January 29, 2014

THEIR VIEW: Addressing the real welfare problem


---- — The General Assembly could help mend Indiana’s increasingly tattered safety net — and potentially save tax dollars — with changes to its Temporary Assistance for Needy Families welfare program.

These changes are not through House Bill 1351, the bill that would require drug testing for all families receiving TANF.

Under HB 1351, TANF recipients would not pay for the bill’s required drug testing. The bill’s required drug testing would cost Hoosier taxpayers an estimated $1.42 million for 2016-17 alone. If drug abuse is found through drug testing, the family on welfare would pay for treatment or lose their benefits.

To be eligible for TANF in Indiana, the annual gross income for a family of three must be below 36.3 percent of the federal poverty level or below $7,104 annually. In addition, the family may not possess more than $1,000 in assets.

Of the 12,837 families receiving assistance, 4,822 are single‐parent households, 213 are two‐parent households and 8,844 are no‐parent households.

In testimony Wednesday in opposition to HB 1351, Derek Thomas, a senior policy analyst for the Indiana Institute for Working Families, stated that Indiana’s growing economy is not helping low- to moderate-income families. He said during the past decade, Hoosiers have experienced increases in poverty at greater rates than nearly all U.S. states, and their wages were also among the hardest hit.

“Yet, here’s how TANF responded,” Thomas said:

“From 2007 through 2011, during the height of the Great Recession, the number of unemployed Hoosiers increased by 92 percent while TANF caseloads fell 51 percent — from 40,985 families to 20,046 families. The national caseload increased by 10 percent.

“As of March 2013, there were just 26,364 individuals (including 23,128 children) participating in TANF.

“That’s equal to just 2.9 percent of nearly 1 million Hoosiers in poverty, and barely 1 percent of the 2.24 million Hoosiers that are low-income.

“At a paltry $288 a month for a family of three, the value of TANF has eroded by 31 percent since 1996 (after adjusting for inflation).

While barriers to self-sufficiency do include substance abuse and addiction, a better approach is Senate Bill 413, introduced by state Sen. John Broden, D-South Bend. Broden’s bill would eliminate the TANF asset test.

Thomas said states that have eliminated the TANF asset test (Illinois, Ohio, Virginia, Hawaii, California, Colorado, Louisiana, Alabama and Maryland) have not seen a surge in TANF applications “because there are already so many hoops you have to jump through” such as work, education and training requirements and personal interviews.

Indiana’s elimination of asset tests is predicted to be “cost neutral” but other states have reported overall savings. In 2012, the year before Illinois eliminated its TANF asset tests, the Illinois Department of Human Services found only eight cases in 192,000 asset limit checks that were over the limit. It cost Illinois more than $960,000 to find those eight cases.

Thomas said the current TANF asset limit in Indiana prohibiting savings of more than $1,000 sends a message to low‐income families that saving is a behavior that warrants punishment. Asset limits create a cycle of reliance on welfare.

HB 1351 — which is costly — is moving steadily through the General Assembly.

Meanwhile, SB 413, which would encourage TANF families to accumulate the assets they need to transition off of public assistance, is not expected to go anywhere.

— KPC News

THE ISSUE House Bill 1351 would require drug testing for all families receiving TANF. THEIR VIEW Indiana Legislature should focus on efforts that help families transition off welfare