Welfare Reform Act

Welfare Reform Act - Title I: Amendments to the Internal Revenue Code of 1954 - Increases the earned income credit to equal 20 percent of the individual's first $5,000 in earned income, with a phaseout between the first $7,500 and $15,000 in adjusted gross or earned income, whichever is greater. Makes the earned income credit permanent. Requires employers to make advance payments of this credit to employees certified as qualifying for the credit during the current year. Treats payments of this advance credit as payment of the employer's FICA and withholding amounts, with parallel treatment of any failure to pay the employee the advance credit. Provides for the transfer of funds from the general fund of the Treasury to the FICA trust funds to cover for revenues paid by employers to employees as an advance credit instead of to the Government as withholding taxes. Imposes administrative changes on government forms and reporting requirements on employees certified for the advance credit.

Includes unemployment compensation in gross income. Imposes reporting requirements on persons making unemployment compensation payments.

Provides for the disclosure of requested tax return information to the Departments of Agriculture; and Health, Education, and Welfare to the extent the information is necessary for auditing beneficiaries' eligibility for AFDC benefits under the Social Security Act.

Includes welfare and food stamp benefits in gross income to the extent they exceed the individual's "tabular amount" when combined with adjusted gross income. Prescribes "tabular amounts" ranging from $5,470 for individuals with one personal exemption to $14,650 for persons with seven or more exemptions. Limits the credits which can be taken against this portion of an individual's income tax liability to the credits for excess withholding taxes, certain uses of gasoline, special fuels and lubricating oil, and earned income.

Allows employers to take an additional jobs credit for a portion of the unemployment insurance wages paid for new employees who are hired under a Work Incentive (WIN) Program and who are eligible for certain AFDC benefits under the Social Security Act. Restricts this credit to premiums paid before 1979.

Title II: Amendments to Aid to Families with Dependent Children - Amends Title IV, part A (Aid to Families with Dependent Children) of the Social Security Act to establish a formula for determining the amount of monthly cash benefits payable to families under such program. Provides that such monthly payments equal the difference between the monthly cash needs standard of an eligible family and the actual monthly income of such a family as determined in accordance with this Act. Sets forth criteria for determining the monthly cash needs standard. Permits States to increase the monthly cash need standard above levels established by this Act, but within specified limits.

Requires the inclusion of family income from all sources in determining the actual monthly income of a family for the purpose of calculating the amounts of monthly cash benefits to which a family is entitled under the program of aid to families with dependent children. Enumerates items of income which are excludable. Prohibits payments to any family whose resources exceed $1,750, or $3,000 if such family includes an individual age 60 or over. Enumerates those resources which are excludable.

Provides for the reduction of benefits for any family which includes a physically or mentally fit individual who refuses to register for or participate in State work incentive (WIN) programs or who quits any job without good reason or refuses employment when offered. Exempts certain classes of parents, students, and part time workers from participation in work incentive programs.

Requires a State to establish and operate a statewide management information system to assist in the management and administration of the State's program of aid to families with dependent children. Requires a State to report the amount each family under the program receives to the Internal Revenue Service and the Secretary of Health, Education, and Welfare.

Requires a State to certify the names of unemployed parents of dependent children to the State work incentive (WIN) sponsor within 30 days after such parent receives benefits for a dependent child. Denies aid to parents who refuse participation in work incentive programs or who are receiving unemployment compensation. Establishes a formula for determining the amount of cash benefits payable to unemployed parents of dependent children and limits payment of such benefits to a period of 17 weeks per year.

Authorizes quarterly payments to States, accordingly to specified percentages, for aid and services under the program of aid to families with dependent children. Eliminates incentive adjustments to the amount of Federal participation in such program where payment error rates are less than four percent of all payments made.

Repeals provisions for emergency assistance to needy families with dependent children and provisions authorizing payment and distribution of food stamp coupons under the program of aid to families with dependent children.

Title III: Amendments to Food Stamp Program - Amends the Food Stamp Act of 1977 to exclude from household income training incentive payments, the earnings of individuals under age 21, and loans, grants, and scholarships for secondary education.

Lowers the standard deduction, in computing household income, from $60 to $30. Eliminates from such computation the 20 percent additional earned income and excess deductions. Revises the formula for the dependent care deduction. Excludes from the asset determination of a household's financial resources the fair market value of all of a family's licensed vehicles up to $6,500.

Requires registration and compliance with the State work incentive (WIN) program sponsor of all physically and mentally fit household members between the ages of 16 and 60.

Revises the formula for computing a household's coupon allotment to provide that the monthly cost to a household of the thrifty food plan (currently reduced by 30 percent) shall be reduced to an amount equal to 20 percent (15 percent for a one-person household) of the household's monthly income under $596, plus 40 percent of such income $596 or over.

Requires the State food stamp agency to provide the Secretary of the Treasury with the name and social security number of each individual in each household receiving coupons, and the value of the coupons so received. Authorizes the State agencies to establish automated statewide management information systems to control and account for all the factors in the total eligibility determination process.

Authorizes the Secretary of Agriculture to pay any State agency: (1) up to 100 percent of the costs of administering the food stamp program on Indian reservations; (2) up to 75 percent of the costs of personnel training; and (3) up to 75 percent of the costs of developing or installing statewide mechanized claims processing and information retrieval systems.

Replaces the current allowance for an increase in the federally funded share of administrative costs to State agencies having a less than 50 percent error rate, with an authorization to reduce such share by up to 50 percent of the amount of such costs attributed to specified kinds of errors.

Title IV: Amendments to Work Incentive (WIN) Program - Limits the amount of appropriation that may be authorized for the Work Incentive (WIN) Program. Directs the Secretary of Labor to estimate, prior to each quarter of each fiscal year, the amount required by each State for its WIN programs and to pay such amount to each State.

Requires the expenditure of 66 2/3 percent of WIN funds for an on-the-job training and 15 percent of such funds for institutional and work experience training.

Establishes formulae for the allotment of WIN program funds to each State.

Changes the priorities for placement of unemployed parents of dependent children under the WIN program. Prohibits placement of an individual in a WIN program unless such individual has registered for the program with the State and has lived with an aid to families with dependent children family for not less than 112 days.

Places responsibility for the establishment and operation of work incentive (WIN) programs with the State. Requires the Governor of each State administering a WIN program to report annually on the operation of such program to the Secretary of Labor.

Allows payment of State or Federal minimum wage (whichever is higher) for work performed under the WIN program. Permits the payment of extra compensation for outstanding work performance of WIN employees, not to exceed five percent of the total amount paid to such employees. Increases the permissible rate of incentive pay from $30 a month to $30 a week. Limits the amount of employer overhead compensation to 20 percent of the wages paid to WIN employees.

Title V: Supplemental Security Income Payments - Increases the dollar amounts on allowable income of certain aged, blind, or disabled individuals seeking benefits under Title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act. Increases the amount of cash benefits under such Title.

Renders recipients of supplemental security income benefits ineligible for food stamp assistance.