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Date: April 11, 1995
FOR IMMEDIATE RELEASE 
Contact:  Michael Kharfen, ACF (202) 401-9215

HHS Approves California Welfare Demonstration

HHS Secretary Donna E. Shalala today approved California's "AFDC and Food Stamp Compatibility Demonstration Project," a statewide welfare demonstration project that cuts welfare red tape and encourages work. This is the second waiver demonstration for California approved under the Clinton administration.

"California's demonstration is aimed at making welfare and food stamp rules more compatible and providing additional financial incentives for work," said Secretary Shalala. "This is the 28th welfare waiver approved by the Clinton administration, with the goal of giving states more flexibility in welfare reform."

Under California's demonstration, rules for welfare and food stamp eligibility will be more uniform. The new rules will allow recipients of Aid to Families with Dependent Children and food stamps with self-employment income to deduct 40 percent of that income in determining eligibility and benefit amounts. Participants in both programs will also be able to exclude college assistance and work-study funds from the resource limit.

The project also allows AFDC participants more reliable transportation to and from work by allowing them to deduct $4,500 from the equity value of a vehicle when figuring resources. It allows California's counties flexibility in determining the method of setting the equity value, including the use of bills of sale, state motor vehicle licensing fee schedules, "blue book" listings and newspaper advertisements.

Additionally, the demonstration allows both AFDC and food stamp families to exclude up to $100 in gift income each quarter.

"This project offers the opportunity to move the welfare bureaucracy toward spending more time on recipients and less on rules," said Mary Jo Bane, assistant secretary for children and families. "The California welfare offices can now use these new work incentives and simpler eligibility rules to better move recipients from dependency to self-sufficiency."

The demonstration will operate for five years, and will include a rigorous evaluation.

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