Welfare getting trickier
April 10, 2004
Imagine a 26-year-old single mother who, after having her baby a year ago, got a job and got off welfare.
She receives $300 a month in child-care assistance and is holding down a $9-an-hour job. At 27 hours a week, she earns about $1,020 a month.
If she works one extra hour each week, her monthly salary reaches almost $1,060, which puts her over the eligibility threshold for child-care assistance in most Colorado counties.
With child care easily hitting $700 a month, if she has no assistance, she’ll be left with less than $300 after taxes to pay for rent, food and doctor bills.
Her options: Work fewer hours so she can still qualify, move to another county, or quit work altogether and go back on welfare.
“We call it a cliff effect where, as they’re going up this slippery slope to self-sufficiency … they hit this cliff,” said Routt County Human Services Director Bob White. “One extra hour of employment a month, in which they have a gain of $9 an hour, and they end up losing all their child-care assistance.”
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Because Routt County’s eligibility threshold for assistance is 185 percent of the federal poverty level — higher than many other counties — residents do not hit the “cliff” as quickly.
But if Routt County has to lower its eligibility thresholds — the maximum amount families can make and still qualify for assistance — to 130 percent of poverty level, this example could become a reality for many single mothers.
Child care and welfare are closely linked, experts continually say. If the point of welfare reform is to get families back to work and self-sufficient quickly, they have to be able to afford quality child care, White said.
When the costs of child care exceed what the family makes, they do not have many options.
“I just don’t see that they have any reasonable choices,” White said.
Welfare reform, or Temporary Assistance for Needy Families, was approved in 1996. Since then, it has received wide support.
But when it came up for reauthorization at the end of March, Congress was unable to agree on the dozens of amendments tacked onto the Senate version of the bill. Senators stalled and extended the existing bill until the end of June.
Before TANF, welfare had not changed since World War I, when it was created to help widows with children.
There were plenty of problems with the old welfare system, called Aid to Families with Dependent Children, White said.
The old system had no time limits, so families could receive assistance for decades. It was a “one size fits all” program for the entire country. And there was no work requirement. No matter how much local governments tried to give incentives for working, nothing prevented residents from opting to stay on welfare rather than strive for self-sufficiency, White said.
Single women who needed financial help just needed to have a child to start receiving assistance. To get a raise in their monthly welfare dollars, they would have another child, White said.
The new system does have a time limit — a maximum of five years in one’s lifetime — so families cannot receive aid forever and are encouraged to get off the aid quickly. It gives state governments the freedom to tailor their programs to their needs, and in Colorado, that freedom has been handed from the state to counties.
Perhaps most important, some say, TANF has specific work requirements, encouraging families to hold down jobs and move off assistance.
Change for the better
The benefits of the new system have been clear at the county level, White said.
Under old welfare rules, the county supported 20 to 30 families each year. Under the new rules, support still goes to 20 to 30 families a year, White said, “which I think shows, no matter how solid your economy is, no matter how many jobs are available … we’re always going to have an element of our society that needs a little (help).”
But there is a big difference, White said.
Under the old system, between 20 and 25 families came on assistance and never got off it. Now, the county is helping between three and five families at any given time, but different families cycle through for shorter periods.
“They come in, get seasonal help for a few months, then they’re self-sufficient,” White said. “That’s why we, here at Routt County, believe this welfare reform has been so successful.”
Through the program, the county helps families get ready for work, collect child support and get assistance with groceries, bills and medical costs.
The program has been a success in the county, White said, for several reasons, one of which is that the local economy has entry-level jobs that pay $9 an hour, significantly higher than the nation’s minimum wage. Although the cost of living is high, some lower income families can receive child-care, medical and housing assistance.
The welfare success story also has been seen at the state level, said Kevin Richards, director of the Colorado Works Program.
“I think every state has experienced a positive change through welfare reform, including Colorado,” Richards said.
The bill has received wide support across the country, Richards said, as well as across party lines, with both Democrats and Republicans working to keep and improve it.
While TANF was up for reauthorization at the end of March, one focus in both the House and the Senate was increasing the number of hours families are required to work. Talk of putting more funds into child-care assistance was another focus.
Through the reauthorization process, concerns also have surfaced. One important concern, White said, is what happens when families hit their five-year limit. In Routt County, where the caseload is small, it’s possible to track which families use their five years, he said. Since welfare reform was approved, only one area family has run out of time, and that family had just moved to the county when almost all of their five years had expired.
But in larger counties, some families may get lost and fall through the cracks, White said.
Another concern is that to qualify for TANF, a two-member family can make no more than $420 a month. The two-member families that qualify only receive $331 a month, which does not go far in a resort town such as Steamboat Springs.
The link to child care
A big concern is how child care fits into the picture, White said.
Routt County received about $280,000 this year for TANF. After it assists needy families, it turns to child care. This year, it put about $70,000 of its TANF funds into child-care assistance.
Much of the remaining child-care assistance funds come from the Child Care Assistance Program, which provided about $250,000.
Even with an extra $50,000 from Routt County, the county’s child-care program found itself with too many families and not enough money.
In the 1990s, the threshold for all counties in the state was 130 percent of poverty level. After welfare reform, Routt County could offer assistance to families up to 300 percent of poverty.
In 2002, the county had to cut its eligibility threshold to 225 percent of poverty and then this past year, cut it again to 185 percent.
Many families were able to get off the assistance on their own, but some had to make changes to deal with the cuts, White said.
Overall, there were no “undesirable” effects, or cases in which parents quit their jobs to go back on welfare, or end up living in the streets.
Some families were making more money before the cuts, so there’s a chance some may have reduced their income to stay eligible, White said.
There is a chance that the state could get all counties to drop their eligibility thresholds back to 130 percent.
“I believe that if we had to go from 185 percent all the way down to 130 percent, we would have some undesirable outcomes,” White said. “Families have choices at 185 they don’t at 130.”
Nearby Moffat County has experienced those “undesirable” outcomes because of a recent decrease in eligibility to 130 percent. Increasing need and dwindling funds made the cuts a necessity, but results have been “horrendous,” said Marie Peer, director of Moffat County Social Services.
Not everyone who makes 130 percent of the poverty levels can even get assistance; the county has a waiting list.
“It is so sad, of all the things on the face of this earth, people who are working so hard to become independent,” Peer said. “This program is such a good program. It supports (families) in the right way. And then to have this happen, it just is a travesty.”
It’s especially sad when many of the families are working so hard to get out of a bad spot, White said.
“The human spirit is folks want to be self-reliant anyways,” he said. “People want to better their lives.”
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