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1993.11.23 : Welfare Demonstration in Virginia

Contact:  David Siegel
(202) 401-9215

HHS Secretary Donna E. Shalala approved a welfare demonstration
today that will operate in the state of Virginia.  Under the terms
of the demonstration, the state will encourage businesses to hire
or train recipients of Aid to Families with Dependent Children
(AFDC) for future employment.

"The Virginia demonstration contains a number of positive features
which will help AFDC families to learn skills to enter and remain
in the workforce," Secretary Shalala said.  "In addition, a
separate pilot project will test an important new approach to the
state's child support enforcement program."

The Virginia demonstration involves four components, two of which
would be implemented statewide.  In the statewide projects, the
state will work with employers throughout Virginia to hire or train
AFDC recipients for jobs that pay between $15,000 and $18,000 a
year.  Welfare recipients who participate in the plan will be paid
a training wage equal to their previous month's AFDC benefit. 
Employers who provide jobs can be reimbursed for 20 percent of the
wages paid to AFDC clients during the first year and 10 percent
during the subsequent year of employment.

A second statewide project will enable AFDC families to accumulate
up to $5,000 in savings which can be used to pay for educational
programs or the purchase of a home.  Under normal rules, AFDC
families can accumulate no more than $1,000 in assets.

In four counties, the state will pilot a project that extends
transitional benefits for child care and Medicaid for up to 36
additional months for AFDC recipients who successfully leave
welfare for work.

In one location, Virginia will offer a child support "insurance"
payment.  Under this component, child support payments will be
guaranteed to AFDC families who leave welfare because of employment
even if the funds have not actually been collected from the non-
custodial parent.  In these cases, the amount of the payment from
the state will be equal to the average child support order issued
for AFDC families in Virginia.

Mary Jo Bane, HHS' assistant secretary for children and families,
noted that the demonstration "will provide a number of innovative
tools to enable families to become self-sufficient and move off
welfare.  We look forward to working with the state as this
demonstration proceeds."

The demonstration will be carefully evaluated and will operate for
a period of four years.

HHS also approved a waiver today to allow Illinois to conduct an
AFDC demonstration.  Since Jan. 20, the department has approved
seven AFDC and Medicaid waivers, including approvals for Wisconsin,
Georgia, Wyoming, Iowa and Vermont.