Nonprofits Gearing Up For Welfare Reform Time Limits

The final clock is ticking.

Depending on the state, just 13 months remain on the five-year welfare time clock that started ticking when the Personal Responsibility and Work Opportunity Reconciliation Act was signed and the last states had their turn over plans approved.
U.S. welfare rolls have shrunk shrinking dramatically since the signing. Nationwide, welfare rolls have dropped a whopping 53 percent between 1996 to 2000.
Just because the law reduces the number of poor families receiving welfare, it did little to reduce the number of poor families who need financial help. So, while federal and state welfare programs are helping fewer people, other entities now have to pick up that slack.

The law itself

The welfare reform law placed new time limits on cash assistance provided under the federal Temporary Assistance for Needy Families (TANF) program, formerly known as the Aid to Families with Dependent Children program. Generally, a family with at least one adult is limited to 60 months of assistance that the federal government will supply under TANF. Also, the law imposed new work requirements on recipients, designed to make them self supporting.
The law provides a certain amount of flexibility to the states. For instance, states may set time limits of less than 60 months. Connecticut is one of these, where families are limited to cash benefits for 21 months. Also, the law allows states to exempt up to 20 percent of its caseload from the time limits — that is, they can receive benefits indefinitely — based a broad definition of “hardship” or in situations of domestic violence.

Additionally, to qualify for TANF funds, a state must spend its own money in an amount equal to at least 75 percent of its historic state welfare spending, and the states need not impose time limits on this cash assistance.

As a result, states were given a lot of flexibility to establish time limit policies, exemptions and extensions. For instance, some states will see to it that assistance is extended or provided through a different program when a family reaches the time limit. And, some states have tagged certain groups of families as exempt from the time limits.

Is it a success?

The decline in families receiving help has been so dramatic that, according to a report by Radcliffe Public Policy Center in Washington, D.C., many states have budget surpluses because they have so few families left receiving welfare.

But from the point of view of a nonprofit that will be more financially stretched as a result of this reform, that’s not necessarily the case. “More people are getting hired, but they are not earning enough to pay the increased costs that result from having a job, like child care or transportation expense,” says Sharon Daly, a vice president with Catholic Charities USA in Alexandria, Va.. So while it’s better, in general, for someone to get a paycheck than a welfare check, many are actually worse off financially.

Dave Berenger, director of Brand Management with Goodwill Industries International in Bethesda, Md., agreed with Daly about families leaving welfare being unable to absorb the additional expense of working. “The issue is not just a job, but keeping that job. People who leave welfare will have problems like child care, or even adult care, that is, care of a parent. Transportation is another issue. If they can’t deal with these issues, say they have to take a day off to take care of their child or parent, they can lose their job.”

A recent study by Washington State University in Seattle, of people who returned to the state’s welfare rolls also indicates another reason why many fail to hold their jobs. A full 36 percent of those who returned to welfare within six months reported being in poor or only fair health. Also, 31 percent reported using mental health services, an indication that mental illness may play a significant role in their failing at their new jobs. “Holding people to a time limit does not make them employable,” said Daly.

Between 50 percent and 60 percent of families leaving welfare because of time limits are finding jobs, according to Stateline.org, a publication of the Pew Center on States. However, Stateline.org pointed out that, as the time limits are just starting to hit in most states, this statement is based on preliminary studies.

These jobs, however, tend to pay minimum wage, which is not enough to move a family of three out of poverty. Plus, they often they do not offer benefits, and they are frequently unstable positions. A very severe problem is the other 40 to 50 percent of the population leaving welfare that don’t get jobs. For these people, the only option is relief from another government agency, or help from a nonprofit.

Sometimes they can go back on welfare. If a family is removed from the rolls because of a sanction, say because it no longer qualifies because its members fail to look for work, they always has the chance of getting back on. But if a family is removed because it hits the time limit, they have no such option, according to Shawn Fremstad, a senior policy analyst with the Center on Budget and Policy Priorities in Washington, D.C. They might be able to qualify for food stamps, or emergency housing. Sometimes they could qualify for additional benefits directly from the state.

Said Dick Powers, with the Massachusetts Department of Transitional Assistance, “Of all those who left our program because of time limits, half of them are still eligible for food stamps. But many of them aren’t getting them because they don’t realize it.”

Leaving welfare is not pushing people to jobs but there does seem to be some informal support. “We’ve done some studies that show that most of those who leave welfare and aren’t working are living in a household where either someone is working or there is a source of unearned income, like child support or disability,” said Chuck Johnson, with the Minnesota Department of Human Services. “However, that will probably change with families coming off welfare because of time limits.”

The issue might be moot in Minnesota anyway. “We’ve had 100,000 families through our welfare system since July, 1998, and only 5,000 are in danger of hitting that time limit. We can continue to support these people through the 20 percent federal exemption,” said Johnson.

Nonprofits’ role

Nonprofits have been trying to keep up with the transitions and requests for help. “I would certainly expect additional stress on our already limited resources,” said Bert Goldberg, executive vice president of the Association of Jewish Family and Children’s Agencies (JFCA) in East Brunswick, N.J. “We have no idea what the extent of that stress will be. We know we will have some huge demands, and with the softening economy putting people out of work, we will be under severe pressure.”

Catholic Charities’ Daly is very concerned. “Our organizations are drowning in the red. We are very concerned. We are turning people away from child care programs because we don’t have enough money. There is no way our agencies will have the money to feed and clothe all the people who will need it.”

At JFCA, it is a question of training and resources. Their approach is to see that staff is alerted to the issue of people coming of welfare because of the time limits. And, most important, they want to make sure that the staff is prepared to deal with the problems they are going to be facing. Nonprofits traditionally help feed the poor through food banks and soup kitchens, and having enough food is a major concern for families who leave welfare. Recent surveys have shown a large number of families leaving welfare report instances of not having enough food, ranging from 24 percent in Arizona to 45.5 percent in the District of Columbia. Some of these families report reducing the size their meals or skipping them altogether.

More severe is when a family reports having their children skip meals. In Missouri, 3 percent of families leaving welfare have reported child missing meals. In Washington 4 percent reported doing so. Of families leaving welfare in Missouri, 7.2 percent received food assistance from a church or community group; 44 percent of such families in Washington state reported receiving food from a food bank or shelter.

Goodwill’s Berenger predicted there will be more families in need because of welfare reform but hopes people will seek placements and other assistance before the clock runs out. Daly of Catholic Charities shares Powers’ concern about people not realizing the benefits to which they are entitled. “The overwhelming majority of people who were pushed off don’t realize that they were still eligible for food stamps and Medicaid and other programs.” This is something Catholic Charities plans to attack in its efforts, through a three-prong approach.

“First, we’ll look for emergency money for food and shelter through government agencies,” she said. There is a lot of cash available from the government, and in many cases it’s just a question of pairing up needy families with the right programs, Daly said.

“Second, we’ll look at long-term housing solutions,” Daly said. Again, this involves going to government agencies like U.S. Department of Housing and Urban Development, or sometimes other nonprofits, such as Habitat for Humanity. And third, they’ll look to help support poor families with volunteer efforts.

Catholic Charities also works with government officials in forming policy. It is taking a stand against President Bush’s tax cut plans. “Our board of trustees, which has not opposed a piece of federal legislation since 1996, has opposed the tax cut because Congress is not meeting the needs of the poor,” she said.


L. Nicholas Deane is a freelance writer based in Montauk, N.Y.