ 100 to $ 50. This provision allows TFA recipients to receive child support and not have the full amount of that support deducted from their TFA benefit.

Acknowledging that the lack of affordable transportation represented the principal barrier preventing TFA recipients from going to work, and that many jobs in eastern Connecticut were going unfilled, the act established an Eastern Connecticut Transportation Access Project to get recipients from other parts of the state to these jobs.

2003-Present. In early 2003, the legislature made numerous DSS budget cuts, including those affecting TFA and related child care and Medicaid expenditures. It (1) reduced from three to two the number of TFA extensions, effective July 1, 2003, but continued the exemptions; (2) reduced income eligibility for transitional child care benefits from 75% to 55% of statewide median income, effective March 1, 2003; and (3) reduced the income limit for adult Medicaid (HUSKY A) (PA 03-2).

PA 04-258 (amended by PA 04-2, MSS) prohibits DSS from granting TFA to applicants before they have attended the initial scheduled employment services assessment interview and worked on their employment plan. But DSS may not delay benefits when it schedules the appointment more than 10 business days after the person applies, nor may it delay assistance when the DOL fails to complete the employment plan within 10 days of the applicant's interview.

The 2004 legislature also expanded the circumstances under which welfare leavers could access the T-RAP program, including allowing people to get rental assistance when they leave the TFA program but have not exhausted the 21 months (PA 04-73).

In 2005, the legislature reduced from two years to one the period of transitional Medicaid for people leaving the TFA program (PA 05-280). But the act restored eligibility for adult caretaker relatives, although it directed DSS to institute cost sharing for these adults.

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