One serious challenge the study found was that states were having difficulties establishing tracking and notification systems. In addition, GAO concluded that "states will probably experience relatively low percentages of cases terminated for non-compliance with program requirements as compared with their total caseloads;" that states will terminate more beneficiaries because of lack of compliance with nonwork requirements than with work requirements, but that the ratio will change over time; that "states will see a significant percentage of those who were terminated due to the program requirements will eventually comply and return to welfare;" and that as families lose their welfare benefits, there will be corresponding reductions in food stamps and Medicaid, even though they are still eligible for those programs.
While work requirements and time limits on collection of welfare benefits were keystones of the 1996 welfare reform law, many states had already received approval to experiment with benefit termination prior to the law's passage. Between January 1987 and August 1996, when the new welfare bill was passed, the U.S. Department of Health and Human Services (HHS) approved waiver requests for 46 states. These requests were for experiments with Aid to Families with Dependent Children (AFDC) and welfare-to-work programs. Thirty-three of those states had approval for experiments with benefit termination similar to the 1996 welfare reform law. The mission of GAO was to examine the track record of states that had implemented these provisions and report on the effect of these changes. GAO surveyed states to determine which recipients had their benefits terminated, and selected three states with large numbers of terminations for further study.
Wisconsin, Iowa and Massachusetts
In its study, GAO found that few states had actually terminated benefits. Of the 33 states with waivers allowing them to terminate benefits because of a recipient's lack of compliance with program requirements or a time limit, GAO found that 14 had not terminated the benefits of any families due to those requirements. In addition, "[o]f the 19 states that had terminated benefits, seven had terminated fewer than 100 cases." The three states with the largest number of terminations -- Wisconsin, Iowa and Massachusetts -- were chosen for more detailed analysis. They accounted for 78 percent of the 9,800 benefits terminations nationwide through June 1996. These states were responsible for 72 percent of 18,000 benefits terminations through December 1996.
Among the factors limiting the movement from welfare to work was the requirement that the state take responsibility for moving recipients off welfare. This requirement placed additional burdens on case workers to provide intensive case management services, including home visits. A change in job function for the case workers -- from eligibility determination to that of job counselor -- has also limited the effectiveness of the program. The GAO found that these three states worked to shift responsibility for moving from welfare to work from the state to the beneficiary. They also viewed the threat of benefit termination as a tool to motivate recipients to become more self-sufficient.
The primary reason for benefit termination was the failure of the recipient to comply with either work requirements or enrollment in the state's JOBS program. JOBS (Job Opportunities and Basic Skills training) is a program implemented as a part of the Family Support Act of 1988. GAO investigators found that over time, the number of families that had their benefits terminated as a result of program requirements (i.e. looking for work or enrolling in JOBS) decreased, and the percentage of those terminated due to the work requirements increased. The percentage of cases among the study states reopened after termination due to lack of compliance with program requirements ranged from 32 percent, in the cases of Iowa and Massachusetts, to 38 percent for Wisconsin. In the words of one Massachusetts caseworker quoted in the GAO report, "Many clients don't take the program seriously until the checks stop. Loss of just the adult portion of the grant isn't enough to get their attention. [But] when they get no benefits at all, they're on the phone with their caseworker right away."
Automation Stumbling Blocks
Among the primary challenges to the states in managing the stricter work requirements and time limits on benefits is tracking work and the amount of time spent on welfare. In order to monitor program compliance, states must implement automated systems that monitor welfare recipients' work activity and amount of time on the program. GAO found, in its study of the three states that had worked to implement the work requirements, that systems and data entry problems severely limited the ability of the states to properly monitor work and notify recipients of impending termination of benefits. Difficulties faced by the states included start-up difficulties because of a lack of pilot testing, failure by employers to submit time stubs or to verify hours on a timely basis, problems entering data in a timely basis, and different data entry methods used by eligibility workers and case managers. Because of these difficulties, states experienced problems with recipient notification. These problems included improper notification of sanctions, including an error rate of up to 70 percent in one Wisconsin county. In Massachusetts, welfare advocates argued that termination notices did not provide adequate information regarding the cause of the termination. Of those who appealed the termination, 47 percent were later reinstated, at least in part.
The only state that terminated benefits due to exceeding a time limit on receipt of welfare benefits was Florida. Its program had only been in place a few months by the time the study was concluded, so no conclusions could be drawn from that state's limited experience.
The GAO report, while limited by the number of states that had actually implemented benefits termination and the relatively small number of terminated beneficiaries, provides some valuable information to states and Congress as the new law is implemented. The data requirements of the new legislation, while not a major finding of the report, could be a significant barrier to state compliance with welfare reform requirements.
Copies of GAO reports are available by calling 202/512-6000 or on GAO's World Wide Web home page at
Milford Sprecher is a program director for IDC Government of Falls Church, Va., where he tracks technology use in the public sector.
