Originally published in Issue 12 - August 25, 1997

New York State’s Welfare Reform Plan

On August 4, 1997, the New York State Legislature passed the Welfare Reform Act of 1997, a major step in implementing the 1996 federal law. The State’s new welfare program maintains a two-tiered system of public assistance, and retains pre-existing benefit levels. However, the State’s new welfare program adds provisions that could make welfare more complicated and costly for localities such as New York City to administer.

The first tier of benefits is for households with minor children, and is now referred to as Family Assistance (FA). Eligibility for benefits under the FA program will in most cases be subject to a cumulative time limit of five years. At the same time, “earned income disregards” have been increased, thereby allowing FA recipients to earn more outside income than they were allowed to do under previous welfare law without becoming ineligible for cash assistance. The second tier of benefits, previously provided under the Home Relief (HR) program, will now be administered under the Safety Net Assistance (SNA) program. Persons eligible for SNA include adults without minor children, families who have reached the FA time limit, and individuals ineligible for FA because of their immigration status or the violation of rules concerning substance abuse. SNA benefits take the form of either cash or non-cash assistance. Cash assistance is limited to two years in a lifetime and is available only to those who are ineligible for FA because they have no minor children or lack the proper immigration status. Individuals who reach the two year limit, or fall into other eligibility categories, will receive primarily non-cash assistance. This includes direct vendor payments or two-party checks for rent and utilities. Of the remaining grants to such recipients, 80 percent would be accessible only through an electronic transfer system and 20 percent would be in cash.

For localities, one of the most important features of the State’s welfare reform plan involves requiring, under the threat of monetary sanctions for non-compliance, that individual social service districts (such as New York City) achieve the recipient work quotas and other work requirements contained in the new federal welfare law. One very significant requirement is commonly referred to as the “two year work rule,” which requires that all able-bodied recipients work after receiving assistance for two years. Strict implementation of this provision could require the City to expend tens of millions of dollars in new City funds over the next several years for workfare and day care slots.

The new State welfare law also establishes a Food Assistance Program (FAP) designed to replace federal food stamp benefits for certain classes of legal aliens denied eligibility for such benefits by the 1996 federal welfare reform law. (Although President Clinton’s actions earlier this month restored SSI benefits for legal aliens already in the country as of August 22, 1996, most legal aliens remain ineligible for federal food stamps as a result of the 1996 federal welfare reform law.) Benefits under FAP would only be available to immigrants who were in the country as of August 22, 1996, and are either under 18, elderly, or disabled. Participation in this program by local districts such as New York City is optional. If the City elects to participate, it will be responsible for 50 percent of program benefit costs for the elderly or disabled.

Also of particular consequence for New York City are the new State law’s provisions pertaining to new immigrants and relocating U.S. citizens. New immigrants arriving after August 4, 1997, are not eligible for benefits during their first year here. U.S. citizens relocating from other parts of the country are limited in their first year to either 50 percent of normal New York State benefit or their prior state’s benefit, whichever is greater.