Welfare Assistance December 7, 2017

Welfare Programs Government programs that provide benefits to individuals based on their economic status. They are means tested.

Major Welfare Programs Earned Income Tax Credit (EITC) is a federal program designed to give cash assistance to low-income working families by refunding some or all of the taxes they pay and, if their wages are low, giving them an additional refund. For tax year 2016, the maximum EIC for a person or couple without qualifying children is $506, with one qualifying child is $3,373, with two qualifying children is $5,572, and with three or more qualifying children is $6,269. Supplemental Nutrition Assistance (Food Stamp) program is a federal program that provides vouchers to low-income families and individuals that can be used to purchase food. Supplemental Security Income (SSI) is a federal program that provides money to low-income people who are elderly, blind, or disabled who do not qualify for Social Security benefits. Medicaid is a healthcare program for low income people, primarily children, pregnant women, and impoverished elderly. Children’s Health Insurance Program (CHIP) provides health insurance to children of low-income families that make too much money to qualify for Medicaid.

Earned Income Tax Credit

What Is Earned Income? Taxable earned income includes: Wages, salaries, and tips; Union strike benefits; Long-term disability benefits received prior to minimum retirement age; Net earnings from self-employment.

Rules for Qualifying Child Your child must have a valid Social Security Number and must pass all of the following tests to be your qualifying child for EITC: Relationship Your son, daughter, adopted child1, stepchild, foster child2 or a descendent of any of them such as your grandchild Brother, sister, stepbrother, stepsister or a descendant of any of them such as a niece or nephew Age. At the end of the filing year, your child was: Younger than you (or your spouse if married filing jointly) and younger than 19, or younger than 24 and a full-time student Any age if permanently and totally disabled3 Residency Child must live with you in the United States4 for more than half of the year. Joint Return The child cannot file a joint return for the year, unless the child and the child's spouse did not have a filing requirement and filed only to claim a refund.

2015 Tax Year Earned Income and adjusted gross income (AGI) must each be less than: $49,298 ($54,988 married filing jointly) with three or more qualifying children $45,898 ($51,698 married filing jointly) with two qualifying children $40,402 ($46,102 married filing jointly) with one qualifying child $15,310 ($21,000 married filing jointly) with no qualifying children The maximum amount of credit for Tax Year 2018 is: $6,444 with three or more qualifying children $5,728 with two qualifying children $3,468 with one qualifying child $520 with no qualifying children

What if I Already Filed my return? File an amended return, Form 1040X. You can file a 1040X for 2016, 2015, and maybe 2014. http://www.irs.gov/taxtopics/tc 308.html

Welfare Reform

Welfare Reform Before 1996 After 1996 The focus of welfare was to ensure recipients had a minimum standard of living. Welfare programs included Aid to Families with Dependent Children (AFDC), a cash benefit program for families with minor children, in addition to the programs listed in the previous slide. The new focus was to move recipients from welfare to the workforce. Congress replaced AFDC with Temporary Assistance for Needy Families (TANF), a federal program that provides temporary financial assistance and work opportunities to needy families. State welfare workers focus on job training, child care, drug treatment, transportation, and mental health counseling.

Elements of Welfare Reform Benefit limits. Welfare reform included a series of limits. For example, able bodied adults have a lifetime limit of 5 years to receive assistance. Childless adults between 18 and 50 years of age can receive Food Stamps for no more than 3 months in any 3 year period. Work requirements. Heads of households must find work in two years or lose benefits. Behavior requirements. Single teenage mothers must stay at home and stay in school in order to receive benefits.

Impact of Welfare Reform Welfare reform helped reduce the welfare rolls, but it did not eliminated poverty. The number of TANF recipients fell dramatically from 14.2 million in 1994 to 3.8 million in 2008 before increasing to 4.4 million in 2009 in the midst of the Great Recession.

TANF and Poverty TANF is less effective than AFDC in terms of providing assistance to families with children that are below the poverty line.

Impact of Welfare Reform Most of the people that have made their way off welfare lack the skills necessary to get jobs that pay much more than $8 or $9 an hour. As a result, they remain dependent on government assistance. The impact of welfare reform has been to change from a system that subsidized families unconditionally to one that subsidizes families in work or on disabilty.

Disability Recipients

Disability v. Work

Disability by State

What You Have Learned What are the major welfare programs? How did welfare reform change the nature of the welfare system? Has welfare reform reduced poverty? How has the disability system become an alternate welfare system?