You asked for information on an Oregon proposal to change how assistance is provided to adult caretaker relatives of children receiving TANF-funded cash assistance who may be eligible for federal Social Security benefits (SSI or SSDI).

Over the last several months, interested parties have been discussing the TANF-related changes required in the federal Deficit Reduction Act of 2005. The group recently released a draft summary of its recommendations. The proposals include temporarily removing from the TANF caseload families in which the adult caretaker has a disability and probably qualifies for federal Social Security benefits and creating a state-funded assistance program for them while they wait for their disability application to be granted.

The Deficit Reduction Act of 2005 makes it harder for states to meet the TANF law's work participation rate (50% of families must be engaged in work activities for at least 30 hours per week). One of the act's provisions requires states that use either TANF or maintenance of effort (MOE) funds to provide assistance to families in which the adult has a disability and may qualify for SSI to be part of the work participation calculation (i. e. , they are placed in the denominator). (The MOE provision in the TANF law essentially requires a state to maintain its same level of spending for low-income families as it had when the TANF law first passed. )

Taking these Oregon families out of the TANF/MOE caseload (using state funds and not claiming them as MOE) would make it easier for the state to meet the new work participation rate requirements. Once the adult was granted federal disability benefits, her children would move back into the TANF caseload. And the family still would not be counted in the denominator.

The process of qualifying for federal disability benefits is often very complicated and time consuming, taking, on average in Oregon, 30 months. By making this change, the state hopes to speed up that process by devoting more resources to helping clients apply for disability benefits. And the state may also save money if it can help the adults qualify sooner than they do currently.

OREGON'S PROPOSAL TO HELP LOW-INCOME FAMILIES WITH ADULT CARETAKERS ELIGIBLE FOR SOCIAL SECURITY DISABILITY BENEFITS

To address the required changes in Oregon's TANF-funded cash welfare program resulting from the federal Deficit Reduction Act of 2005 (see OLR Report 2006-R-0426 for a description of these changes), the executive branch, legislators, advocates and others have developed a comprehensive plan to ensure the best outcomes for the state's lowest-income children and their parents. The major piece of the proposal would change the non-unitary TANF program to one that has four “separate, but interrelated, tracks. ” This will enable the state to direct clients into services that will be most beneficial, while allowing it to have a better handle on how it spends its TANF block grant.

One track is called “State-Only (non-Maintenance of Effort (MOE)) Programs. ” This track includes the State Family SSI Program. This program will help families in which the adult caretaker has a disability and is applying for federal disability benefits. Because it can take many months for federal disability benefits to be granted, these adults are often granted TANF-funded cash assistance to support them while they are waiting.

Under the proposal, Oregon would use state funds and not claim MOE for providing cash support to these adults. This would take them out of the federal work participation rate requirement. Their children would receive a state-funded cash assistance benefit in the same amount they now receive under TANF. The program would be voluntary, so parents would have the choice of getting regular TANF-funded assistance or the State Family SSI program. (Although parents could potentially get

SSDI instead of, or in addition to, SSI benefits, that program's requirement that applicants have a substantial work history would probably affect a relatively small number of adults. )

As an incentive to participate, the new grant would be higher than the regular TANF-funded grant. Clients would receive about 40% of the current federal SSI monthly benefit (as of January 1, 2007, 40% is $ 260) plus an amount equivalent to the TANF cash benefit paid to families in which only children (child-only cases) receive benefits. The adult would be eligible for the benefit until the earlier of appealing a Social Security denial through an administrative law judge or until Social Security benefits were approved. Once Social Security benefits were secured, the children would revert to TANF-funded assistance.

If Social Security subsequently granted eligibility, the adult would have to repay the state her portion of the total grant (the 40% of SSI) from the Social Security lump sum award. However, the adult would not experience an additional cost since the Social Security Administration (SSA) currently reduces a successful applicant's lump sum settlement (initial SSA assistance is paid in a lump sum retroactive to when the person first applies) by the person's portion of any TANF-funded assistance provided during the application period.

The proposal's proponents suggest that under the present structure, staffing to help clients apply for Social Security is limited, often leading to delays and the need for application extensions. And they argue that quicker determination for eligible clients also saves the state money.

The draft report also notes that that the state would need to make administrative changes to ensure that these families receive Medicaid and ongoing child support, since they will not be part of the TANF-funded group while participating in the program.

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