The Senate’s Welfare Reform Proposal

The Senate has released its comprehensive proposal to strengthen the state’s largest cash assistance program, Transitional Aid to Families with Dependent Children (TAFDC). We will vote on it later this week.

Here are the major components of the Senate’s proposal:

First, the bill requires analysis and reporting on some fundamental program issues that have not been addressed in the recent audits. TAFDC is designed to be temporary. It already includes work requirements and term limits. But TAFDC also allows exemptions from those requirements and limits — notably for parents of very young children. The bill requires DTA to develop and release better data showing how many of these exemptions are being allowed.

Second, it tightens the application process. It increases penalties for false representations and requires applicants to more promptly provide valid social security numbers.

Third, it strengthens work requirements. Working through the Commonwealth Corporation, it creates a “job diversion” program to move qualified applicants for assistance directly into jobs instead of onto welfare. It requires applicants to seek work before going on welfare and to continue their job search. The bill funds 50 employment specialists to focus on the recipients most at risk of continuing unemployment. It also gives businesses incentives to hire welfare recipients by covering their health insurance costs — these costs will be offset by savings in the MassHealth program which would otherwise cover health care for these recipients. It imposes more accountability for outcomes on job training and placement programs.

Finally, the bill includes a number of provisions designed to reduce fraud. These requirements will strengthen not only the TAFDC program but also the federally-funded SNAP program (formerly known as food stamps). SNAP benefits are lower than TAFDC benefits, but are available to many more households — 500,000 households, almost ten times as many. The problem of fraud is arguably greater in SNAP because it is only supposed to be used for food.  Some recipients work around that limit by illegally converting the benefits into cash.

The bill requires that Electronic Benefit Transfer cards shall include photo identification of the card holder — making it harder to sell cards. It requires the Department of Transitional Assistance to develop regulations and procedures to authorize other members of a household to use the card (consistent with federal law). It fines store owners who knowingly allow unauthorized persons to use a card to make purchases.

The bill also creates a fraud detection program designed to increase the probability of prosecution of recipients and store owners who are converting benefits into cash through sham transactions. The bill funds six additional fraud investigators.

The bill does include some liberalizations of benefits to the end of increasing the chances that recipients can get off welfare.  It requires recipients to develop economic independence plans and creates a savings program for benefit recipients, encouraging them to escrow a portion of their benefits and use the savings for emergency needs or a security deposit on an apartment. It allows school-attending teenagers in an assisted family to work part-time without jeopardizing eligibility.  It also eliminates the specific limit on the value of the single automobile that an assisted family can own.

This package goes much further than the ad hoc measures that the Senate rejected during the budget process and I do support it.

As we move forward, it is worth bearing in mind that MassHealth covers roughly 50% more people  and costs over six times more than TAFDC and SNAP combined. Our real budget challenge remains health care cost control.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

14 replies on “The Senate’s Welfare Reform Proposal”

  1. Hi Will:

    Thank you for this detailed information regarding the new Welfare proposals.

    Here are my questions:

    1) How much money does Welfare-related fraud cost our state each year? I understand that we can’t measure this with exact precision, but what are the estimates?

    2) How much money will the proposed measures (specifically, the “Fraud Detection Program” and the “incentives” for business owners who provide insurance policies to Welfare recipients) cost?

    2) How does this compare with the amount of state tax revenue lost each year as a result of Massachusetts-based corporations engaging in tax evasion?

    3) Do we seriously expect a significant number of Welfare recipients to have enough money left over (once rent, groceries, food and medical expenses have been paid) to put in savings accounts?

    4) Has anyone considered the possibility that skyrocketing MassHealth costs are a signal that our state’s Healthcare Reform has failed and that it’s time to remove private insurance corporations from the playing field and move to a single-payer, fully socialized health insurance system?

    Thanks in advance for your continued engagement in these discussions!

    Jim Recht, MD

  2. While the State Audit Department cannot endorse a program that seeks to reduce fraud because it compromises its independence. Susan Bump can certainly outline the components of a more airtight program and then we can see how this bill stacks up.

  3. There is no doubt that we can strengthen welfare and other programs for low income Massachusetts residents who need help.

    But it is critical to match stringency with providing enough resources to make it possible for people to get off welfare through jobs and employment. President Clinton’s ambitious welfare reform proposals turned welfare into a time limited program, which is good. But they did not include sufficient funding for child care and transportation, resources that would make it possible for mothers to find and keep jobs. And so, they often reduced welfare rolls (thereby saving taxpayers’ money) without helping those in need. As we noted in a Brandeis study of welfare reform over a decade ago, the questions about efforts to reduce the rolls should focus on the well-being of recipients and their families. In particular, we need to ask, “Are they better off [welfare].”

  4. Hi Jim, responding to your numbered questions (two number two’s), which are all important:

    (1) The amount of fraud in the TAFDC program is, of course, an unknown. But the IG’s report identified eligibility issues that potentially average as much as $25,000,000 per year in costs to the taxpayer. The auditor’s report, which related to both SNAP and TAFDC, identified a variety of issues in TAFDC, doesn’t provide a single total estimate — it identified a number of potential problems, but didn’t quantify total fraud. As to TAFDC, for a very round number, use the IG’s number. For SNAP, a much bigger program with higher potential for fraud, assume a higher number.

    (2) The proposed health care cost incentive is estimated to cost $15 million, but will also save money in terms of Masshealth costs. Including the incentive, the appropriations in the bill total $38 million.

    (2) Haven’t seen a good recent estimate of corporate tax evasion, but settlements in state tax litigation with corporations often run in the tens or hundreds of millions. Agreed — this is a bigger dollar issue, and also critical, just not the issue that we are working on right now.

    (3) Many poverty advocates feel strongly that it is important to allow just a little saving. The disincentive to build assets that might disqualify one from benefits discourages realistic financial thinking. Click here for one example.

    (4) This is a rhetorical question, but, of course. And I salute your advocacy on the issue.

  5. Job training without provision for child care is often an empty promise–or total threat.

  6. Will,

    Thank you for another very thoughtful reply. I appreciate your support for single payer health insurance, and your acknowledgment that corporate fraud is a bigger dollar issue than alleged foodstamp/EBT fraud. I think most knowledgeable individuals would agree that it’s a much, much bigger dollar issue. And though superficially or politically, these may appear to be 3 separate issues — welfare costs, corporate fraud, and health insurance affordability — they all boil down to money. If we had adequate protections against corporate fraud, and a fully socialized health insurance system, then we would have more than enough money to fund superb social welfare and work rehabilitation programs. Now, as a result of our failure to achieve the first two, we’re sticking it to the poor.

  7. Hi Will,

    Thanks for the update and the opportunity to participate in these discussion forums!

    I wanted to ask three questions.

    1) First, I applaud the Senate Bill’s decision to remove the restrictions on the value of a car owned as well as limits on the ability of families to save for the future. I was curious if the savings plans for families are matched IDA accounts – that is, does the government or some non-profit match savings for families participating in TAFDC? I think this could be a really helpful strategy to encourage low-income families to build the assets they need to sustain their transition off of assistance. If we want families to transition into work, we need to support them as they make this transition.

    2) My concern about this bill is its emphasis on fraud elimination. While I, like any citizien, want to see our tax dollars spent well, I am concerned that the emphasis on welfare fraud in this bill is going to further stigmatize those who are already participating in the program. These situations of fraud are less than 1% of TAFDC participants, yet 100% are going to suffer from the increased restrictions and increased public stigma. I was curious if you know of a way to address this issue in the legislation.

    3) I also wanted to learn more about the job diversion program. My concern here is that families with young children will be denied the assistance they need and be forced into low-wage labor. Massachusetts, despite its progressive history, has still not passed legislation that would ensure a living wage for workers. If we send low-income families who need help away to find jobs that keep them below the poverty line, how are we meeting our collective obligation to ensure the wellbeing of all Massachusetts citizens? What kinds of effects will we see on the young children of TAFDC participant parents?


    Drew Reynolds

  8. Larry, in response to your concern about the provision for child care, I wanted to draw your attention to Section 18 of the bill, which provides a child care voucher for recipients’ first year of participation in the full employment program to be administered by the Commonwealth Corporation. You can access the bill here:

    Drew, in response to your first question, I wanted to let you know that, as currently drafted, the bill does not require a matching government contribution for TAFDC families’ contributions to savings plans.

    Anne Johnson Landry
    Committee Counsel and Policy Advisor
    Office of State Senator William N. Brownsberger

  9. Just one additional data point to the concern about child care — parents of children under two and certain others are exempted from the work requirement (under current law and under the proposal).

  10. Below appears the official Senate press release following passage of the legislation:

    Senate Passes Comprehensive Welfare Reform Legislation

    BOSTON – The Senate today passed legislation that makes necessary improvements to the welfare system, closing loopholes and implementing the tools and resources needed to help recipients reach economic independence.

    “We have been working on this issue since September, talking to stakeholders and advocacy groups and doing our due diligence to bring thoughtful changes to the welfare system,” Senate President Therese Murray (D-Plymouth) said. “The changes approved in this bill will provide those who are ready and able to work with the support needed to move forward and live independently. Helping our residents enter the workforce and lead successful and self-sustaining lives will help our economy grow and will support the overall health of the Commonwealth.”

    “The bill lays down a pathway to economic independence for poor people, including the first recognition in years that a self-sustaining job is almost certain to require years of post-high school education,” said Senator Mike Barrett (D-Lexington), Senate Chair of the Joint Committee on Children, Families and Persons with Disabilities.

    Senator Jennifer L. Flanagan (D-Leominster) said, “This legislation addresses many of the concerns brought to light by both EBT Commissions that I was appointed to serve on. It also provides a path to truly make these benefits transitional, not a way of life. I am proud of the provisions in this comprehensive piece of legislation; the Senate addressed this in a thoughtful, complete manner and not piece by piece, which will result in restoration of the public trust in this very important program”

    “This plan is firm, fair and honest,” said Senator Stephen M. Brewer (D-Barre). “We know that meaningful reforms require meaningful investment; this bill provides funding that will connect recipients with vital tools to save and develop assets, learn job skills, and be connected to meaningful employment opportunities to foster economic independence. Furthermore, it combats fraud and holds applicants legally responsible for providing truthful information while ensuring that residents in need of public assistance will still be able to utilize it.”

    — more —
    Under this legislation, applicants are required to search for a job before they receive cash assistance, replacing the current regulations that provide recipients with a 60-day window after they start receiving benefits before they are required to look for a job. This bill also creates a job diversion program through DTA and the Commonwealth Corporation to connect able-bodied individuals with full-time jobs before they start receiving benefits.

    This bill also revives the Full Employment Program that was originally established in 1995 to place recipients in full-time employment instead of receiving benefits from the state. The bill transfers responsibility for the program from DTA to the Commonwealth Corporation and requires the Commonwealth Corporation to identify job openings, match qualified recipients with the needs of the business community and work with recipients to provide relevant training and education. The Full Employment Program is mandatory for all recipients unless they are otherwise exempt from the work requirements.

    Recipients who secure a full-time job will receive childcare for the first year of employment and employers who hire from the Full Employment Program will be eligible for a healthcare subsidy under the insurance partnership program. After receiving the healthcare subsidy for one year, a tax credit will be available to employers of $100 per month worked with a maximum credit of $1200 per participant. This tax credit was created in 1995.

    The bill appropriates funding for DTA to hire additional caseworkers and additional fraud unit investigators and requires DTA to have specialists who are assigned to help high-risk recipients with a maximum caseload of 60.

    To help recipients overcome the “cliff effect,” the bill develops an asset development program through DTA to allow recipients to save money for first, last and security rent payments and for education. This savings would not be counted against the asset limit of $2,500 and will support recipients as they transition out of the welfare system.

    In addition, this legislation will strengthen assistance to pregnant teens and their children by allowing pregnant teens to be eligible for the Teen Living Program at the start of their pregnancy. Under the current regulations, pregnant teens must be 120 days from their due date to be eligible for a Teen Living Shelter Program.

    The bill also closes existing loopholes that continue to serve as incentives for individuals to stay on welfare instead of working:

    • Requires the calculation of the five-year cap on the family rather than separate for each parent and requires DTA to develop specific criteria that must be met in order for a recipient to receive a waiver of the family cap for extraordinary circumstances;
    • Reduces the period for an extension of benefits beyond the 24-month period from six months to three months;

    — more —
    • Changes the number of days in which a temporary absence from Massachusetts creates a presumption that Massachusetts residency has been abandoned from 60 to 30 days;
    • Changes the exemption from the work requirement for recipients who are age 60 or older to age 66;
    • Changes the exemption from the work requirement for women in the last four months of pregnancy to the last month of pregnancy unless the woman has a documented medical issue;
    • Requires self-declarations to be signed under the penalties of perjury and prohibits self-declarations from being used as the only verification of eligibility;
    • Requires work participation forms to be verified by a third party under the penalties of perjury;
    • Institutes a three-month time limit on placeholder social security numbers and suspends benefits for individuals who do not provide a valid social security number within the time limit; and,
    • Requires DTA to refer cases involving multiple even dollar transactions or full benefits withdrawals to DTA’s Program Integrity Division or to the Bureau of Special Investigations in the Office of the State Auditor.

    The bill makes several changes to the Electronic Benefit Transfer (EBT) cards by requiring photographs of recipients over the age of 18 on EBT cards by August 1, 2014 and requiring the welfare fraud hotline and DTA’s website to be printed on newly issued EBT cards. DTA is also required to record and track blank EBT cards.

    For store owners who fail to check photographs on EBT cards, the bill creates penalties of no less than $100 and no more than $500 for the first offense, no less than $1,000 and no more than $2,500 for the second offense and no less than $5,000 for the third or subsequent offense. On the fourth offense, there will be a review of the establishment to determine if they should have the authority to accept EBT cards.

    In addition, the bill requires DTA to make additional reports to the Legislature on the number of exemptions and extensions granted; how long recipients have been receiving benefits; economic independence goals; cases referred to the program integrity unit and the results of their investigations; economic independence accounts opened and recipients receiving cash assistance under one of the eligible noncitizen statuses.

    The bill now goes to the House of Representatives.

  11. There need to be more protections for families with young children, the time when a young family is most likely to need help if their breadwinner abandons/gets sick or otherwise disappears as for even a college educated parent without enough day care vouchers which is the current situation a person working full time will be making maybe $10./week over the expense of day care. There aren’t enough slots now and this bill does not create more.

    Also if this is implemented more families will turn up at my diaper program looking for help. . . it will essentially push families off government help and onto non government funded programs. And that’s if it goes as planned. Indeed last year we were told more help was being given through the DTA to keep families from becoming homeless and in emergency shelters and only a year later both of those in Brighton are filling up again.

  12. This bill does create more child care slots — it creates a specific pool of vouchers for newly employed recipients of assistance.

    The legislative debate on this bill will continue in the fall when the House takes it up. As part of the budget compromise reached on July 1, the Senate agreed to include photo-ID language in the budget and the House promised to look at the issue more comprehensively in the Fall.

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