Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002

CRS Report for Congress
Cash and Noncash Benefits for Persons with
Limited Income: Eligibility Rules, Recipient and
Expenditure Data, FY2000-FY2002
November 25, 2003
Compiled by: Vee Burke
Specialist in Income Maintenance
Domestic Social Policy Division


Congressional Research Service ˜ The Library of Congress

Cash and Noncash Benefits for Persons With
Limited Income: Eligibility Rules, Recipient and
Expenditure Data, FY2000-FY2002
Summary
More than 80 benefit programs provide aid — in cash and noncash form — that
is directed primarily to persons with limited income. Such programs constitute the
public “welfare” system, if welfare is defined as income-tested or need-based
benefits. This definition omits social insurance programs like Social Security and
Medicare.
Income-tested benefit programs in FY2002 cost $522.2 billion: $373.2 billion
in federal funds and $149 billion in state-local funds (Table 1). Welfare spending
represented almost 19% of all federal outlays, with medical aid accounting for 8%
of the budget. Total welfare spending equaled 5% of the gross domestic product and
set a new record high, up $45.3 billion (9.5%) from the previous peak of FY2001.
In current dollars, spending increased during the year for all forms of aid except jobs
and training. Higher medical spending accounted for $32.8 billion of the net
increase, and 54 cents of every welfare dollar went for medical assistance. Expressed
in constant FY2002 dollars (Table 2), welfare spending increased by 7.9% from the

2001 level.


The composition of welfare spending differed by level of government (Tables
3 and 4). Medical aid consumed 80% of state-local welfare funds, but 43.9% of
federal welfare dollars.
Most income-tested programs provide benefits, in the form of cash, goods, or
services, to persons who make no payment and render no service in return. However,
in the case of the job and training programs and some educational benefits, recipients
must work or study. Further, the block grant program of Temporary Assistance for
Needy Families (TANF) requires adults to start work after a period of enrollment, the
food stamp program imposes work and training requirements, and public housing
requires residents to engage in “self-sufficiency” activities or perform community
service. Finally, the Earned Income Tax Credit (EITC) is available only to workers.
An unduplicated count of welfare beneficiaries is not available. Enrollment in
TANF and food stamps remained far below 1994/1995 peak levels during 2000-
2002, but Medicaid enrollment set a new record high. Average 2002 monthly
numbers: Food stamps, 20.2 million; TANF, 5.1 million; and Supplemental Security
Income (SSI), 6.9 million. During the year 50.9 million persons received Medicaid
services, and in 2001, EITC payments went to an estimated 16.8 million tax filers.
Census Bureau data indicate that 5.4 million families with children were poor in

2002 before receiving cash aid from TANF, General Assistance (GA) or the EITC,


compared with 6.7 million in 1996 (last full year of the pre-TANF welfare program).
Among these families, the EITC was received by 53.7% of those with a female head
and by 71.7% of those with a male present (Figure 3).



Contents
In troduction ......................................................1
Trends in Spending................................................4
Composition of Spending..........................................11
Noncitizen Eligibility for Major Federal Benefits........................12
Aid Received by Poor Families With Children..........................13
Income Tests of the Benefit Programs.................................15
Medical Aid.....................................................28
1. Medicaid.....................................................29
2. Medical Care For Veterans Without Service-Connected Disability........39
3. State Children’s Health Insurance Program (SCHIP)...................42
4. General Assistance (Medical Care Component).......................48
5. Indian Health Services..........................................50
6. Consolidated Health Centers......................................52
7. Maternal and Child Health Services Block Grant......................54
8. Title X Family Planning Services..................................56
9. Medical Assistance to Refugees, Asylees, Other Humanitarian Cases......57
Cash Aid........................................................59
10. Supplemental Security Income (SSI)..............................60
11. Earned Income Tax Credit (EITC)................................64
12. Temporary Assistance for Needy Families (TANF)...................67
13. Foster Care..................................................73
14. Child Tax Credit..............................................75
15. General Assistance (Nonmedical Care Component)..................77
16. Pensions for Needy Veterans, their Dependents, and Survivors..........81
17. Adoption Assistance...........................................83
18. Dependency and Indemnity Compensation (DIC) and Death
Compensation for Parents of Veterans.............................84
19. General Assistance to Indians....................................85
20. Cash Assistance to Refugees, Asylees, Other Humanitarian Cases.......87
Food Aid.......................................................89
21. Food Stamps.................................................90
22. School Lunch Program (Free and Reduced-Price Components)..........96
23. Special Supplemental Nutrition Program for Women, Infants, and
Children (The WIC Program)...................................98
24. Child and Adult Care Food Program (Lower-Income Components).....100

25. School Breakfast Program (Free and Reduced-Price Components)......103



27. The Emergency Food Assistance Program (TEFAP).................107
28. Summer Food Service Program.................................109
29. Commodity Supplemental Food Program (CSFP)...................110
30. Food Distribution Program on Indian Reservations (FDPIR)...........112
31. Farmers’ Market Nutrition Programs.............................114
32. Special Milk Program (Free Segment)............................116
Housing Aid....................................................118
33. Section 8 Low-Income Housing Assistance........................119
34. Low-Rent Public Housing......................................122
35. Rural Housing Loans (Section 502)..............................125
36. Home Investment Partnerships Program (HOME)...................127
37. Housing For Special Populations (Elderly and Disabled)..............129
38. Rural Rental Assistance Payments (Section 521)....................132
39. Section 236 Interest Reduction Payments..........................133
40. Housing Opportunities for People with AIDS Program (HOPWA)......135
41. Rural Rental Housing Loans (Section 515)........................137
42. Rural Housing Repair Loans and Grants (Section 504)...............139
43. Farm Labor Housing Loans (Section 514) and Grants (Section 516).....140
44. Section 101 Rent Supplements..................................142

45. Rural Housing Self-Help Technical Assistance Grants (Section 523)


and Rural Housing Site Loans (Sections 523 and 524)...............144
46. Indian Housing Improvement Grants.............................146
47. Section 235 Homeownership Assistance for Low-Income Families.....148
48. Rural Housing Preservation Grants (Section 533)...................150

49. Homeownership and Opportunity for People Everywhere (HOPE)


P rogram s ..................................................152
Educational Assistance...........................................155
50. Federal Pell Grants...........................................156
51. Head Start..................................................158
52. Subsidized Federal Stafford and Stafford/Ford Loans................160
53. Federal Work-Study Program...................................162
54. Federal TRIO Programs.......................................164
55. Supplemental Educational Opportunity Grants.....................167
56. Title 1 Migrant Education Program..............................168
57. Perkins Loans...............................................170
58. Leveraging Educational Assistance Partnerships (LEAP).............172
59. Health Professions Student Loans and Scholarships.................174
60. Fellowships for Graduate and Professional Study...................177
61. Migrant High School Equivalency Program (HEP)..................180
62. College Assistance Migrant Program (CAMP).....................181

63. Close Up Fellowships.........................................182



Services .......................................................183
64. Child Care and Development Block Grant.........................184
65. TANF Services...............................................187
66. Social Services Block Grant (Title XX)...........................188
67. TANF Child Care............................................190
68. Homeless Assistance Grants....................................192
69. Community Services Block Grant...............................194
70. Legal Services (LSC).........................................196
71. Social Services for Refugees, Asylees, Other Humanitarian Cases......198
72. Emergency Food and Shelter Program............................200
Job and Training Programs........................................202
73. TANF Work Activities........................................203
74. Job Corps..................................................205
75. Youth Activities.............................................207
76. Adult Activities..............................................209
77. Senior Community Service Employment Program (SCSEP)...........211
78. Welfare-to-Work Grants.......................................213
79. Food Stamp Employment and Training Program....................215
80. Foster Grandparents..........................................217
81. Senior Companions...........................................218
82. Targeted Assistance to Refugees, Asylees, Other Humanitarian Cases...219
83. Native Employment Works Program.............................220
Energy Assistance...............................................222
84. Low-Income Home Energy Assistance (LIHEAP)...................223
85. Weatherization Assistance.....................................225
List of Figures
Figure 1. Expenditures for Income-Tested Benefits, FY1975-FY2002
(millions of constant 2002 dollars)................................5
Figure 2. Composition of Income-Tested Benefits.......................11
Figure 3. Cash and Noncash Welfare Benefits Received by Poor Families
with Children, 2002..........................................14



List of Tables
Table 1. Expenditures of Major Need-Tested Benefit Programs, by Form
of Benefit and Level of Government, FY2000-FY2002................3
Table 2. Total Expenditures for Need-Based Benefits, FY1968-FY2002......4
Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit,
FY1968-FY2002 ..............................................8
Table 4. State-Local Spending for Income-Tested Benefits by Form of
Benefit, FY1968-FY2002.......................................9
Table 5. Total Spending for Income-Tested Benefits by Form of Benefit,
FY1968-FY2002 .............................................10
Table 6. Outlay Trends by Form of Benefits, FY1978-FY2002.............11
Table 7. Income Eligibility Tests Used by Benefit Programs...............16
Table 8. Bureau of the Census Poverty Thresholds for 2002...............24
Table 9. 2003 Federal Poverty Income Guidelines.......................24
Table 10. Eligibility Levels for Free and Reduced Price Meals for the
Period of July 1, 2003-June 30, 2004.............................25
Table 11. Lower Living Standard Income Level (LLSIL) for a Family of
Four - Effective May 30, 2003...................................26
Table 12. EITC Parameters for Tax Years 2001-2003....................66
Table 13. Maximum Monthly Food Stamp Allotments (October 2003
through September 2004)......................................94
Table 14. Need-Based Benefits: Expenditures and Enrollment Data,
by Programs and Form of Benefits FY2000-FY2002................227



This alphabetical list of programs provides the names of Congressional Research
Service (CRS) staff members who contributed program data and rules to this report. Each
is a member of the Domestic and Social Policy Division of CRS except for Fred Sissine
(Resources, Science, and Industry Division).
Adoption assistanceEmilie Stoltzfus
Adult activitiesLaura Monagle
Cash assistance to refugees, asylees, entrants, othersKarma Ester
Chapter I migrant education programLaura Monagle
Child and adult care food programJoe Richardson
Child care and development block grantMelinda Gish
Child tax creditChristine Scott
College assistance migrant program (CAMP)Laura Monagle
Commodity supplemental food programJoe Richardson
Community services block grant programGarrine Laney
Consolidated health centersSharon Coleman
Close up fellowshipsLaura Monagle
Dependency and indemnity compensation (DIC) for parents of veteransDennis Snook
Earned income tax credit (EITC)Christine Scott
Emergency food and shelter programMaggie McCarty
Farmers’ market nutrition programsJoe Richardson
Farm labor housing loans and grantsBruce E. Foote
Federal Pell grantsLaura Monagle
Federal TRIO programsLaura Monagle
Federal work-study programLaura Monagle
Fellowships for graduate and professional studyLaura Monagle
Food distribution program on Indian reservationsJoe Richardson
Food stampsJoe Richardson
Food stamp employment and training programJoe Richardson
Foster careEmilie Stoltzfus
Foster grandparentsLaura Monagle
General assistance (medical care and cash components)Vee Burke
General assistance to IndiansVee Burke
Head startMelinda Gish
Health professions student loans and scholarshipsSharon Coleman
Home investment partnerships (HOME)Bruce E. Foote
Homeless assistance grantsMaggie McCarty
Homeownership and opportunity for people everywhere (HOPE)Richard Bourdon
Housing for special populations (elderly/disabled)Maggie McCarty
Housing opportunities for people with AIDS (HOPWA)Maggie McCarty
Indian health servicesDonna Vogt
Indian housing improvement grantsBruce E. Foote
Job corpsLaura Monagle
Legal servicesCarmen Solomon-Fears
Leveraging educational assistance partnerships (LEAP)Laura Monagle
Low-income home energy assistance program (LIHEAP)Emilie Stoltzfus



Maternal and child health services block grantSharon Coleman
MedicaidLisa Herz
Medical assistance to refugees, aslyees, othersKarma Ester
Medical care for veterans without service- connected disabilityDennis Snook
Migrant high school equivalency program (HEP)Laura Monagle
Native employment works programVee Burke
Nutrition program for the elderlyCarol O’Shaughnessy
Pensions for needy veterans, their dependents and survivorsDennis Snook
Perkins loansLaura Monagle
Rural housing loans (Section 502)Bruce E. Foote
Rural housing repair loans and grants (Sec. 504)Bruce E. Foote
Rural rental assistance (Section 521)Bruce E. Foote
Rural rental housing loans (Section 515)Bruce E. Foote
Rural housing preservation grants (Section 533)Bruce E. Foote
Rural housing self-help technical assistance grants (Section 523) and ruralBruce E. Foote
housing site loan (Sections 23 & 524)
School breakfast program (free/reduced price meals)Joe Richardson
School lunch program (free/reduced price meals)Joe Richardson
Section 8 low-income housing assistanceMaggie McCarty
Section 101 rent supplementsMaggie McCarty
Section 235 homeownership assistanceMaggie McCarty
Section 236 interest reduction paymentsMaggie McCarty
Senior community service employment programCarol O’Shaughnessy
Senior companionsLaura Monagle
Social services block grant (Title XX)Melinda Gish
Social services for refugees, aslyees, entrants, othersKarma Ester
Special milk programJoe Richardson
Special supplemental food program for women, infants, and children (WIC)Joe Richardson
State child health insurance program (SCHIP)Evelyne Baumrucker
Subsidized federal Stafford and Stafford/Ford loansLaura Monagle
Summer food serviceJoe Richardson
Supplemental educational opportunity grantsLaura Monagle
Supplemental security income (SSI)Alexa Matthews
Temporary assistance for needy families (TANF)Vee Burke
TANF child careVee Burke
TANF servicesVee Burke
TANF work activitiesVee Burke
Targeted assistance to refugees, asylees, othersKarma Ester
The emergency food assistance programJoe Richardson
Title X family planning servicesSharon Coleman
Weatherization assistanceFred Sissine
Welfare-to-work grantsVee Burke
Youth activitiesLaura Monagle
Thomas Gabe prepared Figure 3.



Cash and Noncash Benefits for Persons
With Limited Income: Eligibility Rules,
Recipient and Expenditure Data,
FY2000-FY2002
Introduction
More than 80 benefit programs provide cash and noncash aid that is directed
primarily to persons with limited income. These benefit programs cost $522.2 billion
in FY2002, a record high. This sum was up $45.3 billion (9.5%) from the previous
peak of FY2001, and it equaled 5% of the gross domestic product (GDP). Federal
funds provided 71.5% of the total. Higher medical spending accounted for $32.8
billion of the year’s net increase, and 54 cents out of every welfare dollar went for
medical benefits. Federal welfare outlays represented 18.6% of the federal budget,
with 8% attributed to medical assistance. See Table 1 for FY2000-FY2002
summary.
After adjustment for price inflation, 2002 welfare spending was up $38.2 billion
(7.9%) from that of 2001, the previous peak. Real spending increases (2002 dollars)
were dominated by medical assistance (up $29.1 billion). Other increases were:
education benefits,$ 4.1 billion; food benefits, $3.3 billion; housing, $2.3 billion; and
services, $1.2 billion. Outlays for cash aid dropped by $1.2 billion; and for jobs and
training, by $0.5 billion.
Spending for “human capital” programs (ones providing education and
employment and training activities) accounted for 7.3% of all welfare dollars
(compared with 19.6% for cash assistance).
This report consists of a catalog of 85 need-based programs.1 For each program
the report provides the funding formula, eligibility requirements, and benefit levels.
At the back of the report, summary Table 14 gives expenditure data (federal and
state/local) and recipient data for FY2000-FY2002 by program. Two programs are
new to this series of reports: farmers’ market nutrition programs (formerly treated
as a component of the food stamp program) and housing assistance for special
populations — elderly and disabled. Historical tables have been revised to account
for these additions.


1 The number of programs in this report is somewhat arbitrary. For example, General
Assistance, listed under both cash and medical aid, could be viewed as a single program.

Most of these programs base eligibility on individual, household, or family
income, but some use group or area income tests (see Table 7 — page 16); and a
few offer help on the basis of presumed “need.” Most provide income “transfers.”
That is, they transfer income, in the form of cash, goods, or services, to persons who
make no payment and render no service in return. However, in the case of the job
and training programs and some educational benefits, recipients must work or study
for wages, training allowances, stipends, grants, or loans. Further, the TANF block
grant program requires adults to commence work (defined by the state) after a period
of enrollment, the Food Stamp program imposes work and training requirements,
and public housing programs require recipients to engage in “self-sufficiency”
activities or to perform community service. Finally, the Earned Income Tax Credit
(EITC.) is available only to workers.
This report excludes income maintenance programs that are not income-tested,
including social insurance and many veterans’ benefits, and all but two tax-transfer
programs. Thus, it excludes Social Security cash benefits, unemployment
compensation, and Medicare. Outlays for the Old-Age, Survivors, and Disability
Insurance programs (Social Security cash benefit programs) in FY2002 totaled $456
billion, financed primarily from payroll tax collections. The report also excludes
payments, even though financed with general revenues, that may be regarded as
“deferred compensation,” such as veterans’ housing benefits and medical care for
veterans with a service-connected disability.
The report includes two tax-transfer programs, the EITC for low-income
workers with children and the child tax credit. The EITC reduces the taxes of
working families with gross income below specified limits and makes direct
payments (“refunds”) to those whose income is below the tax threshold or whose tax
liability is smaller than their credit. Before the 2001 tax law, the child tax credit was
refundable only to some taxpayers with three or more children, but it now is
refundable (up to certain limits) for those with earnings above $10,000. This report
treats the direct payment component of these credits, but not the reduction in tax
liability, as a welfare expenditure. Other tax benefits are excluded from the report
because they are not refundable (make no direct payments). Further, in most cases
they impose no income test for eligibility. Examples of these other tax benefits are
the deductibility of mortgage interest and property taxes on owner-occupied homes
(equivalent to outlays of $63.3 billion and $21.8 billion, respectively, in 2002).
These tax transfers increase families’ disposable income by reducing their tax
liability and are known as “tax expenditures.” (The standard deduction and personal
exemption in the income tax code also decrease families’ taxable income.)



CRS-3
Table 1. Expenditures of Major Need-Tested Benefit Programs, by Form of Benefit and Level of Government,
FY2000-FY2002
(millions of current dollars)
Federal expenditures State-local expendituresTotal expenditures
F Y 2000 F Y 2001 F Y 2002 F Y 2000 F Y 2001 F Y 2002 F Y 2000 F Y 2001 F Y 2002
care130,461 145,076 163,760 94,411 104,594 118,708 224,872 249,670 282,468
aid74,974 82,600 82,476 19,433 19,242 19,681 94,407 101,842 102,157
benefits31,983 33,177 36,824 2,165 2,313 2,482 34,148 35,490 39,306
aid30,656 32,070 34,861 509 750 705 31,165 32,820 35,566
14,936 24,401 28,783 1,372 1,617 1,701 16,308 26,018 30,484
ices14,278 16,566 17,525 3,776 4,130 4,690 18,054 20,696 22,215
6,392 6,978 6,893 1,146 1,222 915 7,538 8,200 7,808
iki/CRS-RL32233y aid1,979 2,009 2,030 85 118 122 2,064 2,127 2,152
g/w305,659 342,877 373,152 122,897 133,986 149,004 428,556 476,863 522,156
s.or
leak Table prepared by the Congressional Research Service (CRS).
://wiki Program data on which this table is based are found in summary table (Table 14) at the back of the report.


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Trends in Spending
Annual Spending Data
Total expenditures on cash and noncash welfare programs multiplied many
times between 1968 and 2002 (Table 2). Even after allowance for price inflation,
spending sextupled (rising 523%) over the 34 years, a period when the U.S.
population rose by an estimated 43%.2 Measured in constant 2002 dollars,3 the
annual rate of growth in spending over the whole period was 5.5%. However, the
growth pattern was uneven. Real spending almost tripled in the first 10 years,
declined in some years (1982, 1996. and 1997), and in the last 5 years rose at an
annual rate of 3.9%. Total per capita welfare spending grew in real terms (constant
FY2002 dollars) from $416 in FY1968 to a peak above $1,800 in FY2002.
Table 2. Total Expenditures for Need-Based Benefits,
FY1968-FY2002
(in millions of dollars)
Federal State-localTotal spending
current current Constant
Fiscal yeardollarsdollarsCurrent dollarsdollars
1968 11,406 4,710 16,116 83,861
1973 27,294 10,054 37,348 153,493
1975 40,208 14,753 54,961 185,940
1976 50,506 16,990 67,496 214,820
1977 56,187 18,892 75,079 225,174
1978 64,432 20,151 84,583 236,991
1979 71,336 21,304 92,640 235,282
1980 81,403 24,633 106,036 237,093
1981 89,408 29,045 118,453 238,425
1982 90,543 31,706 122,249 229,345
1983 95,495 33,982 129,477 234,471
1984 100,837 36,191 137,028 238,350
1985 107,267 38,230 145,497 244,087
1986 109,476 40,811 150,287 246,077
1987 115,608 43,364 158,972 253,071
1988 126,098 46,580 172,678 263,990
1989 136,254 51,587 187,841 274,145
1990 153,673 61,065 214,738 298,497
1991 180,494 73,933 254,427 336,689
1992 211,121 88,146 299,267 384,425
1993 227,325 88,683 316,008393,991
1994 250,405 102,421 352,826 428,633
1995 262,905 108,210 371,115 438,553

1996 268,823 107,213 376,036 432,261


2 Based on the resident U.S. population.
3 Current dollars were translated into FY2002 constant value dollars by use of the Consumer
Price Index (CPI) for all urban consumers.

Federal State-localTotal spending
current current Constant
Fiscal yeardollarsdollarsCurrent dollarsdollars
1997 274,980 110,312 385,292 431,398
1998280,965 114,554 395,519 437,997
1999291,798 117,389 409,187 442,318
2000305,659 122,897 428,556 448,985
2001342,877 133,986 476,863 484,005
2002373,152 149,004 522,156 522,156
Source: Table prepared by the Congressional Research Service (CRS). FY1968 and FY1973 data
are from: Income Security for Americans: Recommendations of the Public Welfare Study. Report
of the Subcommittee on Fiscal Policy of the Joint Economic Committee. December 5, 1974. Table
4, p. 28 of Joint Economic Committee study, (1968 federal total has been increased by $54 million
to correct a typographical error in that table, and the 1973 federal total has been increased by $101
million to include Title X family planning, previously omitted from this report series). Data for
FY1975-FY1999 are from previous editions of this report (revised to incorporate public housing
capital fund costs, to account for new estimates of some program outlays, and to provide historical
data for some newly added programs ). Data for FY2000-FY2002 are from Table 1 of this report.
Figure 1 shows the course of expenditures for income-tested benefits from
FY1975-FY2002. The upper line shows total real spending (federal and state-local
spending); the bottom line shows state-local spending alone; the space between
represents federal spending. Throughout this period federal expenditures accounted
for more than 70% of the total. The federal share rose above 76% in 1978-1980, then
began a general decline. In the 1993-2002 decade it averaged 71.4%.


Figure 1. Expenditures for Income-Tested Benefits, FY1975-FY2002
(millions of constant 2002 dollars)
6 00,0 00
500,0 00
4 00,0 00
300,000Total
2 00,0 00
State-local
100,0 00
0 1975 1980 19 85 1990 199 5 2 000
Source: Figure prepared by the Congressional Research Service (CRS)

Major Welfare Policy Changes (1968-2002). During 1968-1976,
Congress liberalized some old welfare programs and established new ones. Some of
the major expansions follow. Effective in 1969, Congress gave a work incentive
bonus to all mothers who received Aid to Families with Dependent Children (AFDC)
checks; the bonus, virtually repealed in late 1981, was the right to a welfare
supplement even after their earnings rose above the state standard of need. In 1969,
minimum rents for public housing were abolished (reinstituted, at a lower level, in
1974). By 1970 amendment, the Food Stamp program was converted into a federal
income guarantee in participating counties. By 1972 amendment, basic educational
opportunity grants were adopted for all needy college students (extended to “middle -
income” students by 1978 law and renamed Pell grants in 1980). In 1972, effective
in 1974, a federal cash income guarantee — Supplemental Security Income (SSI) —
was enacted for the aged, blind, and disabled, and Congress established the Special
Supplemental Food Program for Women, Infants, and Children (WIC). Effective in
1974, food stamps were extended to all counties, providing a national income
guarantee in the form of food stamps. In 1975, a rebatable tax credit was adopted for
low-income workers with children.
In 1981, Congress moved to restrict eligibility for some programs and to lower
some benefits. For example, it imposed gross income eligibility limits for AFDC and
food stamps, reduced AFDC and food stamp benefits for families with earnings,
raised public housing rents, and reduced subsidies for school lunches. Effective in
FY1983, it temporarily reduced the food stamp guarantee. Thereafter, Congress
restored food stamp benefit rules for workers (1985), expanded Medicaid eligibility
for some needy persons not enrolled in cash welfare, sharply expanded the EITC (and
gave it inflation protection) (1986), and required all states to offer AFDC to needy
two-parent families in which the primary earner is unemployed or underemployed
(1988). It also established the Job Opportunities and Basic Skills (JOBS) program
for AFDC recipients and expanded federal matching funds for work and training and
for related child care. In 1993 (P.L. 103-66), Congress again expanded the EITC,
with the goal of ending poverty for a family of four with a parent who works full time
at the minimum wage (counting food stamps toward the antipoverty goal). At the
same time, it established a small EITC for childless workers.
In 1996, effective July 1, 1997 at the latest, Congress repealed AFDC, JOBS,
and Emergency Assistance, replacing them with a fixed annual block grant for
Temporary Assistance for Needy Families (TANF), through FY2002. It specified
that state TANF programs must condition eligibility on work, impose a lifetime limit
(5 years at most) on federally funded basic ongoing aid (traditional cash aid), and
achieve prescribed work participation rates for full funding. The 1996 law (P.L. 104-
193) also ended eligibility for most welfare benefits for non-citizens, added to the
Food Stamp program a stringent work requirement for childless persons aged 18-50,
and sharply expanded federal funding for child care, consolidating the funds in the
Child Care and Development Block Grant. In 1997, Congress added special welfare-
to-work grants to TANF (for FY1998 and FY1999 years only), moderated some of
the rules affecting non-citizens (see later section on Non-Citizen Eligibility for Major
Federal Benefits), established a new program of State-Children’s Health Insurance
(S-CHIP), and created a child tax credit (made refundable, by the 2001 tax act) for
taxpayers with more than $10,000 in annual earnings.



Spending Trends by Level of Government. Tables 3, 4, and 5 present
1968-2002 welfare spending in constant 2002 dollars, by form of benefit; Table 3
displays federal outlays, Table 4, corresponding state-local data, and Table 5, total
welfare spending amounts. Measured in constant 2002 dollars, federal spending for
income-tested benefits climbed from $59.4 billion in FY1968 to $373.2 billion in
FY2002, an increase of 529%. State-local welfare spending (constant dollars) rose
from $24.5 billion to $149 billion over the same period, an increase of 508%. Total
welfare outlays increased from $83.9 billion to $522.2 billion in these years, an
increase of 523%.
Cash aid was the leading form of federal welfare until 1980, when it was
overtaken by medical benefits. Two years later, in 1982, federal welfare spending
declined for all forms of aid except subsidized housing, in which case outlays
reflected earlier commitments, and education benefits. However, beginning in 1983,
real federal welfare outlays climbed steadily before declining in FY1996 and
FY1997. After 1979, state-local outlays rose in all years except 1993 and 1996.
Both federal and state-local outlays set successive new record highs in FY1998-
FY2002.
Medical Benefits. Since 1979, medical spending has accounted for more than
50 cents out of every welfare dollar spent by state-local governments. In 1989, the
share climbed to 60%, and since 1979 it has exceeded 70%. Medical assistance has
accounted for a much smaller share of federal welfare outlays: about 25% until the
mid-80s, above 30% in the 1990s, and an average of 43% in 2000-2002.
Welfare Share of Federal Budget. As a component of the federal budget,
welfare spending averaged 13% from 1975-1979, dropped to 12% in the 1980s, and
since 1994 has equaled or exceeded 17% each year. In 2001 it rose above 18%, and
in 2002 reached 18.6%.
Refundable Income Tax Credits. The earned income tax credit has
become the nation’s largest program of income-tested cash benefits for families with
children. In FY2002, the U.S. Treasury paid out $27.8 billion in refundable earned
income tax credits (chiefly for earners with children) and $5.7 billion in child tax
credits. The total almost equaled federal SSI payments for the aged, blind and
disabled ($33.9 billion) and was five times as much as cash assistance from TANF
federal dollars ($6.5 billion). (TANF expenditures for work activities, child care, and
other services exceeded TANF cash aid. See Table 14 — page 227.)



CRS-8
Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2002
(millions of constant FY2002 dollars)
Fiscal Medical Housing Educat i o n Jobs/ a
yearbenefitsCash aidFood benefitsbenefitsbenefitstrainingServicesEnergy aidTotal aid
1968 14,263 26,211 4,647 4,074 4,475 3,689 1,993 0 59,352
1973 27,367 35,242 15,843 15,519 7,484 3,793 6,925 0 112,173
1975 32,427 43,098 21,784 17,190 7,375 7,270 6,885 0 136,029
1976 34,835 47,489 24,593 18,657 11,757 14,660 8,667 89 160,746
197739,52947,07823,26121,33610,42816,2649,711906 168,514
1978 40,812 44,962 23,841 21,880 11,395 27,178 9,697 765 180,531
1979 41,680 43,003 26,355 24,440 12,219 23,533 9,278 668 181,176
1980 43,376 42,434 29,267 24,520 10,934 19,285 8,351 3,848 182,015
1981 44,791 42,189 31,579 24,820 9,635 15,128 7,776 4,044 179,963
iki/CRS-RL322331982 43,224 40,476 29,405 25,043 14,605 7,484 5,821 3,805 169,863
g/w1983 42,686 40,562 32,767 25,611 13,441 8,161 5,983 3,705 172,916
s.or1984 43,214 41,369 32,555 25,258 13,935 9,353 5,982 3,733 175,399
leak1985 46,772 41,078 32,482 27,372 15,964 6,534 5,957 3,793 179,952
1986 48,751 43,109 31,343 24,505 16,464 5,937 5,551 3,594 179,254
://wiki1987 55,946 43,713 31,668 22,261 15,550 6,021 5,742 3,138 184,039
http1988 59,045 46,344 30,906 24,060 17,042 5,730 6,863 2,789 192,778
1989 61,893 48,400 30,408 25,466 18,220 5,568 6,525 2,377 198,857
1990 69,817 50,661 33,182 27,394 19,129 5,525 5,677 2,230 213,614
1991 82,643 55,939 37,060 28,454 19,669 5,808 6,889 2,390 238,852
1992 101,069 62,578 42,149 31,815 17,473 6,446 7,503 2,164 271,197
1993 106,041 66,516 43,357 34,513 17,845 5,948 7,291 1,913 283,424
1994 113,818 77,018 43,871 34,224 17,782 5,905 9,260 2,329 304,207
1995 119,841 80,266 43,492 34,729 17,888 5,467 7,104 1,892 310,679
1996 119,464 80,479 42,729 35,362 17,729 4,644 7,256 1,355 309,018
1997 120,685 80,446 39,615 35,431 18,485 4,250 7,472 1,503 307,885
1998 122,824 80,777 36,743 34,544 18,809 4,624 11,426 1,392 311,140
1999 129,364 80,385 35,237 32,094 18,680 5,164 13,085 1,415 315,424
2000 136,680 78,548 33,508 32,117 15,648 6,697 14,959 2,073 320,230
2001 147,249 83,837 33,674 32,550 24,766 7,083 16,814 2,039 348,013
2002 163,760 82,476 36,824 34,861 28,783 6,893 17,525 2,030 373,152
: Table prepared by the Congressional Research Service (CRS).
ows may not add to total shown because of rounding.



CRS-9
Table 4. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2002
(millions of constant FY2002 dollars)
Fiscal Medical Housing Educa t io n a
yearbenefitsCash aidFood benefitsbenefitsbenefitsJobs/ trainingServicesEnergy aidTotal
196810,72512,957nanana224604 024,509
197317,11721,770nanana2302,203 041,320
1975 22,36622,8401,891na4841322,199 049,911
1976 24,83824,4112,015na4971242,190 na54,074
1977 26,66024,5182,438na5551712,318 na56,660
1978 27,34923,5412,446na6641772,284 na56,461
1979 28,28321,7761,003na6371982,210 na54,107
1980 29,51521,7921,022na6391811,930 na55,079
1981 31,46022,1351,167na5881692,943 na58,463
iki/CRS-RL322331982 32,93620,9591,349na5051413,564 2859,482
g/w1983 34,19221,3851,418na5471433,803 4561,532
s.or1984 35,71221,5461,652na5251363,305 7562,952
leak1985 36,16922,0611,726na7621363,229 5264,135
1986 37,77123,1231,806na8111203,111 8266,823
://wiki1987 39,17223,5921,858na8131133,152 33169,032
http1988 41,51523,5331,741na8321103,210 27171,211
1989 45,26424,0651,696na7951423,065 26375,289
1990 50,87024,7571,717na8743716,122 17284,884
1991 62,79025,6081,736na7245816,249 15097,837
1992 73,44327,1131,8542,9547896116,351 113113,228
1993 72,25326,7451,9521,6589557016,215 89110,568
1994 82,31127,8472,1501,9621,0977958,171 93124,427
199586,52127,9772,1632,7471,1299586,283 96127,873
199685,07525,8002,2072,8271,0987405,413 84123,243
1997 87,64023,7752,2102,7501,1491995,718 72123,512
1998 91,58820,6262,1462,8881,2597927,469 87126,857
1999 94,44820,7972,200na1,2869457,126 92126,894
2000 98,91220,3592,2685331,4371,2013,956 89128,755
2001 106,16119,5302,3487611,6411,2404,192 120135,993
2002 118,70819,6812,4827051,7019154,690 122149,004
: Table prepared by the Congressional Research Services (CRS).
ows may not add to total shown because of rounding.
ot available



CRS-10
Table 5. Total Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2002
(millions of constant FY2002 dollars)
Medical Educat i o n a
benefitsCash aidFood benefitsHousing aidbenefitsJobs/trainingServicesEnergy aidTotal
1968 24,988 39,168 4,647 4,074 4,475 3,913 2,597 0 83,861
1973 44,485 57,011 15,843 15,519 7,484 4,024 9,128 0 153,493
1975 54,793 65,937 23,675 17,190 7,859 7,402 9,084 0 185,940
1976 59,673 71,901 26,607 18,657 12,253 14,784 10,856 89 214,820
1977 66,189 71,596 25,700 21,336 10,983 16,435 12,030 906 225,174
1978 68,161 68,503 26,287 21,880 12,059 27,355 11,981 765 236,991
1979 69,962 64,779 27,358 24,440 12,856 23,731 11,487 668 235,282
1980 72,890 64,226 30,288 24,520 11,573 19,466 10,281 3,848 237,093
1981 76,252 64,324 32,747 24,820 10,223 15,297 10,718 4,044 238,425
1982 76,160 61,435 30,754 25,043 15,110 7,624 9,386 3,833 229,345
iki/CRS-RL322331983 76,886 61,953 34,188 25,614 13,989 8,305 9,786 3,750 234,471
g/w1984 78,926 62,915 34,208 25,258 14,460 9,489 9,287 3,808 238,350
s.or1985 82,941 63,138 34,208 27,372 16,726 6,670 9,187 3,845 244,087
leak1986 86,522 66,232 33,149 24,505 17,274 6,057 8,662 3,676 246,077
1987 95,119 67,305 33,526 22,261 16,363 6,134 8,894 3,469 253,071
://wiki1988 100,560 69,877 32,647 24,060 17,873 5,840 10,073 3,059 263,990
http1989 107,156 72,465 32,104 25,466 19,015 5,709 9,590 2,640 274,145
1990 120,687 75,417 34,899 27,394 20,003 5,897 11,799 2,402 298,497
1991 145,433 81,547 38,796 28,454 20,392 6,389 13,138 2,539 336,689
1992 174,512 89,691 44,002 34,769 18,261 7,057 13,854 2,278 384,425
1993 178,294 93,260 45,309 36,171 18,800 6,649 13,506 2,001 393,991
1994 196,129 104,865 46,021 36,186 18, 879 6,700 17,431 2,422 428,633
1995 206,362 108,243 45,654 37,477 19, 016 6,425 13,388 1,988 438,553
1996 204,539 106,279 44,936 38,188 18, 827 5,384 12,669 1,439 432,261
1997 208,325 104,221 41,825 38,181 19, 633 4,450 13,190 1,574 431,398
1998 214,412 101,403 38,890 37,432 20, 068 5,416 18,896 1,479 437,997
1999 223,812 101,182 37,437 32,094 19, 967 6,109 20,211 1,507 442,318
2000 235,591 98,907 35,776 32,651 17,085 7,897 18,915 2,162 448,985
2001 253,410 103,367 36,022 33,312 26, 408 8,323 21,006 2,159 484,005
2002282,468102,15739,30635,566 30,4847,80822,2152,152522,156
: Table prepared by the Congressional Research Services (CRS).
ows may not add to total shown because of rounding.



Composition of Spending
The dramatic change since 1978 in the composition of total spending for
income-tested benefits is shown in Figure 2 and in Table 6. In FY1978 spending for
cash relief and medical aid was about equal. Each accounted for 29% of total welfare
spending covered by this report. Thereafter, outlays for medical benefits rapidly
overtook cash aid, topping 50% in FY2000 and reaching 54% in 2002.
Figure 2. Composition of Income-Tested Benefits
F Y 19 78 F Y 20 02
food 11.1%medical 54.1%
medical 28.8%
cash 28.9%other 5.4%other 4.7%
food 7.5%education 5.8%
education 5.1%work/training 1.5%
work/training 11.5%cash 19.6%housing 6.8%
housing 9.2%
Figure prepared by the Congressional Research Service (CRS).
Table 6. Outlay Trends by Form of Benefits, FY1978-FY2002
(billions of constant 2002 dollars)
FY1978 FY1988 FY1992 FY1996 FY1998 FY2000 FY2002
Medical aid$68.2$100.6$174.5$204.5$214.4$235.6$282.5
Cash 68.5 69.9 89.7 106.3 101.4 96.9 101.2
Food aid 26.332.644.044.938.935.839.3
Ho using 21.9 24.1 34.5 38.2 37.4 32.7 35.6
Educatio n 12.1 17.9 18.3 18.8 20.1 17.1 30.5
Jobs/training 27.4 5 .8 7.1 5 .4 5.4 7 .9 7.8
Services 12.1 10.1 13.9 12.7 18.9 18.9 22.2
Energy aid.83.12.31.41.52.22.2
To tal $237.0 $264.0 $384.0 $432.3 $438.0 $449.0 $522.2
Source: Table prepared by the Congressional Research Service (CRS).



Noncitizen Eligibility for Major Federal Benefits
The eligibility of noncitizens for major federal means-tested benefit programs
largely depends on their immigration status and whether they arrived in the United
States, or were enrolled in a benefit program, before enactment of the 1996 welfare
law (P.L. 104-193) on August 22, 1996. That law sharply restricted welfare
eligibility for noncitizens, though it has since been modified. For noncitizens
entering after August 22, 1996, many of the restrictions imposed by the 1996 law
remain essentially unchanged. However, for persons who legally resided in the
United States before enactment of the new law, provisions have been significantly
revised by 1997, 1998, and 2002 amendments. The most significant recent change
(made in the 2002 farm bill, P.L. 107-171) opened up food stamp eligibility to all
legal permanent resident (LPR) children, regardless of date of entry or length of
residence, and to legal permanent residents (LPRs) who meet a 5-year residence test.
Those LPRs who were admitted to the United States as refugees and asylees are
treated differently from other LPRs, as follows:
Refugees and asylees. Eligible for SSI benefits, Medicaid, and food stamps for
7 years after arrival, and for 5 years for TANF. After this term, they generally are
ineligible for SSI, but states may extend federally aided TANF and Medicaid to them.
Legal permanent residents (LPRs)
!Who have a work history or military connection. If they have (a) a substantial
work history, generally 10 years (40 quarters) of work documented by Social
Security or other employment records, or (b) a military connection (active
duty military personnel, veterans, and their families), LPRs are eligible for
major benefits;
!Who were legally resident as of August 22, 1996. If they received SSI as of
August 22, 1996, these LPRs continue to be eligible for SSI. If they are
disabled, they are eligible for SSI and, as a result, for food stamps (regardless
of the date of disability). If they were elderly (65+) as of August 22, 1996,
they are eligible for food stamps. If they were children (under 18) as of
August 22, 1996, they are eligible for food stamps until they become 18;
!Who are qualified SSI recipients. If they meet SSI noncitizen eligibility tests,
these LPRs must receive Medicaid; and
!Who entered the United States after August 22, 1996. These LPRs are barred
from TANF, food stamps, and Medicaid for 5 years. Thereafter, the state may
extend federally-aided TANF, food stamps, and Medicaid to them. (A notable
exception is that LPR children are eligible for food stamps no matter when
they entered the country or how long they have lived here.)



Aid Received by Poor Families With Children
The Census Bureau reports that 7.2 million families (including 5.4 million with
children) in 2002 had total pre-tax money income — after counting any cash from the
welfare programs of TANF, Supplemental Security Income (SSI), and General4
Assistance (GA) — that was below their poverty threshold. The Bureau found that
the money income poverty rate among related children in families was 16.3%, the
highest since 1999 (16.6%).
Overall, 34.6 million persons were classified as poor on the basis of 2002 pre-
tax money income (compared with 31.1 millions in 2000). Of these persons, 66.6%
were in households that received means-tested aid from at least one of eight programs
(TANF, SSI, GA, school lunch, food stamps, Medicaid, subsidized housing, low-
income home energy assistance). By race and ethnicity, the following percentages
of poor persons were in households that received pre-tax aid from one or more of the
eight programs: non Hispanic whites, 53.5%, blacks, 80%, and persons of Hispanic
origin, 78.6%.
Figure 3 depicts income-tested aid provided to families with children who were
poor before receiving any cash aid from TANF, GA, or the EITC. In 2002, these
families totaled 5.7 million (compared with 5.1 million in 2000): 3.4 million with
a female householder and 2.3 million with a male householder (chiefly two-parent
families). These numbers, based on CRS estimates, include unrelated subfamilies
(the Bureau excludes these subfamilies from its “family” counts). As the chart
shows, all but 8.9% of the female-headed families and 11.8% of the male-present
families whose pre-tax, pre-welfare money income fell short of the poverty threshold
received means-tested aid. For male-present families, the EITC, which goes only to
persons with earnings, was the dominant form of aid. In all, 71.7% of male-present
families who were poor before transfers received the EITC (compared with 75.2%
in 2000); for 25.4% it was the only aid. Among female-headed families who were
poor before transfers, 53.7% received the EITC (compared with 59.6% in 2000); for

11.7% it was the only aid. Various combinations of cash assistance (TANF, GA,


EITC) and noncash aid (food stamps, housing subsidies, Medicaid or coverage under
the State Children’s Health Insurance Program (S-CHIP), went to 23.5% of female-
headed families and to 10.6% of male-present families.5


4 U.S. Bureau of the Census, Poverty in the United States: 2002. Current Population
Reports, Series P-60, no. 222, Sept. 2003, and unpublished tables available through
[http://ferret.bls.census.gov] .
5 These combinations are shown in four slices of the pie charts, labeled as:(1) EITC and
(other) cash benefits, (2) TANF or GA, food stamps, and Medicaid or SCHIP; (3) TANF or
GA, food stamps, and Medicaid or SCHIP and housing assistance; and (4) other
combinations of cash and noncash aid.

CRS-14
Figure 3. Cash and Noncash* Welfare Benefits Received
by Poor** Families with Children, 2002


Female-Headed FamiliesMale-Present Families
-TANF or GA, Food Stamps, andEITC and cash benefits
Medicaid or S-CHIP -
... and Housing Assistance
EITC andOther combos.
EITC andcashbenefits5.7%cash and noncash
nonc as h9.6% 6.7% 1.0
only --39.2%7.1%1 . 4% %
iki/CRS-RL32233 2.2%0 . 4%
g/wEITC and
s.ornonc as honly --32.4% 8.9% 11.8%
leak
://wiki Noncash Noncash
httpEITCEITC only25.4%only--23.5%only
Noonly11.7% 13.0%
me ans -te s te d
benefits
* Cash welfare benefits shown are:
Temporary Assistance to Needy Families (TANF)
and General Assistance (GA).
Noncash benefits shown are: Food Stamps,
Medicaid, State Children's Health Insurance Program (S-CHIP)Receives Earned Income Tax Credit
and Housing Assistance.
**Poor before receiving cash welfare.
Chart based on CRS analysis of March 2003 Current Population Survey data.

Income Tests of the Benefit Programs
More than 90% of the programs in this report have an explicit test of income.
The others base eligibility on area of residence, enrollment in another welfare
program, or other factors that presume need. The explicit income tests are of five
kinds: Income ceiling related to (1) one of the federal government’s official poverty
measures (federal poverty income guidelines or Census Bureau poverty thresholds);
(2) state or area median income; (3) the lower living standard income level of the
Bureau of Labor Statistics; (4) an absolute dollar standard; (5) level deemed to
indicate “need.” Table 7 classifies the programs in this report by type of income test.
Tables 8-11 present, respectively, Census Bureau poverty thresholds for 2002,
federal poverty income guidelines for 2003, income eligibility limits for subsidized
meals, July 2003-July 2004, and lower living standard income levels, effective in
May 2003.



CRS-16
Table 7. Income Eligibility Tests Used by Benefit Programs
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
Medical Benefits
X a X b X c
eterans’ medical care (nod
ice disability)XX
CHIP X X e
iki/CRS-RL32233eneral assistance (medical)Xb
g/w
s.orndian health servicesX
leak
://wikiices X f
http X g X h
ily planningXg
ees, b
lees, others X
Cash aid
X i X j
TC (refunds)X
ANF X b
X b X c
X



CRS-17
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
eterans’ pensionsX
Xb
X k X b X c, k
ndians X b
ees, b
lees, others X
iki/CRS-RL32233C (vets’ parents)X
g/wFood benefits
s.or l
leakps X X
://wiki X X m
http
CXXn
ramX
fast
XXm
utrition program for theo
X
he emergency foodb
ram X
mer food serviceX



CRS-18
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
modity supplemental
XX
ndiansX
ers’ market nutrition
ramsXX
ilk (free)X
Housing benefits
iki/CRS-RL32233
g/wincome
s.or assistanceX
leak X
://wiki loansX
http X
for special groups
ed/disabled)X
XX
mentsX
for people with
DSX
loans
X



CRS-19
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
repair loans
rantsX
labor housing loans
rants X
entsX
help grants and
XX
iki/CRS-RL32233ndian housing improvement
g/wa n t s X
s.or
leakeownership X
://wiki preservationantsX
http
XX
Education
r ants X p
X
Xp
-study Xp
RIO programsX
ental educ.p


grantsX

CRS-20
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
igrant educationXq
ins loansXp
eraging educ. assistanceb
X
X r X s
iki/CRS-RL32233ad./professional studyXp
g/w
s.orrant high schoolt
leakalency X
t
://wikie assistance migrantramX
http
Xu
Services
e lopment X v w
grantX
ANF services (other thanXXb
X
ices (Title XX)XxXb
ANF child careXbX
eless assistanceXy



CRS-21
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
munity services blockX
ant
al servicesX
ices for refugees,
lees, others Xb
ergency food and shelterXy
Jobs and training
iki/CRS-RL32233
g/wANF work activitiesX
s.orob CorpsXzXzX
leak z z
XXX
://wiki Xaa
http
munity service
ploymentXX
to-workX
pX
ployment/training
randparentsX
panionsX
argeted aid for refugees,
lees, othersXb
e employment. worksXbX



CRS-22
Limit related to:
OfficialState/ areaIncomeEnrollment/eli
povertyLower livingmedianDollardeemedArea ofgibility for
Program*measureincome level incomeamountneedyresidenceother programOther
Energy aid
income home energybb
XXXX
ation assistanceXX
hort titles and abbreviations are used in this table. See table of contents for full titles.
tates must extend Medicaid to certain persons whose income is below the federal poverty income guideline (or a multiple of it) but who do not receive cash aid.
iki/CRS-RL32233These persons are pregnant women, children born since September 30, 1983, the aged, the blind, and the disabled.
g/weed is decided by state, locality, Indian tribe (or Alaskan Native village).
s.orible for Medicaid, foster care, and adoption assistance are persons who do not qualify for TANF cash assistance but who would be income-eligible for AFDC
leakunder the terms of July 16, 1996 (with some modifications allowed) if that program had not been replaced by TANF. Also eligible for Medicaid in most states
://wikiare persons eligible for SSI.
httpeterans receiving veterans’ pensions or eligible for Medicaid are automatically eligible for free VA medical care.f a state’s Medicaid limit for children is at or above 200% of the poverty guideline, it may give S-CHIP to children whose family income is within 150% of the
Medicaid limit (thus, up to 50% above the Medicaid limit).
he stated purpose of the Maternal and Child Health (MCH) Services Block Grant law is to enable states to assure access to quality MCH services to mothers and
children, particularly those with low income (or limited availability of health services). The law defines low income in terms of the federal poverty income
guidelines. This block grant, which took effect in FY1981, includes funding for crippled children’s services.
limits free care to those below the federal poverty income guidelines.
ed are eligible, but fees must be charged the nonpoor.
payment.
optional state supplement to SSI.
ible for SSI also is eligible for adoption assistance.
posed wholly of recipients of SSI or GA or of recipients of TANF cash or services automatically meet food stamp assets and income tests but their
benefits must be calculated by food stamp rules.
p eligibility is accepted as documentation of eligibility for the free school lunch and free school breakfast programs.
ay give automatic eligibility to public assistance recipients.



CRS-23
he law requires preference for those with greatest economic or social need.
eed is decided by a system known as the federal needs analysis methodology, which is set forth in Part F of Title IV of the Higher Education Act (HEA) as
amended.
here is no income test. Migratory children are presumed to be needy.
iveness of loans made to needy students who fail to complete studies.
eed for loans is decided by the educational institution, by use of a needs analysis system approved by the Secretary of Education “in combination with other
information” about the student’s finances. For all health professional scholarships and for loans to students of medicine and osteopathy, federal regulations define
the required “exceptional financial need.”
egulations require the educational institution to determine that migratory students need the financial assistance provided.
makes eligible middle school and secondary students who are “economically disadvantaged.”
ederal income ceiling is 85% of state median for family of same size
70% of entitlement Child Care Development Block Grant (CCDBG) funds must be used for families receiving TANF, trying to leave welfare
through work, or at risk of becoming eligible for TANF.
pplies to families aided with TANF dollars transferred to Title XX (their income cannot exceed 200% of the federal poverty guidelines).
iki/CRS-RL32233 agencies administering the benefits.
g/whe federal poverty income guideline is used if higher than 70% of the lower living standard income level of the Department of Labor.
s.orhe law requires preference for “low-income” persons if funds are limited.
leake the option of setting limits below outer federal ceilings (but cannot set a ceiling below 110% of the federal poverty income guideline).


://wiki
http

Table 8. Bureau of the Census Poverty Thresholds for 2002
1 person (unrelated individual).....................................$ 9,182
Under 65 years...............................................9,360
65 years and over..............................................8,547
2 persons.......................................................11,752
Householder under 65 years....................................12,108
Householder 65 years and over..................................10,884
3 persons.......................................................14,351
4 persons.......................................................18,390
5 persons.......................................................21,743
6 persons.......................................................24,578
7 persons.......................................................27,952
8 persons.......................................................31,111
9 persons or more.................................................36,860
Source: U.S. Department of Commerce, Bureau of the Census (Jan. 23, 2003).
Table 9. 2003 Federal Poverty Income Guidelines
Forty-eight
contiguous
Size of family unitstates and DCAlaskaHawaii
1$ 8,980$11,210$10,330
2 12,120 15,140 13,940
3 15,260 19,070 17,550
4 18,400 23,000 21,160
5 21,540 26,930 24,770
6 24,680 30,860 28,380
7 27,820 34,790 31,990
8 30,960 38,720 35,600
For each additional
person, add3,1403,9303,610
Source: Federal Register, v. 68, no. 26, Feb. 7, 2003, pp. 6456-6458.



Table 10. Eligibility Levels for Free and Reduced Price Meals
for the Period of July 1, 2003-June 30, 2004
Maximum annual income levels
Free meals: 130%Reduced price meals:
federal poverty income185% federal poverty
Family sizeguidelinesincome guidelines
Forty-eight Contiguous United States, District of Columbia, Guam and Territories
1$11,674$16,613
215,75622,422
319,83828,231
423,92034,040
528,00239,849
632,08445,658
736,16651,467
840,24857,276
Add for each additional member+4,082+5,809
Alaska
1$14,573$20,739
219,68228,009
324,79135,280
429,90042,550
535,00949,821
640,11857,091
745,22764,362
850,33671,632
Add for each additional member+5,109+7,271
Hawaii
1$13,429$19,111
218,12225,789
322,81532,468
427,50839,146
532,20145,825
636,89452,503
741,58759,182
846,28065,860
Add for each additional member+4,693+6,679
Source: Federal Register, v. 68, no. 49, Mar. 13, 2003. P. 12030.



Table 11. Lower Living Standard Income Level (LLSIL) for a
Family of Foura — Effective May 30, 2003
(For use in programs under the Workforce Investment Act and theb
Work Opportunity Tax Credit)
2003 adjusted70% of
Area LLSI Lc LLSI Ld
Northeast
Metropolitan $31,750 $22,230
Non-Metropolitan 30,870 21,610
Midwest
Metropolitan 29,220 20,450
Non-Metropolitan 27,520 19,270
South
Metropolitan 27,580 19,310
Non-Metropolitan 26,100 18,270
West
Metropolitan 31,650 22,150
Non-Metropolitan 30,55021,390
Alaska
Metropolitan 38,750 27,130
Non-Metropolitan 38,35026,850
Hawaii/Guam
Metropolitan 39,360 27,560
Non-Metropolitan 40,95028,670
Metropolitan Statistical Area (MSA)
Anchorage, AK38,75027,130
Atlanta, GA27,89019,520
Boston-Brockton-Nashua, MA/NH/ME35,06024,540
Chicago-Gary-Kenosha, IL/IN/WI30,79021,550
Cincinnati-Hamilton, OH/KY/IN29,29020,500
Cleveland-Akron, OH30,00021,000
Dallas-Ft Worth, TX26,85018,800
Denver-Boulder-Greeley, CO31,63022,150
Detroit-Ann Arbor-Flint, MI28,97020,280
Honolulu, HI39,36027,560
Houston-Galveston-Brazoria, TX25,48017,840
Kansas City, MO/KS28,52019,970
Los Angeles-Riverside-Orange County, CA32,21022,550
Milwaukee-Racine, WI29,27020,490
Minneapolis-St Paul, MN/WI29,54020,680



2003 adjustedc70% ofd


AreaLLSILLLSIL
New York-Northern New Jersey-Long Island33,21023,250
Philadelphia-Wilmington-Atlantic City,30,78021,540
Pittsburgh, PA29,35020,550
St. Louis, MO-IL27,67019,370
San Diego, CA34,82024,380
San Francisco-Oakland-San Jose, CA34,44024,110
Seattle-Tacoma-Bremerton, WA34,92024,450
Washington-Baltimore, DC/MD/VA/WA33,61023,530
Source: Federal Register, v. 68, no. 104, May 30, 2003. PP. 32552-32554.
a. For LLSILs for other family sizes, see Federal Register entry noted above.
b. The LLSIL is used for several purposes under the Workforce Investment Act (WIA). WIA defines
low income individual” for eligibility purposes in terms of the LLSIL or the poverty line. For
purposes of state formula allotments, it defines the terms “disadvantaged adult” or
disadvantaged youth in terms of the LLSIL or the poverty line.
c. To assess whether employment will lead to “self-sufficiency,” WIA sets 100% of the LLSIL as the
minimum pay needed.
d. WIA provides that the termslow-income” person and “disadvantaged adult may be defined as
a member of a family that received total family income that, in relation to family size, does not
exceed 70% of the LLSIL. Further, the Internal Revenue Code provides that the term
economically disadvantaged” may be defined as 70% of the LLSIL for purposes of the Work
Opportunity Tax Credit (WOTC).



Medical Aid



1. Medicaid1


Note: Effective on July 1, 1997 (earlier in most states), P. L. 104-193 ended
Aid to Families with Dependent Children (AFDC), a cash assistance program under
which recipients were automatically eligible for Medicaid. The replacement block
grant program of Temporary Assistance for Needy Families (TANF) does not entitle
all TANF recipients to Medicaid coverage. However, those who meet the income,
resource, and categorical eligibility criteria of the former AFDC program, as in effect
in their state on July 16, 1996 (and subsequently modified, if applicable), are entitled
to Medicaid. The description below summarizes Medicaid as it operated after AFDC
was replaced by TANF.
Funding Formula
The federal government shares in the cost of Medicaid services by means of a
variable matching formula. The formula is inversely related to a state’s per capita
income and is adjusted annually. For FY2000-FY2002, the federal matching rate for
services averaged about 57% for the Nation as a whole. The federal share of
administrative costs generally is 50%, but as high as 100% for certain items.
Preliminary data indicate that federal outlays in FY2002 totaled $146.2 billion.
The federal share of a state’s medical vendor payments is called the federal
medical assistance percentage (FMAP). The FMAP is higher for states with lower
per capita incomes and lower for states with higher per capita incomes. If a state’s
per capita income is equal to the national average per capita income, its FMAP would
be 55%. The law establishes a minimum FMAP of 50% and a maximum of 83%2
(though the highest rate in FY2003 was 76.62% for Mississippi). Federal matching
for the territories is set at 50%, but a dollar ceiling also applies. The statutory
formula for determining the FMAP follows:
FMAP = 100% — state share (with a minimum of 50%
and a maximum of 83%)
State share = (state per capital income)2 x 45%2
(national per capita income)
The percentages are based on the average per capita income of each state and
the United States for the three most recent calendar years for which satisfactory data
are available from the Department of Commerce.


1 Regulations governing Medicaid are found in 42 CFR. Parts 430-456 (Oct. 2002). This
program is No. 93.778 in the Catalog of Federal Domestic Assistance. It is codified at 42
U.S.C. 1396 et seq.
2 In FY2003, federal funds paid exactly 50% of medical vendor payments in the 12 states
with the highest per capita income (CA, CO, CT, DE, IL, MD, MA, MN, NH, NJ, NY, and
WA) and 70% or higher in the 10 states with the lowest per capita income (AL, AR, ID, LA,
MS, MT, NM, OK, UT and WV). Effective in FY1998, a special provision of P.L. 105-33
raised the federal share of Medicaid costs in DC from 50% to 70%.

The law provides one exception to the FMAP for benefits. Family planning
services (instruction in contraceptive methods and family planning supplies) are
federally matched at a 90% rate.
To provide fiscal relief to states, federal matching rates were changed
temporarily by the Jobs and Growth Tax Relief Reconciliation Act (P.L. 108-27),
which altered the rates for certain expenditures for the last two quarters of FY2003
and the first three quarters of FY2004. For these 5 quarters, the federal matching rate
for each state is held harmless for declines from the prior fiscal year, and then is
increased by 2.95 percentage points. A state is eligible for an increase in its FMAP
for any of the specified quarters only if eligibility under Medicaid in effect for that
quarter is no more restrictive than eligibility in effect on September 2, 2003.
Program costs totaled $258 billion in FY2002, with $147 billion (57%) from federal
funds.
Eligibility Requirements
The requirements of federal law, coupled with the decisions of individual states
in structuring their Medicaid programs, determine who is actually eligible for
Medicaid in a given state. Some groups are mandatory, meaning all states must cover
them; others are optional. In general, federal law places limitations on the categories
of individuals that can be covered and establishes specific eligibility rules for groups
within those broad categories. Traditionally, Medicaid eligibility was limited to the
following categories: low-income families with dependent children (in which one
parent was absent, incapacitated or unemployed), low-income persons with
disabilities, and low-income elderly. In addition, certain individuals with higher
income, especially those facing large costs for medical care, were eligible as
“medically needy.” Beginning in the 1980s, additional coverage groups were added
to Medicaid for higher income children and pregnant women. Other coverage groups
are identified in statute as needing special protection against the high cost of medical
care.3 Over 50 distinct population groups are identified in federal law. Some are
mandatory groups that all states must cover; some are optional eligibility groups.
Contributing to the complexity of the Medicaid program are financial criteria.
Medicaid is a means-tested entitlement program. To qualify, applicants’ income and
resources4 must be within certain limits, most of which are determined by states,
again within federal statutory parameters. States have flexibility in defining
countable income and assets. Consequently, income and resource standards vary
considerably among states, and different standards apply to different population


3 An example of such a group is uninsured women diagnosed with breast or cervical cancer
through a special Centers for Disease Control (CDC) program that provides screening
services to those with modest income (up to 250% of the federal poverty level). This
optional coverage group was added by the Breast and Cervical Cancer Prevention and
Treatment Act of 2000 (P.L. 106-354).
4 Resources may include bank accounts and similar liquid assets, as well as real estate,
automobiles, and other personal property for which the value may not exceed specified
limits. Certain resources, such as an individual’s home, are excluded when determining
eligibility.

groups within a state. In general, individuals in similar circumstances may be
automatically eligible for coverage in one state, but required to assume a certain
portion of their medical expenses before they can obtain coverage in another state,
and not eligible at all in a third state.
Families, Pregnant Women, and Children. Medicaid-eligible families,
pregnant women, and children fall into two basic groups: those meeting AFDC
standards as of July 16, 1996, and those qualifying under a series of targeted
Medicaid expansions that began in the 1980s.
AFDC-Related Groups. Medicaid eligibility for AFDC-related groups was
affected significantly by both the Personal Responsibility and Work Opportunities
Reconciliation Act of 1996 (PRWORA, P.L. 104-193), which replaced the AFDC
cash assistance program with the Temporary Assistance for Needy Families (TANF)
block grant program, and the Balanced Budget Act of 1997 (BBA 97, P.L. 105-33).
Mandatory. Members of families that meet the eligibility requirements of the
old AFDC programs in effect in their states on July 16, 1996 must be covered under
Medicaid. States may modify their rules governing income and resource standards
for such AFDC-related groups. These modifications can be made by raising
income/resource standards up to the percentage increase in the Consumer Price Index
(CPI) after July 16, 1996, or by lowering income standards to applicable levels no
lower than those in effect on May 1, 1988, or by using income/resource
methodologies that are less restrictive than those in effect on July 16, 1996.
States must provide Medicaid assistance for recipients of adoption assistance
and foster care under Title IV-E of the Social Security Act. Transitional or extended
benefits are available to families who lose Medicaid eligibility because of increased
hours of employment, increased earnings, loss of a time-limited earned income
disregard, or increased child or spousal support payments. If the family loses
Medicaid eligibility because of increased earnings or hours of employment, Medicaid
coverage is extended for 6 to 12 months.5 (During the second 6 months, a premium
can be imposed, the scope of benefits might be limited, or alternate delivery systems
might be used.) If the family loses Medicaid because of increased child or spousal
support, coverage is extended for 4 months. Pregnant women and children are
exempt from TANF work requirements and retain their Medicaid eligibility.
Optional. States are permitted to cover additional AFDC-related groups. States
may provide Medicaid to former foster care recipients ages 18, 19 and 20, and can
limit such coverage to those eligible for Title IV-E before turning 18. States may
also extend Medicaid to children up to age 21 in families whose income and
resources are within AFDC standards (as of July 16, 1996), but who do not meet the
definition of a dependent child (also known as Ribicoff children), and may limit this
coverage to reasonable subgroups, such as children in two-parent families, those in


5 The requirement for 6 months of transitional Medicaid, which originally applied to
families who lost AFDC eligibility because of work, was carried over in the 1996 TANF
law. It has been extended beyond September 30, 2002 (along with basic TANF grants) by
several laws, most recently by P.L. 108-89 — through March 31, 2004.

privately subsidized foster care, or those who live in certain institutional settings.6
Finally, states may deny Medicaid benefits to nonpregnant adults and heads of
households who lose TANF benefits because of refusal to work.
Poverty-Related7 Pregnant Women and Children. Beginning in 1984,
Congress gradually extended Medicaid coverage to groups of pregnant women and
children who are defined in terms of family income and resources, rather than in
terms of their ties to cash welfare programs.
Mandatory. States must cover pregnant women and children under age 6 with
family incomes below 133% of the federal poverty income guidelines. (The state
may impose a resource standard that is no more restrictive than that for SSI, in the
case of pregnant women, or AFDC as of July 16, 1996, in the case of children.)
Coverage for pregnant women is limited to services related to the pregnancy or
complications of the pregnancy through 60 days postpartum. Children receive full
Medicaid coverage.
States are also required to cover all children under age 19 who were born after
September 30, 1983, and whose family income is below 100% of the federal poverty
level.
Optional. States may cover pregnant women and infants under age 1 with
family incomes up to 185% of the federal poverty level (FPL). In addition, through
other provisions of Medicaid law, states are permitted to cover additional pregnant
women and children with incomes above applicable federal mandatory minimum
levels. Such key provisions include waivers of eligibility rules (through Section
1115), use of more liberal methods for calculating income and resources for some
categories of eligibles (through Section 1902(r)(2)), as well as through Medicaid
expansions under the State Children’s Health Insurance Program (SCHIP; program
no. 3 in this report). For example, under SCHIP, most states now cover at least some
groups of children under age 19 in families with income at or above 200% of the
federal poverty level.
Finally, states have the option of continuing Medicaid eligibility for current
child beneficiaries for up to 12 months without a redetermination of eligibility.
States are also allowed to extend Medicaid coverage to pregnant women and children
under 19 years of age on the basis of “presumptive” eligibility until formal
determinations are completed.
Aged and Disabled Persons. In general, Medicaid provides coverage to
certain groups of individuals receiving (or qualifying for) cash assistance through the
Supplemental Security Income (SSI) program. It also covers the Medicare cost-


6 This group will become largely obsolete as states are required to phase in coverage of
children under age 19 with incomes below poverty. However, some states might still choose
to cover Ribicoff children aged 19 and 20.
7 In 2003, the poverty guideline in the 48 contiguous states and DC was $18,400 for a family
of four.

sharing obligations for certain individuals. In addition, Medicaid covers certain
individuals needing institutional care or other types of long-term care services.
SSI-Related Groups. The SSI program was established in 1972, replacing
previous federal-state cash assistance programs for the aged, blind, and disabled.
Income and resource standards are defined in federal law. For 2003, individuals
applying for SSI could not have countable monthly income in excess of $552, and
their countable resources could not exceed $2,000. Similar criteria for couples were
$829 in monthly income and $3,000 in resources. However, states have the option
of supplementing SSI payments (SSP) for aged persons living independently, and
using the resulting higher income levels as the applicable financial standard for
determining Medicaid eligibility.
Mandatory. States are generally required to cover SSI recipients under their
Medicaid programs. However, states may use more restrictive eligibility standards
for Medicaid than those for SSI if they were using those standards on January 1, 1972
(before the implementation of SSI), as authorized under Section 209(b) of the Social
Security Act. There were 11 such Section 209(b) states in 2001.8 States using more
restrictive income standards must allow applicants to “spend down” — deduct
incurred medical expenses from income before determining eligibility. For example,
if an applicant has a monthly income of $600 (not including any SSI or state
supplement payment) and the state’s maximum allowable income is $500, the
applicant would become eligible for Medicaid after incurring $100 in medical
expenses in that month.
States must continue Medicaid coverage for several defined groups of
individuals who lose SSI or SSP eligibility. The “qualified severely impaired” are
disabled persons who return to work and lose SSI eligibility because of earnings, but
still have the condition that originally rendered them disabled and who meet all
nondisability criteria for SSI except income. Medicaid must be continued for these
persons if they need on-going medical assistance to continue working and their
earnings are not sufficient to provide the equivalent of SSI, Medicaid, and attendant
care benefits for which they would qualify in the absence of earnings. States must
also continue Medicaid coverage for persons who were once eligible for both SSI and
Social Security payments and who lose SSI because of a cost-of-living adjustment
(COLA) in their Social Security benefits. Similar Medicaid continuations have been
provided for certain other persons who lose SSI as a result of eligibility for or
increases in Social Security or veterans’ benefits. Finally, states must continue
Medicaid for certain SSI-related groups who received benefits in 1973, including
“essential persons” (persons who care for a disabled individual).
Optional. States are permitted to provide Medicaid to individuals who are not
receiving SSI but are receiving state-only supplementary cash payments. Effective
in August of 1997, under provisions of the Balanced Budget Act of 1997 (BBA 97),
states may make Medicaid available to disabled SSI beneficiaries with incomes up
to 250% of the FPL. These individuals may “buy into” Medicaid by paying a
premium based on income as determined by the state. The 1999 Ticket to Work


8 These 11 states are CT, HI, IL, IN, MN, MO, NH, ND, OH, OK, and VA.

legislation (P.L. 106-170) further allows states to cover employed, disabled persons
at higher income and resource levels (i.e., income over 250% of the FPL and
resources exceeding $2,000 for an individual or $3,000 for a couple). States may
also cover financially eligible working individuals whose medical condition has
improved such that they no longer meet the SSI definition of disability. Such
individuals may have to buy into Medicaid by paying premiums or other cost-sharing
charges on a sliding fee scale based on income, as established by the state. Finally,
states have the option of extending Medicaid to certain additional elderly or disabled
persons. These include individuals eligible for SSI but not receiving it, and elderly
and disabled persons whose income does not exceed 100% of the FPL and whose
resources do not exceed the SSI standard.
Qualified Medicare Beneficiaries and Related Groups. Certain low-
income individuals who are aged or have disabilities as defined under SSI and who
are eligible for Medicare are also eligible to have some of their Medicare cost-sharing
expenses paid for by Medicaid. There are four categories of such persons:
!Qualified Medicare Beneficiaries (QMB). Qualified Medicare beneficiaries
are aged or disabled Medicare beneficiaries with incomes no greater than
100% of the FPL and assets no greater than $4,000 for an individual and
$6,000 for a couple. States are required to cover, under their Medicaid
programs, the costs of Medicare premiums, deductibles, and coinsurance for
Medicare covered benefits for such persons. Other Medicaid covered
services, such as nursing facility care, prescription drugs and primary and
acute care services, are not covered for these individuals unless they qualify
for Medicaid through other eligibility pathways (e.g., via SSI, medically
needy, or the special income rule for institutionalized persons described
below).
!Specified Low-Income Medicare Beneficiaries (SLMB). Specified low-income
Medicare beneficiaries meet QMB criteria, except that their income is greater
than 100% of the FPL but does not exceed 120% of the FPL. Under this
Medicaid pathway, states are required to cover only the monthly Medicare
Part B premium. Other Medicaid services are not covered for these
individuals unless they qualify for Medicaid through other eligibility
pathways.
!Qualifying Individuals (QI-1). The QI-1 eligibility pathway9 applies to aged
and disabled Medicare beneficiaries whose income is between 120% and
135% of the FPL. For these individuals, states are required to pay the monthly
Medicare Part B premium, only until the federal allotment for this purpose is
depleted.10 These individuals are not otherwise eligible for Medicaid.


9 The program known as Qualifying Individuals-2 (QI-2) ended on Dec. 31, 2002.
10 In general, Medicaid payments are shared between the federal government and the states
according to the matching formula described above. However, expenditures under the QI-1
program are paid 100% by the federal government (from the Part B trust fund) up to the
state’s allocation level. A state is only required to cover the number of persons which would
bring its spending on these population groups in a year up to its allocation level. This
temporary program, originally slated to end Sept. 30, 2002, was extended through Sept.
(continued...)

!Qualified Disabled and Working Individuals (QDWIs). States are required to
pay the Medicare Part A premiums for persons who were previously entitled
to Medicare on the basis of a disability, who lost their entitlement based on
earnings from work, but who continue to have a disabling condition. Such
persons may only qualify if their incomes are below 200% of the FPL, their
resources are below 200% of the SSI limit ($4,000), and they are not
otherwise eligible for Medicaid.
Persons Receiving Institutional or Other Long-Term Care and
Related Groups (all optional). States may provide Medicaid to certain otherwise
ineligible groups of persons who are in nursing facilities (NFs) or other institutions,
or who would require institutional care if they were not receiving alternative services
at home or in the community.
States may establish a special income standard for institutionalized persons, not
to exceed 300% of the maximum SSI benefit that would be payable to a person living
at home and with no other resources ($1,656 per month in 2003). In states without
a medically needy program (described below), this “300% rule” is an alternative way
of providing NF coverage to persons with incomes above SSI or State Supplementary
Payment (SSP) levels.11
Both the medically needy and those becoming eligible under the “300% rule”
must contribute their available income to the costs of their care. Medicaid has
distinct post-eligibility rules to determine how much of a beneficiary’s income must
be applied to the cost of care before Medicaid makes its payment. Special rules exist
for the treatment of income and resources of married couples when one of the
spouses requires nursing home care and the other remains in the community. These
rules are referred to as the “spousal impoverishment” protections of Medicaid law,
because they are intended to prevent the impoverishment of the spouse remaining in
the community.
A state may obtain a waiver under Section 1915(c) of the Act to provide home
and community-based services to a defined group of individuals who would
otherwise require institutional care. The waiver coverage may include persons who
would be eligible under the “300%” rule if they were in an institution, or those
eligible through a medically needy program.


10 (...continued)

2004, by P.L. 108-173.


11 Until OBRA-93, persons with incomes in excess of these limits could not qualify for
Medicaid coverage for their nursing home care, even if their income was insufficient to
cover the costs of such care. OBRA-93 included provisions that allow individuals to deposit
excess income above the 300% limit into a trust, sometimes referred to as a “Miller Trust,”
and receive Medicaid coverage. The funds in the trust are recoverable by the state after the
person’s death. This arrangement, which is essentially a delayed spend-down, has reduced
access barriers that may have been encountered by persons in states that do not otherwise
permit spend-down under Medicaid.

A state may also provide Medicaid to several other classes of persons who need
the level of care provided by an institution and would be eligible if they were in an
institution. These include children who are being cared for at home, persons of any
age who are ventilator-dependent, and persons receiving hospice benefits in lieu of
other covered services. States electing these options must cover all persons who are
in the class and living in the state.
The Medically Needy. In 2002, 35 states and the District of Columbia
provided Medicaid to at least some groups of “medically needy” persons. These are
persons who meet the nonfinancial standards for inclusion in one of the groups
covered by Medicaid, but who do not meet the income or resource requirements for
such coverage. Under medically needy programs, individuals can spend down to the
medically needy standard set by the state by incurring medical expenses, in the same
way that SSI recipients in Section 209(b) states may spend down to Medicaid
eligibility.
Under medically needy programs, states may set income standards at any level
up to 133 and 1/3% of the standard used for the most closely related cash assistance
program. For families with children, the maximum applicable medically needy
income standard would be up to one-third more than that which was in effect for a
similar family under the state’s former AFDC program. For individuals who have
a disability or are elderly, it would be up to one-third more than the SSI income
standard. States may limit the groups of individuals who receive medically needy
coverage. If the state provides any medically needy coverage, however, it must
include all children under 18 who would qualify under one of the welfare-related
groups, and all pregnant women who would qualify under either a mandatory or
optional group, if their income or resources were lower.
Individuals Qualifying Under Demonstration Waivers. Demonstration
waivers available under the authority of Section 1115 (of the Social Security Act)
enable states to experiment with new approaches for providing health care coverage
that promote the objectives of the Medicaid program. Section 1115 allows the
Secretary of HHS to waive a number of Medicaid rules — including many of the
federal rules relating to Medicaid eligibility. The Health Insurance Flexibility and
Accountability (HIFA) Initiative, introduced by the Bush Administration in 2001, is
an explicit effort to encourage states to seek Section 1115 waivers to extend
Medicaid and SCHIP to the uninsured, with a particular emphasis on statewide
approaches that maximize private health insurance coverage options and target
populations with incomes below 200% of the FPL. Some states have used such
waivers to enact broad-based and sometimes statewide health reforms although
demonstrations under Section 1115 need not be statewide. Some states have
extended comprehensive health insurance coverage to low-income children and
families who would not otherwise be eligible for Medicaid.
Aliens. Legal immigrants arriving in the United States after August 22, 1996
are ineligible for Medicaid for their first 5 years in this country. Coverage of these
persons after the 5-year ban is a state option. States are required to provide Medicaid
to legal immigrants who resided in the country and were receiving benefits on August
22, 1996 (and who continue to meet the criteria) and to those residing in the country
as of that date who become disabled in the future.



States are also required to provide coverage to: (1) refugees for the first 7 years
after entry into the United States, (2) asylees for the first 7 years after asylum is
granted, (3) individuals whose deportation is being withheld by the Immigration and
Naturalization Service (INS) for the first 7 years after grant of deportation
withholding, (4) lawful permanent aliens after they have been credited with 40
quarters of coverage under Social Security, and (5) lawful permanent aliens who are
honorably discharged U.S. military veterans or active duty military personnel, and
their spouses and unmarried dependent children who otherwise meet the state’s
financial eligibility criteria.
States are required to provide emergency Medicaid services to all legal and
undocumented non-citizens who meet the financial and categorical eligibility
requirements for Medicaid.
Medicaid Purchase of COBRA Coverage. COBRA12 provides that
employees or dependents who leave an employee health insurance group in a firm
with 20 or more employees must be offered an opportunity to continue buying
insurance through the group for 18 to 36 months (depending on the reason for leaving
the group). The employer may charge a premium of no more than 102% of the
average plan cost (150% for months 19 to 29 for certain disabled persons). Under
OBRA 90, state Medicaid programs may pay the premiums for COBRA continuation
coverage when it is cost-effective to do so, and the individual otherwise meets the
state’s eligibility requirements.
Benefits
States are required to offer the following services to most groups of recipients:
inpatient and outpatient hospital services; rural health clinic services; laboratory and
X-ray services; nursing facility services for those over age 21; home health services
for those over age 21 and to those under 21 if entitled to nursing facility care; the
early and periodic screening, diagnostic and treatment program (EPSDT) for those
under age 21; family planning services and supplies; federally qualified health center
services; nurse-midwife, certified family and pediatric nurse-practitioner services;
and physicians’ services and medical and surgical dental services furnished by a
dentist. States must also assure transportation of any Medicaid-eligible individual
to and from providers of medical care.
Federal law includes two basic coverage requirements for the medically needy.
First, if a state provides medically needy coverage to any group, it must provide
ambulatory services to children under 18 and individuals entitled to institutional
services, prenatal and delivery services for pregnant women (as well as 60 days of
postpartum care for those eligible for and receiving pregnancy-related services), and
home health services to individuals entitled to nursing facility services. Second, if
the state provides medically needy coverage for persons in institutions for mental
diseases or intermediate care facilities for the mentally retarded (ICFs/MR), it must
offer to all groups covered in its medically needy program all of the mandatory
services required for the categorically needy (except services provided by pediatric


12 COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272).

and family nurse practitioners), or alternatively, any of seven categories of care and
services listed in Medicaid law defining covered benefits.
Finally, states may also choose to provide one or more optional services to
categorically and medically needy beneficiaries. These additional services include,
for example, prescription drugs, eyeglasses, other dental services, physical therapy,
and inpatient psychiatric care for individuals under age 21 or over 65.
States may limit the amount, duration and/or scope of care provided under any
mandatory or optional service category (such as limiting the number of days of
covered hospital care or number of physical therapy visits). Federal law permits
states to impose nominal cost-sharing charges on some Medicaid beneficiaries and
for some services.
In FY2000, the most recent year for which enrollment data are available, 44.3
million persons were covered by Medicaid. The aged, blind and disabled represented

25% of Medicaid enrollment but accounted for 70% of program spending. Non-


disabled children and adults, in contrast, comprised 67% of enrollment but only 26%
of spending. Between FY2000 and FY2002, total federal and state Medicaid
spending increased by about 25% from $206.1 billion to $258.2 billion. In FY2002,
Medicaid outlays from federal funds totaled $146.2 billion. Total FY2003 Medicaid
expenditures are expected to reach roughly $278 billion, with federal outlays
estimated at $158 billion.
Note: For more information, see CRS Report RS20245, Medicaid: A Fact
Sheet, CRS Report RS21071, Medicaid Expenditures, FY2000 and FY2001, and

2003 Green Book, Section 15: Other Programs, U.S. House of Representatives,


Committee on Ways and Means (forthcoming).



2. Medical Care For Veterans Without Service-


Connected Disability
Funding Formula
Medical care from the Department of Veterans Affairs (VA) is funded by the
federal government. VA medical services are defined as discretionary in the federal
budget. Appropriations requests are guided by estimates of the expected caseload,
and for FY2003, Congress provided $23.9 billion, for an expected caseload of nearly
4.9 million “unique” patients. VA is also authorized to use proceeds of the Medical
Care Collections Fund (MCCF)1 for medical care, an amount estimated to be $1.836
billion in FY2003.
In addition to care provided in VA facilities and under contract, the VA provides
per diem payments to states for care of eligible veterans in state facilities. The VA
also provides for medical care to certain spouses and children of certain service-
connected disabled and other veterans under the Civilian Health and Medical
Program (CHAMPVA). The amount of FY2002 appropriations used to provide free
care to veterans who qualified because of having low income and/or low assets is2
estimated at $8.1 billion.
Eligibility Requirements3
Unlike other medical benefit entitlements such as Medicare or Medicaid,
eligibility for medical benefits from VA conveys varying degrees of rights. In
principle, all veterans are eligible to receive services from VA medical facilities,
although the potential total amount of services available to all veterans is contingent
on appropriations. Veterans with high-priority rights under VA law are generally
assured a full array of services, and those with lower-priority are provided services
if space and resources are available. Highest priority for the full range of medical
services is granted to veterans with severe, service-connected disabilities. Other
veterans have varying degrees of access for the different types of medical services,
with distinctions based on the severity of the condition, whether or not it is service-
connected, level of income, and type of medical service provided.
In practice, there is no evidence that any veterans were denied services at any
VA facility in FY2002, and no denials are expected during FY2003 (except for
nursing home care, which is provided only on a space-available basis, regardless of
priority status). As a general rule, no veteran is denied medical services upon


1 The MCCF receives reimbursements from medical insurers with some responsibility for
care provided by VA to veterans enrolled in those insurer’s health plans, and copayments
and deductibles paid by about 10% of veterans receiving care whose eligibility obligates
them for such cost sharing.
2 All but 10% of the veterans served by VA receive their care free (but most do not have to
satisfy a needs test).
3 Eligibility rules are set forth in 38 CFR. Part 17.47 (2002). This program is no. 64.009 in
the Catalog of Federal Domestic Assistance.

presenting a health complaint to qualified personnel at a VA medical facility. For
administrative purposes, and to best manage the medical needs of individual patients,
veterans are encouraged to enroll in regional VA health care plans (enrollment for
veterans who do not have a service-connection, whose enrollments are above the
threshold for means-tested services, or who are not already enrolled has been
temporarily halted). There are 23 of these Veterans Integrated Service Networks
(VISNs) nationwide.
The largest category of veterans provided free medical care by VA consists of
persons who qualify for that care because their assets and income are below certain
annually adjusted standards (in 2003: single person, $24,644; with one dependent,
$29,576; for each additional dependent, $1,586), with possible additional adjustments
for regional differences in medical costs. VA estimates that out of 25 million
veterans, about 7 million would qualify for free care because they meet the low-
income standards. Veterans whose incomes in the previous calendar year were no
higher than the pension of a veteran in need of regular aid and attendance (in 2003:
single person, $16,169; with one dependent, $19,167; for each additional dependent,
$1,653) are also eligible for free medications; others pay copayments of $7 monthly
for prescriptions filled in VA pharmacies, up to a maximum of $840 per year. A
veteran applying for care under the low-income eligibility test is advised that reported
income is subject to verification by matching the amount shown on the application
with income reported to the Internal Revenue Service (IRS). Once eligible under the
income rules, a veteran remains eligible until determined upon (annual) reevaluation
to no longer meet the income standard. VA has estimated that about 38% of the
applications for medical services are from veterans entitled to free care because of
meeting the income standards.4
Benefit Levels
Benefits in VA facilities include inpatient hospital care, nursing home care,
domiciliary care, and outpatient care. The VA contracts with other facilities to
provide care to veterans in areas where VA medical facilities are unavailable. VA
is the largest provider of inpatient psychiatric services, specializes in treatments for
spinal injuries and prosthetics, and conducts or sponsors research in numerous
medical fields, with special emphasis on conditions traceable to a period of military
service. The VA offers medical care to the nation’s 25 million veterans, although a
relatively few (about 15%) of those eligible avail themselves of the services. In
FY2002, the VA provided care for 4.7 million persons, through 732 thousand
inpatient episodes and 47 million outpatient visits.


4 Data from VA show that about 38% of veterans who applied for care since the inception
of enrollment in VA health care plans at the start of FY1999 qualified as a result of meeting
the means-tested requirements for VA health care or qualified because of being eligible for
other means-tested programs such as VA pensions or Medicaid.

During FY2003, the Veterans Health Administration (VHA) operated 172
hospitals, 137 nursing homes, 843 outpatient clinics, 43 domiciliaries, and an
extensive pharmaceutical supply apparatus. Veterans’ medical care appropriations
were $21.3 billion in FY2002, $23.5 billion in FY2003 and are projected to reach
$24.8 billion in FY2004.



3. State Children’s Health Insurance Program
(SCHIP)
Funding Formula
The Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) established the State
Children’s Health Insurance Program (SCHIP) under Title XXI of the Social Security1
Act. The program offers federal matching funds for states and territories to provide
health insurance to targeted low-income children. In the original law, Congress
appropriated $39.7 billion in SCHIP federal matching grants for 10 years, FY1998
through FY2007.2 For each year from FY1998 through FY2001, total federal funding
available to states and territories was approximately $4.3 billion. For each of
FY2002, FY2003, and FY2004, federal funding equals $3.2 billion. State matching
funds for FY2002 are estimated at $1.6 billion.
Allotment of funds among the states is determined by a formula set in law. This
formula is based on a combination of the number of low-income children and low-
income, uninsured children in the state, and includes a cost factor that represents
average health service industry wages in the state compared to the national average.
All states have submitted SCHIP program plans to the Centers for Medicare and
Medicaid Services (CMS) (formerly known as the Health Care Financing
Administration). States have 3 fiscal years in which to draw down a given year’s
funding. Under SCHIP law as enacted in 1997, allotments not spent by the end of
the applicable 3-year period will be redistributed — by a method to be determined
by the Secretary of Health and Human Services (HHS) — to states that have fully
spent their original allotments for that year. Redistributed funds not spent by the end
of the fiscal year in which they are reallocated will officially expire.3
Like Medicaid, SCHIP is a federal-state matching program. For each dollar of
state spending, the federal government makes a matching payment, up to the state’s


1 The program number for SCHIP in the Catalog of Federal Domestic Assistance is 93.767.
It is codified at 42 U.S.C. 1397aa et seq. The final rule governing SCHIP was published on
January 11, 2001(42 CFR Parts 431, 433, 435, etc.) and was revised by an interim final rule
published June 25, 2001 (42 CFR Parts 431, 433, et al.), which took effect on August 24,

2001.


2 The law set aside 0.25% of SCHIP funds for territories and commonwealths (Puerto Rico,
Guam, Virgin Islands, American Samoa, and the Northern Marianas). It also set aside $60
million annually for Special Diabetes Grants for FY1998 through FY2002 only.
3 The Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA-2000), incorporated by reference into P.L. 106-554, created a special rule for the
redistribution and availability of unused FY1998 and FY1999 SCHIP allotments. The rule
allowed states that had not spent all of their allotments to retain a portion of their unspent
funds, thus decreasing the amount available for redistribution to states that had spent all of
their allotments. Unspent funds from FY1998 and FY1999 were made available through the
end of FY2002. For a more detailed discussion on SCHIP financing issues, see CRS Reportth
RL31977, SCHIP Financing Issues in the 108 Congress.

allotment. The state’s share of program spending is equal to 100% minus the
enhanced federal medical assistance percentage (the enhanced FMAP). The
enhanced FMAP is equal to the state’s Medicaid FMAP (for the regular FMAP
formula, see program no. 1 of this report), increased by the number of percentage
points that is equal to 30% multiplied by the number of percentage points by which
the FMAP is less than 100%.4,5
There is a limit on spending for SCHIP administrative expenses, which include
activities such as data collection and reporting, as well as outreach and education.
For federal matching purposes, a 10% cap applies to state administrative expenses.
It is imposed on the dollar amount that the state actually draws down from its
allotment to cover benefits under SCHIP, as opposed to 10% of its total allotment for
a given year.
Eligibility Requirements
Each state defines the group of targeted low-income children who may enroll
in SCHIP. The law allows states to use these factors in determining eligibility:
geography, age, income and resources, residency, disability status, access to other
health insurance and duration of eligibility for SCHIP. In general, funds cannot be
used for children who are eligible for the state’s Medicaid program or for children
covered by a group health plan or other insurance.
Under SCHIP states may cover children in families with incomes that are either:
(1) above the state’s applicable Medicaid eligibility standard under the rules in effect
in the state on March 31, 1997, but less than 200% of the federal poverty guideline,6
or (2) in states with Medicaid income levels for children already at or above 200%
of the poverty line, within 50 percentage points over the state’s Medicaid income
eligibility limit for children. Many states cover at least some groups of children in
families with income at or above 200% FPL.
In addition, several states have sought approval for special waivers of SCHIP
rules to use SCHIP funds to cover new groups, including some categories of adults.
Under Section 1115 of the Social Security Act, the Secretary of HHS has broad


4 For example, if a state has a Medicaid FMAP of 60%, under Medicaid a state must spend
40 cents for every 60 cents that the federal government contributes. The enhanced FMAP
would be equal to the Medicaid federal matching percentage increased by 12 percentage
points, (60%+[30% multiplied by 40 percentage points]=72%.) The state share would be
equal to 100%-72%=28%. Compared with Medicaid FMAPs, which range from 50% to
76.62% in FY2003 (a maximum of 83% is allowed in statute), the enhanced FMAP for the
SCHIP programs ranges from 65% to 83.63%. The enhanced FMAP is subject to a ceiling
of 85%.
5 On May 28, 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-
27) was enacted and included a temporary increase in the Medicaid FMAP for the last 2
quarters of FY2003 and the first 3 quarters of FY2004.
6 In 2003, 200% of the federal poverty guideline was $24,240 for a family of two, $30,520
for a family of three, and $36,800 for a family of four (higher guidelines apply in Alaska and
Hawaii).

statutory authority to conduct research and demonstration projects under six
programs, including Medicaid and SCHIP. Using waiver authority, the Health
Insurance Flexibility and Accountability (HIFA) Initiative, announced by the Bush
Administration in August 2001, encourages states to develop statewide projects that
coordinate Medicaid and SCHIP with private health insurance coverage and targets
uninsured individuals with income below 200% of the federal poverty level, just as
SCHIP does. Later, the Administration indicated that unspent SCHIP funds could
be used to finance the HIFA initiative.7 As of June 12, 2003, CMS approved 14
SCHIP 1115 waivers (6 others were in review). Seven of the 14 approved waivers
are SCHIP HIFA demonstrations.8 Several of the approvals allow states to use
SCHIP funds to cover new groups of individuals such as pregnant women, parents
of SCHIP and Medicaid-eligible children, and childless adults.
Benefit Levels
States may choose from three options when designing their SCHIP programs.
They may expand their existing Medicaid program,9 create a new “separate state”
insurance program, or devise a combination of both approaches. As of July 8, 2003,
20 jurisdictions implemented Medicaid expansions (ME), 19 created separate state
programs (SSP), and the remaining 17 developed a combination approach
(C OMBO). 10
States that choose to cover targeted low-income children under Medicaid must
provide the full range of mandatory Medicaid benefits, as well as all optional services
specified in their state Medicaid plans. In creating a new separate state insurance
program, states may choose any of three benefit options: (1) a benchmark benefit
package, (2) benchmark equivalent coverage, or (3) any other health benefits plan
that the Secretary determines will provide appropriate coverage to the targeted
population of uninsured children.
A benchmark benefit package is one of the following three plans: (1) the
standard Blue Cross/Blue Shield preferred provider option plan offered under the
Federal Employees Health Benefits Program (FEHBP), (2) the health coverage that


7 Department of Health & Human Services, Centers for Medicare and Medicaid Services,
Report on the Health Insurance Flexibility and Accountability (HIFA) Initiative: State
Accessibility to Funding for Coverage Expansions, Oct. 4, 2001.
8 [http://www.cms.gov/schip/1115waiv.pdf].
9 Under Medicaid, states may cover targeted low-income children in one or more of the
following three ways: (1) by establishing a new optional eligibility group for such children
as authorized in BBA-97; (2) by liberalizing the financial rules for any of several existing
Medicaid eligibility categories using Section 1902(r)(2) authority, or (3) by liberalizing the
income standards or methodologies applicable to family coverage under Section 1931.
When states use the second or third approach (rather than creating a new optional coverage
group) services provided to the subset of targeted low-income children without other health
insurance are paid for out of the SCHIP allotments at the enhanced SCHIP FMAP rate.
Services delivered to the remaining children with other health insurance are paid for by
Medicaid at the regular FMAP rate.
10 [http://www.cms.hhs.gov/schip/statemap.asp].

is offered and generally available to state employees in the state involved, or (3) the
health coverage that is offered by an HMO with the largest commercial (non-
Medicaid) enrollment in the state involved.
Benchmark equivalent coverage is defined as a package of benefits that has the
same actuarial value as one of the benchmark benefit packages. A state choosing to
provide benchmark equivalent coverage must cover each of the benefits in the “basic
benefits category.” The benefits in the basic benefits category are inpatient and
outpatient hospital services, physicians’ surgical and medical services, lab and x-ray
services, and well-baby and well-child care, including age-appropriate
immunizations. Benchmark equivalent coverage must also include at least 75% of
the actuarial value of coverage under the benchmark plan for each of the benefits in
the “additional service category.” These additional services include prescription
drugs, mental health services, vision services, and hearing services. States are
encouraged to cover other categories of services not listed above. Abortions may not
be covered, except in the case of a pregnancy resulting from rape or incest, or when
an abortion is necessary to save the mother’s life.
Title XXI gives states authority to determine the amount, duration and scope of
the services covered unless the state chooses to provide a benchmark plan.
Benchmark equivalent plans may limit their benefit packages in any way they choose
as long as the entire package is certified to be an actuarial equivalent of the
benchmark plan.
While federal law permits states to impose cost-sharing for some beneficiaries
and services, cost-sharing is not permitted for well-baby or well-child care services,
and American Indian and Alaskan Native children are exempt from all cost sharing.
Apart from these general exceptions, states that choose to cover targeted low-income
children under Medicaid must follow the cost-sharing rules of the Medicaid program.
Generally, Medicaid does not allow cost sharing for medical services (e.g.,
deductibles, co-payments, and co-insurance), and cost sharing associated with
program participation (e.g., enrollment fees, and premiums) is limited to nominal
amounts. If the state implements SCHIP through a separate state program, premiums
or enrollment fees may be imposed, but they are subject to limits.
Under separate state programs, for families with incomes under 150% of the
federal poverty line, income-related charges (i.e., enrollment fees, premiums, or
similar charges tied to the total gross family income) may not exceed the amounts set
forth in federal Medicaid regulations.11 For children whose family income is at or
below 100% FPL, service-related cost-sharing is limited to nominal amounts as
defined in Medicaid regulations.12 For children whose family income is between
101% and 150% FPL, service-related cost-sharing must meet “adjusted nominal
amounts.”13 These adjusted amounts reflect the enrollees’ increased ability to pay.


11 42 CFR. §447.52 (2002)
12 42 CFR. §447.54 (2002)
13 42 CFR. §457.555 (2002).

Cumulative cost-sharing maximums for each 12-month enrollment period must not
exceed 5% of the family’s annual income.14
For families with income above 150% of the federal poverty line, service-related
cost sharing may be imposed in any amount, provided cost-sharing for higher income
children is not lower than cost-sharing for lower income children. However, the total
annual aggregate cost-sharing (including premiums, deductibles, co-payments and
any other charges) for all targeted low-income children in the family may not exceed

5% of total family income for the year. Regardless of the family’s cumulative cost-


sharing maximum, states must: (1) inform families of these limits; (2) provide a
mechanism for families to stop paying once the cost-sharing limits have been
reached; and (3) provide reasonable notice of any missed payments prior to
disenrollment.
Early in the program, enrollment rates were low, but by FY2002, the pace of
enrollment had increased. Estimates from CMS15 indicated that as of December
1998, nearly 1 million children (982,000) were enrolled in SCHIP under 43
operational state programs, and by the end of FY1999, nearly 2 million children
(1,979,459) were enrolled under 53 operational state programs.16 Preliminary data
show that total SCHIP enrollment reached 5.3 million children in FY2002. Of this
total, 1.3 million were targeted low-income children covered under Medicaid
expansions, and 4.0 million children were covered in separate state programs.17
Preliminary data show that total SCHIP enrollment for adults reached 349,118 in
FY2002.
SCHIP spending during the first 4 years of the program, (FY1998-FY2001), was
well below federal appropriations, but has increased over time.18 For FY1998,
SCHIP program federal expenditures totaled $122 million; for FY1999, $922
million; for FY2000, $1.93 billion, and for FY2001 federal expenditures increased
to $2.62 billion. In FY2002, federal SCHIP expenditures equaled $3.78 billion.
FY2002 is the first fiscal year in which state spending of available SCHIP funds
exceeded the SCHIP program appropriations for that year. This trend is likely to
continue as additional states spend all of their available funds and are eligible for
redistributions of unspent funds from earlier annual allotments. However, while
more states will be eligible for redistributions there will be fewer funds available for


14 42 CFR. §457.560(b) (2002)
15 Centers for Medicare and Medicaid Services (formerly known as HCFA), A Preliminary
Estimate of the Children’s Health Insurance Program Aggregate Enrollment Numbers
Through December 31, 1998 (background only), Apr. 20, 1999.
16 Health Care Financing Administration, The State Children’s Health Insurance Program,
Annual Enrollment Report, October 1, 1998-September 30, 1999. (no date)
17 Centers for Medicare and Medicaid Services, Fiscal Year 2002 Number of Children Ever
Enrolled in SCHIP — Preliminary Data Summary, Jan. 30, 2003.
18 For each of FY1998 through FY2001, total federal funding available to states and
territories was approximately $4.3 billion. For each of FY2002, FY2003, and FY2004,
federal funding available to states and territories equals $3.2 billion.

redistribution to such states. In the absence of statutory changes to SCHIP financing
provisions, CMS projects shortfalls for some states over the second half of the
program (FY2003-FY2006). In its March 2003 baseline, CBO projected that total
federal SCHIP spending will grow to $5.0 billion in FY2007.
Note: For more information about SCHIP, see CRS Report RL30473, The State
Children’s Health Insurance Program (SCHIP): A Brief Overview; CRS Report
RL30642, The State Children’s Health Insurance Program: Eligibility, Enrollment,
and Program Funding; and CRS Report RL31977, SCHIP Financing Issues for the

108th Congress.



4. General Assistance (Medical Care Component)1


Funding Formula
No federal funds are available for this program.
As of mid-1998, medical assistance for recipients of non-federally funded cash
aid (generally known as General Assistance (GA)) and for other persons ineligible
for Medicaid2 was offered in 32 states, including the District of Columbia (D.C.). In
13 jurisdictions, this aid was fully state funded;3 in seven states, costs generally were
paid by a combination of state and local funds;4 in seven states, medical benefits were
wholly paid with local funds.5 In five states, even though they were not in categories
usually eligible for federally-funded medical assistance, recipients of GA cash
received Medicaid.6 This aid was allowed under waivers from Medicaid law, and
costs were paid by federal and state funds. In the remaining 19 states, ongoing
medical benefits generally were not offered to persons ineligible for federally-funded
aid.7 Estimated GA medical payments (state-only dollars) in FY2002 totaled $5
billion.
Eligibility Requirements
To receive GA medical assistance, a person generally must be deemed needy
and live where the program is available. In 1998, most of the 32 states offering this
aid made eligible all recipients of GA cash payments, but several specified that
persons had to be in medical need and some imposed special medical income
eligibility requirements. Thus, Ohio offered medical assistance to all GA recipients
and to needy able-bodied persons who would become incapacitated without
medication. However, some jurisdictions set more liberal eligibility rules for GA
medical and than for GA cash benefits.


1 Most data reported here are based on the most recent national study of state general
assistance programs (State General Assistance Programs, 1998, conducted by the Urban
Institute) and subsequent information from some states.
2 Using waivers from federal law, some states provide Medicaid to all recipients of GA cash
benefits, even if they are not in categories usually eligible.
3 AL, CO, KS, MD, MI, MN, MO, NE (program for the disabled), PA, RI, UT, VT, and WA.
4 IL, ME, NJ, NY, OH, VA (some counties) and WI (some counties).
5 CA, ID, MT (some counties), NV, NH, NC (some counties) and SD. (Not counted here
in NE program for the nondisabled, which provides medical aid at county expense.)
6 DE, DC, HI, MA, and OR. In addition, TN, which has no GA cash program, offered
medical aid to a wide range of needy persons under a Medicaid waiver.
7 Ten of these states had no statewide GA program (AL, AK, LA, MS, OK, SC, TN, TX,
WV, and WY). AZ, CO, and NM offered uniform statewide cash GA but no GA medical
assistance; in some of their counties, FL, GA, KY, and ND offered GA cash aid, but no
medical benefits; Indiana and Iowa offered GA cash aid statewide, but not medical benefits.

Benefit Levels
Using waivers from federal law, some states in mid-1998 made all GA
recipients eligible for Medicaid and its comprehensive services: Delaware (for its
Diamond State Health Plan), Hawaii (for QUEST), and Oregon (for the Oregon
Health Plan). D.C. and Massachusetts also offered Medicaid to all GA cash
recipients. Among the other 27 states with medical assistance for recipients of GA
cash, benefits generally were less comprehensive than those of Medicaid. Five
states8 offered inpatient and outpatient hospital care, physician services, and
prescription drugs; another six9 added nursing home care to the foregoing list of
benefits. Some restricted GA medical benefits to physician services and prescription
drugs, and some offered aid only in emergencies. Maryland’s programs of Primary
Care for the Medically Indigent and Maryland Pharmacy Assistance (for GA disabled
adults and others who meet medical income eligibility limits) provided only basic
physician services and a limited list of prescription drugs. The Urban Institute study
noted that most of the states and counties without a medical component in their GA
program have alternative medical assistance available to at least some GA cash
recipients. Examples include indigent health care programs or charity hospital
systems.
Data from the Centers for Medicare and Medicaid Services (Office of the
Actuary, National Health Statistics Group) indicate that state-local outlays for GA
medical assistance in FY2002 totaled $4,955.8 million, up 5% from FY2001, but
down 10.4% from the FY1992 record high of $5,531.7 million. These data exclude
premiums paid by welfare agencies for Medicare and for health maintenance
organizations (HMOs) and health insurance, which presumably are reimbursed by
Medicaid. Composition of FY2002 GA medical spending: hospital care, 37.5%;
prescription drugs, 43.4%; payments to medical professionals, 12.4% (physician and
clinical services, 10.2%; dentists, 0.9%; and other professionals, 1.2%); nursing
homes, 3.9%; home health care, 0.5%; other care, 2%; and durable medical
equipment, 0.2%.
The composition of GA medical outlays changed over the 1993-2003 decade.
Spending on prescription drugs rose from $901 million to $2.2 billion; but outlays
for hospitals dropped from $3.2 billion to $1.9 billion. The share of expenditures
attributed to prescription drugs more than doubled; the hospital share dropped by

40%.


8 CA (Los Angeles County); CT; IL (Chicago), prescription drugs only if required for life
maintenance or to avert a life-threatening condition; MN; and MO.
9 ID (Ada County); KS; NE; NV (Clark County); SD (Minnehaha Country); and WA.

5. Indian Health Services
Funding Formula
Indian Health Service (IHS) appropriations are allocated among its 12 service
areas through a “historical,” or “program continuity” basis, under which each area
can expect to receive its recurring base budget from the previous year, plus an
increase in certain mandatory cost categories. Using a Resource Allocation
Methodology (RAM), the Service distributes a small portion of its appropriation to
areas and tribes based on documented health deficiencies. Tribes may assume from
the IHS the administration and operation of health services and programs in their
communities, and about 52% of IHS funds are used by Indian tribes to deliver IHS
services to their own communities. The Service collects reimbursements from the
Medicare and Medicaid programs for services that it provides to members of its
eligible population who are also eligible for those programs. In FY2001, IHS
collected $484 million in reimbursements, while in FY2002, this number increased
to $514 million. For FY2002, total program appropriations were $2.824 billion, up
$135 million from the FY2001 appropriation of $2.689 billion.
Eligibility Requirements1
Eligible under Public Health Service regulations are persons of American Indian
or Alaskan Native (AI/AN) descent who: (1) are members of a federally recognized
Indian tribe; (2) reside within an IHS Health Service Delivery Area (HSDA); or (3)
are the natural minor children (18 years old or younger) of such an eligible member
and reside within an IHS HSDA. The program imposes no income test; any eligible
AI/AN can receive health services. The program serves Indians living on federal
reservations, Indian communities in Oklahoma and California, and Indian, Eskimo,
and Aleut communities in Alaska. According to the 2000 census, more than 57% of
AI/AN reside in urban areas. Under the Indian Health Care Improvement Act of
1976, P.L. 94-437, as amended, the IHS contracts with 34 urban Indian organizations
to make health services more accessible to 605,000 urban Indians. Combined, all
IHS programs serve between 1.6 million AI/AN.
Benefit Levels
The IHS provides hospital, medical, and dental care and environmental health
and sanitation services as well as outpatient services and the services of mobile
clinics and public health nurses, and preventive care, including immunizations and
health examinations of special groups, such as school children. All services are
provided free of charge to beneficiaries. If the eligible AI/AN has private insurance,
IHS will be reimbursed for the services provided. Benefits are provided through 155
service units, 49 IHS hospitals, 5 school health centers, 231 health centers, and over

309 smaller health stations and satellite clinics; Alaskan village clinics; contracts


1 Regulations are found at 42 CFR. Part 136 (2002). This program is no. 93.228 in the
Catalog of Federal Domestic Assistance.

with non-federal hospitals, clinics, private physicians and dentists; and contractual
arrangements with state and local health organizations.



6. Consolidated Health Centers
Funding Formula
The Health Care Safety Net Amendments of 2002, P.L. 107-251, amended the
Public Health Service Act (PHS Act) to reauthorize the health centers grant program
through FY2006. The health centers program includes community health centers,
migrant health centers, health centers for the homeless, and health centers for
residents of public housing. They are codified under Section 330 of the PHS Act.
The program does not have a statutory formula. The grant applicant must assume
part of the project costs, which are determined on a case-by-case basis.
Centers receive grant money to provide primary care services to groups that are
determined to be medically underserved. Grants are awarded through the Bureau of
Primary Health Care of the Health Resources and Services Administration (HRSA)
of the U.S. Department of Health and Human Services (HHS). Centers are required
to seek third-party reimbursement from other sources, such as Medicare and
Medicaid. State and local governments may also contribute. Centers may receive
one or more of the following types of grants: (1) planning grants, to plan and
develop health centers or a comprehensive service delivery network; (2) operating
grants, to assist with operation costs of a center; and (3) infant mortality grants, to
assist in the reduction of infant mortality and morbidity among children less than 3
years of age and to develop and coordinate service and referral arrangements between
health centers and other entities for the health management of pregnant women and
children. FY2002 appropriations were $1.3 billion.
Eligibility Requirements1
A health center is an entity that provides health care services to a medically
underserved population, or a special medically underserved population comprised of
migratory and seasonal agricultural workers, the homeless, and residents of public
housing by providing required primary health services and additional health services
as may be appropriate for particular centers. By regulation, medically underserved
areas are designated by the HHS Secretary on the basis of such factors as: (1) ratio
of primary care physicians to population, (2) infant mortality rate, (3) percentage of
population aged 65 and over, and (4) percentage of population with family income
below the poverty level. Profit-making organizations are not eligible for health
center grants.
All residents of an area served by a health center are eligible for its services.
Benefit Levels
Regulations limit free service to families with income at or below the federal
poverty income guidelines. The 2003 federal poverty income guideline in the 48


1 Regulations for community health centers are found at 42 CFR Subpart 51c (2002). This
program is no. 93.224 in the Catalog of Federal Domestic Assistance.

contiguous states is $18,400 for a family of four. Nominal fees may be collected
from these individuals and families, under certain circumstances. Individuals and
families with annual incomes greater than the poverty guideline but below 200% of
it are required to pay for services from a fee schedule adjusted on the basis of the
patient’s ability to pay. Full payment is required from those with income that
exceeds twice the poverty level.
The centers provide a range of primary health services on an ambulatory basis,
including diagnostic, treatment, preventive, emergency, transportation, and
preventive dental services. They can arrange and pay for hospital and other
supplemental services in certain circumstances if approved by the Secretary.
Funding for the health centers for FY2003 was $1.5 billion (appropriations), and
the annual service population was an estimated 9.6 million persons.
Note: For more information, see CRS Report 97-757, Federal Health Centers
Program.



7. Maternal and Child Health Services Block Grant1


Funding Formula
The Maternal and Child Health (MCH) Services Block Grant supports activities
to improve the health status of mothers and children. Most of the funds are
distributed to state governments to pay for services; however, some funds are set
aside for use by the federal government to finance special projects of regional and
national significance (SPRANS) and the community integrated service systems
program (CISS). State allocations are based on: (1) a state’s share of FY1981 levels
of funding for programs that were combined into the block grant when it was
authorized in 1981; and (2) the number of low-income children in the state. States
must contribute $3 for every $4 of federal funds awarded. States are required to use
at least 30% of their block grant allocations for preventive and primary care services
for children and 30% for services for children with special needs. States may use the
remaining 40% for services for either of these groups or for other appropriate
maternal and child health services, including preventive and primary care services for
pregnant women, mothers, and infants up to age 1. States may use no more than 10%
of their allocations for administrative costs.
Federal law requires that 15% of the appropriation for the block grant up to
$600 million be set aside for SPRANS activities in categories that include research,
training, genetic disease programs and newborn genetic screening, hemophilia
programs, and maternal and child health improvement, especially infant mortality.
When the appropriation for the block grant exceeds $600 million, the law
authorizes that 12.75% of the amount over $600 million be set aside for CISS
projects. Funds from this set-aside are used for initiatives that include case
management, projects to increase the participation of obstetricians and pediatricians
in both the block grant program and Medicaid, integrated delivery systems, rural or
hospital-based MCH projects, and community-based programs including day care for
children who usually receive services on an inpatient basis. FY2002 appropriations
were $731 million, and non-federal matching funds were estimated at $548 million.
(The FY2003 appropriation declined to $730 million.)


1 P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, established a Maternal and
Child Health (MCH) Services Block Grant under Title V of the Social Security Act. The
block grant replaced the previous programs of Maternal and Child Health Services and
Crippled Children’s Services, also in Title V, and included the following other existing
federal programs: supplemental security income services for disabled children, lead-based
paint poisoning prevention, genetic diseases, sudden infant death syndrome, hemophilia
centers, and adolescent pregnancy prevention.

Eligibility Requirements2
States determine eligibility criteria for MCH block grant services. The law
provides that block grant funds are to be used by the states “to provide and to assure
mothers and children (in particular those with low income or with limited availability
of health services) access to quality maternal and child health services.” Low-income
mothers and children are those with family income below 100% of federal poverty
guidelines — $18,400 per year for a family of four in 2003 (higher in Alaska and
Hawaii).
Benefit Levels
States determine the level of services provided under the block grant. These
services may include prenatal care, well-child care, dental care, immunization, family
planning, and vision and hearing screening services. They may also include inpatient
services for children with special health care needs, screening services for lead-based
poisoning, and counseling services for parents of sudden infant death syndrome
victims.
States are allowed to charge for services; however, they may not charge mothers
and children whose family incomes are below federal poverty guidelines. Charges
must be based on a sliding scale that reflects the income, resources, and family size
for those with family incomes above poverty.
In FY2002 Title V provided services to 2.2 million pregnant women, 3.7
million infants, almost 1 million children with special health care needs, and 2.2
million other women of child-bearing age.
Note: For more information, see CRS Report 97-350, Maternal and Child Health
Block Grant.


2 Regulations are found at 45 C.F.R. Part 96 (2002). This program is no. 93.994 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C.701 et seq.

8. Title X Family Planning Services
Funding Formula
Grants are provided for voluntary family planning services through the family
planning program, established by Title X of the Public Health Service Act. There is
no requirement that grantees match federal funds at a specified rate, but regulations
specify that no family planning clinic project may be fully supported by Title X
funds. Congress has continued to appropriate money for the program even though
Title X has not been reauthorized since FY1985. Grants for family planning clinics
are made to states and territorial health departments, hospitals, universities and other
public and nonprofit agencies. Appropriations for FY2003 were $273 million.
Eligibility Requirements1
The law requires that priority for clinic services go to persons from low-income
families. Clinics must provide family planning services to all persons who request
them, but the priority target group has been women aged 15-44 from low-income
families who are at risk of unplanned pregnancy. Clinics are required to encourage
family participation.
Clinics must provide services free of charge (except to the extent that Medicaid
or other health insurers cover these services) to persons whose incomes do not
exceed 100% of the federal poverty income guidelines ($18,400 for a family of four
in the 48 contiguous states in 2003). A sliding payment scale must be offered for
those whose incomes are between 100% and 250% of the poverty guideline.
Benefit Levels
Participating clinics must offer a broad range of family planning methods and
services. Required services include natural family planning methods and supplies,
counseling services, physical examinations (including testing for cancer and sexually
transmitted diseases), infertility services, services for adolescents, pregnancy tests,
periodic follow-up examinations, referral to and from other social and medical
service agencies, and ancillary services. The law forbids use of any Title X funds in
programs where abortion is a method of family planning.
In FY2002, approximately 4.8 million persons received family planning services
through 4,600 clinic sites supported by 85 service grantees. The clinics administered
more than 3 million cervical cancer screenings, 2.8 million breast cancer screenings,
and 600,000 HIV tests. An estimated one-third of all clients served at Title X clinics,

1.6 million per year, are adolescents.


Note: For more information, see CRS Report 98-1048, The Title X Family Planning
Program.


1 Regulations governing Title X family planning services are found in 42 CFR Part 59
(2002). This program is no. 93.217 in the Catalog of Federal Domestic Assistance.

9. Medical Assistance to Refugees, Asylees, Other
Humanitarian Cases
Funding Formula
The Immigration and Nationality Act (INA) authorizes 100% federally funded
medical assistance for needy refugees and asylees during their first 3 years in the
United States, and other legislation authorizes similar assistance for certain Cuban
and Haitian entrants1 and for certain Amerasians.2 However, since FY1992, funding
has been appropriated to provide medical care only for the first 8 months after entry.
These benefits are administered by the Department of Health and Human Service’s
Office of Refugee Resettlement (ORR). For refugee medical assistance (RMA),
ORR expenditures amounted to an estimated $74 million in FY2002.3
Eligibility Requirements4
A person must (a) have been admitted to the United States as a refugee or asylee
under the Immigration and Nationality Act or have been paroled as a refugee or
asylee under the Act, (b) be a Cuban or Haitian paroled into the United States
between April 15 and October 20, 1980, and designated a “Cuban/Haitian entrant,”
or be a Cuban or Haitian national paroled into the United States after October 10,
1980, (c) be a person who has an application for asylum pending or is subject to
exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
If a needy person in one of the above groups meets the income and assets tests
prescribed by his state for Medicaid eligibility but does not otherwise qualify for that
program because of its categorical requirements, such as family composition, the
person is eligible for RMA. Under the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (P.L. 104-193), as amended by P.L. 105-33,
these persons are now eligible for 7 years after entry (earlier law gave permanent
eligibility). After 7 years their continued participation is at state option, as it is with5
other legal permanent residents.
Benefit Levels
Medical benefits consist of payments made on behalf of needy refugees to
doctors, hospitals, and pharmacists. Federal law requires state Medicaid programs


1 Title V of the Refugee Education Assistance Act (P.L. 96-422)
2 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
3 Estimate, based on 1998-1999 proportion of combined medical and cash refugee
expenditures attributed to medical services.
4 Regulations governing this program are found in 45 CFR Parts 400-401 (2002). This
program is no. 93.566 in the Catalog of Federal Domestic Assistance.
5 Wyoming has opted to limit noncitizens, including legal permanent residents, to emergency
Medicaid only.

to offer certain basic services, but authorizes states to determine the scope of services
and reimbursement rates, except for hospital care.



Cash Aid



10. Supplemental Security Income (SSI)


Funding Formula
Since its January 1974 beginning, Supplemental Security Income (SSI) has
provided a minimum income floor, financed by U.S. general revenue and
administered by the Social Security Administration (SSA), to persons eligible under
federal rules. Some states chose to provide additional payments to SSI recipients at
their own expense. In addition, a “grandfather” clause requires states to provide
supplements to a small number of persons, previously enrolled in the pre-SSI
programs of federal-state cash aid for needy aged persons and blind or disabled
adults, whose income otherwise would fall below what it was in December 1973.1
If a state chooses to have the federal government administer its supplements, it
must agree to provide supplements for all federal SSI recipients of the same class and
pay an administration fee to SSA for the service.2 If states administer their own
supplements, they are generally free to design their own supplementary programs and
may adopt more restrictive eligibility rules than those of SSI. As of January 2003,
the federal government administered supplements for 15 jurisdictions.
Total SSI outlays in FY2002 were $38.5 billion, with $33.9 billion (87% of the
total) from federal funds. The federal share of maximum SSI benefits ranged from
50% in Alaska to 100% in the seven jurisdictions where no recipient received a
supplement (Arkansas, Georgia, Kansas, Mississippi, Tennessee, West Virginia, and
the Northern Mariana Islands).
Eligibility Requirements3
Title XVI of the Social Security Act entitles to SSI payments persons who are
(1) aged 65 and over, blind or disabled (adults and children of any age); (2) whose
counted income and resources fall within limits set by law and regulations, and (3)
who live in one of the 50 states, the District of Columbia, or the Northern Mariana
Islands. Also eligible is a child who lives overseas with a parent who is on military
assignment, provided the child received SSI before the parent reported for overseas
duty.


1 The U.S. Social Security Administration (SSA) reported the number of recipients of
mandatory state supplementary payments at 1,220 in March 2003.
2 Since FY1994, Congress has required states to pay for federal administration of state
supplementary payments. Fees began at $1.67 per monthly payment in FY1994 and reached
$8.50 in FY2002. P.L. 105-33 provided that after FY2002, the rate was to be adjusted for
changes in the Consumer Price Index or set at a level determined by the Commissioner of
Social Security. For FY2003, the fee is $8.59.
3 Federal regulations governing SSI are found in 20 CFR Part 416 (2002). Income and
resources rules are in Subparts K and L, respectively. This program is no. 96.006 in the
Catalog of Federal Domestic Assistance. SSI is codified in 42 U.S.C. Section 1381 et seq.

To be eligible for SSI on grounds of disability, an adult must be unable to
engage in any “substantial gainful activity”4 because of a medically determined
physical or mental impairment expected to result in death or that has lasted, or can
be expected to last, for at least 12 months. Under terms of the 1996 welfare reform
law (P.L. 104-193) a child under age 18 may qualify as disabled if he or she has an
impairment that results in “marked and severe” functional limitations. Previously a
child could qualify if his impairment were of “comparable severity” to that of an
eligible adult.
In addition, to qualify for SSI a person must be (1) a citizen of the United States
or (2) if not a citizen, (a) an immigrant who was enrolled in SSI on August 22, 1996
or who entered the United States by that date and subsequently became disabled; (b)
a refugee or asylee who has been in the country or granted asylum, respectively, for
fewer than 7 years, (c) a person who has worked long enough to be insured for Social
Security, usually 10 years (work test gives credit to work by spouse or parent of an
alien child); or (d) a veteran or active duty member of the armed forces (spouses or
unmarried dependent children of veterans/military personnel also qualify).
For basic federal benefits, countable income limits in 2003 are $582 monthly
per individual and $829 per couple. These income ceilings equal maximum federal
benefits of the program (see below for benefit details and for rules about what
income is disregarded). For states with supplementary SSI benefits, countable
income limits are higher, ranging in 2002 up to $907 monthly per individual (living
independently) in Alaska.
Since 1989, the countable resource limit has been $2,000 per individual and
$3,000 per couple. Excluded assets include a home; the first $2,000 in equity value
of household goods and personal effects; the full value of an auto if needed for
employment or medical treatment, or if modified for use by a handicapped person,
otherwise, the first $4,500 in market value of the auto; and a life insurance policy not
exceeding $1,500 in cash surrender value and burial plots and funds, subject to a
limit.
P.L. 98-21 requires the Social Security Administration (SSA), when notifying
Social Security beneficiaries aged 64 about their approaching eligibility for Medicare,
to inform them also about SSI.
Benefit Levels
The Social Security Act establishes benefit levels and requires that whenever
Social Security benefits are increased because of an automatic cost-of-living
adjustment (COLA), SSI benefits be increased at the same time and by the same
percentage.


4 Defined by regulation as monthly earnings, net of impairment-related expenses, of $800,
effective January 1, 2003. The amount is to be adjusted annually.

SSI basic monthly guarantees:5
1996 1997 1998 1999 2000 2001 2002 2003
Indivi dual $470 $484 $494 $500 $512 $530 $545 $552
Couple 705 726 741 751 769 796 817 829
From 1975 through 1982, COLAs were paid each July. In passing the Social
Security Amendments of 1983, Congress accepted President Reagan’s proposal to
delay the 1983 COLA for 6 months, to January 1984, and thereafter to adjust benefits
each January. At the same time it voted an increase of $20 monthly in SSI benefits
($30 per couple), payable in July 1983.
States that supplement SSI benefits are required to “pass through” to recipients6
an increase in the federal basic benefit. However, when Congress deferred the 1983
COLA and instead enacted the $20 benefit increase (about 7%), it required states to
pass through only about half this amount (the 3.5% increase that the regular COLA
would have yielded). As of January 2002, state supplements for aged persons living
independently were offered in 25 states and ranged from $1.70 in Oregon to $362 in
Alaska.
To assure some gain from work, SSI disregards a portion of recipients’ earnings;7
namely, $65 per month, plus 50% of the balance. Because of this rule, aged SSI
recipients without Social Security benefits or other unearned income who work
remain eligible for a declining SSI payment until gross earnings equal double their
basic benefit plus $85 monthly.8 In a state that does not supplement the basic federal
benefit, the gross income limit in 2003 for an aged SSI recipient with only wage
income is $1,189 monthly in earnings. The gross income limit is higher in states that
supplement the federal benefit.


5 The law requires a one-third SSI benefit reduction for those who live in another person’s
household and receive support and maintenance in kind from him.
6 The requirement for passthrough can be satisfied by either of these conditions: (1) if a
state’s total spending for SSI supplements during the relevant 12-month period is not below
that for the preceding 12 months (P.L. 94-585) or (2) if state SSI supplementary payment
levels equal those in effect in March 1983 (P.L. 98-21).
7 For blind or disabled recipients, the law provides additional deductions from earnings.
Blind: disregard the first $65 earned, plus one-half of the rest, plus reasonable work
expenses. Disabled: disregard the first $65 earned, work and living expenses caused by the
disability, plus one-half of the rest. For both blind and disabled SSI recipients, income
needed for the fulfillment of a self-support plan approved by the SSA Commissioner also
is disregarded. (The special expense deduction for the disabled was enacted in June 1980
as a provision of P.L. 96-265.)
8 The $85 disregard consists of the first $20 of any income plus $65 in earnings.

In all but 11 states,9 SSI recipients automatically are eligible for Medicaid. In
the 11 states with more restrictive eligibility rules, states must deduct medical
expenses of SSI recipients in determining their countable income.
Disabled SSI recipients whose counted monthly earnings exceed the $800
“substantial gainful activity” test that determines disability status are eligible for
special cash benefits (calculated as though they still had disability status), as long as
their gross earnings are below the regular SSI ceiling ($1,189 in 2003 in a state
without supplementation). The special cash benefit preserves Medicaid eligibility for
the disabled worker.10 In 1996 (P.L. 104-121), Congress ended SSI (and Social
Security Disability Insurance) benefits for persons disabled because of their addiction
to drugs or alcohol.
In December 2002, federally administered SSI benefits went to 6,787,867
persons,11 including 914,821 children. Benefits averaged $322 to aged recipients,
$439 to the blind, $418 to the disabled (and $488 for children). About 36% of the
Nation’s SSI recipients of federally administered payments also receive Social
Security, and 4.1% have earnings (December 2002 data). As of that date, SSI checks
were supplementary to Social Security benefits for 58% of aged SSI recipients, 34%
of blind recipients, and 30% of disabled recipients. In December 2001, income was
earned by about 2% of aged recipients and by 7% and 5%, respectively, of blind and
disabled recipients. Social Security benefits of dual recipients averaged $414.
Earnings of SSI recipients averaged $318 monthly.12
FY2002 SSI expenditures totaled $38.5 billion (federal funds, $33.9 billion;
state funds, $4.7 billion). Federal SSI spending represented 1.7% of all federal
outlays.
Note: See also CRS Report 94-486, Supplemental Security Income (SSI): A
Fact Sheet.


9 CT, HI, IL, IN, MN, MO, NH, ND, OH, OK, and VA.
10 The Balanced Budget Act of 1997 permitted states to provide Medicaid to disabled
persons who lost SSI eligibility because of earnings, provided their incomes did not exceed
250% of the federal poverty guidelines. P.L. 106-170, enacted in December 1999, allows
states to provide Medicaid to disabled working persons with incomes above 250% of the
poverty guidelines.
11 In December 2002, 151,989 other persons received only state-administered supplementary
SSI benefits.
12 Social Security Administration, Annual Statistical Supplement, 2002.

11. Earned Income Tax Credit (EITC)1


Funding Formula
This benefit is 100% federally funded and is provided through the tax system.
FY2002 outlays (tax year 2001) totaled $27.8 billion. (Another $4.5 billion in credits
was used to offset taxes and is not included in this report.)
Eligibility Requirements
Unlike most tax credits, the EITC is a “refundable” credit. A person need not
owe or pay any income tax to receive the EITC. However, an eligible worker must
apply for the credit by filing an income tax return at the end of the tax year. A person
may receive advance payment of the credit by filing an earned income eligibility
certificate with his or her employer.2 To be eligible for the EITC, married couples
generally must file a joint income tax return. The EITC is a percentage of the
person’s earnings, based on the number of children, up to a maximum earned income
amount. Beginning at the phase-out income level, the EITC is reduced by the phase-
out percentage for every dollar of earnings (or adjusted gross income [AGI],
whichever is greater) above the phase-out income level. Persons with earnings above
the level at which the EITC is reduced to $0 are not eligible for the EITC.
The Earned Income Tax Credit (EITC) is available to a parent (or parents) with
earnings and a qualifying child. A qualifying child must be: (1) a son, daughter,
grandson, granddaughter, stepson, stepdaughter or foster child of the tax filer; (2) be
less than age 19 (24 if a full-time student); and reside with the tax filer for more than
one-half of the tax year (all year if a foster child). The tax filer does not have to meet
a financial support test for the child and the child does not need to be claimed by the
tax filer as a dependent to qualify for the earned income credit. The tax filer must be
a U.S. citizen or resident alien and live in the United States for more than one-half
of the tax year, unless the tax filer is in the U.S. military and on duty overseas.
The EITC also is available to workers ages 25 through 64 who have no eligible
children and whose AGI is less than $11,060 ($12,060 for married couples) in tax
year 2002.3
In 1995, Congress established a limit on investment income for EITC
eligibility.4 The 1996 welfare reform law changed filing procedures to make it less
likely that undocumented workers could gain access to the EITC by requiring both


1 Called Earned Income Credit (EIC) by the Internal Revenue Service (IRS) in tax forms
and literature.
2 The option for advance payments by an addition to paychecks is not available for childless
couples or individuals.
3 The EITC became available for adults with no eligible children in 1994.
4 P.L. 104-7 set a limit of $2,350 in annual income from interest and dividends. P.L. 104-
193 changed this “disqualifying income” limit, setting it at $2,200 in 1996 dollars and
applied it to net capital gains and net passive income as well as interest and dividends.

the tax filer and qualifying children to have social security numbers. In 1996 and
1997, Congress broadened the definition of income used to phase out the EITC for
filing units above the phase-out income threshold.5
In response to an Internal Revenue Service (IRS) study indicating a high
incidence of unwarranted claims from tax filers, Congress enacted provisions against
fraud in the Taxpayer Relief Act of 1997 (P.L. 105-34). A tax filer found to have
claimed the credit fraudulently is barred from claiming the EITC for 10 years; one
who claimed the credit by reckless or intentional disregard of EITC rules is barred
for 2 years. The law also imposes a $100 penalty on paid preparers who fail to fulfill
“due diligence requirements” (as specified by IRS) in filing EITC claims.
Benefit Levels
The EITC was enacted in 1975 as a temporary measure to return a portion of the
employment taxes paid by lower income workers with children. The EITC became
permanent in 1978, with a maximum benefit of $500 and no adjustment for family
size. In the 1990s, Congress increased the credit, provided expansion of the credit
based on family size and extended the credit to childless workers.
The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-

16), contained changes to the EITC with respect to married tax filers filing jointly.


The law increased the beginning and ending of the EITC phase-out range for married
couples filing jointly by $1,000 in taxable years beginning in 2002-2004; by $2,000
in taxable years 2005-2007; and by $3,000 in years after 2007 (adjusted annually for
inflation after 2008). The law also simplified the definition and calculation of the
credit: tax filers no longer must include nontaxable income from employment (for
example, excludable dependent care or education assistance benefits) and may use
adjusted gross income (AGI n a prominent line on all tax returns) rather than
modified adjusted gross income (which required a number of additions and
subtractions to AGI).
EITC Treatment by Other Means Tested Programs. Before 1996, the
federal rules for treatment of the EITC in determining eligibility for means-tested
programs varied by program and changed several times. The Omnibus Reconciliation
Act of 1990 (OBRA 1990, P.L. 101-508) provided that EITC payments were not to
be counted as income by the Aid to Families with Dependent Children (AFDC),
Supplemental Security Income (SSI), Medicaid, Food Stamps, and certain low-
income housing programs. The 1996 welfare reform law (P.L. 104-193), by
repealing AFDC, ended federal rules for the treatment of the EITC by the family
welfare program; thus, states now may treat the EITC in any way they wish in their


5 Effective in 1996, the income used to phase out the EITC was enlarged for some filers by
the exclusion of certain losses: net capital losses, net losses from nonbusiness rents and
royalties, net losses from estates and trusts, and half of net business losses (P.L. 104-193).
The Taxpayer Relief Act of 1997 (P.L. 105-34) further modified the AGI definition for the
EITC phaseout by including nontaxable income from tax-free interest and nontaxable
pensions, annuities, and distributions from individual retirement plans in AGI calculations
and by excluding 75% of net business losses.

Temporary Assistance to Needy Families (TANF) programs. However, P.L. 105-34
disallowed TANF recipients engaged in work experience or community service
(“workfare”) the EITC for TANF earnings to the extent the payments are subsidized.
EITC Benefit Levels. The following table shows the parameters for the EITC
for tax years 2001 through 2003.
Table 12. EITC Parameters for Tax Years 2001-2003
Credit Phase-
200120022003rateout rate
No Children7.65%7.65%
Maximum earned income amount$4,760$4,910$4,990
Maximum credit$364$376$382
Phase-out income level
Joint returns$5,950$7,150$7,240
Other returns$5,950$6,150$6,240
Income where EITC =$0
Joint returns$10,710$12,060$12,230
Other returns$10,710$11,060$11,230
One child34%15.98%
Maximum earned income amount$7,140$7,370$7,490
Maximum credit$2,428$2,506$2,547
Phase-out income level
Joint returns$13,090$14,520$14,730
Other returns$13,090$13,520$13,730
Income where EITC =$0
Joint returns$28,281$30,201$30,666
Other returns$28,281$29,201$29,666
Two or more children40%21.06%
Maximum earned income amount$10,020$10,350$10,510
Maximum credit$4,008$4,140$4,204
Phase-out income level
Joint returns$13,090$14,520$14,730
Other returns$13,090$13,520$13,730
Income where EITC =$0
Joint returns$32,121$34,178$34,692
Other returns$32,121$33,178$33,692
Disqualifying investment income level$2,450$2,550$2,600
Note: For more information about EITC, see CRS Report RL31768, The Earned
Income Tax Credit (EITC): An Overview.



12. Temporary Assistance for Needy Families
(TANF)
Note: This entry describes use of TANF block grant funds for cash aid. Federal plus
state expenditures in FY2002 for TANF cash aid1 were estimated at $10.4 billion
(excluding administrative costs). For TANF child care, TANF work programs and
activities, and TANF services, see separate entries in this report.
Funding Formula
Federal Funding. The 1996 welfare reform law (P.L. 104-193) repealed Aid
to Families with Dependent Children (AFDC), Emergency Assistance (EA), and the
Job Opportunities and the Basic Skills (JOBS) training program, and combined
recent federal funding levels for the three programs into a block grant ($16.5 billion
preappropriated annually through FY2002) for Temporary Assistance for Needy
Families (TANF).2 The law entitles each state to an annual family assistance grant
roughly equal to peak funding received for the repealed programs in FY1992-
FY1995. It also entitles the territories to TANF grants, and it permits Indian tribes,
defined to include Native Alaskan Organizations, to operate their own tribal family
assistance plans with a block grant3 deducted from their state’s TANF grant.
Added to the basic federal block grant for qualifying states are other funds of
five kinds: supplemental grants for 17 states with low TANF grants per poor person,
compared with the national average, and/or high population growth ($800 million,4
FY1998-FY2001); bonuses for up to five states with the greatest decline in non-
marital birth ratios and a decline in abortion rates ($400 million, FY1999-FY2002);
bonuses for states with “high performance” in meeting program goals ($1 billion,
FY1999-FY2003); matching grants (at the Medicaid matching rate) from a
contingency fund for states with high unemployment and/or increased food stamp
caseloads ($1.96 billion, FY1997-FY2001); and Welfare-to-Work (WtW) grants
(most of which required 33.3% state matching funds) for efforts, including job
creation, to move into jobs long-term welfare recipients with barriers to employment


1 Cash assistance reported here consists of basic ongoing cash aid, state contributions to
Individual Development Accounts, state earned income credits and other refundable tax
credits, and short-term, non-recurring benefits (such as diversion payments).
2 In both 2002 and 2003, the House passed a bill to reauthorize TANF for another 5 years,
but, as of autumn 2003, the Senate had not. Since October 1, 2002, TANF has operated
under temporary spending authority that continues FY2002 terms. The most recent extension
is through March 31, 2004 (P.L. 108-89).
3 In early 2003, 38 tribal family assistance plans were in operation in 15 states. Tribes design
their own programs. Work participation rules, time limits, and penalty rules are set by HHS
with tribal participation.
4 Congress later extended supplemental grants, at the FY2001 level of $319 million, through
March 31, 2004.

($3 billion for FY1998-FY1999).5 For a description of the separate WtW program,
which is administered by the Labor Department, see program no. 78 — page 213.
TANF law also established a $1.7 billion revolving loan fund for state use in TANF
operations.
State-local Funding. To avoid penalties, states must spend a specified6
amount of their own funds on TANF-eligible families. The required “maintenance-
of-effort” (MOE) level is from 75% to 80% of the state’s “historic” expenditures,
defined as the state share of FY1994 expenditures on AFDC, EA, JOBS, and AFDC-
related child care. Nationally, the 75% MOE level equals $10.4 billion annually; if
a state fails to meet work participation minimums, the MOE level rises to 80%.
Expenditures of state funds in separate state programs (or in TANF programs that
segregate state funds from federal funds) are countable toward the general TANF
MOE rule. However, for the contingency fund7, a higher state spending requirement
is imposed (100% of the historic level), and spending in separate state programs
cannot be counted toward this MOE.
In FY2002, TANF outlays for cash assistance were estimated at $10.419
billion, with $4.848 billion (47%) from federal funds. Total administrative costs for
the TANF block grant (including those for child care services, work activities, and
other services) were $2.6 billion, with $1.6 billion (62%) from federal funds.
Eligibility Requirements8
Basic Eligibility. TANF permits a state to give ongoing basic cash aid9 to any
needy family that includes (a) a minor child who lives with his/her parent or other
caretaker relative; or (b) a pregnant woman. As under AFDC, states decide who is
“needy.” Unlike AFDC, TANF allows states to aid needy children with an able-
bodied and employed second parent in the home. More than 30 states have expanded
eligibility by adopting one of more of these policies: treating needy two-parent
families on the same basis as one-parent families, liberalizing treatment of earnings
as a work incentive, and increasing asset limits. Most states also aid pregnant
women, but many require them to be in the last trimester of pregnancy, as AFDC did.
Many state policy choices tend to restrict the caseload. They include benefit cutoff


5 P.L. 106-554 extended the deadline for spending WtW funds to September 30, 2004.
6 Qualifying to meet the state spending requirement are expenditures under all state
programs for TANF-eligible families on cash aid (including child support collections passed
through to the family without reducing the TANF benefit), child care, educational activities
(excluding general public education spending), job training and work. For this purpose,
TANF-eligible families are defined to include those ineligible because of the 5-year time
limit or the federal ban on benefits to new immigrants.
7 The contingency fund provides capped matching grants (a total of $2 billion) for use by
state TANF programs in case of recession.
8 TANF law is found in Title IV, Part A of the Social Security Act (and in Title 42, Section
601 et seq.of the U.S. Code). TANF regulations are at 45 CFR, Parts 260-270 (2002). This
program is no. 93.558 in the Catalog of Federal Domestic Assistance.
9 The law uses the term “assistance.” See footnote no. 10 for a definition.

time limits shorter than the limit in federal law, tough sanctions, welfare avoidance
(diversion) payments, and family caps (reduced or zero benefits for new babies born
to TANF mothers). Some of these changes, expansive and restrictive, were first
adopted by states under waivers from AFDC law.
Ineligible Persons. Federal law makes ineligible for TANF-funded basic
ongoing cash aid unwed mothers under 18 (and their children) unless they live in an
adult-supervised arrangement and, if they are high school dropouts, attend school
once their youngest child is 12 weeks old. Also ineligible: persons convicted of a
drug-related felony for an offense occurring after August 22, 1996 (date of enactment
of TANF) unless the state exempts itself by state law; aliens who enter the country
after August 22, 1996 (barred from TANF for 5 years after entry) and persons who
fraudulently misrepresented residence to obtain TANF, food stamps, SSI, or
Medicaid in more than one state. TANF may not be paid to a person who fails to
assign child support or spousal support rights to the state. Except for limited
“hardship” exemptions,10 federal TANF funds may not be used for basic ongoing aid
to a family that includes an adult who has received 60 months of TANF
“assistance”11 while an adult, a minor household head, or a minor married to a
household head (benefit cutoff time limit). Seventeen jurisdictions have adopted
time limits shorter than the federal 60-month limit, and three others reduce benefits
(by deducting the parent’s share of the grant) before 60 months are reached. Twenty-
five jurisdictions impose the federal time limit. Four continue aid (for children only)
beyond 60 months, funding benefits with state dollars (California, District of
Columbia, Rhode Island, and Washington). Five states continue full family benefits
with their own funds (Maine, Maryland, Michigan, New York — generally in
noncash form — and Vermont).12 According to HHS calculations, 767,241 TANF
families (out of 1,825,239 families who had accrued fewer than 5 years of TANF
assistance in FY2002) were exempt from the time limit: 88% because they were
child-only units; 6.4% because their programs were state-funded, 5% because of
approved welfare waivers, and 0.5% because they were in Indian country. In their
TANF plans, more than half of the states said they would make “diversion”
payments, usually one-time payments for immediate needs, in lieu of ongoing TANF
aid.
Work/conduct Requirements. States must require a parent or caretaker
who receives federally funded TANF basic ongoing aid to engage in work, as defined
by the state, after a maximum of 24 months of ongoing basic aid (work trigger limit);
25 out of the 54 TANF jurisdictions with TANF have chosen a shorter work trigger
limit. Adopting a work first philosophy, many states require immediate work, and
some identify job search as the immediate work activity. To enforce the work
requirement, the law sets fiscal penalties for states that fail to achieve minimum


10 Under a “hardship” exemption, a state may provide federally fund assistance beyond 60
months for up to 20% of its caseload. Also, a state may use its own MOE funds for aid
beyond 60 months.
11 Assistance is defined by regulation as cash, payments, vouchers, and other forms of
benefits directed at ongoing, basic needs; it excludes non-recurrent, short-term benefits for
crisis situations and various services.
12 See CRS Report RS21069, TANF Time Limits: Basic Facts and Implications.

participation rates.13 For this purpose, only specified work activities are countable.14
Furthermore, to be counted as a participant, a TANF recipient must work for a
minimum average number of hours weekly. The work week is 20 hours for single
adults with a child under 6 years old (almost half of all TANF adults) and 30 hours
for single adults with an older child, effective in FY2000. A longer work week is
imposed on two-parent families. States may exempt single parents caring for a child
under age 1 from work requirements (and disregard them in calculating work
participation rates). According to the fifth annual TANF report, 23 states exempt
these parents, but 19 states require a care-giving parent to work before the child is
one, and four grant no exemptions.
The law imposes several sanctions for non-compliance with TANF rules. It
requires states to sanction TANF recipients for refusal to engage in required work by
discontinuing aid or by reducing aid to the family “pro rata” with respect to the
period of work refusal. According to state plans, the penalty for a first work violation
in 19 jurisdictions is loss of 100% of benefits until compliance or after a minimum
penalty period (this count includes two states that end benefits for quitting a job).
For repeat offenses, penalties are increased; ultimately, under some circumstances 38
states end family benefits (seven for life). The law requires TANF recipients to
assign child support and spousal support rights to the state; if a recipient does not
cooperate in efforts to establish paternity or to establish or enforce a support order,
the state must reduce the family’s benefit by at least 25%. If a TANF family’s
benefits are reduced because of failure to perform a required action, the state may not
give the family an offsetting increase in food stamps, and it may reinforce the cash
penalty by cutting food stamp benefits by up to 25%.15 The law also allows states to
reduce the family’s benefit for failure to comply with a signed individual
responsibility plan.16 Illustrative recipient obligations include school attendance,
immunization of children, attendance at parenting or money management classes, and
needed substance abuse treatment. On the other hand, states that adopt a provision
known as the Family Violence Option (FVO) are permitted under certain conditions
to waive federal TANF rules regarding work, time limits and child support
cooperation for victims of domestic violence. In FY2002, all but 10 TANF
jurisdictions had adopted the FVO.


13 The statutory work participation rates are reduced for caseload declines from FY1995
average levels. The statutory rates were set at 30% for all TANF families for FY1998 and
rise by 5 percentage points yearly to a peak of 50% for FY2002. The rate for two-parent
families was increased from 75% for FY1998 to a peak of 90% for FY1999 and thereafter.
14 Unsubsidized employment, subsidized private or public sector employment, work
experience, on-the-job training, job search and job readiness assistance (generally limited
to 6 weeks), community service programs, vocational educational training (12 months
maximum,), job skills training directly related to employment, education directly related to
employment (recipient without high school diploma or equivalent), satisfactory attendance
at secondary school (high school dropout), and provision of child care services to a TANF
recipient engaged in community service.
15 The law also permits states to end Medicaid for adults who refuse TANF work
requirements, but requires continued Medicaid for their children.
16 Penalties for refusal to work, cooperate in child support efforts, and sign individual
responsibility plans may be waived for good cause established by the state.

Income and Resource Limits. Under TANF, states have freedom to set
income and resource limits. As of January 2003, all but seven states had raised
countable asset limits for cash recipients above the AFDC ceiling of $1,000 per
family (about half doubled the limit); more than half the states now exclude one
vehicle from countable assets; some permit restricted savings accounts; and one
(Ohio) has eliminated asset limits altogether.
Benefit Levels
Cash Assistance. States determine amounts paid to families with no
countable income and whether to disregard any earnings as a work incentive and any
assets as a savings incentive, (and if so, how much). Almost all jurisdictions have
liberalized treatment of earnings to bolster work (two states, Connecticut and
Virginia, disregard all recipient earnings below the federal poverty guideline). One
state (West Virginia) pays a $100 monthly bonus to married couples. At least three
states (California, Hawaii, and Massachusetts) have established a lower maximum
benefit schedule for persons required to work than for those exempt from work.
More than 20 states pay a reduced benefit, or zero benefit, on behalf of a new baby
born to a TANF mother (family cap).
A CRS telephone survey found that maximum benefits for a three-person TANF
family in January 2003 ranged from $170 in Mississippi to $709 in Vermont and
$923 in Alaska. In half the states, TANF maximum benefits for three persons were
unchanged from those for AFDC in July 1996, just before passage of TANF. This
means that their real value, after adjustment for price inflation, was down almost

15.7%. However, four states increased benefits in real value (Louisiana, up 10%;


Maryland, 9%; Mississippi, 22%, and West Virginia, 55%).
Wisconsin has made the most drastic change. Its TANF program, known as W-
2 (for Wisconsin Works) no longer bases benefits on family size; it pays flat benefits
and conditions them on hours of required activity. For those in a community service
job (CSJ), it pays $673 monthly (about 75% of full-time monthly minimum wages)
plus food stamps, for 30 hours of weekly work (plus up to 10 hours in education and17
training). For those unable to participate in a CSJ, it pays $628 monthly. For each
missed hour, it reduces benefits by $5.15, the minimum wage rate. The Wisconsin
program also seeks to create jobs for TANF recipients by offering employers a $300
maximum wage subsidy monthly, and it establishes child care plans and health care
plans that all low-income families may join for a fee.
Related Programs. Although the 1996 law ended AFDC, it retained AFDC
eligibility limits for use in Medicaid and in the programs of foster care and adoption
assistance. It requires states to provide Medicaid coverage and benefits to children
and family members who would be eligible for AFDC cash aid (under terms of July
16, 1996) if that program still existed. For this purpose, states may increase AFDC
income and resource standards by the percentage rise in the consumer price index
since enactment of TANF; they also may adopt more liberal methods of determining


17 The July 1996 WI maximum AFDC benefit for a family of three was $517; for a family
of four, $617.

income and resources. The law requires 12 months of medical assistance to those
who lose TANF eligibility because of earnings that lift counted income above the
July 16, 1996 AFDC eligibility limit. The law also makes foster care and adoption
assistance matching funds available for children who would be eligible for AFDC
cash aid (under terms of July 16, 1996) if that program still were in effect.
Other Benefits. Benefits other than basic ongoing assistance are known as
“nonassistance.” They are not subject to TANF’s time limits or work requirements,
but they must promote one or more of the goals of TANF. States define who is
eligible and may set different income limits for different services. See entries on
TANF child care, TANF work activities, and TANF services.
Note: For more detail, see CRS Report RL30695, Welfare Reform: State
Programs of Temporary Assistance for Needy Families, CRS Report 96-720, TANF
Block Grant Program: Current Provisions Compared with AFDC, and Section 7 of
Ways and Means Committee Print 108-6, the 2003 Green Book: Temporary
Assistance for Needy Families (TANF), available on the Committee’s web site at
[http://waysandmeans.house.gov/media/pdf/greenbook2003/Section7.pdf]



13. Foster Care1


Funding Formula
Title IV-E of the Social Security Act provides federal matching funds to states
for maintenance payments for the care of certain low-income children placed in
licensed foster care homes, private child care institutions (non-profit or for-profit),
or public child care institutions that house no more than 25 persons. The matching
rate for a state is that state’s Medicaid matching rate (see program no. 1 — page 29).
The FY2003 federal matching rate ranged from 50% to 76.62%. For certain
administrative costs of the program and expenses related to child placement, the
federal government offers 50% matching funds. States receive 75% federal matching
for certain training expenses. FY2002 outlays were $8.6 billion, with $4.5 billion
(52%) from federal funds.
Eligibility Requirements2
For a state to be eligible to claim federal foster care payments on behalf of a
child, the child’s removal from the home must be the result of a judicial
determination that reasonable efforts have been made to enable the child to remain
home and that continuation in the home would be contrary to the child’s welfare.
States also may claim federal payments for children placed into foster care under a
voluntary placement agreement between the child welfare agency and the child’s
parents, if certain judicial findings are made within 180 days of the child’s
placement. In addition, a child must meet the eligibility standards of the repealed
AFDC program, as it existed in his state on July 16, 1996.3 Finally, the child must
be placed in a licensed home or institution.
Benefit Levels
States determine payments to foster parents and institutions, and children are
automatically eligible for Medicaid. P.L. 96-272 requires that states make reasonable
efforts to prevent the need to place children in foster care, and to reunify children
with their families when possible. (P.L. 105-89, enacted in 1997, allows certain
exceptions to this requirement.) Each child in foster care must have a written case


1 This program was established on October 1, 1980, under a new part (Part IV-E) of the Aid
to Families with Dependent Children (AFDC) title of the Social Security Act, by the
Adoption Assistance and Child Welfare Act of 1980 (P.L. 96-272). Previously, foster care
was a separate component of the regular AFDC program.
2 Regulations for this program are found in 45 CFR Parts 1355 and 1356 (2002). This
program is no. 93.658 in the Catalog of Federal Domestic Assistance. It is codified at 42
U.S.C. 670 et seq.
3 This rule took effect on July 1, 1997, mandatory start date for TANF, which replaced
AFDC. The TANF law (P.L. 104-193) originally established the “look-back” AFDC
eligibility date as June 1, 1995 for foster care and adoption assistance use. However, it was
changed to July 16, 1996 (the look-back date for Medicaid use) by the Balanced Budget Act
of 1997 (P.L. 105-33).

plan, and states must hold administrative and judicial reviews of each child’s case
according to a prescribed schedule.
In FY2002, administrative costs (including training and data collection
expenses) were estimated to represent 54% of total federal spending for foster care.
According to the most recent data collected from states by the Child Welfare League
of America, maintenance payments vary widely among states, ranging in FY2000
from $216 monthly for a 2-year-old child in Missouri to $760 for a 16-year-old in
Connecticut. Nationwide average monthly maintenance payments in FY2000 were
$389 for a child age 2, $406 for a child age 9, and $465 for a child age 16.
(Note: A related program, now known as the Chafee Foster Care Independence
Program, was created in 1986 (P.L. 99-272) and expanded in 1999 (P.L. 106-169)
and 2001 (P.L. 107-133). As most recently amended, Section 477 of the Social
Security Act authorizes grants to states to assist foster children who are likely to “age
out” of foster care without returning to their original homes or being placed for
adoption, and former foster children, with their transition to independent living. The
law also authorizes a separate grant to states to provide education and training
vouchers to these youth. These programs are not means-tested, although it is
assumed that the majority of beneficiaries are low-income. Expenditures for these
programs are not included in this report.)



14. Child Tax Credit
Funding Formula
This benefit is 100% federally funded and is provided through the tax system.
FY 2002 outlays (tax year 2001) totaled $5.1 billion. (Another $22.5 billion was
used to offset taxes and is not included in this report.)
Eligibility Requirements
To be eligible for the credit, taxpayers must have a child under age 17 at the
close of the calendar year in which their tax year begins. The taxpayer must be able
to claim a dependent exemption for the child, and the child must be their son,
daughter, grandson, granddaughter, stepson, stepdaughter, or an eligible foster child.
The credit is phased out at higher income levels.
Benefit Levels
The Taxpayer Relief Act of 1997 (P.L. 105-34) created a child credit of $400
in 1998, increasing to $500 for 1999 and thereafter. The Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16) increased the credit limit
to $600 in tax years 2001 through 2004, to $700 in tax years 2005 through 2008,
$800 in tax year 2009, and $1,000 in tax year 2010. The increases will expire in tax
year 2011 with the credit reverting to the prior law level of $500. The Jobs and
Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27) raised the maximum
credit to $1,000 per child for tax years 2003 through 2004.
The credit is refundable for up to 10% of the taxpayer’s earned income in excess
of $10,000 for calendar years 2001-2004, indexed for inflation beginning in 2002
(resulting in $10,500 for tax year 2003). Beginning in 2005, the credit is refundable
for up to 15% of the taxpayer’s earned income above $10,000 (indexed). Before
passage of EGTRRA, the child credit was refundable in two ways: (1) as a
supplemental credit in coordination with the Earned Income Tax Credit (EITC) (the
credit was part of the child credit calculations, and had no separate form or
calculation requirements for taxpayers); and (2) as an additional credit for taxpayers
with three or more children, limited to the amount by which their social security taxes
exceeded their earned income tax credit.1
The credit is phased out at the rate of $50 for each $1,000 (or fraction thereof)
by which modified adjusted gross income (AGI) exceeds certain thresholds: for
singles and heads of households, $75,000; for married couples filing jointly,
$110,000; and for married couples filing separately, $55,000.
Treatment by Other Means-Tested Programs. EGTRRA specified that
the refundable portion of the child credit does not constitute income and shall not be


1 The old rule will apply for taxpayers with three or more children if it provides a larger
refundable credit than the new general rule.

treated as a resource for purposes of determining eligibility or the amount or nature
of benefits under any federal program or any state or local program financed with
federal funds.



15. General Assistance (Nonmedical Care
Component)1
Funding Formula
No federal funds are provided for General Assistance (GA). GA is a general
name for state and local programs that help some of the low-income persons who do
not qualify for federally aided cash payments from Temporary Assistance for Needy
Families (TANF) or Supplemental Security Income (SSI).2 GA is the most common3
term, but several other names are used.
As of mid-1998, 25 states, including the District of Columbia (D.C.), operated
statewide GA cash programs with uniform eligibility rules and, usually, uniform4
benefit schedules. Of these programs, 20 were funded 100% by the state, and five
required counties or localities to share costs with the state.5 Nine states had statewide
programs with county variations; in these states, all counties/localities were required
to operate and fully fund GA programs.6 One state (Nebraska) had a uniform
statewide program for the disabled and a statewide program with county variation for
others. In addition, under state supervision, and with state/local funding, most
Virginia counties and many Wisconsin counties offered GA. In six states, with
county funding only, some counties offered GA.7 Finally, 10 states8 had no program.


1 Most state data reported here are based on the most recent national study of state general
assistance programs and subsequent information from some states. The national study,
entitled State General Assistance Programs, 1998, was conducted by the Urban Institute in
the summer of 1998 as part of the Institute’s project on Assessing the New Federalism. The
study is available at [http://newfederalism.urban.org/html/ga_programs/ga_full.html].
2 Some states use GA for interim assistance to SSI applicants (and later are reimbursed with
SSI funds).
3 Some states use the term, General Relief: AK, CA, MO and VA. Other names include:
safety net assistance (NY); poor relief (IN and SD); direct assistance (NV); and relief block
grant (WI).
4 The 20 jurisdictions with 100% state funding: AK, AZ, CT, DE, DC, HI, KS, MD, MA,
MI, MN, MO, NE (disability program), NM, OR, PA, RI, UT, VT, and WA.
5 The five states with uniform statewide programs and shared state/local funding: CO, ME,
NJ, NY, and OH.
6 The nine states in which all counties/localities were required to operate and fund GA
programs: CA, ID, IL (state funds paid all GA costs in Chicago and about 60 other
localities), IN, IA, NE (for the non-disabled), NV, NH, and SD.
7 The six states in which some counties offered GA (funded by counties): FL, GA, KY, MT,
NC, ND.
8 The 10 states with no program were AL, AR, LA, MS, OK, SC, TN, TX, WV, and WY.

Eligibility Requirements
To receive GA, a person must be judged in financial need and must live where
the program is available. Further, in most states, one must be disabled, elderly, or
otherwise deemed unemployable. In mid-1998, 18 states (including New York and
California, the two most populous states) allowed GA for needy able-bodied adults,
but 13 restricted this aid to persons with children, and most conditioned it on meeting
work requirements. Many states provided GA to disabled or elderly persons who had
applied for SSI and were awaiting determination of SSI eligibility (states are
reimbursed by the Social Security Administration for interim payments made to
persons found eligible). Some aided persons with a temporary disability that did not
qualify them for SSI. A few offered GA to persons enrolled in a drug or alcohol
abuse treatment program. Some states made eligible “unattached” children, those not
living with a relative and hence ineligible for TANF.
Eleven of the statewide programs imposed no categorical eligibility limits; they
(or some of their counties or localities) offered aid to any person needy under their
standards who did not qualify for federally funded aid: Alaska; California (Los
Angeles County); Idaho (Ada County); Indiana (Center Township of Marion
County); Iowa (Polk County); Maine; Nebraska; Nevada (Clark County); New
Hampshire (City of Manchester); New York; and South Dakota (Minnehaha County).
Income and asset limits for GA eligibility vary. In Florida (Dade County),
Kentucky (Jefferson County), and New Hampshire (City of Manchester), only
persons with zero income were eligible, but Hawaii, the most generous state, set the
monthly income limit at $1,239 for an individual. Several states set the countable
asset limit at zero, but most adopted limits between $1,000 and $2,000.
Most GA programs also impose citizenship and residency tests for eligibility.
The 1996 welfare law (P.L. 104-193) prohibits state and local benefits for illegal
aliens unless the state expressly authorizes them by law, and it permits states to
exclude most legal aliens9 from GA. In mid-1998, some GA programs denied
eligibility (for 5 years or permanently) to legal immigrants arriving after August 22,

1996, when the welfare law was enacted. Some of the GA programs open to non-


citizens require immigrants to apply for citizenship as a condition of eligibility. GA
programs typically require current residence in the state, county, or municipality; and
seven require a minimum residence period, ranging from 15 days to 9 months.
Since 1992, coverage of many GA programs has been reduced. Montana
abolished the state-run program that had operated in 12 of its counties; Wisconsin
replaced its state-required county-based program with a block grant for an optional
program. Connecticut, Hawaii, Minnesota, Ohio, and Pennsylvania ended benefits
for able-bodied employable persons without children (and Pennsylvania, for families
as well). D.C. ended GA benefits for SSI applicants. Six states tightened eligibility
criteria for persons with disabilities. The total number of statewide programs with


9 Under P.L. 104-193 as amended, states may not exclude from GA legal aliens with 40
quarters of work covered by social security and, during the first 7 years after their entry into
the United States, refugees and asylees.

time limits rose to nine, but two states (Hawaii and Michigan) removed time limits
for persons with a disability. Since the 1996 passage of TANF, which can be used
for cash aid to pregnant women at any stage of pregnancy, several states have ceased
using GA funds for this group.
Benefit Levels
Mid-1998 Data. GA benefit levels vary greatly among states and often within
them. In mid-1998, maximum GA cash benefits reported by states with uniform
statewide programs ranged from $80 monthly for a single person in Missouri to $339
in Massachusetts and $645 for a disabled person in Nebraska (these amounts were
unchanged from mid-1996). Maximum benefits averaged $248 monthly.
About three-fourths of the states with statewide GA programs provide aid in the
form of cash (except in special circumstances). Nine of these states or some of their
counties provide only vendor payments or vouchers: Idaho (Ada County); Indiana,
(Center Township of Marion County); Iowa (Polk County), Kentucky (Jefferson
County); Maine; Nebraska (non-disabled program); New Hampshire (City of
Manchester); South Dakota (Minnehaha County), and Vermont.
In general, ongoing assistance was provided in mid-1998, to at least some
categories of recipients, by most of the 33 states with statewide programs. However,
these states imposed time limits: Arizona, and Maryland, 12 months out of 36;
California (Los Angeles County) 12-month limit for employable persons; Colorado,

12-month lifetime limit for persons disabled by substance abuse; New Jersey, 60-


month lifetime limit (with extension possible); New York, 24-month lifetime limit
for cash aid (no limit for noncash aid); Pennsylvania, 9-month lifetime limit for
persons in substance abuse treatment and victims of domestic violence; Utah, 7
months out of an 18-month period (for persons in program called Working Toward
Employment; and Vermont, 36-month lifetime limit, for persons in drug treatment.
Recent State Data. In March 2003, enrollment in the Massachusetts program
of Emergency Aid to the Elderly, Disabled, and Children (EAEDC) was up 5% from
the previous year; and benefits averaged $324 (down $7 from 2002). In August the
state announced plans to cut benefits by 11.5% because of a budget shortfall. In
April 2003, enrollment in the Michigan state-funded program of Emergency Relief
was up 77% from the year-earlier level (914 families, compared with 515); and
benefits averaged $377. Maryland issued $2 million in vouchers in April 2003 under
its Transitional Emergency Medical and Housing Assistance program (TEMHA) on
behalf of about 14,709 persons (up 15% from a year earlier); benefits averaged $135
per person. New York spent $68 million in April 2003 for “safety net” assistance,
some of which was in noncash form, to 283,958 persons in 159,865 cases, including
families transferred out of TANF after reaching that program’s 5-year time limit.
Payments averaged $425 per case. California paid a total of $22.3 million in general
relief in March 2003 to 95,177 cases, almost all of which held only one person.
Benefits averaged $234 per case ($335 for family cases).
Census Data. The U.S. Census Bureau reports that direct cash assistance by
states and localities for noncategorical aid totaled $2.968 billion in FY2000 and
$2.956 billion in FY2001. The preliminary estimate for FY2002, based on data from



states that accounted for one-third of the FY2000 census-reported total, is $3.251
billion. Most GA programs offer medical assistance as well as cash. For medical aid
provided under state-local GA programs, see program no. 4 — page 48.



16. Pensions for Needy Veterans, their Dependents,


and Survivors
Funding Formula
The federal government provides 100% funding for veterans’ and survivors’
pensions. Total federal outlays for these pensions reached $3.164 billion during
FY2002.
Eligibility Requirements1
Eligibility for a veteran’s pension requires a discharge (other than dishonorable)
from active service of 90 days or more, at least one of which must have been served
during a period defined in law as a period of war. The veteran must be disabled for
reasons neither traceable to military service nor to willful misconduct. The survivor
pension is provided to surviving spouses and children of wartime veterans who died
of nonservice-connected causes, subject to income limitations. There is no disability
requirement for eligible survivors.
Benefits
After considering other sources of income, including Social Security, retirement,
annuity payments, and income of a dependent spouse or child, the Department of
Veterans Affairs (VA) pays monthly amounts to qualified veterans to bring their total
incomes to specified levels (maximum benefits), shown below. These levels are
increased (by $2,197 in 2003) for veterans with service in World War I or earlier in
recognition of their lack of home loan and education benefits made available to
veterans of later wars. Countable income can be reduced for unreimbursed medical
expenses, as well as some educational expenses incurred by veterans or their
dependents. Pensions are not payable to veterans with substantial assets (when it is
“reasonable” that they use some of their net worth for their own maintenance).
Pensions awarded before 1979 were paid under one of two programs, referred
to as Old Law and Prior Law, both of which were governed by complex rules
regarding countable income and exclusions. Since January 1, 1979, applications
have been processed under the Improved Law program, which provides higher
benefits but has eliminated most exclusions, offsetting countable income dollar-for-
dollar. The Improved Law program accounts for 98% of pension costs and about

88% of beneficiaries.


1 Eligibility rules of this program are found in 38 CFR Subpart A of Part 3 (2002). This
program is no. 64.104 in the Catalog of Federal Domestic Assistance.

Maximum annual benefits in 2003 VeteranSurvivor
Beneficiary without dependent$9,690$6,497
Beneficiary with one dependent12,6928,507
For each additional dependent1,6531,653
Needing regular aid and attendance without dependent16,16910,387
Estimated average benefits (Old, Prior, and Improved)7,4913,200



17. Adoption Assistance1


Funding Formula
Title IV-E of the Social Security Act provides federal matching funds to states
for payments to parents adopting certain low-income children with “special needs.”
The matching rate for a given state is that state’s Medicaid matching rate (see
program no. 1). The FY2003 federal matching rate ranged from 50% to 76.62%. For
administrative expenses and certain training expenses, the federal matching rates are
50% and 75%, respectively. The 1986 tax reform legislation (P.L. 99-514) amended
the adoption assistance program by authorizing 50% federal matching for
reimbursement of certain non-recurring adoption expenses up to $2,000, such as
adoption and attorney fees and court costs. FY2002 outlays were $2.5 billion ($1.3
billion from federal funds).
Eligibility Requirements2
A child must be eligible for SSI (see program no. 10) or meet the eligibility
standards of the repealed AFDC program, as it existed in his state on July 16, 1996,3
must be legally free for adoption, and must have “special needs,” as determined by
the state, that prevent adoption without assistance payments. Such special needs may
include mental or physical handicap, age, ethnic background, or membership in a
sibling group. (In addition, parents who adopt children with special needs who are
not AFDC or SSI eligible are entitled to assistance under the matching program for
non-recurring adoption expenses.)
Benefit Levels
The state adoption assistance agency, by agreement with the adoptive parents,
decides the amount of the adoption payment; however, the payment cannot exceed
what would have been paid to maintain the child in a foster family home. Children
receiving federally subsidized adoption assistance are automatically eligible for
Medicaid. Benefits can continue until the child reaches age 18 or, in cases where the
child is mentally or physically handicapped, age 21.


1 This program was established in 1980 under the Adoption Assistance and Child Welfare
Act of 1980 (P.L. 96-272) as part of a new Title IV-E of the Social Security Act. States
were required to have an adoption assistance program by Oct. 1, 1982, in order to continue
receiving AFDC matching funds.
2 Regulations for this program are found in 45 CFR Parts 1355 and 1356 (2002). This
program is no. 93.659 in the Catalog of Federal Domestic Assistance. It is codified at 42
U.S.C. 673 et seq.
3 This rule took effect on July 1, 1997, mandatory start date for TANF, which replaced
AFDC. The TANF law (P.L. 104-193) originally established the “look-back” AFDC
eligibility date as June 1, 1995 for adoption assistance and foster care use. However, it was
changed to July 16, 1996 (the look-back date for Medicaid use) by the Balanced Budget Act
of 1997 (P.L. 105-33).

18. Dependency and Indemnity Compensation (DIC)


and Death Compensation for Parents of Veterans1
Funding Formula
The federal government provides 100% funding for dependency and indemnity
compensation, and for death compensation. Federal outlays in FY2002 were
estimated at $84 million for 7,463 parents.
Eligibility Requirements 2
Under Title 38 of the United States Code, Section 1315, parents of veterans who
died from a service-connected cause are eligible for Dependency and Indemnity
Compensation (DIC) if their counted income is below limits in federal law and
regulations. Countable annual income limits in 2003 are $11,024 for one parent
alone and for each of two parents not living together; $14,817 for two parents living
together, or for a remarried parent living with his spouse. Chief exclusions from
countable income are cash welfare payments and 100% of retirement income,
including Social Security.
Recipients of death compensation benefits are required to meet the net worth
rules applicable to veterans’ pensioners. (See program no. 15.) There are no net
worth rules for the DIC program.
Benefit Levels
The Veterans’ and Survivors’ Pension Improvement Act of 1978 (P.L. 95-588)
established DIC rates for parents effective January 1, 1979, and required that
thereafter, whenever Social Security benefits were increased by an automatic
cost-of-living adjustment (COLA), DIC rates must be adjusted by the same
percentage and at the same time.
The maximum benefit for a sole surviving, unremarried parent in 2003 is $464
monthly. The maximum for each parent when both survive but do not live together
is $334 per month. The maximum payment to individual surviving parents, who live
either with the other parent, or with the spouse of the deceased veteran is $314
monthly. The minimum monthly payment is $5.00. Parents in need of “aid and
attendance” receive an additional monthly allowance of $250 in 2003.


1 Dependents of veterans who died before 1957 are entitled to “death compensation” or may
elect to receive DIC. Persons who choose to remain under the old program receive higher
benefits than they would under DIC.
2 Eligibility rules are found in 38 CFR. Subpart A of Part 3 (2002). DIC for parents of
veterans is the income-tested component of program no. 64.110 in the Catalog of Federal
Domestic Assistance (DIC benefits for other survivors, spouses, and children).

19. General Assistance to Indians
Note: This entry describes the program of General Assistance (GA) to Indians
operated by the Bureau of Indian Affairs (BIA). However, tribes may design their
own GA programs, changing eligibility rules and benefit levels, provided they pay
any net cost increase, use any savings for tribal needs, and receive BIA approval of
their plan.1 Tribes may administer their redesigned plan themselves or request BIA
to do so.
Funding Formula
The Snyder Act provides 100% federal funding for General Assistance (GA) to
Indians, which is administered by the Bureau of Indian Affairs (BIA). Federal
obligations in FY2002 were $66.5 million.
Eligibility Requirements2
Eligible are needy Indians who are members of a tribe that is recognized by the
U.S. government and Alaskan Natives with at least one-fourth degree Native blood
(or who are regarded as Natives by the Native village). Federally recognized tribes
are located in 34 states, of which 24 have BIA programs of GA.
Persons must be deemed needy on the basis of standards established under the
state’s TANF program. They must apply for aid from other governmental or tribal
programs for which they are eligible, and they may not receive TANF or
Supplemental Security Income (SSI). They must reside in the tribe’s service area and
where non-federally funded aid from a state or local government unit3 is not available
to them. Able-bodied adults must actively seek work, make satisfactory progress in
an Individual Self-sufficiency Plan (ISP), jointly developed and signed by the
recipient and the social services worker, and accept available local and seasonal
employment unless they are enrolled at least half-time in a specified program of
study, caring full-time for a preschool child, or would have a minimum commuting
time of one hour each way.
Certain sums of earned income are disregarded in determining benefits: federal,
state, and local taxes; Social Security taxes; health insurance payments; work-related
expenses, including reasonable transportation costs; child care costs (unless the other
parent in the home is able-bodied and not working); and the cost of special clothing,
tools, and equipment directly related to the person’s employment. Also deducted


1 Between 1999 and the end of FY2002, BIA reports that it assisted 78 tribes develop and
implement comprehensive welfare plans. Its FY2004 budget called for adding 10 more
tribes to this list in FY2003 and FY2004.
2 Revised regulations for this program took effect on Nov. 20, 2000. See 25 CFR, Part 20,
Subpart C (2003). This program is no. 15.113 in the Catalog of Federal Domestic
Assistance.
3 Such programs generally are known as “general assistance,” but various other names are
used, including general relief, poor relief, and safety net assistance.

from countable income is an allowance for shelter costs; namely, 25% of the TANF
standard unless a smaller amount is designated for shelter in the state TANF
standard.
Disregarded as income or resources is the first $2,000 in liquid resources
annually available to the household and any home produce from garden, livestock,
and poultry used by the family. Specific laws exempt certain other income.4
Eligibility for GA must be reviewed periodically, every 3 months for persons
not exempt from seeking work and every 6 months for all participants.
BIA expects the GA caseload in FY2003 and FY2004 to decline from the
FY2002 level of 45,000 persons.5 (Because of the relatively high levels of
unemployment on Indian reservations, it is thought that many Indians enrolled in
TANF will remain eligible for that program beyond 5 years, and hence will be
ineligible for GA. The TANF time limit does not apply to any month of aid during
which the recipient lived in Indian country6 or in an Alaska native village where at
least 50% of adults were unemployed, according to the most reliable available data.
Benefit Levels
General Assistance to Indians provides cash payments and work experience and
training, and the regulations state that the program goal is to increase self-sufficiency.
BIA GA payments are made on the basis of state need standards under the TANF
program unless the state “ratably reduces” actual payments. In those cases, the
Bureau must reduce GA payments by the same percentage. This means that actual
maximum payments in the GA program are the same as in the state TANF program.
For a family of three persons, maximum monthly TANF benefits ranged in January
2003 from $170 in Mississippi to $923 in Alaska. If the state TANF program has no
assistance standard for one adult, the Bureau standard for one adult is the greater of
(a) the difference between the standard for one child and that for a two-person
household with an adult member or (b) one-half the standard for a household of two
persons.
A GA recipient who participates in the tribe’s Tribal Work Experience Program
(TWEP) receives an extra monthly payment ($115 in FY2002 and 2003). This
program provides work experience and job skills training. TWEP programs can be
incorporated within self-determination contracts, self-governance annual funding


4 P.L. 100-241 requires the BIA to exclude from countable income or resources up to
$2,000 per year in corporate dividends paid to an individual under the Alaska Native Claims
Settlement Act (ANCSA). The Indian Tribe Judgment Funds Distribution Act (P.L. 93-134,
as amended by P.L. 97-458 and P.L. 103-66) and certain Indian claims settlement acts also
exclude various amounts from countable income or resources.
5 Bureau of Indian Affairs, Budget Justifications and Annual Performance Plan, Fiscal Year

2004, p. 40.


6 Indian country is defined here to cover: all lands in Indian reservations, off-reservation
trust lands, and dependent Indian commuinities.

agreements and programs coordinated under P.L. 102-477, which allows for
integration of federally-funded employment and training programs.
20. Cash Assistance to Refugees, Asylees, Other
Humanitarian Cases
Funding Formula
The Immigration and Nationality Act authorizes 100% federally funded cash
assistance for needy refugees and asylees during their first 3 years in the United
States, and other legislation authorizes similar assistance for certain Cuban and12
Haitian entrants and for certain Amerasians. However, since FY1992, funding has
been appropriated to provide cash assistance only for the first 8 months after entry.
These benefits are administered by the Department of Health and Human Service’s
Office of Refugee Resettlement (ORR). For refugee cash assistance (RCA), ORR
expenditures were an estimated $41 million in FY2002.
Eligibility Requirements3
A person must (a) have been admitted to the United States as a refugee or asylee
under the Immigration and Nationality Act or have been paroled as a refugee or
asylee under the Act, (b) be a Cuban or Haitian paroled into the United States
between April 15 and October 20, 1980, and designated a “Cuban/Haitian entrant,”
or be a Cuban or Haitian national paroled into the United States after October 10,
1980, (c) be a person who has an application for asylum pending or is subject to
exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
Under the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA; P.L. 104-193), as amended by P.L. 105-33, refugees, asylees,
and others in the above groups are eligible for Temporary Assistance for Needy
Families (TANF) for 5 years after entry, provided they meet the income and asset
tests prescribed by their state for TANF. Those who meet the state’s financial
eligibility tests but who are not categorically eligible for TANF or the federal
program of Supplemental Security Income (SSI) qualify for RCA. (For example, a
single refugee or a childless couple could receive RCA if deemed needy by state
TANF standards.) At the end of the 5-year period, their continued participation is at
state option, as it is with legal permanent residents. The law requires employable
RCA applicants and recipients to accept “appropriate” job offers and to register for
employment to receive cash assistance.


1 Title V of the Refugee Education Assistance Act (P.L. 96-422).
2 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
3 Regulations of this program are found in 45 CFR Parts 400-401 (2002). This program is
no. 93.566 in the Catalog of Federal Domestic Assistance.

Under PRWORA, refugees who qualify for SSI are eligible for 7 years after
entry (before the 1996 welfare law, there was no time limit on eligibility).4 At the
end of the 7-year period, they become ineligible until they naturalize or meet the
work requirement. However, if they were here and receiving SSI by August 22,
1996, the enactment date of PRWORA, they remain eligible. If they were here by the
enactment date and subsequently become disabled, they are eligible also for SSI.
Benefit Levels
RCA payment levels are based on the state’s TANF payment to a family unit of
the same size. For example, an able-bodied couple below age 65 would receive an
RCA benefit equal to that of a two-person (parent and child) TANF family. See
program no. 12 for description of TANF benefit levels. (Benefit levels for persons
who qualify for TANF and SSI are the levels established for those programs.)


4 Under prior law, refugees were eligible for SSI benefits on the same basis as citizens or
permanent resident aliens (see SSI program description).

Food Aid



21. Food Stamps
Funding Formula
The Food Stamp Act generally provides 100% federal funding for food stamp
benefits.1 Federal funds also pay for (1) federal administrative costs, (2) 50% of state
and local administrative expenses 2 and (3) the majority of costs associated with
employment and training programs for food stamp recipients.3 “States” — the 50
states, the District of Columbia, Guam, and the Virgin Islands — are responsible for
the remainder of food stamp expenses. In Puerto Rico, American Samoa, and the
Northern Marianas, federal funds, authorized under the Food Stamp Act, provide
annual grants, in lieu of food stamps, to fund nutrition assistance benefits and
associated administrative costs. The grants for Puerto Rico and American Samoa are
set by law and indexed for inflation. In FY2003, they totaled $1.4 billion ($1.395
billion for Puerto Rico and $5.6 million for American Samoa). The grant for the
Northern Marianas is an annually negotiated amount based on identified needs in the
Commonwealth ($7.1 million in FY2003).4
Eligibility Requirements5
The Food Stamp program imposes four major tests for eligibility: income
limits, liquid asset limitations, employment-related requirements, and limits on the
eligibility of noncitizens. In addition, households composed entirely of recipients of
cash aid or services under state Temporary Assistance for Needy Families (TANF)


1 In a few cases, states have chosen to pay the cost of food stamp benefits (and related
administrative expenses) for households not eligible for federally financed benefits — e.g.,
certain noncitizens.
2 The 50% federal share of state/local administrative expenses is reduced by $197 million
a year to account for costs covered by grants for Temporary Assistance for Needy Families
(TANF), resulting in an actual federal share paid under the Food Stamp program that is
slightly below 50%.
3 See the Food Stamp Employment and Training Program (program no. 79) for more
information about this aspect of food stamp program funding.
4 The Commonwealth of Puerto Rico’s nutrition assistance program provides benefits
(averaging $244 per household per month in FY2002) to some 1 million low-income
residents. It uses financial eligibility tests that are similar to, but more restrictive than those
used for food stamps; benefits are provided through an electronic benefit transfer system
under which the majority of the benefit is earmarked to purchase food items, while the
minority may be withdrawn as cash. The Commonwealth of the Northern Mariana Islands
receives a grant under the Food Stamp Act to operate a program similar to the regular Food
Stamp program, although some of the benefits are earmarked for local food purchases; and
American Samoa receives a grant to run a limited program providing aid to the elderly and
disabled.
5 Regulations for food stamps (and related programs) are found at 7 CFR Part 271 et seq.
(2003). They are nos. 10.551, 10.561, and 10.566 in the Catalog of Federal Domestic
Assistance.

programs, the Supplemental Security Income (SSI) program, or state/local General
Assistance (GA) programs are, in many cases, automatically eligible for food stamps.
Automatic food stamp eligibility may continue for up to 5 months after a household
leaves a TANF program.
Income. Households not automatically eligible because of receiving TANF,
SSI, or GA must have counted (net) monthly income below the federal poverty
income guidelines, which are adjusted annually to reflect inflation measured by the
Consumer Price Index (CPI). More importantly, households without an elderly or
disabled member6 must also have basic (gross) monthly income below 130% of the
poverty guidelines in order to qualify. Changes in these income limits take effect
each October.
Basic (gross) monthly income includes all cash income of the household, except
for: certain “vendor” payments made to third parties (rather than directly to the
household); unanticipated, irregularly received income up to $30 a quarter; loans
(deferred payment education loans are treated as student aid, see below); income
received for the care of someone outside the household; nonrecurring lump-sum
payments such as income tax refunds (these are counted as liquid assets); payments
of federal earned income tax credits (these are not counted as either income or — for

12 months — as assets); federal energy assistance; reimbursements for certain out-of-


pocket expenses; income earned by children who are in school; the cost of producing
self-employment income; education assistance under Title IV of the Higher
Education Act (e.g., Pell grants, student loans); other student aid to the extent
earmarked or used for tuition, fees, and education-related expenses; certain payments
under the Workforce Investment Act (WIA); income set aside by disabled SSI
recipients under an approved “plan to achieve self-sufficiency”; and some other types
of income required to be disregarded by other federal laws. In addition, states may,
within certain limits, exclude income they disregard when judging TANF or
Medicaid eligibility.
Counted (net) monthly income subtracts from basic (gross) income the7
following “deductions”: (1) a “standard” monthly deduction; (2) 20% of any earned
income; (3) expenses for the care of a dependent (up to $200 per dependent per
month for those under age 2 or $175 for other dependents); (4) out-of-pocket medical
expenses of elderly or disabled household members, to the extent they exceed $35
per month; (5) shelter expenses, to the extent they exceed 50% of the income
remaining after all other potential deductions and excluded expenses have been


6 “Elderly” is defined as age 60 or older. “Disabled” is generally defined as being a
recipient of governmental disability benefits such as Social Security or SSI disability
payments.
7 The “standard” deduction varies by household size, indexed for inflation, and differs for
AK, HI, and the territories. During FY2004, the standard deduction in the 48 states and the
DC is $134 a month for households of one to four persons, $149 for five-person households,
and $171 for households of 6 or more persons. For deductions in other areas, see the U.S.
Department of Agriculture Web site at [www.fns.usda.gov/fsp].

subtracted (up to an annually indexed ceiling standing at $378 a month in FY2003);8
and (6) amounts paid as legally obligated child support payments.
The following tables set out the monthly net and gross income limits in the 48
contiguous states, the District of Columbia, the Virgin Islands, and Guam — for the
period October 1, 2003 through September 30, 2004.9
Monthly counted (net) Monthly basic (gross)
Household sizeincome limitsincome limits
1 person$ 749$ 973
2 persons1,0101,313
3 persons1,2721,654
4 persons1,5341,994
5 persons1,7952,334
6 persons2,0572,674
7 persons2,3193,014
8 persons2,5803,354
Each additional person +262+341
Assets. An eligible household’s liquid assets may not exceed $2,000 or
$3,000 if the household includes an elderly or disabled member. This asset test
excludes the value of a residence, business assets, household belongings, and certain
other resources, such as Earned Income Tax Credits paid as a lump sum. The extent
to which the value of a vehicle owned by an applicant household is counted as an
asset varies by state, often conforming to the state’s rule for its TANF program.
Under the most stringent rule, the fair market value of any vehicle above $4,650 is
counted; however, the majority of states either disregard the value of at least one
vehicle or apply a more liberal threshold. The food stamp asset test does not apply
to automatically eligible TANF, SSI, and GA households; states also may, within
certain limits, disregard assets that they do not count in their TANF or Medicaid
programs.
Employment-Related Requirements. In order to maintain eligibility,
certain nonworking able-bodied adult household members must register for
employment, accept a suitable job if offered one, fulfill any work, job search, or
training requirements established by administering welfare agencies, provide the


8 The limit on the shelter expense deduction varies in AK, HI, and the territories, and does
not vary by household size. For the limit in other areas, see the U.S. Department of
Agriculture website at: www.fns.usda.gov/fsp.
9 Limits are higher in AK and HI, by 25 and 15%, respectively. Puerto Rico’s nutrition
assistance program uses a gross income test only, set substantially below that used in the 48
states and the DC.

welfare agency with sufficient information to allow a determination with respect to
their job availability, and not voluntarily quit a job without good cause or reduce
work effort below 30 hours a week. Exempt from these requirements are: persons
caring for dependents (disabled or under age 6); those already subject to another
program’s work requirement; those working at least 30 hours a week or earning the
minimum-wage equivalent; the limited number of postsecondary students who are
otherwise eligible; residents of drug addiction and alcoholic treatment programs; the
disabled; and those under 16 or age 60 or older (those between ages 16 and 18 are
also exempt if they are not the head of a household or if they are attending school or
a training program). If the household head fails to fulfill any of these requirements,
the state may disqualify the entire household for up to 180 days. Individual
disqualification periods differ according to whether the violation is the first, second,
or third; minimum periods range from 1 to 6 months and may be increased by the
welfare agency, in some cases to permanent disqualification.
In addition to the above work-related requirements, special rules apply to some
persons without dependents. Many able-bodied adults (between 18 and 50) without
dependents are ineligible for food stamps if, during the previous 36 months, they
received food stamps for 3 months while not working at least 20 hours a week or
participating in an approved work/training activity (including “workfare,” work in
exchange for benefits). Those disqualified under this rule are able to re-enter the
Food Stamp program if, during a 30-day period, they work 80 hours or more or
participate in a work/training activity. If they then become unemployed or leave
work/training, they are eligible for an additional 3-month period on food stamps
without working at least 20 hours a week or enrolling in a work/training activity. But
they are allowed only one of these added 3-month periods in any 36 months — for
a potential total of 6 months on food stamps in any 36 months without half-time work
or enrollment in a work/training effort. [Note: At state request, the special rule for
able-bodied adults without dependents can be waived for areas with very high
unemployment (over 10%) or lack of available jobs. Moreover, states themselves
have authority to exempt up to 15% of those subject to the rule.]
States must operate work and training programs under which recipients not
exempt by law or by state policy must fulfill employment requirements (which can
include workfare, training, job search, education, or other activities) as established
by the welfare agency. These programs are described separately in this report (see
program no. 79).
Other Limitations. Categorical eligibility restrictions include: (1) a ban on
eligibility for many noncitizens;10 (2) a ban on eligibility for households containing
striking members, unless eligible prior to the strike; (3) a ban on eligibility for most
nonworking postsecondary students without families; (4) a ban on eligibility for
persons living in institutional settings, except for those in special small group homes
for the disabled, persons living in drug addiction or alcoholic treatment programs,
persons in temporary shelters for battered women and children, and those in homeless


10 For information on rules barring noncitizens’ eligibility for food stamps, see CRS Report
RL31114, Noncitizen Eligibility for Major Federal Public Assistance Programs: Policies
and Legislation.

shelters; (5) a state-option ban on eligibility for those who have violated another
welfare program’s rules and been disqualified, (6) limits on participation by boarders;
(7) a requirement that Social Security numbers be provided for all household
members; (8) denial of eligibility where assets have been transferred to gain
eligibility; (9) denial of eligibility where there has been intentional violation of
program rules or failure to cooperate in providing information needed to judge
eligibility and benefits; and (10) a ban on eligibility for SSI recipients in California.11
Benefit Levels
The Food Stamp Act specifies that a household’s maximum monthly food stamp
allotment be the cost of a nutritionally adequate low-cost diet, as determined by the
U.S. Department of Agriculture’s Thrifty Food Plan, adjusted each October for
changes in food prices. A participating household’s actual monthly allotment is
determined by subtracting, from the maximum allotment for its size, an amount equal
to 30% of its counted monthly income (after all applicable deductions, see above),
on the assumption that the household can afford to spend that amount of its own
income on food. Minimum benefits for households of one and two persons are
legislatively set at $10 per month; minimum benefits for other household sizes vary
but generally are somewhat higher. Maximum monthly allotments in FY2004 are
shown in the following table.
Table 13. Maximum Monthly Food Stamp Allotments (October

2003 through September 2004)


48 states andAlaskaabVirgin
Household sizeD.C.(urban)HawaiiIslandsGuam
1 person$141 $167 $210 $182 $208
2 persons259307386333382
3 persons371439553477547
4 persons471558702606695
5 persons560663834720826
6 persons6727951,001864991
7 persons7438791,1069551,095
8 persons8491,0051,2641,0921,252
Each additional person+106+126+158+137+157
a. Maximum allotment levels in rural AK are 27% to 55% higher than the urban AK allotments noted
here. The allotment levels noted here are those in effect as of Oct. 1, 2003. However, under
legislation pending as of Oct. 28, 2003, they are scheduled to increase slightly: to $169, $309,
$443, $563, $669, $803, $887, $1,014, and +$127.


11 Cash SSI payments have been increased in California to include an estimated value for
food stamp benefits.

b. The allotment levels noted here are those in effect as of Oct. 1, 2003. However, under legislation
pending as of Oct. 28, 2003, they are scheduled to increase slightly: to $212, $389, $557, $707,
$840, $1,008, $1,114, $1,273, and +$159.
Food stamp benefits are issued through electronic benefit transfer (EBT) cards.
These cards are used like “debit cards” to access food stamp recipients’ individual
food stamp accounts when purchasing food items at approved stores. Food stamp
benefits can be used only to buy food items; however, EBT cards often include access
to cash benefit programs (in which case, the card can be used to access cash).



22. School Lunch Program
(Free and Reduced-Price Components)
Funding Formula
The Richard B. Russell National School Lunch Act provides a guaranteed
federal subsidy for each free or reduced-price lunch served to needy children in
schools and residential child care institutions (RCCIs) choosing to participate in the
School Lunch program. The cash subsidy for free and reduced-price lunches consists
of two parts: a basic payment authorized under Section 4 of the Act for every lunch
served, without regard to the family income of the participant, and an additional
special assistance payment authorized under Section 11 of the Act only for lunches
served free or at reduced price to lower-income children. Additionally, the federal
government provides commodity assistance for each meal served. The level of
federal cash subsidies and the value of federal commodity aid are legislatively set and
annually indexed. State and local government funds and children’s payments also
help finance lunches served in participating schools and RCCIs. No charge may be
made for a free lunch, but a charge of up to 40 cents may be imposed for a reduced-
price lunch. Schools may set whatever charge they wish for lunches served to
children who do not qualify for free or reduced price lunches, or who do not apply
for them, so long as this charge does not result in a profit.
The law requires that states contribute to their lunch programs revenues equal
to at least 30% of the total Section 4 federal funding provided in the 1980-1981
school year (about $200 million a year). However, no matching funds are required
for the extra federal subsidy provided for free and reduced-price lunches, under
Section 11 of the Act.
Eligibility Requirements1
All children are eligible to receive at least a partially subsidized lunch in
participating schools and RCCIs, although subsidies are higher for meals served free
or at a reduced price. All public schools, private nonprofit schools, and RCCIs are
eligible to participate and receive federal subsidies if they serve meals that meet
nutrition requirements set by the U.S. Department of Agriculture based on the
Dietary Guidelines for Americans, offer free and reduced-price meals to lower
income children, and agree not to make a profit on their meal program.
Children whose current annual family income is at or below 130% of the
annually indexed federal poverty income guidelines are eligible for a free lunch;
those children whose family income is more than 130%, but not more than 185% of
the guidelines, are eligible for a reduced-price lunch. Annual income limits for a
family of four for the 2002-2003 school year in the 48 contiguous states, the District
of Columbia, Puerto Rico, Guam, and the Virgin Islands were: for free lunches,


1 School lunch regulations are found in 7 CFR Parts 210 and 245 (2003). This program is
no. 10.555 in the Catalog of Federal Domestic Assistance.

$23,530; for reduced-price lunches, $33,485.2 In addition, most children from
families receiving public assistance (e.g., cash welfare, food stamps) can be certified
for free school lunches based on their public assistance enrollment.
Benefit Levels
Benefits are provided to local “school food authorities” through state education
agencies. Federal cash subsidies are provided to participating schools and RCCIs for
each lunch served. The law establishes specific reimbursement (subsidy) rates for
each type of lunch served (free, reduced-price, “full-price”) and mandates that they
be adjusted each July for inflation. Cash reimbursement rates for the 2002-2003
school year were:3 (1) $2.14 for each free lunch, (2) $1.74 for each reduced-price
lunch, and (3) 20 cents for each full-price lunch.
In addition to the cash assistance noted above, the federal government provides
commodity assistance for all meals served in participating schools and residential
child care institutions. This assistance rate is adjusted annually each July for
inflation, and, for the 2002-2003 school year, it was a minimum of 15.25 cents per
meal served (e.g., the total cash and commodity subsidy rate for free lunches was
approximately $2.29).
Schools and RCCIs in the School Lunch program also may expand their
programs to cover snacks (and, in some cases, suppers) served to children through
age 18 in after-school programs. Federal subsidies are paid at the free snack/supper
rate offered to child care providers if the snack/supper is served free to children in
lower-income areas. In other cases, federal subsidies vary by the child’s family
income. (See program no. 24, the Child and Adult Care Food Program, for the
various federal subsidy rates for snacks/suppers and additional authority for schools
and public and private nonprofit organizations to receive subsidies for snacks/suppers
served in after-school programs.)
In FY2002, more than 90% of schools and RCCIs received school lunch
program subsidies — some 93,000 schools, plus nearly 6,000 RCCIs. Average daily
participation was 28 million children; 13.3 million received free lunches, 2.6 million
ate reduced-price lunches, and lunches for 12 million students were subsidized at the
minimum full-price rate (for which no income test is required). While children
receiving free or reduced-price lunches made up 57% of those participating, subsidies
for their lunches accounted for over 90% of federal spending on the school lunch
program.
Note: For more information, see: CRS Report RL31577, Child Nutrition and
WIC Programs: Background and Funding.


2 Higher limits apply in AK (+25%) and HI (+15%).
3 An additional 2 cents is provided for each lunch served in schools where 60% or more of
the school lunch participants receive free or reduced-price meals. Significantly higher
reimbursement rates apply in AK and HI.

23. Special Supplemental Nutrition Program for
Women, Infants, and Children (The WIC Program)
Funding Formula
The Child Nutrition Act provides 100% federal funding through grants to states
for food costs and nutrition services and administration (NSA); money also is
provided for to support breast-feeding initiatives and the development of local
agencies’ administrative infrastructure, small farmers’ market nutrition programs (see
Program 31), and research and evaluations. State allocations are based on a formula
that reflects food and NSA caseload costs, inflation, and “need” as evidenced by
poverty indices — although small amounts are set aside for infrastructure
development and other special initiatives. Except for a small matching amount for
states choosing to operate a farmers’ market nutrition program, no state or local
matching funding is required.
Eligibility Requirements1
Section 17 of the Child Nutrition Act makes eligible for WIC benefits
lower-income mothers, infants, and children judged to be at “nutritional risk.” These
include infants (up to age 1), children up to 5 years old, pregnant women,
non-nursing mothers up to 6 months after childbirth, and nursing mothers up to 1
year after childbirth. A competent professional authority on the staff of a
participating local public or private nonprofit health clinic or welfare agency that
operates a WIC program must certify that the recipient is at nutritional risk through
a medical or nutritional assessment guided by federal standards.
In addition to meeting the nutritional risk criterion, WIC enrollees must have
annual family income below state-established limits, and public assistance recipients
may be judged automatically income eligible. Income limits may not exceed those
for reduced-price meals under school meal programs — 185% of the federal poverty
income guidelines (as annually adjusted) — $27,7872 for a three-person family for
July 2002 through June 2003. States can set lower income limits, but these must not
be lower than 100% of the poverty guidelines.
Unlike most other nutrition assistance programs, the ability of the WIC program
to serve all those who apply and are judged eligible is largely limited by the annual
amount of federal funding made available, and not all eligible applicants are3
guaranteed benefits. State health departments or comparable agencies determine


1 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
regulations are found at 7 CFR Part 246 (2003). This program is no. 10.557 in the Catalog
of Federal Domestic Assistance.
2 This income ceiling is for the 48 contiguous states, the DC, PR, GU and the VI. Higher
limits apply in AK (+25%) and HI (+15%).
3 Regular annual federal appropriations for the WIC program are supplemented by rebates
from infant formula companies, any unused money carried over from the prior year, and, in
(continued...)

which local health or welfare agencies are eligible for program participation or
expansion in order of greatest need based on economic and health statistics, and
available funding. And a priority system seeks to ensure that individuals at the
greatest risk are served first. The program is estimated to serve at least 80% of the
eligible population. In FY2002, average monthly participation was just under 7.5
million women, infants, and children.
Benefit Levels
Beneficiaries receive selected supplemental foods, as called for in federal
regulations, either in the form of food or, most commonly, as vouchers/checks valid
for specific prescribed food items in stores.4 Federal regulations include
requirements about the types and quantities of food to be made available and about
tailoring food packages to meet the varying nutritional needs of the infants, children,
and pregnant and postpartum women participating in the program. However, state
WIC agencies have some leeway in designing specific food packages and specifying
foods that may be bought with WIC vouchers. In FY2002, the national average
monthly federal cost of food in a WIC food package was $35 (after an offset for
rebates by infant formula companies).
The law also requires that participants receive breast-feeding support, nutrition
education, and a nutritional risk evaluation (in order to qualify). Monthly NSA costs
for these services averaged $13 a recipient in FY2002.
In addition to the regular WIC program, a majority of states have chosen to
operate a farmers’ market nutrition program that offers WIC applicants and recipients
special vouchers that can be used to buy fresh foods at participating farmers’ markets
(See program 31).
Note: For more details, see CRS Report RL31577, Child Nutrition and WIC
Programs: Background and Funding.


3 (...continued)
some cases, voluntary state contributions.
4 Items in WIC food packages vary by the type of recipient and include milk, cheese, eggs,
infant formula, cereals, peanut butter, fruit and vegetable juices, and other items keyed to
specific dietary deficiencies.

24. Child and Adult Care Food Program
(Lower-Income Components)1
Funding Formula
The Richard B. Russell National School Lunch Act provides 100% federal
funding for this program in the form of legislatively set (and annually indexed) cash
subsidies for all meals and snacks served in participating child and adult day care
centers and family and group day care homes for children. Subsidies are varied by
participants’ family income (in day care centers), or (in the case of family day care
homes) whether the provider has a lower-income or located in a lower-income area.
Payments to sponsors of day care homes (based on the number of homes sponsored)
and some federal commodity assistance also are provided, as are administrative
payments to day care center sponsors. There is no requirement for matching funds
from non-federal sources.
Eligibility Requirements2
Licensed (or otherwise approved) public and private nonresidential nonprofit
child care, adult care, and Head Start centers, some schools operating after-school
programs, and family and group day care homes are eligible for federal subsidies for
meals, snacks, and (in some cases) suppers they serve meeting federal nutrition
requirements. For-profit child care institutions also are eligible, but their eligibility
is limited based on the degree to which they serve “lower-income” children (as
measured by the centers’ receipt of government child care subsidies or by the family
income of children served). Participation by centers and homes is voluntary.
All children and elderly clients in participating programs operated in child and
adult care centers receive federally subsidized meals and snacks, although subsidies
are higher for meals served free or at a reduced price to lower-income individuals.
As with the School Lunch and School Breakfast programs: free meals/snacks are
available to those whose household income is not above 130% of the federal poverty
income guidelines ($23,530 for a family of four during the period July 2002-June

2003); those whose household income is above 130%, but not above 185% of the3


poverty guidelines ($33,485 for a family of four) are eligible for reduced-price
meals/snacks. Income eligibility guidelines are adjusted annually. Meals and snacks
for individuals from households with income above these limits (or who do not apply
for free or reduced-price meals/snacks) also are subsidized, but the subsidies are
much smaller. Unlike the school meal programs, while federal cash subsidies paid


1 The adult care component of this program is relatively small. It provides federal subsidies
for meals in nonprofit centers serving functionally impaired adults age 60 and over. Adult
recipients represent about 2% of total participation. The program operates in the same
manner for adult care centers as for child care centers.
2 Regulations for this program are found in 7 C.F.R. Part 226 (2003). This program is no.

10.558 in the Catalog of Federal Domestic Assistance.


3 These income ceilings are for the 48 contiguous states, the DC, GU, PR, and the VI.
Higher limits apply in AK (+25%) and HI (+15%).

to centers differ according to family income, there is no requirement that “free” or
“reduced-price” meals/snacks be served. Centers may adjust their fees to account for
federal subsidies or charge (or not charge) separately for meals to account for the
subsidies, but the program itself does not regulate the fees they charge.
All children in participating family day care homes receive federally subsidized
meals/snacks. However, the subsidies are generally not differentiated by the child’s
family income.
Benefit Levels4
Federal subsidies are provided for up to two meals and one snack per day per
recipient (or three meals a day in homeless/emergency shelters). Participating
centers receive cash subsidies for meals that are the same as those provided for
lunches or breakfasts under the School Lunch and School Breakfast programs. For
the period July 2002 through June 2003, these amounts were: (a) for lunches and
suppers, $2.14 each for free meals, $1.74 for reduced-price meals, and 20 cents for
“full-price” meals; (b) for breakfasts, $1.17 for free meals, 87 cents for reduced-price
meals, and 22 cents for full-price meals. Cash subsidies for snacks were set at 58
cents for free snacks, 29 cents for reduced-price snacks, and 5 cents for full-price
snacks. Finally, centers may receive the federal commodity assistance (about 15
cents a meal) and are allowed to retain some of their federal subsidies for
administrative costs. All subsidy rates are annually indexed.
The federal subsidy structure for family day care homes is different. Day care
homes receive subsidies that generally do not differ by the family income of
individual recipients. Instead, there are two distinct annually indexed subsidy rates.
“Tier I” homes (those located in lower-income areas or operated by lower-income
providers) receive higher cash subsidies; for July 2002 through June 2003, all
lunches/suppers were subsidized at $1.80, all breakfasts were subsidized at 98 cents,
and all snacks were subsidized at 53 cents. “Tier II” homes (those not located in
lower-income areas or without lower-income providers) receive lower subsidies; for
July 2002 through June 2003, all lunches/suppers were subsidized at $1.09, all
breakfasts at 37 cents, and all snacks at 14 cents. Organizations sponsoring homes
receive monthly payments for their administrative/oversight costs, which vary by the
number of homes sponsored; and Tier II homes may seek higher Tier I rates for
individual low-income children if the proper documentation is provided.
In addition to the regular Child and Adult Care Food Program (CACFP), the law
allows public and private nonprofit organizations (including child care centers and
schools) operating after-school programs to receive federal CACFP subsidies for
snacks served free in their programs to children (through age 18) in lower-income
areas — at the free snack rate noted above. In some cases, subsidies also are offered
for suppers in after-school programs.


4 All federal subsidy rates noted here are significantly higher in AK and HI.

In FY2002, 42,000 child care centers and some 2,000 adult care centers with an
average daily attendance of 1.8 million persons participated, and some 165,000 day
care homes received subsidies for just under 1 million children in attendance.
Note: For more information, see CRS Report RL31577, Child Nutrition and
WIC Programs: Background and Funding.



25. School Breakfast Program
(Free and Reduced-Price Components)
Funding Formula
The Child Nutrition Act provides a guaranteed federal subsidy for each free or
reduced-price breakfast served needy children in schools and residential child care
institutions (RCCIs) that choose to participate. A small subsidy also is provided for
“full-price” breakfasts to non-needy children. Certain schools, designated as “severe1
need” schools, receive subsidies that exceed regular subsidies. State and local
government funds, as well as children’s meal payments, also help finance the cost of
breakfast programs, although there is no formal matching requirement. No charge
may be made for a free breakfast, but up to 30 cents may be charged for a reduced-
price breakfast.
Eligibility Requirements2
As with the School Lunch program, all children are eligible to receive at least
a partially subsidized breakfast in participating schools and institutions, although
subsidies are higher for meals served free or at a reduced price. All public schools,
private nonprofit schools, and RCCIs are eligible to participate and receive federal
subsidies if they serve meals that meet nutrition requirements set by the U.S.
Department of Agriculture based on the Dietary Guidelines for Americans, offer free
and reduced-price meals to lower-income children, and agree not to make a profit on
their meal program.
Children whose current annual family income is at or below 130% of the federal
poverty income guidelines are eligible for a free breakfast; those children whose
family income is more than 130%, but not more than 185%, of the guidelines are
eligible for a reduced-price breakfast. Annual income limits for a family of four for
the 2002-2003 school year were: for free breakfasts, $23,530; for reduced-price
breakfasts, up to $33,485.3 Income eligibility guidelines are annually adjusted for
inflation. In addition, most children from families receiving public assistance (e.g.,
cash welfare, food stamps) can be certified eligible for free breakfasts based on their
public assistance enrollment.


1 Severe need schools are defined as schools in which 40% or more of lunches under the
School Lunch program are served free or at a reduced price.
2 School breakfast regulations are found in 7 C.F.R. Parts 220 and 245 (2003). This program
is program no. 10.553 in the Catalog of Federal Domestic Assistance.
3 These income ceilings are for the 48 contiguous states, the DC, GU, PR, and the VI.
Higher limits apply in AK (+25%) and HI (+15%).

Benefit Levels
As with the School Lunch program, benefits are provided to local “school food
authorities” through state education agencies. The law provides a guaranteed federal
cash reimbursement (subsidy) to participating schools and RCCIs for each breakfast
served. It establishes specific reimbursement rates for each type of breakfast served
(free, reduced-price, “full-price”) and mandates that they be adjusted each July for
inflation. Regular cash reimbursement rates for the 2002-2003 school year were:4
(1) $1.17 for each free breakfast, (2) 87 cents for each reduced-price breakfast, and
(3) 22 cents for each full-price breakfast.
In FY2002, 76% of schools in the School Lunch program (and virtually all
RCCIs in the program) also operated breakfast programs. Some 71,000 schools and
roughly 6,000 child care institutions were in the program, with an average daily
participation of 8.1 million children — 6 million received free breakfasts, 700,000
ate reduced-price meals, and 1.4 million were subsidized at the full-price rate.
Note: For more information, see CRS Report RL31577, Child Nutrition and
WIC Programs: Background and Funding.


4 An additional 23 cents for each free or reduced-price meal is provided to severe need
schools (see footnote number 1). Significantly higher rates apply in AK and HI.

26. Nutrition Program for the Elderly
Funding Formula
Nutrition services for the elderly under Title III of the Older Americans Act are
supported by grants to states and territories from the U.S. Department of Health and
Human Services, Administration on Aging (HHS/AoA). The nutrition services
program includes three components: congregate nutrition services; home-delivered
nutrition services; and commodities or cash-in-lieu of commodities.
The Act specifies that the federal share of a state’s allotment for congregate and
home-delivered meal services may cover up to 85% of the cost of developing and/or
operating local projects. The non-federal matching share can be paid in cash or
in-kind contributions. Federal funds are allotted to the states on the basis of their
share of the U.S. total population aged 60 and over, except that the minimum state
allotment is 0.5% of the U.S. appropriation for the year. (Minimums are smaller for
Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands.)
States also receive funds from HHS1 for commodities, or cash in lieu of
commodities, to supplement Title III grant funds for congregate and home-delivered
meals. These funds are allocated to states on a formula that is based on a state’s
share of meals served by all states under auspices of the Title III program for the
preceding fiscal year.
FY2003 appropriations for the nutrition program totaled $714 million.
Eligibility Requirements2
The Older Americans Act makes eligible persons aged at least 60 and their
spouses. In addition, congregate meals may be provided to persons with disabilities
under age 60, who reside in housing facilities occupied primarily by the elderly where
congregate nutrition services are provided, or who reside with and accompany older
persons to meals. Eligible for home-delivered meals are persons who are homebound
by reason of illness or disability, or who are otherwise isolated. The law requires that
preference be given to those with the “greatest” (1) economic need and (2) social
need. The law defines group one to be persons whose income is at or below the
poverty guideline issued by HHS (the guideline issued in February 2003 was $8,980
for a “family unit” of one person) and group two to be persons whose need for
services is caused by noneconomic factors3 that restrict their ability to perform
normal daily tasks or that threaten their capacity for independent living.


1 Up until FY2003, the U.S. Department of Agriculture (USDA) received appropriations of
funds for allocation to state agencies on aging under Title III for cash or cash-in-lieu of
commodities. In FY2003, the program was transferred to the Department of Health and
Human Services, Administration on Aging.
2 Regulations concerning nutrition services are found at 7 CFR Part 250 (2003).
3 Listed as such factors are physical and mental disabilities, language barriers, and cultural,
social, or geographical isolation including that caused by racial or ethnic status.

The law requires that congregate meal services be located as close as possible
to where most eligible older persons live, preferably within walking distance. Means
tests are prohibited.
Benefit Levels
The law requires providers to offer at least one meal daily, 5 or more days per
week. If the nutrition project serves one meal a day, each meal is to assure a
minimum of one-third of the daily recommended dietary allowances (RDAs)
established by the Food and Nutrition Board of the National Academy of Sciences-
National Research Council. If the project serves more than one meal daily,
nutritional requirements are higher (two-thirds of RDA for two meals, 100% for
three). Nutrition services funds also may be used to provide support services such
as outreach and nutrition education.
The law requires that providers give participants an opportunity to contribute
toward the cost of the meal. Service providers may establish suggested contribution
schedules; but each participant is to decide for him/herself what, if anything, he/she
is able to pay. A service provider may not deny any older person nutrition services
for failure to contribute to the cost of the service. The law requires that voluntary
contributions be used to expand services for which the contributions were made.
Note: For more information about nutrition services for the elderly, see CRS
Report RL31336, Older Americans Act: Programs and Funding, and CRS Report
RS21202, Older Americans Act Nutrition Program.



27. The Emergency Food Assistance Program
(TEFAP )1
Funding Formula
The Emergency Food Assistance Program (TEFAP) provides federally donated
food commodities to states for distribution to emergency feeding organizations
(EFOs), including soup kitchens and food banks, serving the homeless and other
needy persons. Cash grants also are provided to help states and local EFOs with the
administrative costs of storing, transporting, handling, and distributing the
commodities.
Commodities are allocated under a poverty-unemployment allotment formula:
60% of them are distributed based on a state’s share of all persons with incomes
below the poverty level, and 40% based on its share of all unemployed persons.
Administrative funding is distributed to states in the same proportion as their share
of commodities. To cover local EFO costs, states must distribute to localities at least
40% of the administrative funding which they receive. Further, they are required to
match (in cash, or in-kind) funds that they do not pass along to local agencies.
In FY2002, the value of federally donated commodities distributed under
TEFAP was $306 million, and federal support for distribution and administrative
costs was $55 million — for a total of $361 million.
Eligibility Requirements2
State agencies administering TEFAP are responsible for selecting the emergency
feeding organizations that will distribute food. There are no federal criteria for
agency selection except that the feeding organization must serve needy persons and
have the capacity to store and handle commodities. Emergency feeding organizations
include food banks and pantries, soup kitchens, hunger centers, temporary shelters,
community action agencies, churches, and other nonprofit agencies offering food
assistance to the indigent and needy. By law, those eligible to receive commodity
packages must be “needy,” but states set the criteria for individual eligibility for
benefits under federal regulations that require each state agency to establish uniform
criteria for determining household eligibility. The criteria must include income-
based standards that enable each agency to ensure that TEFAP commodities go only
to households that are in need of food assistance because of inadequate income.
Benefit Levels
The commodities donated for this program are bought by the U.S. Department
of Agriculture (USDA) with appropriated funds, purchased to reduce agricultural


1 This program represents a consolidation of previous federal efforts to support emergency
shelters, soup kitchens, and food banks.
2 Regulations for this program are found at 7 C.F.R. Part 251 (2003). This program is no.

10.568 and 10.569 in the Catalog of Federal Domestic Assistance.



surpluses, or drawn from excess holdings of the Commodity Credit Corporation
when available. In recent years, appropriated funds have been used to acquire
between one-third and one-half of the commodities distributed under TEFAP; the
remainder were provided from surplus purchases and Commodity Credit Corporation
stocks. Benefits consist of commodities provided to states for food banks, pantries,
and other feeding agencies that distribute them to individuals for at-home
consumption, or to soup kitchens and homeless shelters and central feeding centers
serving meals to the poor. Commodities are packaged in sizes appropriate for
program use: small package sizes for at-home consumption, and larger, institutional
sizes for meal service operations. Traditionally, most commodities have gone for at-
home consumption. In FY2002, USDA provided roughly three dozen types of food
items such as canned and fresh fruits and vegetables and juices, beans, canned meats,
raisins, nuts, pasta, peanut butter, dairy products, and rice. Food package size and
value generally are the same for all recipients; there is no variation by income or
family size. By law, TEFAP benefits may not be treated as income or resources of
a recipient for any purpose.



28. Summer Food Service Program
Funding Formula
The Richard B. Russell National School Lunch Act offers federal funding in the
form of legislatively set, annually indexed subsidies for all meals and snacks served
under summer programs for children, as well as administrative payments to program
sponsors. No matching funds are required from non-federal sources.
Eligibility Requirements1
There are no individual income tests for participation. Eligibility for benefits
normally is tied to the location of the summer program. In general, eligible programs
must operate in areas where at least 50% of the children are from families with
incomes that meet the eligibility criteria for free or reduced-price school lunches (that
is, with income at or below 185% of the annually updated federal poverty income
guidelines: $33,4852 for a four-person family in the summer of 2003). Sponsors also
may receive federal support if at least 50% of children “enrolled” in the program
meet the above-noted income eligibility test (regardless of where they are located).
Sponsorship is available to all public or private nonprofit school food authorities,
local municipal or county governments, residential nonprofit summer camps, most
private nonprofit organizations, and colleges and universities participating in the
National Youth Sports program.
Benefit Levels
The law provides federal cash subsidies to sponsors for the cost of obtaining,
preparing, and serving food. They are undifferentiated by recipient child’s family
income and may be supplemented with a small amount of federally provided
commodity assistance. The summer 2003 subsidy rates were: $2.35 for each lunch
or supper, $1.35 for each breakfast, and 55 cents for each snack. Sponsoring
agencies also receive funds for approved administrative costs, based on the number
of meals/snacks served and the type of sponsor (sponsors located in rural areas and
those who prepare meals on site receive higher payments). The number of subsidized
meals/snacks served is limited to two per day.
In the summer of 2002, some 3,500 summer program sponsors operating 30,000
sites provided subsidized meals/snacks to 1.9 million children in the peak month of
July.
Note: For more information, see CRS Report RL31577, Child Nutrition and
WIC Programs: Background and Funding.


1 Regulations for this program are found in 7 CFR Part 225 (2003). This program is no.

10.559 in the Catalog of Federal Domestic Assistance.


2 This amount is for the 48 contiguous states, the DC, GU, PR, and the VI. The income limit
is higher in AL (+25%) and HI (+15%).

29. Commodity Supplemental Food Program
(CSFP)
Funding Formula
The Commodity Supplemental Food Program (CSFP) operates in 112 project
areas in 28 states, the District of Columbia, and two Indian tribal areas; these projects
often offer other services to program participants. The CSFP provides U.S.
Department of Agriculture commodities and funds for administrative and distribution
costs to local agencies offering food packages to low-income mothers, infants, young
children, and elderly persons. Appropriations for the program finance purchase of
food products to be used in monthly packages distributed to participants, as well as
expenses associated with this distribution (typically, about 20% of total funding); in
addition, projects can receive “bonus” commodities provided without appropriated
funds from Agriculture Department stocks. Funding and commodities are distributed
according to the caseload, or “slots” allocated to each project. These allocations are
based on previous participation levels of the projects. However, “expansion” funding
for new slots or new state projects is available if added appropriations are provided.
FY2002 funding (obligations) was approximately $104 million.
Eligibility Requirements1
Eligible are pregnant women, breast-feeding women, postpartum women,
infants, and children up to age 6 who (a) qualify for food, health, or welfare benefits
under a governmental program for low-income persons, (b) are determined to be at
nutritional risk (if the state agency has adopted this requirement), and (c) live within
the service area (if the state agency has adopted such a residency rule). In general,
women, infants, and children must live in households with income below 185% of
the federal poverty income guidelines (e.g., about $28,200 for a three-person family
in FY2004). More important, CSFP projects may serve elderly persons in their
service areas whose income does not exceed 130% of the federal poverty guideline
(a ceiling of about $11,700 for a single person in FY2004. The elderly make up over
75% of recipients. Persons may not participate in the CSFP and the Special
Supplemental Nutrition Program for Women, Infants, and Children (the WIC
program) at the same time; however they may participate in other nutrition programs
for the elderly.
Benefit Levels
Participants receive food commodities from local agencies. Agriculture
Department guidelines establish food packages for each category of participant.
Commodities in the food packages include items such as infant formula, cereals,
canned and nonfat dry milk, canned meats and stews, canned poultry and fish, egg
mix, fruit and vegetable juices, potatoes, canned vegetables and fruits, peanut butter,
pasta, and dry beans.


1 Federal regulations governing this program are found at 7 CFR Part 247 (2003). This
program is no. 10.565 in the Catalog of Federal Domestic Assistance.

In FY2002, a total of 427,000 individuals (75,000 mothers, infants, and children
and 352,000 elderly persons) received commodity food packages valued at $16-$20
a month.



30. Food Distribution Program on Indian
Reservations (FDPIR)
Funding Formula
The Food Distribution Program on Indian Reservations (FDPIR) is an
“entitlement” program — operated and funded under the aegis of the Food Stamp Act
— providing food packages in lieu of Food Stamp benefits. Under FDPIR, the U.S.
Department of Agriculture (USDA) acquires the food commodities to be included in
the program’s monthly food packages either by direct purchase (with appropriated
funds designated for Indian food assistance) or, to a lesser degree, through its
agriculture support programs. The food acquired by the USDA is given to the 94
Indian Tribal Organizations (ITOs) and six state agencies operating FDPIR projects
for distribution to eligible households — based on the projects’ number of recipients.
In addition, the federal government pays at least 75% of administrative and
distribution costs of the projects. FY2002 federal spending on this program
(commodity purchases and support for administrative/distribution costs) totaled $74
million.
Eligibility Requirements1
The FDPIR allows ITOs or state welfare agencies to operate food distribution
programs in lieu of the Food Stamp program. Recipients must reside on or near a
participating reservation, or, in the case of Oklahoma, reside within a stipulated
service area. Eligible households not residing on a reservation must include a Native
American household member. Households must meet financial needs tests:
households in which all members are included in a public assistance or SSI grant are
financially eligible for FDPIR; for non-assistance households, the income ceiling
generally is the income standard of the food stamp program, increased by the amount
of that program’s standard deduction. Except for the area of residence/Native
American householder requirements, eligibility rules are similar to those for the Food
Stamp program. Grantee agencies are responsible for certifying recipient eligibility,
providing nutrition education, transporting and storing commodities, and distributing
them to recipient households. Both food stamps and the FDPIR may be available in
the same area, as long as no individual household participates in both programs
concurrently. In FY2002, the FDPIR operated on 243 reservations (as well as a
number of designated service areas in Oklahoma), with average monthly participation
of 110,000 persons.
Benefit Levels
Benefits consist of monthly food packages that meet federal guidelines for
nutritional adequacy. Commodities contained in the monthly food packages consist
of a variety of items, including canned meats, fish, fruits, and vegetables, fruit and
vegetable juices, cereals, rice, pasta, cornmeal, cheese, butter, nonfat dry milk, flour,


1 Regulations for this program are found at 7 CFR Parts 253 and 254 (2003). This program
is no. 10.567 in the Catalog of Federal Domestic Assistance.

vegetable oil, peanut butter and peanuts, corn syrup, and (in most projects) fresh
fruits and vegetables. In FY2002, foods valued at about $36 per person per month
were provided under the FDPIR.



31. Farmers’ Market Nutrition Programs
Funding Formula
Federal funding is provided to states (typically through state agriculture agencies
that operate programs in cooperation with state health or social services departments)
for two farmers’ market nutrition programs: (1) a program for participants in (or
those on a waiting list for) the Special Supplemental Nutrition Program for Women,
Infants, and Children (the WIC Farmers’ Market Nutrition program) and (2) a Senior
Farmers’ Market Nutrition program. Money for the WIC Farmers’ Market Nutrition
program is provided as a set-aside from the annual appropriation for the Special
Supplemental Nutrition Program for Women, Infants, and Children (the WIC
program) — e.g., $25 million in FY2002. Funds for the Senior Farmers’ Market
Nutrition program are made available through a mandatory directive to spend $15
million a year (plus any additional amounts that Congress may provide through
annual appropriations).
State grants are allocated, at the U.S. Department of Agriculture’s discretion,
based on the needs described in their state plans, the availability of new federal
funds, and states’ past use of funds, but not all states participate in these programs.
In FY2003, 36 states, the District of Columbia, Guam, and Puerto Rico — along with
five Indian Tribal Organizations — participated in the WIC Farmers’ Market
Nutrition program. This program requires that states’ contribute at least 30% of the
total cost of the program (although Indian Tribal Organizations may contribute a
match of as little as 10%). In FY2003, 35 states, the District of Columbia, Puerto
Rico, and three Indian Tribal Organizations participated in the Senior Farmers’
Market Nutrition program. This program requires no state match. Expansion of both
programs (both to new participants and new states) depends on the availability of
additional federal funding.
Eligibility Requirements2
Organized farmers’ markets (and, in some cases, roadside farm produce stands
or special community-supported nutrition projects) approved by administering state
agencies (normally state agriculture departments) are eligible to participate in the two
farmers’ market nutrition programs. In FY2002, a total of just over 3,000 markets
participated. For the WIC Farmers’ Market Nutrition program, WIC recipients (see
program no. 23), or those approved but waiting for WIC benefits are eligible in
participating jurisdictions. Under the Senior Farmers’ Market Nutrition program,
lower-income elderly persons — generally defined as those at least 60 years of age
who have household income of less than 185% of the federal poverty income
guidelines — are eligible for benefits. However, administering agencies may accept
proof of participation in a means-tested benefit program like food stamps or the


2 Regulations for the WIC Farmers’ Market Nutrition program are found at 7 CFR Part 248
(2003). This program is no. 10.572 in the Catalog of Federal Domestic Assistance.
Information about the Senior Farmers’ Market Nutrition program may be found at the U.S.
Department of Agriculture’s Web site, using the address:
[ www.f n s .us da .gov/ wi c / Se n i o r FM NP] .

Supplemental Security Income (SSI) program when determining individuals’
eligibility.
Benefit Levels
Benefits under the two farmers’ market programs are issued as coupons or
vouchers usable only at participating markets. Vouchers/coupons may be redeemed
for fresh, unprepared fruits, vegetables, and herbs. Vouchers/coupons issued under
the WIC Farmers’ Market Nutrition program may not have a value of more than $20
per year per recipient (although participating states may increase this value using
non-federal funds). Vouchers/coupons issued under the Senior Farmers’ Market
Nutrition program are not limited in value by law, although budgetary constraints
typically require that they be limited to amounts similar to those under the WIC
Farmers’ Market Nutrition program. Nutrition education activities arranged by WIC
program operators also may be provided at farmers’ market sites.



32. Special Milk Program (Free Segment)


Funding Formula
The Child Nutrition Act provides 100% federal funding — legislatively set,
annually indexed subsidies — to cover the cost of free half-pints of milk served to
low-income children by schools and residential child care institutions (RCCIs)
choosing to participate in this program. Federal subsidies also are available for half-
pints of milk served to non-needy children. In FY2002, approximately 5% of the
half-pints of milk subsidized under this program were served free to low-income
children. No matching funds are required from non-federal sources.
Eligibility Requirements1
All children in participating schools and RCCIs are eligible to receive
subsidized milk under this program. Participating schools and RCCIs must have a
policy of lowering any prices charged for milk they serve to maximum extent
possible and using their federal payments to reduce the selling price of milk to
children. In addition, individual schools and RCCIs may choose to offer free milk
to low-income children. The program operates primarily in those schools and
institutions that do not participate in the school lunch or school breakfast programs.2
Each half-pint served is federally subsidized at a different rate, depending on whether
it is served free or not — but provision of free milk is not required, and most children
are charged.
To qualify for free milk (if offered), a child must meet the income eligibility
standards for a free meal under the School Lunch or Breakfast programs. That is, the
child’s family’s income must not exceed 130% of the federal poverty income
guidelines (e.g., $23,5303 for a family of four in the 2002-2003 school year). Non-
needy children and needy children in schools/RCCIs that do not offer free milk pay
an amount determined by the school or RCCI.
Benefit Levels
For the 2002-2003 school year, half-pints were subsidized at 13.5 cents each (if
there was a charge to the child) or the net cost to the school/RCCI, typically 1.5-2.5
cents higher (if the milk was served free).
In FY2002, 112 million subsidized half-pints (5% free) were served to roughly

500,000 children through over 8,000 schools and RCCIs.


1 Regulations for this program are found at 7 CFR Part 215 (2001). This program is no.

10.556 in the Catalog of Federal Domestic Assistance.


2 Schools with split (part-day) sessions for kindergartners or pre-kindergartners where the
children do not have access to regular school meal programs may participate in this program.
3 This amount is for the 48 contiguous states, the DC, GU, PR, and the VI. The income limit
is higher in AK (+25%) and HI (+15%).

Note: For more information, see CRS Report RL31577, Child Nutrition and
WIC Programs: Background and Funding.



Housing Aid



33. Section 8 Low-Income Housing Assistance
Funding Formula
This program is funded 100% by the federal government. Outlays were $18.5
billion in FY2002.
Eligibility Requirements1
The Section 8 rental assistance program was authorized by the Housing and
Community Development Act of 1974 (P.L. 93-383). The program has two
components; section 8 project-based rental assistance and section 8 Housing Choice
Vouchers. The project-based rental assistance component is a set of rent subsidies
attached to housing units owned by private landlords. The vouchers are portable
subsidies that eligible households take to private landlords and use to subsidize their
housing costs. Currently, HUD is not entering into any new contracts under the
project-based rental assistance component of Section 8 and when the existing
contracts expire, the households are given vouchers.
Low-income families and single persons2 are eligible for both forms of
subsidies. Low-income, for the purpose of this program, is defined as income at or
below 80% of the local area median income, adjusted for family size. Although low-
income households are eligible for Section 8 housing subsidies, extremely low-
income households, defined as households with incomes at or below 30% of the local
area median income, are targeted for assistance.3 Forty percent of available project-
based rental assistance subsidies and 75% of vouchers must be targeted to extremely
low income households. In the project-based rental assistance program, project
owners maintain waiting lists and can give priority to working families. In the
voucher program, quasi-governmental local Public Housing Authorities (PHAs)
maintain waiting lists for Section 8 vouchers and can develop a set of local
preferences that can be used to prioritize the list.


1 Eligibility rules for Section 8 tenant-based assistance are found at 24 CFR Part 982.
(2003). This program is no. 14.871 in the Catalog of Federal Domestic Assistance.
2 Before 1990, the law defined families to include two or more related persons, single
persons at least 62 years old, and younger single persons who were disabled, handicapped,
displaced by governmental action or natural disaster, or the remaining member of an eligible
tenant family, and permitted no more than 15% of units to be made available to other
singles. The National Affordable Housing Act (P.L. 101-625) added other single persons
to the definition of family and removed their percentage limitation, but barred occupancy
by these other (able-bodied younger) singles of units with more than one bedroom.
3 The Department of Housing and Urban Development (HUD) estimates that low-income
limits (80% of median family income) in FY2003 averaged $36,000 in nonmetropolitan
areas and $48,240 in metropolitan areas. . Extremely low income limits (30% of median
family income) averaged $13,500 in nonmetropolitan areas and $18,090 in metropolitan
areas. These amounts are averages for all family sizes.

In determining the annual countable income of a family, various deductions are
made from gross income.4 The chief ones are $480 per dependent, $400 for an
elderly family, excess medical costs for an elderly family, and costs of child care and
handicapped assistance.5 For families with net family assets above $5,000, federal
regulations include in “income” used to decide eligibility and required rent the
greater of (a) actual income from all net family assets, or (b) a percentage of their
value, based on the current passbook savings rate.6 Net family assets are defined as
net cash value (after costs of disposal) of real property, savings, stocks, bonds, and
other forms of investment. Not included are such “necessary items” as furniture and
automobiles.7 In 1990, the National Affordable Housing Act (P.L. 101-625)
increased the deductions from gross income for Section 8 housing and public
housing, but made the changes subject to approval in an appropriations measure.
Through FY2003 no appropriation bill had provided for the larger deductions, and
old deductions still applied. Section 8 recipients must recertify their incomes
annually. Eligibility and rental charges are based on countable family income
expected in the 12 months following the date of determination.
Benefit Levels
Benefit levels for project-based rental assistance and vouchers are calculated
using different formulas.
Families who receive Section 8 project-based rental assistance pay towards rent
the highest of (a) 30% of counted income, (b) 10% of gross income, or (c) a
minimum rent of up to $50 monthly set by the PHA.8 Exemptions to the minimum
rent levels can be made for a variety of hardship circumstances. The federal
government then pays the difference between contract rent and the rent paid by the
tenant. The contract rent charged by the owner of Section 8 housing must be within
limits established by a HUD survey of fair market rents (FMRs) for standard units in
each metropolitan area or non-metropolitan county of the Nation. P.L. 98-181
revoked authority to contract for additional Section 8 project-based rental assistance
units. In FY2002, the federal government had $4 billion in budget authority for
747,093 project-based rental assistance units. The average subsidy paid per unit was
$5,388.
Families who receive Section 8 Housing Choice Vouchers pay towards rent an
amount between 30% and 40% of their adjusted income. The federal government


4 Some items are excluded from gross income by definition. They include children’s
earnings, certain lump-sum payments, student financial assistance, and amounts received
under HUD training programs. 24 CFR Section 5.609(c)(2002).
5 24 CFR Part 5.611 (2002).
6 24 CFR Section 5.609(b)(3)(2002).
7 24 CFR Section 5.603 (2002).
8 A fourth alternative applies to families who receive a cash welfare grant that includes a
sum designated for housing costs. These dual program families must pay the welfare
housing sum if it exceeds either of the other measures. Another exception applies to
recipients of vouchers.

pays a Housing Assistance Payment (HAP) based on the difference between a
predetermined maximum payment, called a payment standard, and 30% of the
household’s income. A payment standard is calculated by the PHA as an amount
between 90% and 110% of FMR, or the rent charged for the unit, whichever is less.
In FY2002, HUD had $11.5 billion in budget authority for vouchers, which was used
to support 1.96 million vouchers, at an average per household subsidy of $5,891.
Note: For more information about Section 8 rental assistance, see CRS Report
RL31930, The Housing Choice Voucher Program: Background, Funding, and Issues
in the 108th Congress.



34. Low-Rent Public Housing
Funding Formula
This program is funded 100% by the federal government. However, an indirect
local contribution results from the difference between full local property taxes and
payments in lieu of taxes that are made by local housing authorities. FY2002 federal
outlays for public housing were $8.2 billion (including operating subsidies and
capital grants).1
Eligibility Requirements2
Public housing is publicly-owned housing for low-income families that is
managed by local, quasi-governmental, public housing authorities (PHA). The
federal government subsidizes the operating and capital costs of maintaining these
buildings through regular subsidies, as well as competitive subsidies paid to PHAs.
The competitive subsidies include the HOPE VI Revitalization of Distressed Public
Housing Grants, which can be used to demolish and/or revitalize troubled public
housing developments and the Public Housing Drug Elimination Program (PHDEP),
which can be used to promote safety in public housing. The public housing program
was authorized by the U.S. Housing Act of 1937 (93-383), as amended.
Households3 are eligible to live in public housing if they are low-income, which
is defined as having income at or below 80% of the local area median income,
adjusted for family size. Although low-income families are eligible for public
housing, since 1998, at least 40% of all public housing units must be occupied by
extremely low-income families, defined as families with income at or below 30% of
area median income.4 However, PHAs are directed not to concentrate extremely poor
families in public housing, rather to encourage an income mix.


1 Outlays consisted of capital grants (45% of the total), operating subsidies (44%),
HOPE VI (6%), Public Housing Drug Elimination Program [PHDEP] (4%), and
loans (less than 1%).
2 Regulations governing admission to, and occupancy of, public housing are found at 24
CFR Part 960 (2003). This program is no. 14.850 in the Catalog of Federal Domestic
Assistance.
3 Before 1990, the law defined eligible “families” to include single persons who were at
least 62 years old and younger singles who were disabled, handicapped, displaced by
governmental action, or the remaining member of a tenant family, and permitted no more
than 30% of units under the jurisdiction of the housing agency to go to other singles. The
National Affordable Housing Act (P.L. 101-625) added other single persons to the definition
of family and removed their percentage limitation, but barred occupancy by these other
(able-bodied younger) single persons of units with more than one bedroom.
4 The Department of Housing and Urban Development (HUD) estimates that low-income
limits (80% of median family income) in FY2003 averaged $36,000 in nonmetropolitan
areas and $48,240 in metropolitan areas. Extremely low income limits (30% of median
family income) averaged $13,500 in nonmetropolitan areas and $18,090 in metropolitan
areas. These amounts are averages for all family sizes.

In determining the annual countable income of a family, various deductions are
made from gross income.5 The chief ones are: $480 per dependent, $400 for an
elderly family, excess medical costs for an elderly family, and costs of child care and
handicapped assistance.6 For families with net family assets above $5,000, federal
regulations include as “income”: (a) actual income from all net family assets, or (b)
a percentage of their value, based on the current passbook savings rate.7 Net family
assets are defined as net cash value (after costs of disposal) of real property, savings,
stocks, bonds, and other forms of investment. Not included are such “necessary
items” as furniture and automobiles.8 Eligibility and rental charges are based on
countable family income expected in the 12 months following admission or
recertification. Income is recertified annually.
In order to maintain eligibility to live in public housing, certain residents are
required to participate in an economic self-sufficiency program or contribute 8 hours
per month of community service. This requirement was established by the Quality
Housing and Work Responsibility Act of 1998 (QHWRA) (P.L. 105-276). It was
suspended during FY2002, but was reinstated as of August 1, 2003. Exempt from
this rule are persons who are engaged in an educational program or work-related
activity, have a disability which would prohibit them from complying with the
requirement or are 62 years of age or older. Those who do not comply with the
requirement could lose the right to renew their lease.
Benefit Levels
Households who live in public housing pay towards rent the highest of (a) 30%
of counted income, (b) 10% of gross income, or (c) a minimum rent of up to $50
monthly set by the PHA.9 Exemptions to the minimum rent levels can be made for
a variety of hardship circumstances. Under P.L. 105-276, tenants are permitted to
choose (annually) between paying either a flat rent or an income-based rent. This
provision is intended to encourage families to seek employment and higher earnings.
Also, if a family’s income does increase as a result of work, the increase is not to be
used to determine the family’s portion of rental payment for 1 year. After 1 year, the
rental increase is phased in.


5 Some items are excluded from gross income by definition. They include children’s
earnings, certain lump-sum payments, student financial assistance, and amounts received
under HUD training programs. 24 CFR Section 5.609(c)(2002).
6 24 CFR § 5.611 (2002). In 1990, the National Affordable Housing Act (P.L. 101-625)
increased the deductions from gross income for Section 8 housing and public housing, but
made the changes subject to approval in an appropriations measure. Through FY2003, no
appropriation bill had provided for the larger deductions, and old deductions still applied.
7 24 CFR §5.609(b)(3)(2002)
8 24 CFR §5.603 (2002).
9 A fourth alternative applies to families who receive a cash welfare grant that includes a
sum designated for housing costs. These dual program families must pay the welfare
housing sum if it exceeds either of the other measures. Another exception applies to
recipients of vouchers.

The amount of subsidy paid by the federal government on behalf of the residents
of public housing is based on the difference between the cost of operating and
maintaining a public housing project and the amount collected in tenant rent.
FY2002 federal outlays for public housing (including capital grants, operating
subsidies, PHDEP, Hope VI, and the public housing loan fund),10 averaged about
$6,795 per unit.11


10 Previous editions of this report excluded PHDEP (first outlays in 1992), Hope VI (first
outlays in 1994) and the loan fund from outlays for public housing. Loan fund outlays
peaked in 1985 (accounting for 80% of total public housing outlays that year). Here are
aggregate public housing outlay totals (in billions) from FY1977 through FY2002 (for years
before 1994, the capital grants component of these totals represents an increase over figures
shown in the 2001 edition of this report): FY1977, $1.564; FY1978, $1.779; FY1979,
$1.815; FY1980, $2.218; FY1981, $2.478; FY1982, $2.553; FY1983, $3.318; FY1984,
$3.932; FY1985, $17,261; FY1986, $3,859; FY1987, $3.517; FY1988, $3.699; FY1989,
$3.774; FY 1990, $4.331; FY1991, $4,786; FY1992, $5,182; FY1993, $6,447; FY1994,
$6,857; FY1995, $7.505; FY1996, $7.668; FY1997, $7.809; FY1998, $7.575; FY1999,
$7.208; FY2000, $7.217; FY2001, $7.504; and FY2002, $8.213. (In this year’s report, these
totals are used in historical tables.)
11 This estimate was obtained by dividing FY2002 total outlays for public housing ($8.213
billion) by the number of public housing units under management in FY2002.

35. Rural Housing Loans (Section 502)


Funding Formula
This program is funded 100% by the federal government. Factors used to
allocate loan funds: state shares of rural occupied substandard units, rural
population, rural population in places of fewer than 2,500 persons, and low-income
and very-low-income rural households. Federal obligations for direct and guaranteed
loans totaled $3.5 billion in FY2002.
Eligibility Requirements1
The law permits loans for owners or potential owners of a farm, or owners of
a home or nonfarm tract in a rural area, who are without decent, safe, and sanitary
housing and unable to obtain credit elsewhere on reasonable terms. Both very-low-
and low-income families are eligible for Section 502 loans and interest credits.2 The

1983 Housing and Urban-Rural Recovery Act (Titles I through V of P.L. 99-181)


requires that at least 40% of units nationwide and 30% of the units in each state
financed under this program be occupied by very-low-income families or persons.
The law defines low-income and very-low-income families as those whose
incomes do not exceed limits established for these families in public housing and
Section 8 housing (adjusted for family size, these limits are 80% and 50% of the area
median, respectively).3
The Housing and Community Development Act of 1987 (P.L. 100-242)4
directed the Farmers Home Administration (FmHA), since replaced by the Rural
Housing Service (RHS),5 to carry out a 3-year demonstration program under which
moderate income borrowers (with income at or below the area median) might obtain
guaranteed loans under Section 502 for the purchase of single-family homes. The
program was made permanent by the Cranston-Gonzalez National Affordable
Housing Act (P.L. 101-625).


1 Section 502 rural housing loan regulations are found at 7 CFR Part 3550 Subpart B and 7
CFR Part 1980 Subpart D, (2003). This program is no. 10.410 in the Catalog of Federal
Domestic Assistance.
2 P.L. 96-399, the Housing and Community Development Act of 1980, required that credits
be made available to moderate-income borrowers, but P.L. 97-35 made this a discretionary
provision, and the Secretary of Agriculture in December 1981 determined that such credits
were not needed.
3 In FY2003, the low-income limits for a family of four in nonmetropolitan areas ranged
from $29,200 (parts of Mississippi) to $55,050 (a Connecticut county); the corresponding
extremely low income limits ranged from $10,950 to $20,650.
4 Section 304.
5 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the
Farmers Home Administration (FmHA) and created the Rural Housing Service (RHS). The
rural housing programs that were formerly administered by FmHA are now administered by
RHS.

Other eligibility requirements are set by RHS. Families must have sufficient
income to make mortgage payments and to pay premiums, taxes, maintenance, and
other necessary living expenses.
The 1983 Act required FmHA to define adjusted annual income in accordance
with criteria used by the Department of Housing and Urban Development (HUD) for
Section 8 housing and public housing. Accordingly, the chief deductions from
countable income are $480 per year per dependent, $400 for an elderly family, excess
medical costs for an elderly family, and costs of child care and handicapped
assistance.6 RHS regulations exclude some items by definition.7 They also require
that income from net family assets be counted in calculating income for eligibility
and loan repayment purposes and define net family assets to include the equity value
of real property other than the dwelling or site, savings, stocks, bonds, and other
forms of investment. Items not counted as assets include necessary items of personal
property, assets that are part of the business, trade, or farming operations, or
irrevocable trust funds.8
Benefit Levels
Residents of rural areas may qualify for direct loans from RHS to purchase or
repair homes. The homes must be “modest” in size, design, and cost, and regulations
specify that a new house for six persons should not exceed 1,248 square feet. Section
502 direct loans generally have a term of 33 years, but the term may be extended to
38 years for borrowers with incomes below 60% of the area median. Depending on
the borrower’s income, the interest rate may be subsidized to as low as 1%. In a
given fiscal year, at least 40% of the funding must be made available to very-low-
income borrowers (those with income of 50% or less of the area median). The
Housing and Community Development Act of 1992 permits guaranteed loans to
borrowers whose income does not exceed 115% of the area median.
In FY2002, direct loans from RHS totaled $1.080 billion and provided housing
for 14,727 low-income families. Private lenders made about $2.419 billion in
guaranteed loans to 28,364 low- to moderate-income families.


6 24 CFR§5.611 (2002).
7 Items excluded from “income” by definition include irregular gifts, amounts that
reimburse medical expenses, lump-sum additions to family assets, full amount of any
student aid, earned income tax credits, other tax refunds, earnings of children, and payments
received for the care of foster children. 7 CFR Part 3550.54(b) (2003).
8 7 CFR §3550.54(d) 2003.

36. Home Investment Partnerships Program
(HOME)
Funding Formula
Federal funds pay 25% of costs of new construction, rehabilitation or tenant-
based assistance under the Home Investment Partnerships program, which was1
established in late 1990 by P.L. 101-625. A participating jurisdiction (local or state
government) pays the remaining share; it may use bond or debt financing to cover no
more than 25% of its overall matching fund requirement. However, if a jurisdiction
is found in “fiscal distress,” its funding share is reduced or eliminated. To receive
HOME funds, a jurisdiction must submit a consolidated plan identifying its housing
needs and strategies. The formula for allocating HOME funds among states and units
of local government (metropolitan cities, urban counties, or consortia) has six factors,
three of which are poverty-related measures. Federal obligations for FY2002 totaled
$1.8 billion; state/local contributions totaled $704 million.
Eligibility Requirements2
To be eligible for help from this “affordable housing” block grant program,
families or individuals must meet an income test. For rental housing and tenant-
based rental assistance, at least 90% of recipient families must have annual incomes
that do not exceed 60% of the median family income for the area (adjusted for family
size);3 the remaining 10% of families may have incomes up to 80% of the area
median. For homebuyers, the income limit is 80% of the area median.
In determining the annual countable income of a family, various deductions are
made from gross income.4 The chief ones are: $480 per dependent, $400 for an
elderly family, excess medical costs for an elderly family, and costs of child care and


1 As originally authorized by the National Affordable Housing Act of 1990, the program had
a three-tiered matching fund provision requiring state and local governments to provide
matches of 50% for new construction, 33% for substantial rehabilitation, and 25% for
moderate rehabilitation and tenant-based assistance. The Housing and Community
Development Act of 1992 reduced the match rate for new construction to 30%. The Multi-
family Housing Property Disposition Act of 1994 eliminated the bias against new
construction by reducing its match rate to 25%, like that for other eligible activities.
2 HOME regulations are found in 24 CFR Part 92 (2002). This program is no. 14.239 in the
Catalog of Federal Domestic Assistance.
3 For FY2003, this income limit (60% of median family income) averaged $27,000 in
nonmetroplitan areas and $36,180 in metropolitan areas, according to the Department of
Housing and Urban Development (HUD). These amounts are averages for all family sizes.
4 One of three definitions of annual (gross) income may be used: the Section 8 definition,
the federal income tax definition of adjusted gross income, or income as reported on the
long form of the most recent decennial census. 24 CFR § 92.203(b)(2002).

handicapped assistance.5 For families with net family assets above $5,000, federal
regulations include in “income” used to decide eligibility and required rent the
greater of (a) actual income from all net family assets, or (b) a percentage of their
value, based on the current passbook savings rate.6 Net family assets are defined as
net cash value (after costs of disposal) of real property, savings, stocks, bonds, and
other forms of investment. Not included are such “necessary items” as furniture and
automobiles.7
Benefit Levels
The goal of HOME is to increase the supply of affordable housing, especially
of rental housing, for very low-income and low-income Americans (amendments in
1992 added elder cottage housing opportunity (ECHO) units to the program). The
maximum rental subsidy payable under HOME is the difference between the rent
standard established for the unit and 30% of the family’s monthly adjusted income,
as defined for the Section 8 and public housing programs. Rents paid by most of the
extremely low-income families generally exceed 30% of income unless they receive
additional tenant-based rental assistance.
Over the course of the program, as of September 30, 2002, about $6.3 billion
in HOME funds and $19.2 billion in other public (and some private) funds had
assisted 687,274 housing units and provided tenant-based assistance to 83,939
families. In the projects completed through the end of FY2002, 97% of the tenants
receiving rental assistance, 81.5% of the tenants in assisted rental housing, 68.8% of
the residents of repaired homes, and 29.4% of the assisted homebuyers, had incomes
of 50% or less of the area median income.


5 24 CFR §5.611 (2002).
6 24 CFR §5.609(b)(3)(2002)
7 24 CFR §5.603 (2002).

37. Housing For Special Populations
(Elderly and Disabled)
Note: This program was inadvertently omitted from previous editions of this report.
Program outlays for FY1996 through FY20021 have been added to historical tables
in this edition.
Funding Formula
This program is funded 100% by the federal government. Outlays were $895
million in FY2002.
Eligibility Requirements2
The Department of Housing and Urban Development’s (HUD) Housing for
Special Populations program is actually two programs: Section 202 Supportive
Housing for the Elderly and Section 811 Supportive Housing for the Disabled.3 Both
programs provide capital advances to finance the construction, rehabilitation or
acquisition of structures that will serve as supportive housing for low-income elderly
and/or disabled households. The capital advance is interest-free and can be forgiven
as long as the property remains available for very low-income elderly or disabled
households for at least 40 years. The capital advances are paired with rental
assistance, similar to Section 8 rental assistance. Each year, up to 25% of Section
811 funds provided by Congress are used to provide Section 8 Housing Choice
Vouchers to persons with disabilities to allow them to search for units in the private
market.
Both programs4 restrict eligibility to households with income at or below 50%
of the local area median income, adjusted for family size.5 In determining the annual


1 FY1996, $720 million; FY1997, $820 million; FY1998, $824 million; FY1999, $761
million; FY1999, $761 million; FY2000, $720 million; and FY2001, $774 million.
2 Eligibility rules for Section 202 and Section 811 are found at 24 CFR Part 891. (2003).
Section 202 is no. 14.157 and Section 811 is no. 14.181 in the Catalog of Federal Domestic
Assistance.
3 The Section 202 program was established under the U.S. Housing Act of 1959 (P.L. 86-
372) to serve both the elderly and disabled. The program has been changed significantly
from its original structure. The National Affordable Housing Act of 1990 (P.L. 101-625)
created the separate Section 811 Supportive Housing for the Disabled program and changed
the Section 202 program into a program specifically for the elderly.
4 Some older Section 202 projects permit eligibility for households with no more than 80%
of the area median income.
5 In FY2003, this limit (50% of area median income) averaged $22,500 in nonmetropolitan
areas and $30,150 in metropolitan areas, according to the Department of Housing and Urban
Development (HUD). These amounts are averages for all family sizes.

countable income of a family, various deductions are made from gross income.6 The
chief ones are: $480 per dependent, $400 for an elderly family, excess medical costs
for an elderly family, and costs of child care and handicapped assistance.7 For
families with net family assets above $5,000, federal regulations include in “income”
used to decide eligibility and required rent the greater of (a) actual income from all
net family assets, or (b) a percentage of their value, based on the current passbook
savings rate.8 Net family assets are defined as net cash value (after costs of disposal)
of real property, savings, stocks, bonds, and other forms of investment. Not included
are such “necessary items” as furniture and automobiles.9
Like in most HUD housing assistance programs, residents of Section 202 and
Section 811 properties must recertify their incomes annually. Eligibility and rental
charges are based on countable family income expected in the 12 months following
the date of determination.
In addition to income requirements, Section 202 and Section 811 are restricted
to households who are elderly or disabled. In order to live in a Section 202 property,
a household must have at least one member who is at least age 62 at the time of
initial occupancy. In order to live in a Section 811 property, a household must have
at least one member who has a disability, such as a physical or developmental
disability, or a chronic mental illness.
Benefit Levels
Households who live in a Section 202 or Section 811 property pay towards rent
the higher of (a) 30% of counted income or (b) 10% of gross income.10 Minimum
rents can be set as high as $50, however, exemptions to the minimum rent levels can
be made for a variety of hardship circumstances. The benefit level paid by the
federal government to the landlord is equal to the difference between the contract rent
for the unit and the amount of rent paid by the tenant. The contract rent must be
within limits established by a HUD survey of fair market rents for standard units in
each metropolitan area or non-metropolitan area of the Nation.


6 Some items are excluded from gross income by definition. They include children’s
earnings, certain lump-sum payments, student financial assistance, and payments received
for foster care. 24 CFR§5.609(c)(2002).
7 24 CFR §5.611(2002). In 1990, the National Affordable Housing Act (P.L. 101-625)
increased the deductions from gross income, but made the changes subject to approval in
an appropriations measure. Through July 2003, no appropriation bill had provided for the
larger deductions, and old deductions still applied.
8 24 CFR§5.609(a)(3)(2002).
9 24 CFR§5.603 (2002).
10 A third alternative applies to families who receive a cash welfare grant that includes a sum
designated for housing costs. These dual program families must pay the welfare housing
sum if it exceeds either of the other two measures.

In FY2002, the federal government spent $672 million for the Section 202
program and $223 million for the Section 811 program. In 2002, these programs
supported 62,694 Section 202 units and 18,649 Section 811 units.



38. Rural Rental Assistance Payments
(Section 521)
Funding Formula
This program is funded 100% by the federal government. Factors used to
allocate funds: state shares of rural population, rural housing units lacking plumbing
and/or overcrowded, and poor persons living in rural areas. Federal obligations for
this program totaled $705 million in FY2002.
Eligibility Requirements1
Since 1974 the Farmers Home Administration (FmHA) and its successor, the
Rural Housing Service (RHS)2 have been authorized to make rental assistance
payments to owners of RHS-financed rural rental housing (Section 515) and farm
labor housing (Sections 514 and 516) to enable them to reduce rents charged to
eligible tenants. Eligible tenants must have adjusted family income that does not
exceed the very-low-income limit established for the area by the Department of
Housing and Urban Development (HUD) — 50% of the area median, adjusted for
family size.3 Owners must agree to operate the property on a limited profit or
nonprofit basis. The term of the rental assistance agreement is 20 years for new
construction projects and 5 years for existing projects. Agreements may be renewed
for up to 5 years. An eligible owner who does not participate in the program may be
petitioned to participate by 20% or more of the tenants eligible for rental assistance.
Benefit Levels
The rental assistance payments, which are made directly to the housing owners,
make up the difference between the tenants’ payments and the RHS-approved rent
for the units. Originally, tenants in the program paid no more than 25% of their
income in rent.4 Amendments in the 1983 Housing Act provide that rent payments
of eligible families are to equal the highest of (1) 30% of monthly adjusted family
income, (2) 10% of monthly income, or (3) for welfare recipients, the portion of a5
family’s welfare payment, if any, that is designated for housing costs.
In FY2002, this program provided assistance to about 44,298 families (in rental
assistance renewal contracts and aid for newly constructed units).


1 Rules governing the program are found at 7 CFR Part 1930, Subpart C, Exhibit E (2003).
This program is no. 10.427 in the Catalog of Federal Domestic Assistance.
2 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) replaced the
Farmers Home Administration (FmHA) with the Rural Housing Service (RHS).
3 In FY2003, the extremely low income limits for a family of four in nonmetropolitan areas
ranged from $10,950 (parts of Mississippi) to $20,650 (a Connecticut county).
4 Authorized by Section 514 of P.L. 93-383.
5 Section 517(c) of P.L. 98-181.

39. Section 236 Interest Reduction Payments
Funding Formula
This program is funded 100% by the federal government. Outlays in FY2002
totaled $579 million.
Eligibility Requirements1
Authorized by the Housing and Community Development Act of 1974 (P.L. 93-
383), the Section 236 Interest Reduction Payments (IRP) program provides mortgage
subsidies to owners of multifamily properties who agree to keep the property
available to low-income families for a specified number of years. Section 236
subsidized units often also receive some form of rent subsidy, such as Section 8
rental assistance.
Households are eligible to live in Section 236 properties as long as their
incomes are not in excess of 80% of the area median income. The program is open
to families and to single persons without regard to age, except in units also
subsidized by Section 8, where Section 8 regulations apply.
Until December 2, 1979, the law excluded from “income” for the purposes of
determining eligibility and subsidy levels 5% of gross incomes, all earnings of minor
children living at home, plus $300 for each child. For tenants admitted after
December 21, 1979, P.L. 96-153 provided that income should be defined in
accordance with procedures and deductions permissible under the Section 8 program.
That program excludes some items (including earnings of children, lump-sum
payments, and payments for foster care) from “income” by definition. It also
deducts some items from income. The chief ones are $480 per dependent, $400 for
an elderly family, excess medical costs for an elderly family, and costs of child care
and handicapped assistance.2 Income recertification is required annually. Eligibility
and subsidy amounts are based on anticipated income in the year ahead, but a shorter
accounting period is permitted by regulations.
Benefit Levels
A basic monthly rental charge is established for each unit on the basis of the
costs of operating the project with the debt service requirements of a mortgage
bearing a 1% interest rate. The Department of Housing and Urban Development
(HUD) makes payments to a mortgagee to reduce the effective interest rate to the
project to 1%. A fair market rental charge is established for each unit based on costs
of operation with the debt service requirements of a mortgage at the full market rate.


1 Regulations governing Section 236 interest reduction payments are found at 24 CFR
Subpart C of Part 236 (2003). Because no new mortgages are being issued under this
program, it no longer is included in the Catalog of Federal Domestic Assistance. Its catalog
number was 14.103.
2 24 CFR §5.611 (2002).

The law provides that the tenant family shall pay the basic rent or an amount equal
to 30% of “adjusted gross income,”3 (countable housing income, as defined above),
whichever is greater, but not more than the market rent. However, 20% of tenants
who cannot afford the basic rent are to be provided additional help to lower their
rental payment to 30% of income.4 Further, elderly and handicapped families paying
more than 50% of their income for rent can receive Section 8 assistance.5
In FY2002, benefits averaged $1,833 per dwelling unit, $153 monthly. These
subsidies were paid on behalf on families in 315,976 units.6


3 Percentage of adjusted gross income was raised from 25 to 30% by P.L. 97-35, enacted in

1981. For then current tenants this increase was phased in and completed by Sept. 30, 1985.


4 Before passage of P.L. 93-383, up to 40% were eligible for rent supplements, but only 10-

20% received them.


5 Provision was added by P.L. 96-399.
6 The number of subsidized units is from FY2004 HUD budget documents; the average per
unit subsidy was derived by dividing the outlays in FY2002 by the number of units
supported in FY2002.

40. Housing Opportunities for People with AIDS
Program (HOPWA)1
Funding Formula
This program is 100% federally funded. Ninety percent of appropriated funds
are distributed by formula,2 and 10% by competitive awards. Three-fourths of
formula grants are made to cities (for metropolitan statistical areas with a population
of more than 500,000 and more than 1,500 AIDS cases) and to eligible states (with
more than 1,500 AIDS cases in areas outside of MSAs eligible for HOPWA grants
through a city). Remaining formula funds are allocated among cities (in metropolitan
statistical areas with a population greater than 500,000 and more than 1,500 AIDS
cases) that had a higher than average per capita incidence of AIDS during the year3
previous to the appropriation year. The minimum formula grant is $200,000. The
number of jurisdictions that qualify for a formula allocation has been growing, from
97 in 1999 to a projected 114 in 2004. Competitive awards are made for projects
proposed by states and local governments for areas not included in formula
allocations. Competitive grants also are available for projects of national
significance proposed by nonprofit entities. HOPWA outlays for FY2002 were $314
million.
Eligibility Requirements
The AIDS Housing Opportunity Act (enacted as part of P.L. 101-625) makes
eligible low-income persons with AIDS or related diseases, including HIV infection,
and their families. The law defines low-income to mean a person or family whose
income does not exceed 80% of the local area median income, adjusted for family
size.4 However, the law authorizes the Secretary of Housing and Urban Development
(HUD) to alter the income ceiling for an area if this is found necessary because of
prevailing levels of construction costs or unusually high or low family incomes. The
program offers information about housing to all persons with AIDS regardless of
income.


1 The HOPWA program appears in the Catalog of Federal Domestic Assistance at 14.241.
In the Code of Federal Regulations it is found at 24 CFR Parts 574 (2003). It is codified
at 42 U.S.C. Section 12901 et seq.
2 HOPWA formula funds are available through HUD’s Consolidated Plan Initiative.
Jurisdictions applying for funds from four HUD formula grant programs (Community
Development Block Grant program, the Emergency Shelter Grant program, the HOME
Investment Partnerships program, and HOPWA), submit a single document. A consolidated
plan includes an assessment of community needs and a proposal that addresses those needs,
using both federal funds and community resources.
3 24 CFR §574.130 (2003)
4 The Department of Housing and Urban Development (HUD) estimates that 80% of median
family income in FY2003 averaged $36,000 in non-metropolitan areas and $48,240 in
metropolitan areas. These amounts are averages for all family sizes.

According to a 2002 survey of providers, more than half of households served
by HOPWA have extremely low incomes, below 30% of the area median.5
Benefit Levels
HOPWA funds may be used for numerous benefits and services, including
housing information services; acquisition, rehabilitation, conversion, lease, and repair
of facilities to provide housing and services; new construction (for single room
occupancy (SRO) dwellings and community residences only); project- or tenant-
based rental assistance, including assistance for shared housing arrangements; short-
term rent, mortgage, and utility payments to prevent homelessness; supportive
services such as health and mental health services, drug and alcohol abuse treatment
and counseling, day care, nutritional services, intensive care when required, aid in
gaining access to other public benefits; operating costs; and technical assistance in
establishing and operating a community residence.
HUD data show that in FY2002, 68,000 households received housing assistance
through HOPWA. HUD has projected that in FY2003, 73,000 households will
receive assistance through HOPWA.
Note: For more details about HOPWA, see CRS Report RS20704, Housing
Opportunities for People with AIDS (HOPWA).


5 National Evaluation of the Housing Opportunities for Persons with AIDS Program
(HOPWA), prepared by ICF Consulting for the U.S. Department of Housing and Urban
Development, Dec. 2000.

41. Rural Rental Housing Loans (Section 515)


Funding Formula
This program is funded 100% by the federal government. Factors used to
allocate funds state shares of: rural population, rural housing units lacking plumbing
and/or overcrowded, and poor persons living in rural areas. Federal obligations for
this program totaled $114 million in FY2002.1
Eligibility Requirements2
The law permits loans for rural rental and cooperative housing units to be
occupied by families with “very low” or “moderate” income, or by handicapped or
disabled persons or those aged at least 62. The law requires that at least 40% of
Section 515 units nationwide and 30% of units in each state be occupied by
“very-low-income” families or persons. Moreover, the Housing and Community
Development Act of 1987 restricts occupancy of Section 515 housing units, if
constructed with help of low-income housing tax credits, to families whose incomes
are within the limits established for the tax credits.3 However, this restriction does
not apply if the Rural Housing Service (RHS)4 finds that units have been vacant for
at least 6 months and that their continued vacancy threatens the project’s financial
viability.
The law5 defines “low-income” and “very-low-income” families as those whose
incomes do not exceed limits established by the Department of Housing and Urban
Development (HUD) for such families in public housing and Section 8 housing (that
is, up to 80% or 50% of area median income, respectively, adjusted for family size).6
Federal regulations issued October 1, 1985, provide that the moderate-income
limits are $5,500 above the low-income ceilings (unless the moderate income limit
in use before October 1, 1985, was higher, in which case it is continued).
Sponsors can be nonprofit, profit oriented, or “limited profit,” must be unable
to obtain credit elsewhere on reasonable terms that would enable them to rent the


1 7 C.F.R. §1940.575 (2003).
2 Regulations are found at 7 C.F.R. Part 1930 Subpart C (2003) and 7 C.F.R. Part 1944,
Subpart E (2003). This program is no. 10.415 in the Catalog of Federal Domestic
Assistance.
3 Section 306 of P.L. 100-242.
4 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) replaced the
Farmers Home Administration (FmHA) with the Rural Housing Service (RHS).
5 The Rural Housing Amendments of 1985 (Title V of P.L. 98-181).
6 In FY2003, the low-income limits (80% of area median) for a family of four in
nonmetropolitan areas ranged from $29,200 (parts of MS) to $55,050 (CT county); the
corresponding extremely low income limits (30% of area median) ranged from $10,950 to
$20,650.

units for amounts within the payment ability of eligible tenants, and must have
sufficient initial capital to make loan payments and meet costs. Applicants must
conduct market surveys to determine the number of eligible occupants in the area
who are willing and financially able to occupy the housing at the proposed rent
levels.
Benefit Levels
Nonprofit sponsors and state and local public agencies are eligible for loans up
to 100% of the appraised value or development cost, whichever is less. Purchase
loans for buildings less than 1 year old are limited to 80% of the appraised value.
Loan amounts and terms can be determined by RHS.
In FY2002, Section 515 loans financed housing for about 7,284 families.



42. Rural Housing Repair Loans and Grants
(Section 504)
Funding Formula
This program is funded 100% by the federal government. Two factors are used
to allocate loan funds: state shares of rural occupied units and very-low income rural
households. For grants, a third factor is added: rural population aged at least 62.
Federal obligations for this program totaled $57.8 million in FY2002.
Eligibility Requirements1
The law permits repair loans at a very low interest rate for “very-low-income”
owners of a farm or rural home who cannot obtain credit on reasonable terms
elsewhere. The program uses the very-low-income limits established by the
Department of Housing and Urban Development (HUD) for the area.2 Income of
borrowers must be insufficient to qualify for a Section 502 loan, but adequate,
including any “welfare-type” payments, to repay a Section 504 loan, as determined3
by the Rural Housing Service (RHS). The law provides that farm housing programs
are to use the income definition of the Section 8 (and public housing) programs (See4
program no. 33). Grants are made to elderly homeowners at least age 62 whose
annual income prevents any loan repayment.
Benefit Levels
Loans are limited to $20,000 and have a 20-year term at a 1% interest rate.5
Owners who are at least age 62 may qualify for grants of up to $7,500. Depending
on repair costs and the homeowner’s income, the owner may be eligible for a grant
for the full cost of repairs or for some combination of a loan and a grant, not to
exceed $20,000. In FY2002, $31.8 million in loans repaired 55,615 homes. A total
of about $30.6 million in grants was used for the repair of 6,170 homes owned by the
elderly.


1 Regulations governing rural housing repair loans and grants are found at 7 CFR Part 3550,
Subpart C (2003). This program is no. 10.417 in the Catalog of Federal Domestic
Assistance.
2 In FY2003, the extremely low income limits (30% of area median) for a family of four in
nonmetropolitan areas ranged from $10,950 (parts of Mississippi) to $20,650 (a CT county).
3 The Rural Housing Amendments of 1983 (Title V of P.L. 98-181).
4 Appropriation language restricts Section 504 grants to those aged at least 62.
5 More costly repairs may be financed through the Section 502 program.

43. Farm Labor Housing Loans (Section 514)


and Grants (Section 516)
Funding Formula
This program is fully funded by the federal government. The funds for the
programs are not allocated to the states. The funds are kept in reserve at the RHS
national office and are available as determined administratively. Federal obligations
for these loans and grants totaled $61.7 million in FY2002.
Eligibility Requirements1
Individual farm owners, associations of farmers, local broad-based nonprofit
organizations, federally recognized Indian tribes, and agencies or political
subdivisions of local or state governments may be eligible for loans at a very low
interest rate from the Rural Housing Service (RHS),2 successor to the Farmers Home
Administration (FmHA), to provide low-rent housing and related facilities for
domestic farm labor. Applicants must show that the farming operations have a
demonstrated need for farm labor housing, must agree to operate the property on a
nonprofit basis, and must be unable to obtain credit on terms that would enable them
to provide housing to farm workers at rental rates that would be affordable to the
workers. Except for state and local public agencies or political subdivisions,
applicants must be unable to provide the housing from their own resources and
unable to obtain the credit from other sources on terms and conditions that they could
reasonably be expected to fulfill. The RHS state director may make exceptions to the
“credit elsewhere” test when (1) there is a need in the area for housing for migrant
farm workers and the applicant will provide such housing, and (2) there is no state
or local body or nonprofit organization that, within a reasonable period of time, is
willing and able to provide the housing.
Applicants must have sufficient initial operating capital to pay the initial
operating expenses. It must be demonstrated that, after the loan is made, income will
be sufficient to pay operating expenses, make capital improvements, make payments
on the loan, and accumulate reserves.
Nonprofit organizations, Indian tribes, and local or state agencies or
subdivisions may qualify for Section 516 grants to provide low-rent housing for farm
labor if there is a “pressing need” in the area for the housing and there is reasonable
doubt that it can be provided without the grant. Applicants must contribute at least

10% of the total development costs from their own resources or from other sources,


including Section 514 loans.


1 Regulations governing these loans and grants are found at 7 CFR Part 1944, Subpart D
(2003). This program is no. 10.405 in the Catalog of Federal Domestic Assistance.
2 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the
Farmers Home Administration (FmHA) and created the Rural Housing Service (RHS). The
rural housing programs that were formerly administered by FmHA are now administered by
RHS.

The Housing and Community Development Act of 1987 redefined “domestic
farm labor” to include persons (and the family of such persons) who receive a
substantial portion of their income from the production or handling of agricultural or
aquacultural products.3 They must be U.S. citizens or legally admitted for permanent
residence in the United States. The term includes retired or disabled persons who
were domestic farm labor at the time of retiring or becoming disabled. In selecting
occupants for vacant farm labor housing, RHS is directed to use the following order
of priority: (1) active farm laborers, (2) retired or disabled farm laborers who were
active at the time of retiring or becoming disabled, and (3) other retired or disabled
farm laborers.
Benefit Levels
Farm labor housing loans and grants to qualified applicants may be used to buy,
build, or improve housing and related facilities for farm workers and to purchase and
improve the land upon which the housing will be located. The funds may be used to
install streets, water supply and waste disposal systems, parking areas, and
driveways, as well as to buy and install appliances such as ranges, refrigerators,
washing machines, and dryers. Related facilities may include the maintenance
workshop, recreation center, small infirmary, laundry room, day care center, and
office and living quarters for the resident manager.
Section 514 loans are available at 1% interest for up to 33 years. Section 516
grants may not exceed the lesser of (1) 90% of the total development cost of the
project, or (2) the difference between the development costs and the sum of (a) the
amount available from the applicant’s own resources and (b) the maximum loan the
applicant can repay given the maximum rent that is affordable to the target tenants.
In FY2002, $47.3 million in loans and $14.5 million in grants financed the
development of 1,870 housing units for farm workers and their families.


3 Section 305 of P.L. 100-242, enacted Feb. 5, 1988.

44. Section 101 Rent Supplements
Funding Formula
This program is funded 100% by the federal government. Outlays totaled $54
million in FY2002.
Eligibility Requirements1
Section 101 of the Housing and Urban Development Act of 1965 (P.L. 89-117),
as amended, authorized the Department of Housing and Urban Development (HUD)
to pay rent supplements on behalf of low income tenants who lived in privately-
owned housing or housing developed under HUD’s Section 236 program. Income
eligibility for new2 recipients of rent supplements is based on eligibility for Section
8 rental assistance and is therefore limited to low income families, defined as families
whose incomes are 80% or less of the area median income, adjusted for family size.3
Included in the definition of income are earnings from total assets greater than
$5,000. Income recertification is required annually. Preference for available rent
supplements is given to households who live in substandard housing, are
involuntarily displaced, or are paying more than 50% of income for rent.
Before 1979, families were eligible if they were: aged 62 or over or
handicapped; displaced by governmental action or natural disaster; occupants of
substandard housing; or military personnel serving on active duty, or their spouses.
Benefit Levels
The rent supplements paid by HUD under this program are set as the difference
between 30% of a tenant’s adjusted gross income (as defined above) or 30% of the
market rent, whichever is higher, minus a basic rent. The basic rent is established by
HUD and is designed to cover the total housing costs for each unit.


1 Existing rent supplements are governed by 24 CFR Part 215 (1995), as in effect
immediately before May 1, 1996. Part 215 has been removed because no new rent
supplement contracts are authorized under this program. Section 101 is no. 14.149 in the
Catalog of Federal Domestic Assistance.
2 P.L. 96-153 changed the eligibility for the Rent Supplement program to align with the
Section 8 program and added the preference categories, except for the preference for
households who pay more than 50% of their incomes toward rent, which was established by
P.L. 100-242.
3 In FY2003, the low-income limits (80% of area median) for a family of four in
nonmetropolitan areas ranged from $29,200 (parts of Mississippi) to $55,050 (a Connecticut
county).

In FY2002, 18,600 units received subsidies, which averaged about $2,9004 per
unit. No new commitments have been entered into under this program since 1973.
Current spending under the program is only for the 18,600 contracts that have not yet
expired.


4 The number of subsidized units is from FY2004 HUD budget documents; the average per
unit subsidy was derived by dividing the outlays in FY2002 by the number of units
supported in FY2002.

45. Rural Housing Self-Help Technical Assistance
Grants (Section 523) and Rural Housing Site Loans
(Sections 523 and 524)
Funding Formula
These programs are funded 100% by the federal government. The funds for the
programs are not allocated to the states. The funds are kept in reserve at the RHS
national office and are available as determined administratively. Federal obligations
for these grants and loans totaled $27 million in FY2002.
Eligibility Requirements1
States, political subdivisions, public nonprofit corporations (including Indian
tribes and tribal corporations), and private nonprofit corporations2 may receive
Technical Assistance (TA) grants from the Rural Housing Service (RHS), successor
to the Farmers Home Administration (FmHA).3 The TA grants are used to pay all
or part of the cost of developing, administering, and coordinating programs of
technical and supervisory assistance to families that are building their homes by the
mutual self-help method. This is the method whereby families, organized in groups
of 6 or 10 families, use their own labor to reduce construction costs. Each family is
expected to contribute labor on group member’s houses to accomplish 65% of the
tasks specified by RHS.4
Applicants must demonstrate that (1) there is a need for self-help housing in the
area, (2) the applicant has or can hire qualified people to carry out its responsibilities
under the program, and (3) funds for the proposed TA project are not available from
other sources.
The program is limited to very-low-income and low-income rural families,
defined as those with income below 50% and 80% of the area median, respectively,5


adjusted for family size.
1 Regulations governing Section 523 Technical Assistance grants are found at 7 CFR Part
1944, Subpart I (2003). Regulations governing Section 523 and 524 site loans are at 7 CFR
Part 1822, Subpart G (2003). In the Catalog of Federal Domestic Assistance, technical
assistance grants and site loans are programs no. 10.420 and no. 10.411, respectively.
2 Private nonprofit corporations must be legally precluded from distributing gains and profits
to their members.
3 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the
Farmers Home Administration (FmHA) and created the Rural Housing Service (RHS). The
rural housing programs that were formerly administered by FmHA are now administered by
RHS.
4 7 CFR §1944.403(k) (2003).
5 In FY2003, the low-income limits (80% of area median)for a family of four in
nonmetropolitan areas ranged from $29,200 (parts of MS) to $55,050 (a CT county); the
(continued...)

The TA funds may not be used to hire construction workers or to buy real estate
or building materials. Private or public nonprofit corporations, however, may be
eligible for 2-year site loans under Section 523 or Section 524. Private nonprofit
organizations must have a membership of at least 10 community leaders. The site
loans may be used to buy and develop rural land, which then is subdivided into
building sites and sold on a nonprofit basis to low- and moderate-income families.
Generally, a loan will not be made unless it will result in at least 10 sites. The sites
need not be contiguous.
Sites financed through Section 523 may be sold only to families who are
building homes by the mutual self-help method. Section 524 site loans place no
restrictions on construction methods. Houses built on either kind of subsidized site
usually are financed through the Section 502 rural housing loan program (see
program no. 35).
Benefit Levels
The RHS state director may approve TA grants of up to $200,000 to eligible
organizations. The state director must have written consent from the RHS national
office for larger grants. Applicants must demonstrate that the self-help method will
result in net savings per house of at least $500.
The TA grants may be used for hiring personnel (director, coordinator,
construction supervisor, and secretary-bookkeeper), paying office and administrative
expenses, buying and maintaining specialty and power tools (participating families
are expected to have their own basic hand tools), and paying for technical and
consultant services that are not readily available without cost to the participating
families.
Section 523 site loans are made at an interest rate of 3%, but the rate on Section
524 site loans is the Treasury cost of funds. The loans may be used to buy and
develop sites. Funds may be used to construct access roads and utility lines, provide
water and waste disposal facilities if such facilities cannot reasonably be provided on
a community basis with other financing, and to provide landscaping, sidewalks,
parking areas, and driveways. Common areas such as playgrounds and “tot lots” may
be funded if they are legally required as a condition of subdivision approval.
In FY2002, organizations received $26.5 million in mutual and self-help
housing grants, and $0.5 million in site development loans. No self-help site loans
were made in FY2002. The count of families receiving assistance is reported under
the Section 502 program.


5 (...continued)
corresponding extremely low income limits (30% of area median) ranged from $10,950 to
$20,650.

46. Indian Housing Improvement Grants
Funding Formula
This program is funded 100% by the federal government. Federal obligations
for this program totaled $19.6 million in FY2002.
Eligibility Requirements1
Applicants must meet the following requirements: (1) they must be members
of a federally recognized American Indian Tribe or Alaska Native Village (2) they
must live in an approved tribal service area, (3) their annual income may not exceed
125% of the poverty income guidelines of the Department of Health and Human
Services,2 (4) their present housing must be substandard, (5) they must meet the
ownership requirements for the assistance needed, (6) they must have no other
resource for housing assistance, (7) they have not received assistance after October
1, 1986, for repairs and renovation, replacement of housing, or down payment
assistance, and (8) they did not acquire their present housing through participation
in a federal housing program that includes the assistance referred to in item seven.
Priority is given to families on the basis of four factors: annual household income
as a percent of the federal poverty income guidelines; the age of elderly occupants;
whether the property is occupied by disabled individuals and the percent of the
disability; and the number of unmarried dependent children.
Benefit Levels
The Housing Improvement Program (HIP) is operated by the Bureau of Indian
Affairs (BIA) of the Department of the Interior. In general, the program is
administered through a servicing housing office operated by a Tribe or by the BIA.
HIP grants are made in one of three categories. Category A grants are used to
make interim repairs to properties that are to be made safe, more sanitary, and livable
until standard housing is available. The condition of the housing must be such that
it is not cost effective to renovate the property. These grants are limited to $2,500
per housing unit.
Category B grants are made to qualified applicants who occupy housing that can
economically be placed in standard condition. Grants are limited to $35,000 for any
one dwelling and the grants may be made to homeowners or renters. Occupants of
rental housing must have an undivided leasehold (the applicants are the only lessees)
and the leasehold must last at least 25 years from the date that assistance is received.
All applicants must sign a written agreement stating that the grant will be voided if


1 Regulations governing this program are found at 25 CFR Part 256 (2003). This program
is no. 15.141 in the Catalog of Federal Domestic Assistance.
2 For a family of four, this sum in calendar year 2003 was $23,000 in the 48 contiguous
states, $26,450 in HI, and $28,750 in AK.

the house is sold within 5 years of completion of repairs, and that the applicants will
repay BIA the full cost of repairs that were made.
Category C grants are made to applicants who (1) own or lease homes which can
not be brought to applicable building code standards for $35,000 or less, or (2) who
own or lease land that is suitable for housing and the land has adequate ingress and
egress rights. The grants are used to provide modest replacement housing.
Applicants who lease houses or land must have an undivided leasehold and the
leasehold must last at least 25 years from the date that assistance is received. If the
home is sold within 10 years, the full amount of the grant must be repaid. For each
year after the 10th year, the grantee may retain 10% of the original grant amount and
refund the remainder if the home is sold. If the home is sold after 20 years, the grant
does not have to be repaid.
In FY2002, HIP grants assisted 572 families by providing for the renovation of

389 homes, and the construction of 183 homes.



47. Section 235 Homeownership Assistance for
Low-Income Families1
Note: P.L. 100-242 (Section 401(d)(1)) terminated authority to make additional
Section 235 commitments, effective October 1, 1989.
Funding Formula
This program is funded 100% by the federal government. Federal outlays for
this program totaled $11 million in FY2002.
Eligibility Requirements2
The Section 235 program, created by the National Housing Act (P.L. 90-448),
provides monthly mortgage assistance to lower-income homeowners.
Families (two or more related persons) and singles who are elderly (at least 62
years old) or handicapped; and whose adjusted annual incomes do not exceed 95%
of the median family income for the area, adjusted for family size, are eligible for
Section 235 assistance. The HUD regulations exclude from “income” for the
purposes of determining eligibility and subsidy levels 5% of gross income, all
earnings of minor children living at home, plus $300 for each such child.3 Also
excluded is unusual income or property income that does not occur regularly or other
income of a temporary nature.
To qualify for this program, housing units must be new or substantially
rehabilitated single-family units that were under construction or rehabilitated on or
after October 17, 1975, condominium units that have never been occupied, or family
units (in existing condominium projects) that are purchased by a displaced family.
Benefit Levels
The Section 235 program provides aid, in the form of monthly payments to the
mortgagee on behalf of the assisted home buyer, to reduce interest costs on an
insured market rate home mortgage to as low as 4%. The borrower must be able to4
pay toward his mortgage payments at least 20% of his or her “adjusted gross
income” (countable housing income, as defined above). Mortgage amounts for
commitments made after July 13, 1981, are limited to $40,000 for single-family and
condominium units with three bedrooms or less, and $47,500 for units with four or


1 The Section 235 program was suspended with other major subsidized housing programs
on January 5, 1973. In October 1975, $264.1 million that had not previously been used for
the Section 235 program was released, to be used according to revised regulations.
2 Regulations governing this program are found at 24 CFR Part 235 (2003).
3 24 CFR § 235.1206 (2003). The 5% income exclusion was established by regulation. It
is not required by law.
4 Twenty-eight percent for those in the restructured program.

more bedrooms. These limits may be raised by as much as $7,500 in high cost areas,
and additionally, by 10% for a dwelling to be occupied by a physically handicapped
person, if the larger mortgage is needed to make the dwelling accessible and usable
to him.
Any assistance payment made pursuant to a commitment issued on or after May

27, 1981, is subject to recapture upon (1) disposition of the subsidized property, (2)


a 90-day cessation of payments on its mortgage, or (3) its rental for longer than 1
year. The law provides that the amount recaptured shall be equal to the assistance
actually received or at least 50% of the net appreciation in the value of the property,
whichever is less.5
Benefits averaged about $828 per dwelling unit in FY2002, about $69 monthly.6
Approximately 13,000 dwelling units received assistance in FY2002.


5 The recapture provision was added by P.L. 96-399, the Housing and Community
Development Act of 1980.
6 The number of subsidized units was taken from FY2004 HUD budget documents; the
average per unit subsidy was estimated by dividing FY2002 outlays by the number of units
supported that year.

48. Rural Housing Preservation Grants
(Section 533)
Funding Formula
This program is funded 100% by the federal government. Grantees are
encouraged, however, to leverage the grants with funds from local, state, or other
sources. Factors used to allocate funds: state shares of rural population, rural
occupied substandard units, and rural poor families. Federal obligations for this
program totaled $8.6 million in FY2002.
Eligibility Requirements1
States, local governments, nonprofit corporations, and Indian tribes, bands, or
nations may be eligible to receive grants to operate programs that finance the repair
and rehabilitation of single-family housing owned and occupied by families with
“low” income (not above 80% of the area median, adjusted for family size) or “very-
low” income (not above 50% of the area median). The program uses the dollar limits
established by the Department of Housing and Urban Development (HUD) for the
area.2 Grant applicants must have a staff or governing body with either (1) proven
ability to perform responsibly in the field of low-income rural housing development,
repair, and rehabilitation; or (2) management or administrative experience that
indicates the ability to operate a program offering funds for housing repair and
rehabilitation.
The homes must be located in rural areas and must need housing preservation
assistance. Assisted families must meet the income restrictions and must have
occupied the property for at least 1 year. Occupants of leased homes may be eligible
for assistance if (1) the unexpired portion of the lease extends for 5 years or more,
and (2) the lease permits the occupant to make modifications to the structure and
precludes the owner from increasing the rent because of the modifications.


1 Regulations governing Section 533 rural housing preservation grants are found at 7 CFR
Part 1944, Subpart N (2003). This program is no. 10.433 in the Catalog of Federal Domestic
Assistance.
2 In FY2003, the low-income limits (80% of area median) for a family of four in
nonmetropolitan areas ranged from $29,200 (parts of MS) to $55,050 (a CT county); the
corresponding extremely low income limits (30% of area median) ranged from $10,950 to
$20,650.

Benefit Levels
The Rural Housing Service (RHS),3 successor to the Farmers Home
Administration (FmHA), is authorized to provide grants to eligible public and private
organizations. The grantees may in turn provide homeowners with direct loans,
grants, or interest rate reductions on loans from private lenders to finance the repair
or rehabilitation of their homes. Many housing preservation activities are authorized:
(1) installation and/or repair of sanitary water and waste disposal systems to meet
local health department requirements; (2) installation of energy conservation
materials, such as insulation and storm windows and doors; (3) repair or replacement
of the heating system; (4) repair of the electrical wiring system; (5) repair of
structural supports and foundations; (6) repair or replacement of the roof; (7) repair
of deteriorated siding, porches, or stoops; (8) alteration of the interior to provide
greater accessibility for any handicapped member of the family, and (9) additions to
the property that are necessary to alleviate overcrowding or to remove health hazards
to the occupants. Repairs to manufactured homes or mobile homes are authorized
if (1) the recipient owns the home and site and has occupied the home on that site for
at least 1 year, and (2) the home is on a permanent foundation or will be put on a
permanent foundation with the funds to be received through the program. Up to 25%
of the funding to a dwelling may be used for improvements that neither contribute
to the health, safety, or well-being of the occupants; or materially contribute to the
long-term preservation of the unit. These improvements may include painting,
paneling, carpeting, air conditioning, landscaping, and improving closets or kitchen
cabinets.
The Section 533 program was authorized in 1983, and regulations for the
program were published in 1986.4 The RHS is authorized to make Section 533 grants
also for rehabilitation of rental and cooperative housing. Regulations to implement
these grants were issued in spring 1993,5 even though Congress had directed this
action much earlier.6 Funding for this part of the Section 533 program became
available in FY1994.
In FY2002, rural housing preservation grants financed home repairs for 2,133
families.


3 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the
Farmers Home Administration (FmHA) and created the Rural Housing Service (RHS). The
rural housing programs that were formerly administered by FmHA are now administered by
RHS.
4 Section 522 of the Housing Urban-Rural Recovery Act of 1983 (P.L. 98-181, Nov. 30,

1983) added Section 533 to the Housing Act of 1949.


5 Federal Register, v. 58, Apr. 26, 1993, p. 21891.
6 Section 310 of P.L. 100-242, the Housing and Community Development Act of 1987,
enacted Feb. 5, 1988.

49. Homeownership and Opportunity for People
Everywhere (HOPE) Programs
Funding Formula
The Homeownership and Opportunity for People Everywhere programs (HOPE
1, 2, and 3) were established in 19907 to help low-income, first-time homebuyers
purchase housing owned by federal, state, and local governments. Grants were
awarded through FY1996 on a competitive basis to nonprofit organizations, resident
management corporations, cooperative associations, public housing authorities, or
other bodies who, in turn, carry out the economic development and homeownership
goals. Regulations required recipients of HOPE 3 implementation grants to
contribute $1 in matching money for each $4 in federal funds awarded (for amounts
granted before April 11, 1994, the required match was higher, 33%). While there has
been no new funding of HOPE 1, 2, and 3 programs since FY1996 and no new grants
are being made, some money already committed and in the pipeline continues to be
spent. According to figures from the Office of Management and Budget, federal
outlays from current balances were $25 million in FY2000, $21 million in FY2001
and $3 million in FY2002. HOPE grantees have included Habitat for Humanity,
Catholic Charities, Volunteers of America, and the Enterprise Foundation.
Eligibility Requirements1
In general, to be eligible to purchase an available home in HOPE 1, 2, or 3, a
person or family must be a tenant of an eligible property, a resident of other HUD
assisted housing, or have an income that does not exceed 80% of the median income
for the area, adjusted for family size.
Benefit Levels
HOPE 1 authorizes funds to develop tenant management at public and Indian
housing projects, for project-related jobs, and for the eventual sale of the renovated
units to tenants and other qualifying households. HOPE 2 authorizes grants for the
sale of multifamily properties that are insured by the Department of Housing and
Urban Development (HUD) or are owned by the government, and for funds for small
business startups and other economic development activities. HOPE 3 provides
funds for the purchase of single-family homes held or insured by federal, state, or
local governments. Many of the HOPE 3 properties sold were homes held by the
Resolution Trust Corporation, dating to the “Savings & Loan crisis.”


7 HOPE programs were authorized by the Cranston-Gonzalez National Affordable Housing
Act of 1990 (P.L. 101-625) and amended by the Housing and Community Development Act
of 1992 (P.L. 102-550) and the Quality Housing and Work Responsibility Act of 1998 (P.L.

105-276).


1 HOPE 3 regulations are found in 24 CFR Part 572 (2003). HOPE programs are no longer
included in the Catalog of Federal Domestic Assistance.

Purchasers were expected to buy fully renovated units at significant discounts
from appraised values. There has been almost no information available on program
activity in the last few years on HOPE 1, 2, or 3.
Over the years, a variety of HUD programs have sold public housing units to
tenants and other low income households. Including HOPE 1, HUD has approved
the sale of more than 4,700 public housing units since 1993. However, moving from
the planning stage to actual sale of units can take as many as 10 years. In many
cases, grantees are devoting a portion of the grant to support resident organizations,
counseling, and training of residents, and other neighborhood economic development
activities.
HOPE 1 Implementation Grants of $82.4 million were made for 30 grants
during FY1992 and FY1994. In a FY2000 HUD status report, information was
available on only about one-third of the applicants approved. Of grantees receiving
$8.2 million, approximately $4.6 million remained unspent. A number of projects
are in the process of being shut down, with grants being terminated, and money being
returned. For example, in FY1994, a grant of $1.67 million was made to the housing
authority of Hartford, Connecticut. A grant was approved for the sale of 60 units.
HUD says that its field office proposed to terminate the grant as of June 30, 2000 for
failure to execute. A total of $278,000 has been spent, but no information is
available on whether any units have been sold. An example is from the housing
authority in Kern County, California. An implementation grant of $4.5 million was
made in FY1994 for the sale of 168 units of public housing. As of FY2000, there
was a remaining balance of $1.9 million, although no information is available on how
many units may have been sold. It appears from previous reports that at least 261
HOPE 1 grants totaling $113 million have been made, but again, no aggregate
information is available on how many units have been sold.
Under HOPE 2, grants of about $75 million were made through FY1996. No
further information has been made available from HUD.
As of July 1997, the cumulative amount of HOPE 3 implementation grants was
$210 million for 258 grantees. As of August 1995, 2,298 homes had been acquired
under HOPE 3 and 1,234 transferred to new buyers.2
Under the Clinton Administration, there was a move away from the sale of
multifamily units, with a shifting emphasis to the sale of both publicly and privately
owned, scattered-site, single-family homes. In the last few years there has been a
phasing down of specialized programs like HOPE 1, 2, and 3. This reflects a policy
of “empowering local communities” by giving them the flexibility to develop
innovative strategies to meet their local housing and community development needs.
For example, currently, HUD’s Federal Housing Administration (FHA) sells HUD-
owned single-family homes to approved non-profits at discounts under its “Direct
Sales” program. These homes are usually resold to low- and moderate-income
homebuyers in coordinated efforts with local governments and other federal


2 For a detailed report on HOPE 3, see Evaluation of the HOPE 3 Program: Final Report,
prepared for HUD by Abt Associates, Aug. 1996.

programs to stabilize and revitalize certain neighborhoods. Other HUD owned
homes are sold at 50% discounts under FHA’s Officer Next Door and Teacher Next
Door programs. For detailed information about government-assisted home buying,
see HUD’s homebuyer site at [http//www.hud.gov/buyhome.html].



Educational Assistance



50. Federal Pell Grants
Funding Formula
Federal Pell Grants, the largest source of federal student grant assistance
administered by the Department of Education (ED), are 100% federally funded.
These grants are authorized by Title IV-A of the Higher Education Act.
Appropriations for the 2001-2002 school year were $11.4 billion.
Eligibility Requirements3
Pell Grants, originally called “Basic Educational Opportunity Grants,” are
available to undergraduate students enrolled in an eligible institution of
postsecondary education who meet a needs test, the elements of which are prescribed
in the Higher Education Act (Part F of Title IV). Grantees must meet general student
aid eligibility requirements including maintaining satisfactory progress in their course
of study, not be in default on a federally assisted student loan, not owe a refund on
a Pell Grant or Supplemental Educational Opportunity Grant, and register for the
Selective Service, if so required.
The federal need analysis methodology takes into account the income and assets
of the student and his or her family, and determines the amount that a student and
his/her family might reasonably be expected to contribute toward total costs for
postsecondary education (the expected family contribution or EFC). For a
dependent4 student, the expected family contribution is based on the student’s and his
or her parents’ income and assets. For an independent5 student, the expected
contribution is based on the income and assets of the student, if single, and student
and spouse, if married. Included as income are welfare benefits, including TANF
payments, child support, the earned income tax credit, untaxed Social Security
benefits, and some other untaxed income and benefits.
On May 30, 2003, the Department of Education announced updates to the need
analysis tables for the 2004-2005 award year.6 The announcement provided inflation-
adjusted updates to four tables used in calculating the expected family contribution:
the income protection allowance, the adjusted net worth of a business or farm, the
education savings and asset protection allowance, and the assessment schedules and


3 Regulations for Pell Grants are found at 34 CFR Part 690 (2002). This program is no.
84.063 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a et
seq.
4 A student is considered dependent if he/she does not fall into any of the categories for an
“independent student.”
5 A student is considered independent if he/she is age 24 or older, is a graduate, professional,
or married student, or has legal dependents other than a spouse. Also automatically
considered independent are orphans (without an adoptive parent or legal guardian), veterans,
or wards of the court. Financial aid administrators may make a documented determination
of independence for other students by reason of other unusual circumstances.
6 Federal Register, v. 68, May 30, 2003, pp. 32468-32478.

rates. The Department publishes an annual booklet explaining the Expected Family
Contribution (EFC) formula.7
In FY1999, more than 90% of Pell Grant recipients considered to be dependent
students had total parental income below $40,000. Among independent student
grantees, more than 90% had total income below $30,000.8
Benefit Levels
Pell Grant awards to students are the lesser of: (1) a statutorily established
maximum award ($4,050 for FY2003), minus the expected family contribution (see
explanation under Eligibility Requirements); or (2) the cost of attendance minus the
expected family contribution.
For the academic year 2001-2002, an estimated 4.8 million students received
Pell Grants averaging $2,411.
The Higher Education Act forbids AFDC (or its successor, TANF), food stamps,
and any other governmental program that receives federal funds from taking Pell
grants (or other student aid provided under the act) into account when determining
eligibility for benefits, or the amount of benefits.
Note: For more information, see CRS Report RL31668, Federal Pell Grant
Program of the Higher Education Act: Background and Reauthorization and CRS
Report IB10097, The Higher Education Act: Reauthorization Status and Issues.
Also see the Federal Student Aid Handbook at [http://www.ifap.ed.gov/
IFAPW ebApp/currentSFAHandbooksPag. jsp] .


7 The 2003-04 formula book and tables (in portable document format [PDF]) are available
at [http://www.ifap.ed.gov/efcinformation/0304EFCFormulaWkSheetsTable.html].
8 CRS Report RL31668, Federal Pell Grant Program of the Higher Education Act:
Background and Reauthorization, summary page.

51. Head Start1


Funding Formula
Head Start funds are allocated among states by formula2 but awarded directly
to local Head Start agencies. Federal assistance for a Head Start program is limited
to 80% of program costs, but the law permits a larger share if the Secretary of HHS
determines this to be necessary for Head Start’s purposes. Federal regulations permit
a higher federal share for a Head Start agency that is located in a relatively poor
county3 or one that has been “involved” in a major disaster if the Secretary finds that
the agency is “unable” to pay a 20% share despite a “reasonable effort” to do so.
Also, if a Head Start agency received more than an 80% federal share for any budget
period within FY1973 or FY1974, it is entitled by regulation to continue to receive
the larger share. The non-federal share may be paid in cash or in kind. It may be
paid by the Head Start agency or by another party. A Head Start agency is a local
public or private nonprofit or for profit organization designated to operate a Head
Start program. FY2003 appropriations for Head Start were $6.7 billion.
Eligibility Requirements4
Head Start is targeted by law to low-income families, but the law gives authority
to HHS for determining eligibility criteria. The regulations require that at least 90%
of the children in each Head Start program be from “low-income” families,5 defined
as families with incomes below the “official poverty line,” and including children
from families receiving public assistance and children in foster care. In addition, at
least 10% of total Head Start enrollment opportunities in each program must be made
available for handicapped children In 2003, federal poverty income guidelines were
$15,260 for a family of three and $18,400 for a family of four for the 48 contiguous


1 Although Head Start is classified here as an educational program, it should be noted that
it provides many other services. It is administered by the Department of Health and Human
Services (HHS) rather than the Department of Education (ED).
2 The Head Start allotment formula, as amended by the Head Start Amendments of 1998,
P.L. 105-285, provides that 13% of the Head Start appropriation shall be reserved by the
Secretary for: (1) Indian and migrant programs; (2) payments to the territories; (3) training
and technical assistance; (4) discretionary payments by the Secretary; and payments for
research, demonstration and evaluation activities. Additional amounts are set-aside for
quality improvement. The remaining funds are distributed to the states as follows: each
state receives the amount it received in FY1998, and any amounts available above the
FY1998 level are distributed proportionately among states on the basis of the number of
children under 5 years old whose family income is below the federal poverty line.
3 Regulations define this as a county with annual personal per capita income below $3,000
(45 CFR §1301.21 (2002)).
4 Head Start eligibility rules are found at 45 CFR Part 1305 (2002). This program is no.

93.600 in the Catalog of Federal Domestic Assistance. Head Start is codified at 42 U.S.C.


9801 et seq.


5 Under specified conditions, a Head Start program operated by an Indian tribe may enroll
more than 10% of its children from nonpoor families.

states and the District of Columbia. Head Start does not have asset rules restricting
eligibility.
The law allows certain small, remote communities to establish their own
eligibility criteria as long as at least half of the families are eligible under the income
guidelines. To qualify for this authority, communities must have a population no
greater than 1,000, be medically underserved, and lack other preschool programs or
medical services within a reasonable distance.
Benefit Levels
Head Start provides comprehensive services to preschool children. Services
include educational, dental, medical, nutritional, and social services to children and
their families. Head Start agencies are forbidden by law from charging fees, although
families who want to pay for services may voluntarily do so.
Note: For further information about Head Start, see CRS Report RL30952,th
Head Start Issues in the 108 Congress.



52. Subsidized Federal Stafford and
Stafford/Ford Loans
Funding Formula
Subsidized Federal Stafford loans are provided to students by the Federal
Family Education Loan (FFEL) program and the Ford Federal Direct Student Loan1
(DL) program. Capital for FFEL Stafford loans is provided by banks and other
private lenders. Capital for Stafford/Ford loans is provided directly by the federal
government. In the FFEL program the federal government pays the student’s interest
during certain periods, and provides interest subsidies to lenders, and federal
reinsurance against borrower default, death, disability, and bankruptcy. In the Ford
direct loan program, the government forgoes student interest payments during certain
periods. These subsidized loan programs are authorized by Title IV of the Higher
Education Act of 1965, as amended. Estimated net obligations for FY2002 were $7.5
billion.
Eligibility Requirements2
FFEL and DL subsidized loans are available to undergraduate, graduate, or
professional students enrolled on at least a half-time basis at a participating college,
university, or vocational/technical school. While eligibility is not restricted to
individuals with limited income (almost a fifth of loan recipients have incomes over
$50,000), applicants must satisfy a test of need.
Institutions use the methodology described in Part F of Title IV as the need
analysis system to calculate an expected family contribution for educational expenses
(known as the EFC). The formulas in Part F use information about the student and
his or her family’s income and assets to determine the amount the student and family
can reasonably be expected to contribute. This amount is subtracted from the
student’s cost of attendance to determine the amount of a subsidized loan for which
the student is eligible. On May 30, 2003, the Department of Education announced3
updates to the need analysis tables for the 2004-2005 award year. The
announcement provided inflation-adjusted updates to four tables used in calculating
the expected family contribution: the income protection allowance, the adjusted net
worth of a business or farm, the education savings and asset protection allowance,
and the assessment schedules and rates. The Department publishes an annual booklet


1 The Federal Direct Student Loan (DL) program, established in 1993, originally was
intended to gradually expand and replace FFEL loans. It now accounts for more than one-
third of total student loan volume.
2 Regulations for the FFEL programs are found at 34 CFR Part 682, and for the DL
programs at 34 CFR Part 685 (2002). The FFEL subsidized Stafford Loan program is no.
84.032 in the Catalog of Federal Domestic Assistance. The DL program is no. 84.268 in the
Catalog of Federal Domestic Assistance. The FFEL program is codified at 20 U.S.C. 1071-

1087-2; the DL program is codified at 20 U.S.C. 1087a et seq.


3 Federal Register, v. 68, May 30, 2003, pp.32468-32478.

explaining the Expected Family Contribution (EFC) formula.4 Undergraduate
students must receive a determination of whether they are eligible for a Pell Grant
before applying for a subsidized loan. This rule is to assure that eligible students
receive grant aid before incurring loan debt.
Benefit Levels
A borrower’s interest rate for FFEL Stafford and Stafford/Ford loans varies
annually during repayment. The variable rate is calculated based upon the bond
equivalent rate of the 91-day Treasury bill plus a premium which differs depending
on whether the borrower is in-school or in repayment. For loans made from July 1,
1998, through June 30, 2006, the borrower interest rate is based on the 91-day
Treasury bill plus 1.7% for those in school, and the 91-day Treasury bill plus 2.3%
for those in repayment. In the FFEL program, the lender is required to pay the 3%
origination fee to the federal government; the lender can choose whether or not to
pass the entire fee on to the borrower, within certain limitations. In the DL program,
borrowers pay a 3% origination fee to the federal government.
Undergraduates may borrow $2,625 for their first year of study, $3,500 for their
second year, and $5,500 per year for the next 3 years of study; for graduate and
professional school students, the limit is $10,500 per year for up to 5 years of school.
The aggregate loan limit for undergraduate, graduate and professional study is
$65,500.
In FY2002, subsidized FFEL Stafford and DL Stafford/Ford loan disbursements
totaled over $30.1 billion. The main components of FFEL annual federal
expenditures are the in-school, grace period and deferment interest payments to
lenders on behalf of borrowers of subsidized loans, special allowance payments to
lenders, and reimbursements to guaranty agencies for losses due to borrower defaults;
guaranty agencies also receive allowances from the federal government for
administrative expenses. In the DL program, the main components of annual federal
costs are the foregone interest payments for subsidized loans while students are in
school, during the grace period and deferments; defaults; and administrative costs of
contracts for loan origination, servicing and collections, and fees to schools who
perform origination functions themselves. In both programs, there are also certain
annual revenues that offset some of these costs, including fees that students or
parents pay when borrowing, and collections on defaulted loans. In FFEL, other
offsets include fees that are assessed on lenders/loan holders, and guaranty agencies.
Net federal obligations for FY2002 were an estimated $4.9 billion.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues; CRS Report RL30655, Federal Student
Loans: Terms and Conditions for Borrowers; and CRS Report, RL30656, The
Administration of Federal Student Loan Programs: Background and Provisions.


4 The 2003-04 formula book and tables (in portable document format) are available at
[ h t t p : / / www.i f ap.ed.gov/ e f c i n f o r mat i on/ 0304EFCFor mul aWkSheet sT abl e .ht ml ] .

53. Federal Work-Study Program1


Funding Formula
The Higher Education Act of 1965, as amended, authorizes federal funding to
partially finance part-time employment for undergraduate, graduate, and professional
students in eligible institutions of post-secondary education who need earnings to
attend. Students may work on-campus or off-campus for a public or private
nonprofit or a private for-profit organization. Since October 1, 1993, institutions
have been required to use at least 5% of their allocation of Federal Work Study
(FWS) funds for community service jobs; effective in FY2000, this rose to 7%.2
Federal grants to institutions fund 50% to 75% of the student’s wages; the remaining
percentage is paid by the post-secondary institution or other employer. Funds are
allocated to institutions first on the basis of their FY1985 award and then in
proportion to aggregate need.3 FY2002 appropriations were $1 billion.
Eligibility Requirements4
The law authorizes federally subsidized wages for students who are enrolled in
a post-secondary program, including proprietary institutions, who demonstrate
financial need, as determined by the statutory need analysis system set forth in Part
F of Title IV of the Higher Education Act. This system calculates an expected family
contribution.5 Five percent of an institution’s FWS funds must be used for students
who are enrolled on a less than full-time basis if the total financial need of these
students exceeds 5% of the need of all students attending the institution.
Benefit Levels
A student’s earnings under the FWS program6 are limited to his or her need, and
the rate of compensation must at least equal the minimum wage. The institution’s
share of compensation may be provided to the student through tuition payments,
room and board, or books.


1 The name of the program was changed from College Work-Study to Federal Work-Study
by Congress in 1992.
2 This change was made by P.L. 105-244, which reauthorized the Higher Education Act.
3 P.L. 105-34 revised the allocation formula.
4 FWS regulations are found at 34 CFR Part 675 (2002). This program is no. 84.033 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 2751-2756a.
5 On May 30, 2003, the Department of Education announced updates to the need analysis
tables for the 2004-2005 award year (Federal Register, v. 68, pp. 32468-32478). The
Department publishes an annual booklet explaining the Expected Family Contribution (EFC)
formula. The 2003-04 formula book and tables are available in portable document format
at [http://www.ifap.ed.gov/efcinformation/0304EFCFormulaWkSheetsTable.html].
6 See also CRS Report RL31618, Campus-Based Student Financial Aid Programs Under
the Higher Education Act.

During the academic year 2002-2003, an estimated 1,073,000 students received
FWS-supported earnings averaging $1,252.
The Higher Education Act forbids AFDC (or its successor, TANF), food stamps,
and any other governmental program that receives federal funds from taking student
aid provided under the Act into account when determining eligibility for benefits, or
the amount of benefits.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and CRS Report RL31618, Campus-Based
Student Financial Aid Programs Under the Higher Education Act.



54. Federal TRIO Programs1


Note: The federal TRIO programs consist of six programs authorized by Title
IV of the Higher Education Act of 1965, as amended: Upward Bound, Student
Support Services, Talent Search, Educational Opportunity Centers, Ronald E.
McNair Postbaccalaureate Achievement, and Staff Development. The first three
were the original “TRIO” programs. The Staff Development activities provide
short-term training for TRIO program staff; they are not described below. FY2002
appropriations were $827 million.
Funding Formula
These are categorical grant programs. They are 100% federally funded. In
addition, institutions conducting Student Support Services programs must provide
assurances that each participating student will be offered aid sufficient to meet his
or her financial need for college attendance.
Eligibility Requirements
Eligibility requirements differ slightly from program to program and are
described below. At the outset it should be noted how the term “low-income” applies
in these programs. The authorizing statute for the TRIO programs defines a
low-income individual as one whose family’s taxable income in the preceding year
did not exceed 150% of the “poverty level” as determined under Bureau of the
Census criteria. For the school year 2002-2003, the taxable income limits for three-
and four-person families were $22,890 and $27,600, respectively (higher in Alaska
and Hawaii).2 The program descriptions below are drawn from the authorizing
statute and program regulations.
Upward Bound.3 Not fewer than two-thirds of the participants in any project
must be low-income, potential first generation college goers. The remaining
one-third must be either low-income or potential first generation college goers. All
participants must need academic support in order to successfully pursue an education
beyond high school. With certain exceptions, participants must have completed
grade 8 but not entered grade 12, and be 13 to 19 years of age. For veterans there is
no age limit.


1 Previously entitled “special programs for students from disadvantaged backgrounds.”
2 These amounts are 150% of the 2003 federal poverty income guidelines, issued by the
Department of Health and Human Services.
3 Upward Bound eligibility rules for participants are found at 34 CFR Part 645 (2002). This
program is no. 84.047 in the Catalog of Federal Domestic Assistance. It is codified at 20
U.S.C. 1070a-11 and 1070a-13.

Student Support Services.4 Not fewer than two-thirds of program
beneficiaries must be either disabled, or low-income first generation college goers.
The remaining participants must be disabled, or low-income, or first generation
college goers. All participants must need academic support in order to successfully
pursue a post-secondary education program.
Talent Search.5 Not fewer than two-thirds of program beneficiaries must be
low-income, potential first generation college goers. The program requires that all
participants must have completed the fifth grade or be at least 11 years of age, but
generally not older than 27. (For veterans there is no age limit.)
Educational Opportunity Centers.6 Not fewer than two-thirds of the
beneficiaries served by each center must be low-income, potential first generation
college goers. In general, participants must be at least 19 years of age.
Ronald E. McNair Postbaccalaureate Achievement.7 This program was
authorized in 1986 to assist students in gaining admission to graduate programs. At
least two-thirds of the participants must be low-income, first generation college
students. The remaining participants must be from groups underrepresented in
graduate education.
Benefit Levels
Upward Bound and Student Support Services provide such services as:
instruction in reading, writing, study skills, mathematics, and other subjects necessary
for education beyond high school; personal counseling; academic counseling;
tutoring; exposure to cultural events and academic programs; and activities
acquainting students with career options.
Among its services, Talent Search provides participants with information on the
availability of student financial aid, personal and career counseling, and tutoring.
The program’s projects encourage qualified students or dropouts to complete high
school and to undertake post-secondary education.


4 Participant eligibility rules for Student Support Services are found at 34 CFR Part 646
(2002). This program is no. 84.042 in the Catalog of Federal Domestic Assistance. It is
codified at 20 U.S.C. 1070a-11 and 1070a-14.
5 Talent Search eligibility rules for participants are found at 34 CFR Part 643 (2002). This
program is no. 84.044 in the Catalog of Federal Domestic Assistance. It is codified at 20
U.S.C. 1070a-11 and 1070a-12.
6 Participant eligibility rules for Educational Opportunity Centers are found at 34 CFR 644
(2002). This program is no. 84.066 in the Catalog of Federal Domestic Assistance. It is
codified at 20 U.S.C. 1070a-11 and 1070a-16.
7 Rules for the Ronald E. McNair postbaccalaureate achievement program are found at 34
CFR 647 (2002). This program is no. 84.217 in the Catalog of Federal Domestic Assistance.
It is codified at 20 U.S.C. 1070a-11 and 1070a-15.

Educational Opportunity Centers provide services, such as information on
financial and academic assistance available for post-secondary study, assistance to
participants in filling out college applications and financial aid request forms, and
tutoring and counseling.
McNair Postbaccalaureate Achievement provides services such as summer
internships, tutoring, counseling, and research opportunities.
In FY2002, an estimated 865,434 participants were served in the TRIO
programs, as follows:
!Upward Bound — 56,324;
!Student Support Services — 198,046;
!Talent Search — 389,454;
!Educational Opportunity Centers — 217,836; and
!Ronald McNair Achievement Program — 3,774
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and CRS Report RL31622, TRIO and GEAR
UP Programs: Status and Issues.



55. Supplemental Educational Opportunity Grants
Funding Formula
This program allocates funds to eligible institutions of post-secondary education
for grants to needy undergraduates. The non-federal share must come from the
institution’s own resources. Funds are allocated to institutions first on the basis of
their FY1985 award and then in proportion to aggregate need. FY2002
appropriations were $760 million.
Eligibility Requirements1
The Higher Education Act of 1965, as amended, authorizes supplemental
educational opportunity grants2 for post-secondary undergraduate students with the
greatest financial need as determined by the need analysis system set forth in Part F
of Title IV of the Higher Education Act.3 Institutions’ financial aid administrators
have, however, substantial flexibility in determining the size of individual student
awards. The first priority is for Pell Grant recipients with exceptional need. An
institution’s supplemental educational opportunity grant funds may be used for less
than full-time students.
Benefit Levels
The law sets minimum and maximum awards at $100 and $4,000, respectively.
An estimated 1,189,000 students received average grants of $772 under the program
during the 2002-2003 academic year.
The Higher Education Act forbids AFDC (or its successor, TANF), food stamps,
and any other governmental program that receives federal funds from taking student
aid provided under the act into account when determining eligibility for benefits, or
the amount of benefits.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and CRS Report RL31618, Campus-Based
Student Financial Aid Programs Under the Higher Education Act.


1 Federal regulations for this program are found at 34 CFR Part 676 (2002). This program
is no. 84.007 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C.

1070b.


2 See also CRS Report RL31618, Campus-Based Student Financial Aid Programs Under
the Higher Education Act.
3 On May 30, 2003, the Department of Education announced updates to the need analysis
tables for the 2004-2005 award year (Federal Register, v. 68, pp. 32468-32478). The
Department publishes an annual booklet explaining the Expected Family Contribution (EFC)
formula. The 2003-04 formula book and tables are available in portable document format
at [http://www.ifap.ed.gov/efcinformation/0304EFCFormulaWkSheetsTable.html].

56. Title 1 Migrant Education Program
Funding Formula
The Department of Education makes annual formula grants, under Title I, Part
C of the Elementary and Secondary Education Act (ESEA), as amended, to state
educational agencies for programs designed to meet the special needs of migratory
children of migratory agricultural workers or fishermen. Through FY2002, funds
were allocated among states on the basis of annual counts of eligible children and a
percentage of average per pupil expenditures.1 Under P.L. 107-110, from FY 2003
forward, states are to receive the same amount as in FY2002,2 plus a share of any
additional appropriations (allocated on the basis of the previous formula, with
updated child counts). Most programs are administered by local school districts,
which receive subgrants from the state educational agencies, though some are run by
other public or private nonprofit agencies. Discretionary grants and contracts are also
available to state educational agencies to improve program coordination within and
among states. As of 1995, record transfer is the sole responsibility of the states.
FY2002 appropriations were $395 million.
Eligibility Requirements3
Eligible students are migratory children whose parents or guardians are
migratory agricultural workers or fishers and who have moved within 3 years from
one school district to another to enable a member of their immediate family to obtain
temporary or seasonal employment in agricultural or fishing activities.
Children who are 3 through 21 years of age are eligible to participate, though
only younger children may receive day care services. There is no income test, but
migratory children are presumed to need special educational and other services.
Benefit Levels
Title 1 migrant education programs commonly provide regular academic
instruction, remedial or compensatory instruction, bilingual and multicultural
instruction, vocational and career education, testing, guidance and counseling, and
medical and dental screening. Preference is given to students at risk of not meeting
state academic standards or who moved during the school year. In school year 1999-
2000, an estimated 818,159 children were eligible. In FY2002, migrant education
programs served about 738,000 students, according to the Office of Migrant
Education.


1 Three states received 52% of FY2001 funds: CA, 31%; TX, 14%, and FL, 7%.
2 If appropriations fall short of the FY2002 level, the Secretary may proportionately reduce
the amount allocated to each state.
3 Regulations for this program are found at 34 CFR §200.40 (2002). This program is no.

84.011 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 6391-


6399, 6511.



Note: For more information, see CRS Report RL31325, The Federal Migrant
Education Program as Amended by the No Child Left Behind Act of 2001.



57. Perkins Loans
Funding Formula
The Perkins Loan program, authorized by Title IV of the Higher Education Act
(HE) of 1965, as amended, provides federal assistance to institutions of higher
education to operate a revolving fund providing low-interest loans to students.
Federal funds provide new capital contributions, and pay for the cancellation of
certain loans authorized in the law. Since academic year 1994-1995 participating
institutions have been required to provide a 25% annual match to the federal capital
contribution (previously, their match rate was 15%). FY2002 appropriations were
$166 million.
Eligibility Requirements1
The law authorizes low-interest, long-term loans for (1) undergraduate,
graduate, or professional students,2 (2) who are “in need” of the amount of the loan
to pursue a course of study, and (3) who maintain good academic standing. The need
analysis system set forth in Part F of Title IV the HE is used in calculating an
expected family contribution under the Perkins Loan program. On May 30, 2003, the
Department of Education announced updates to the need analysis tables for the 2004-
2005 award year.3 The Department publishes an annual booklet explaining the
Expected Family Contribution (EFC) formula.4
Benefit Levels
Effective October 1, 1981, the law authorized loans at a 5% interest rate. Loans
are to be repaid over a 10-year period beginning 9 months after the end of study that
is on at least a half-time basis. No interest is charged until repayment of the principal
begins, unless the payment is deferred, as permitted under certain conditions. In
addition, all or a portion of the loans may be canceled for those who enter specific
teaching jobs, law enforcement, or military service. Annual loan limits are $4,000
for undergraduate students and $6,000 for graduate or professional students. The
aggregate limits are $20,000 for undergraduate students (who have completed 2 years
of study, but who have not completed their baccalaureate degree) and $40,000 for
graduate and professional students; and $8,000 for any other students study. An
estimated 707,000 students borrowed loans averaging $1,790 under the program in
the 2002-2003 school year.


1 Regulations for Perkins Loans are found at 34 CFR Part 674 (2002). This program is no.

84.038 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1087aa-


1087hh and 20 U.S.C. 421-429.


2 Before July 1, 1987, students had to be enrolled on at least a half-time basis.
3 Federal Register, v. 68, pp. 32468-32478.
4 The 2003-04 formula book and tables (in portable document form) are available at
[ h t t p : / / www.i f ap.ed.gov/ e f c i n f o r mat i on/ 0304EFCFor mul aWkSheet sT abl e .ht ml ] .

Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and RL31618, Campus-Based Student
Financial Aid Programs Under the Higher Education Act.



58. Leveraging Educational Assistance
Partnerships (LEAP)
Note: This program was known as the State Student Incentive Grant (SSIG)
program until October 1, 1998, when it was revised and renamed by P.L. 105-244.
Funding Formula
Under Leveraging Educational Assistance Partnerships, states receive federal
formula grants, which are matched with equal state funds to provide for the
establishment of state student aid programs for needy post-secondary students. After
each state’s program grant is combined with the required non-federal matching funds,
resulting “state aid” awards are made either directly to students or indirectly through
participating institutions. The law provides that no state shall receive less from the
federal government than it received in FY1979. Funds not used by one state may be
reallotted to others in proportion to their higher education enrollments. State
allocations are based on their share of the total number of eligible students in all
states as determined by the U.S. Secretary of Education. States are permitted to use
20% of funds for community service work learning jobs for eligible students. The
1998 law, which reauthorized the program and renamed it as LEAP, also authorized
a new program of “Special Leveraging Education Assistance Partnerships.”1 FY2000
appropriations were $67 million.
Eligibility Requirements2
To be eligible for a LEAP grant, post-secondary students must be enrolled in
or accepted for enrollment in an institution of post-secondary education, must meet
citizen/resident requirements, must demonstrate substantial financial need as
determined in accordance with criteria of his/her state and approved by the Secretary
of Education, must maintain satisfactory academic progress, and must not default on
a student loan or owe a refund for student assistance. At state discretion, part-time
students may also be eligible. All public or private nonprofit institutions of higher
education as well as post-secondary vocational institutions are eligible to participate
unless prohibited by state constitution or state statute.


1 For any fiscal year in which the appropriation exceeds $30 million, the excess is reserved
for Special LEAP. Special LEAP funds are allocated to the states in the same manner as
LEAP grants to states. States participating in the Special LEAP program must meet
maintenance of effort (MOE) criteria and match the federal funds on a two-to-one basis (the
federal share of the Special LEAP program’s activities will not exceed 33 1/3%). Special
LEAP program funds are authorized, on behalf of students who demonstrate financial need,
for such activities as: increasing the dollar amount of grants awarded under LEAP to
eligible students, or creating other scholarship, early intervention, mentoring or career
education programs.
2 Regulations for this program are found at 34 CFR Part 692 (2002). This program is no.

84.069 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070c-


1070c-4.



Benefit Levels
Maximum grants are $5,000 for full-time students and may be used, among
other purposes, for work-study jobs provided through campus-based “community
service work learning study programs.”3 (The regulations also call these work-study
jobs “community service-learning” jobs.) In academic year 2002-2003,
approximately 171,000 students received average grants of $1,000.
The Higher Education Act forbids AFDC (or its successor, TANF), food stamps,
and any other governmental program that receives federal funds from taking student
aid provided under the act into account when determining eligibility for benefits, or
the amount of benefits.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and CRS Report RS21183, Leveraging
Educational Assistance Partnership Program (LEAP): An Overview.


3 Before July 23, 1992, maximum grants were $2,500.

59. Health Professions Student Loans and
Scholarships
Funding Formula
The law provides 90% federal funding for student loans and 100% for
scholarships. Eligible schools must contribute to the loan fund a minimum share
equal to one-ninth of the federal sum The federal government’s share of the loan
fund (its capital contribution) now is financed by loan repayments from participating
schools — not by appropriations. Appropriations for scholarships (and some loan
repayments) in FY2002 were $57.8 million.
Eligibility Requirements1
2
Loans. The Health Professions Student Loan Program (HPSL) provides long-
term, low-interest rate loans to full-time, financially needy students to pursue a
degree in an accredited public or nonprofit school of medicine, dentistry, optometry,
pharmacy, podiatric medicine, or veterinary medicine. The Loans for Disadvantaged
Students Program (LDS) provides long-term, low-interest rate loans to full-time,
financially needy students from disadvantaged backgrounds to pursue a degree in
allopathic medicine, osteopathic medicine, dentistry, optometry, podiatric medicine,
pharmacy or veterinary medicine. To be eligible for LDS funds, a participating
school must carry out a program for recruiting and retaining students from
disadvantaged backgrounds, including racial and ethnic minorities and must operate
a program to recruit and retain minority faculty. Students at accredited public and
nonprofit private schools of nursing are eligible for loans from the Nursing Student
Loan (N.L.) program. The school selects qualified loan applicants, makes reasonable
determinations of need, and determines the amount of student loans.
These loan programs no longer receive appropriations. Funds that are returned
to the Government by participating schools are re-awarded to schools that show a
need for additional funds. Any school that receives returned funds is required to
deposit the school’s share of one-ninth of the amount received into the loan fund for
additional loans to students.
Scholarships. P.L. 105-392, the Health Professions Partnerships Training Act
of 1998, enacted on November 13, 1998, reauthorized and consolidated the health
professions education and training programs under the Public Health Service Act
through FY2002. The Act repealed authority for then existing scholarship programs,
namely: (1) Scholarships for Students of Exceptional Financial Need (EFN); (2)
Financial Assistance for Disadvantaged Health Professions Students (FADHPS); and
(3) Scholarships for Health Professions Students from Disadvantaged Backgrounds


1 Regulations for these loans and scholarships are found at 42 C.F.R. Part 57, Subparts C
and D (loans), CC and DD (scholarships) (2000).
2 In the Catalog of Federal Domestic Assistance (CFDA), the Health Professions Student
Loan Program and the Loans for Disadvantaged Students Program are listed together as
program no. 93.342, and the Nursing Student Loan program is no. 93.364.

(SHPDB). It established a new program of Scholarships for Disadvantaged Students
(SDS).3 However, the law provides funding as part of the new SDS program for
recipients of EFN and FADHPS who continue to be enrolled after academic year

1998-1999.


The SDS program makes grants to the following accredited public or private
nonprofit schools for scholarship assistance: allopathic medicine, nursing,
osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry, veterinary
medicine, chiropractic, allied health, or schools offering graduate programs in public
health, behavioral and mental health or physician assistants. At least 16% of SDS
funds must be made available to schools that will provide scholarships only for
nurses, and schools must give preference to former EFN and FADHPS recipients.
Schools are required to agree that, in providing scholarships under SDS, preference
will be given to students from disadvantaged backgrounds for whom the costs of
attending the school would constitute a severe financial hardship. The Secretary may
not make a grant to a school unless the school is carrying out a program for recruiting
and retaining students from disadvantaged backgrounds, including racial and ethnic
minorities.
Loan Repayments. Two programs provide loan repayments, funded by
appropriations: (1) the Disadvantaged Health Professions Faculty Loan Repayment
and Fellowship Program (Faculty Loan Repayment Program/FLRP); and (2) the
Nursing Education Loan Repayment for Registered Nurses Entering Employment at
Eligible Health Facilities Program (Nursing Education Loan Repayment4
Program/NELRP).
Eligible for FLRP are persons who (1) have a degree in medicine, osteopathic
medicine, dentistry, pharmacy, podiatric medicine, optometry, veterinary medicine,
nursing, graduate public health, allied health or graduate behavioral and mental
health; (2) are enrolled in an approved graduate training program in one of the health
professions listed previously; or (3) are enrolled as full-time students in accredited
institutions described above and in the final course of study or program leading to a
degree.
Eligible for NELRP are persons who (1) have received a degree in nursing; (2)
have unpaid qualifying loans; (3) are a U.S. citizen, national or permanent legal
resident; (4) are employed full-time at an eligible health facility; (5) have a current
unrestricted license in the State in which they intend to practice; and (6) sign a
contract to work full-time as a registered or advanced practice nurse for 2 or 3 years
at an eligible health facility.


3 In the CFDA, the program of Scholarships for Disadvantaged Students is no. 93.925.
4 Faculty Loan Repayment Program is no. 93.923, and the Nursing Education Loan
Repayment Program is no. 93.908.

Benefit Levels
Loans. Health Profession Student Loans and Loans for Disadvantaged
Students may be made in amounts that do not exceed the cost of attendance,
including tuition, other reasonable educational expenses, and reasonable living
expenses. Loans have a 5% interest rate and must be repaid over a period ranging
between 10 years and 25 years, at the discretion of the institution. Excluded from the
time period for repayment are certain periods of: active duty performed by the
borrower as a member of a uniformed service; service as a Peace Corps volunteer;
and periods of advanced professional training, including internships and residencies.
The Secretary may, subject to the availability of funds, repay all or part of an
individual’s HPSL loan if the Secretary determines that the individual: (1) failed to
complete the health professions studies leading to the individual’s first professional
degree; (2) is in exceptionally needy circumstances; (3) is from a low-income family
(with income below the poverty guideline) or a disadvantaged family; and (4) has not
resumed or cannot reasonably be expected to resume the course of study within 2
years of ending them.
Nursing Student loans have a maximum limit of $2,500 for an academic year,
$4,000 for each of the final 2 years, or the amount of the student’s financial need,
whichever is less. The aggregate of the loans for all years is limited to $13,000 for
any student. Preference for these loans is given to licensed practical nurses, to
persons with exceptional financial need, and to persons who enter as first-year
students. Loans are repayable over a 10-year period, excluding periods for service
and study similar to those listed above. A school is authorized to extend the
repayment period for up to an additional 10 years for certain borrowers who failed
to make consecutive payments.
Loan Repayments. The program of Faculty Loan Repayment repays loans
at a rate of up to $20,000 per year for persons who have agreed to serve for at least
2 years as faculty members at an eligible school. The program of Nursing Education
Loan Repayments provides for repayment of 30% of unpaid principal and interest for
each qualified loan after the first year of service, 30% of the principal and interest
after the second year of service, and 25% of the principal and interest after the third
year of service. Appropriations in FY2002 were $1.3 million for FLRP and $10.3
million for NELRP.
Scholarships. Scholarships are awarded for tuition expenses, other
reasonable educational expenses, and reasonable living expenses incurred while
attending school for the year. In awarding grants to eligible health professions and
nursing schools, the Secretary must give priority to eligible entities based on the
proportion of graduating students going into primary care, the proportion of under-
represented minority students, and the proportion of graduates working in medically
underserved communities. Scholarship appropriations in FY2002 totaled about $46
million.



60. Fellowships for Graduate and
Professional Study
Funding Formula
The Higher Education Act of 1965 (HE), as amended, authorizes three need-
based fellowship programs: Javits Fellowships, Title VII-A, Subpart 1; Graduate
Assistance in Areas of National Need (GAANN), Title VII-A, Subpart 2; and the
Thurgood Marshall Legal Educational Opportunity Program, Title VII-A, Subpart 2.1
From FY1997 through FY2000, the Javits Fellowships were funded under GAANN,
then reverted back to separate funding in FY2001.2 Beginning in FY2000 funding
for Javits Fellowships was specifically dictated in appropriations language to provide
funds a year in advance of the academic year in which the fellowships would be3
used. Institutions must match 25% of the federal GAANN fellowship grant.
FY2002 appropriations were $46 million.
Eligibility Requirements
Javits Fellowships. Title VII-A, Subpart 1, HE, authorizes the Javits
Fellowships4 in the arts, humanities, and social sciences. Title VII-A, Subpart 1
fellowship stipends are based on financial need, and recipients are selected by panels
appointed by the Javits Program Fellowship Board. Students who are entering
graduate school for the first time or who, at the time of application, have not
completed their first year of study are eligible to apply for a Javits Fellowship.
Applicants must be accepted at or attending a post-secondary institution in one of the
selected fields of study. Twenty percent of the fellowships are awarded in the social
sciences, 20% in the arts, and 60% in the humanities.5 Fellowships are awarded for
a period of up to 4 years. Recipients are selected through a national competition


1 Several graduate fellowship programs previously authorized by the HEA no longer exist.
Funding for Title IX-A and Title IX-B programs, which provided grants to institutions of
higher education to encourage women and minority participation, ceased in FY1995. Title
IX-A grants were used to identify talented needy undergraduates and to support them during
summer research internships and seminars designed to prepare them for graduate study.
Title IX-B authorized Patricia Roberts Harris Fellowships for pursuit of graduate degrees
by under represented minorities and women. For non-competing continuation awards only,
the Patricia Roberts Harris fellowships were consolidated into Title IX-D by the last
reauthorization by the Higher Education Amendments of 1998 (P.L. 105-244). Title IX-E,
which once provided need-based Faculty Development Fellowships for under represented
groups, no longer makes new awards.
2 U.S. Department of Education, Fiscal year 2001 Justifications of Appropriation Estimates
to the Congress, Washington, GPO., 2001, v. 2, p. S-92.
3 Ibid., p. S-93.
4 Regulations for the Javits Fellowships program are found at 34 CFR Part 650 (2002). This
program is no. 84.170 in the Catalog of Federal Domestic Assistance. It is codified at

20 U.S.C. 1134-1134d.


5 U.S. Department of Education, Jacob Javits Fellowship Program Web site at
[ ht t p: / / www.ed.gov/ pr ogr ams/ i e gpsj avi t s / i ndex.ht ml ] .

based on “demonstrated achievement, financial need, and exceptional promise.”6
The program is limited to U.S. citizens and nationals, permanent residents, and
citizens of the Freely Associated States (Republic of the Marshall Islands, Republic
of Palau, and the Federated States of Micronesia).
GAANN Fellowships. Title VII-A, Subpart 2, HE, authorizes a program of7
Graduate Assistance in Areas of National Need (GAANN). Individual graduate
students are eligible to receive a fellowship from an assisted department if they
demonstrate financial need, according to criteria determined by their higher education
institutions, and have excellent academic records. The Secretary of Education
designates areas of graduate study in which there are national needs. The Secretary
makes grants to academic departments providing courses of study leading to a
graduate degree in one of these areas. In addition, institutions must assure that they
will seek talented students from backgrounds traditionally under-represented in these
fields of graduate study. For GAANN awards for academic year 2003-04, the
Secretary has designated the following areas of national need: biology, chemistry,
computer and information sciences, engineering, geological and related sciences,
mathematics, and physics.8
Thurgood Marshall Fellowships. Title VII-A, Subpart 3, HE authorizes
the Thurgood Marshall Legal Educational Opportunity Program to assist minority,
low-income or disadvantaged college graduates to prepare for and complete law
school. The Title VII-A, Subpart 3, program is administered by the Council on Legal
Education Opportunity (CLEO) through a single grant award by the Secretary of
Education for a period of not less than 5 years.9 CLEO, a nonprofit project of the
American Bar Association Fund for Justice and Education, began assisting
disadvantaged students in 1968.10
Benefit Levels
Javits Fellowships. Each Javits Fellowship consists of an institutional
payment covering tuition and fees and a student stipend for living expenses. The
amount of the stipend is based on either the student’s financial need or the level of
support provided by the National Science Foundation’s Graduate Research
Fellowship program, whichever is less. In FY2002, 57 new fellowship awards were
made.


6 HEA, as amended, Section 701 (a).
7 Regulations for the Graduate Assistance in Areas of National Need program are found at
34 CFR Part 648 (2002). This program is no. 84.200 in the Catalog of Federal Domestic
Assistance. It is codified at 20 U.S.C. 1135-1135ee.
8 Federal Register, v. 67, October 1, 2002, pp. 61605-06.
9 Beginning in 1974, funding for the single grant to CLEO was made under the Legal
Training for the Disadvantaged and Assistance for Training in the Legal Profession
programs, precursors to the Thurgood Marshall Educational Opportunity Program.
10 American Bar Association ABA network Web site at
[ h t t p : / / www.a b a n e t .or g/ c l e o / wha t i s .ht ml ] .

GAANN Fellowships. The GAANN fellowships are provided under 3-year
grants to academic programs. Grants for a fiscal year are for not less than $100,000
and not more than $750,000. Students may receive the fellowships for up to 5 years
of study. Students receive a stipend to cover living expenses, while an institutional
payment covers the fellow’s tuition, fees, and other expenses. The amount of the
student stipend is based on either the student’s financial need or the level of support
provided by National Science Foundation’s Graduate Research Fellowship program,
whichever is less. The institutional 25% match of the federal grant can be used for
additional fellowships and to meet other costs not covered by the institutional
payment. In FY2002, no new fellowship awards were made, but in FY2001, 86 new
awards were made.
Thurgood Marshall Fellowships. The Thurgood Marshall Fellows receive
counseling for study at accredited law schools, preparation on selecting and applying
to a law school, and financial assistance. A number of services are available to
Thurgood Marshall Fellows for meeting the competition of law school and to
improve the student’s retention and success in law school including: a 6-week pre-
law summer institute for at law schools throughout the country; pre-law mentoring
programs with law school faculty, bar association members and judges; tutoring,
academic counseling, midyear seminars, and preparation for bar examinations.
Thurgood Marshall Fellows may also be paid a stipend for participation in summer
institutes and midyear seminars. In FY2002, the single grant awarded to CLEO
provided support services for an estimated 350-450 Thurgood Marshall fellows.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues and CRS Report RS21436, Graduate
Fellowship Programs Under Title VII of the Higher Education Act (HE):
Background and Reauthorization.



61. Migrant High School Equivalency Program
(HEP)
Funding Formula
The Department of Education makes discretionary grants to colleges and
universities and other public or private nonprofit agencies cooperating with such1
schools to help migrant students obtain a high school equivalency certificate. Most
grants are for a 5-year period. FY2002 appropriations were $23 million.
Eligibility Requirement2
To be served, students or their parents must have spent a minimum of 75 days
during the past 24 months in migrant and seasonal farmwork; alternatively, they must
be eligible to participate (or must have participated within the last 2 years) in the
Title 1 Migrant Education program (see program no. 56) or the Workforce
Investment Act program for migrant and seasonal farmworkers. They must be at
least 16 years of age (or beyond the age of compulsory school attendance in the state
in which they reside), not enrolled in school, and not have a high school diploma or
its equivalent.3
Benefit Levels
HEP projects typically provide instruction in reading, writing, mathematics, and
other subjects tested by equivalency examinations; career-oriented work-study
courses; tutoring; and personal and academic counseling. In addition, they provide
financial assistance, housing, and various support services. In the 2002-2003 school
year, HEP served about 8,600 students at 23 institutions. Average federal
contribution per student was approximately $2,674.


1 This migrant education program is authorized under Title IV, Section 418A of the Higher
Education Act (HEA), as amended.
2 Regulations for this program are at 34 C.F.R. Part 206 (2002). This program is no. 84.141
in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070d-2(a).
3 Regulations define migrant farmworkers as seasonal farmworkers whose employment
requires travel precluding them from returning to their domicile (permanent place of
residence) within the same day. Seasonal farmworkers are defined as persons who, within
the past 24 months, were employed at least 75 days in farmwork and whose primary
employment was in farmwork on a temporary or seasonal basis.

62. College Assistance Migrant Program (CAMP)


Funding Formula
The Department of Education makes discretionary grants to colleges and
universities and other public or private nonprofit agencies cooperating with such
schools to help migrant students complete their first year in college.1 Most grants are
for a 5-year period. FY2002 appropriations were $15 million.
Eligibility Requirements2
To be served, students or their parents must have spent a minimum of 75 days
during the past 24 months in migrant and seasonal farmwork; alternatively, they must
be eligible to participate in the Title 1 Migrant Education program or the WIA
program for migrant and seasonal farmworkers. Students must be admitted to or
enrolled as first year students at a participating college or university.3
Benefit Levels
CAMP projects typically provide tuition and stipends for room and board and
personal expenses; they also provide academic and personal counseling, tutoring in
basic skills and other subject areas, and various support services. In the 2002-2003
school year, CAMP served about 2,500 students at twelve institutions. Average
federal contribution per student was approximately $6,500.
Note: For more information, see CRS Report IB10097, The Higher Education
Act: Reauthorization Status and Issues.


1 This migrant education program is authorized under Title IV, Section 418A of the Higher
Education Act (HEA), as amended.
2 Regulations for this program are at 34 CFR Part 206 (2002). This program is no. 84.149
in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070d-2(a).
3 Regulations define migrant farmworkers as seasonal farmworkers whose employment
requires travel precluding them from returning to their domicile (permanent place of
residence) within the same day. Seasonal farmworkers are defined as persons who, within
the past 24 months, were employed at least 75 days in farmwork and whose primary
employment was in farmwork on a temporary or seasonal basis.

63. Close Up Fellowships
Note: This program, formerly called Ellender Fellowships ( Title X, Part G of the
Elementary and Secondary Education Act of 1965) has been funded even though
recent federal budgets have requested no appropriation for it.1 Close Up Fellowships
now are authorized by Title I, Part E, of the Elementary and Secondary Education Act
(ESEA), as amended by the No Child Left Behind Act (P.L. 107-10). This entry
summarizes Ellender Fellowships and Close Up Fellowships rules under both laws.
Funding Formula and Eligibility Requirements
Ellender Fellowships. This program provided fellowships to economically
disadvantaged students, secondary school teachers, economically disadvantaged older
Americans, and recent immigrants to spend 1 week in Washington, D.C. attending
seminars on government and current events and meeting with leaders of the Federal
Government. “Older American” was defined as an individual at least 55 years old.
Economic disadvantage was not defined in the law, and the program had no2
regulations. The Close Up Foundation administered the program.
Close Up Fellowships. The Close Up Foundation continues to administer
the program by providing federal funding for fellowships to middle and secondary
school economically disadvantaged students, their teachers, and recent immigrants
to spend one week in Washington, D.C. attending seminars on government and
current events and meeting with leaders of the Federal Government.
Appropriations for FY2002 Close Up Fellowships were $1.5 million.
Benefit Levels
Fellowships cover the costs of room, board, tuition, administration, and
insurance for a week-long series of meetings, tours, and seminars about public affairs
in Washington, D.C., sponsored by the Close Up Foundation. Students and their
teachers meet with officials from the three branches of the federal government and
discuss pending issues. In the 2002-2003 school year, 1,334 students, 1,246 teachers,
and 250 new American immigrants received fellowships, at an overall average cost
of $1,231 for students and $1,331 for teachers (federal share of $694 for students and
$352 for teachers) and $1,450 for new American immigrants (federal share of $540).


1 In justifications for the FY2000 budget, the Clinton Administration said that “direct
support of this program is not an appropriate federal responsibility.” In its first budget (for
FY2002), the Bush Administration requested zero funds for Ellender fellowships. However,
Congress voted on December 20, 2001; to appropriate $1.5 million to the Close Up
Foundation for FY2002 (H.R. 3061).
2 The Close Up foundation is headquartered in Alexandria, VA. According to its Web site,
it is the nation’s largest nonprofit, nonpartisan citizenship education program. Founded in
1970, it promotes “close up” experience in government through programs in DC and in state
and local government. See [http://www.closeup.org/].

Services



64. Child Care and Development Block Grant
Funding Formula
The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) created the
Child Care and Development Block Grant (CCDBG), which provides 100% federally
paid discretionary funds to states and other entities.3 CCDBG also receives
entitlement funds, some of which require state matching funds (see below). Federal
outlays in FY2002 — from discretionary funds, entitlement funds, and amounts
transferred to CCDBG from the block grant for Temporary Assistance for Needy
Families (TANF) — totaled $6.4 billion.
Discretionary Funds. Of discretionary CCDBG funds, one-half of 1% is
reserved for allotment to the territories, and 1% to 2% ( determined by the Secretary
of Health and Human Services) is reserved for payments to Indian tribes and tribal
organizations. Remaining discretionary funds are allocated among states, based on
each state’s proportion of all children under age 5, its proportion of all children who
receive free or reduced price school lunches, and its per capita income relative to that
of the Nation. Through FY1995, states were required to reserve 25% of their
allocation to improve child care quality and to increase availability of early childhood
development programs and before- and after-school services. Effective in FY1996,
states could spend no more than 5% of their allotments for administrative costs, and
no less than 4% on efforts to improve the quality and availability of child care.
Entitlement Funds. Before October 1, 1997, states also received federal
funds for child care services on behalf of current, former, and potential recipients of
Aid to Families with Dependent Children (AFDC). For these funds states had to
provide matching funds. The 1996 welfare reform law repealed the AFDC-related
child care programs and replaced them with entitlement funding to states for child
care services. The law appropriated $13.9 billion in entitlement child care funding
for 6 years, FY1997-FY2002, with annual amounts of $2.1 billion for FY1998, $2.2
billion for FY1999, $2.4 billion for FY2000, and $2.6 billion and $2.7 billion for
FY2001 and FY2002, respectively. Funding for FY2003 was extended on a quarterly
basis at the FY2002 rate of $2.717 billion annually. These amounts are provided
under Title IV-A of the Social Security Act (the part governing TANF), but states are
required to transfer them to the same agency that administers the CCDBG and to
spend them in accordance with CCDBG rules. The combined discretionary and
entitlement funding streams are referred to by HHS and federal regulations as the
Child Care and Development Fund (CCDF).


3 For FY1991, FY1992, and FY1993, ceilings were imposed ($750 million, $825 million,
and $925 million, respectively); for FY1994 and FY1995, unlimited funds were authorized.
In 1996, CCDBG was reauthorized in welfare reform legislation (P.L. 104-193), with a
yearly authorization ceiling of $1 billion in discretionary funds for FY1996-FY2002.
However, appropriations for FY2000 and FY2001 (at $1.2 billion and $2 billion,
respectively) exceeded the ceiling. Congress appropriated $2.1 billion in discretionary
funds for FY2003 (the same level as FY2002), but did not pass a reauthorization bill.

Of entitlement child care funding, between 1% and 2% is reserved for payments
to Indian tribes and tribal organizations. The rest is provided to states in two
components. First, each state receives a fixed amount each year, equal to the
maximum annual amount received by the state under the repealed AFDC child care
programs in FY1994, FY1995, or in FY1992-FY1994, on average. This amount is
estimated to equal $1.2 billion each year; no state match is required to receive these
funds. Second, remaining entitlement funds are allocated to states according to each
state’s share of children under age 13. States must achieve maintenance-of-effort
spending targets to qualify for these funds; they also must provide matching funds
for them, at the Medicaid match rate, which varies among states and is related
inversely to state per capita income (see program no. 1). As with discretionary
CCDBG funding, states may spend no more than 5% of their entitlement funds for
administrative costs, and no less than 4% on activities to improve the quality and
availability of child care. Note: States are authorized to transfer to the CCDBG up
to 30% of their TANF block grants, which total $16.5 billion annually (P.L. 105-33).
Eligibility Requirements4
To be eligible for subsidized child care, a child must (1) be less than 13 years5
old (or, at option of the grantee, under 18, if disabled or under court supervision),
and (2) live with at least one parent who is working or attending a job training or
educational program (unless the child is receiving protective services or in need of
them). In addition, the income of the child’s family cannot exceed 85% of the state
median for a family of the same size (before FY1996, the income ceiling was 75%
of the state median). The law requires that states give priority to children in very
low-income families and to those with special needs. According to statute, states
must spend 70% of entitlement funds on welfare recipients working toward self-
sufficiency or families at risk of welfare dependency. However, because all families
with income below 85% of the state median can be classified as “at risk,” the 70%
targeting rule (for welfare and at-risk families) does not necessarily mean that welfare
families must be served. In theory, all funds may be used for low-income, non-
welfare, working families. However, state plans indicate that many states guarantee
child care to welfare families.
Benefit Levels
For subsidized child care services, states must establish a sliding fee schedule
that requires cost sharing unless the family’s income is below the poverty level.
Parents must be given the option to obtain care from a provider who is paid directly
by the state, through a grant or contract, or through certificates that are payable for
child care from an eligible provider of the parents’ choice. Child care services may
include center-based care, group home care, family care, and “in-home” care.


4 Regulations governing child care and development block grants to states are found in 45
C.F.R. Parts 98 and 99 (2002). This program is no. 93.575 in the Catalog of Federal
Domestic Assistance. It is codified at 42 U.S.C. 618, 9658.
5 Or under age 19, if the state extends TANF eligibility to a “child” to this age.

Note: See also CRS Report RL30785, The Child Care and Development Block
Grant: Background and Funding and CRS Report RL31817, Child Care Issues inth
the 108 Congress.



65. TANF Services
Funding Formula
See TANF block grant entry (program no. 12).
In FY2002, expenditures for TANF-funded services (other than child care,
shown separately in this report) were estimated at $6.1 billion, $4.4 billion (72%)
from federal funds and $1.7 billion from state-local funds. This excludes TANF
funds transferred by states to the Social Services Block grant.
Eligibility Requirements1
TANF law permits states to use block grant funds to provide services to
recipient families and to various groups of other “needy” families, so long as the
services can be expected to lead toward ending the dependence of needy parents on
government benefits or enabling needy families to care for children at home, two of
the program’s goals. States decide what income limits to set for specific services,
and they may tailor services to the circumstances of individual families. States also
may provide services to non-needy families if they are directed at the goals of
preventing and reducing out-of-wedlock pregnancies or encouraging the formation
and maintenance of two-parent families. In their TANF plans, most states said they
provide support services to recipient families plus three categories of needy families
not enrolled in cash aid: former cash recipient families, families at risk of becoming
eligible for cash aid, and unemployed or underemployed non-custodial parents.
Generally income limits range from 150% to 250% of federal poverty guidelines (in
2003, from $22,890 to $38,150 for a family of three). However, some states have
higher flat annual income limits for some services. For example, Colorado sets an
outer limit of $75,000 for any TANF-funded service.
Benefit Levels
Transportation subsidies, parental skill building services, home energy aid,
housing aid, rehabilitation services (mental health/substance abuse counseling and
treatment), and domestic violence counseling are examples of benefits/services
provided (other than child care, the most frequently mentioned service). Examples
of TANF-funded services that impose no income test include teen pregnancy
prevention programs, responsible parenthood counseling, abstinence programs, and
family planning services. A broad category of TANF expenditures is for services
authorized under pre-TANF law (such as services for children in the juvenile justice
system and certain child welfare and foster care services).
Note: For more information, see CRS Report RL30695, Welfare Reform: State
Programs of Temporary Assistance for Needy Families.


1 Eligibility criteria for activities funded with state maintenance-of-effort funds must be
reported (45 CFR §265.9(c)(6)(2002)). The TANF block grant is program no. 93.558 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 601 et seq.

66. Social Services Block Grant (Title XX)


Funding Formula
The Social Security Act (Title XX) provides 100% federal funding 1 to states for
social services up to a maximum ceiling level ($1.7 billion in FY2001-2003, lowered
from $2.38 billion in FY2000). Funds are distributed among states on the basis of
population. The FY2000 appropriation of $1.775 billion was below the $2.38 billion
ceiling, and appropriations in FY2001 and FY2002 dropped to $1.725 billion and
$1.7 billion respectively. Funding for FY2003 was maintained at $1.7 billion. Note:
In FY1997-FY2003 states had authority to transfer to the social services block grant
(SSBG) up to 10% of their TANF block grants, which total $16.5 billion annually2
(P.L. 105-33). Transfers of TANF funds to SSBG totaled $1.1 billion in FY1998,
$1.3 billion in FY1999, $1.1 billion in FY2000, $920 million in FY2001, and $1
billion (or 6% of the TANF grant) in FY2002. The authorized transfer amount was
scheduled to decline to 4.25% on October 1, 2001 under P.L. 105-178, but more
recent legislation maintained the 10% transfer limit for FY2002 and 2003.
Eligibility Requirements3
States are free to establish their own eligibility criteria for Title XX social
services. They decide what groups to serve and what fees, if any, to charge.
Benefit Levels
State expenditure reports submitted to HHS provide national data on how states
spent SSBG funds in FY2001. The reporting form includes a list of 29 eligible
service categories in which funds may be spent. The list includes categories such as
child care, home-delivered meals for the elderly, foster care, housing services, and
family planning services. In FY2001, for the country as a whole, the services
receiving the greatest percentage of spending were: child protective services
(11.8%), foster care services for children (10.1%), special services for the disabled
(8.3%), and child day care (7.6%). For FY2000 the corresponding shares were

10.8%, 10.7%, 7.8%, and 5.9%, respectively.


1 P.L. 97-35 ended requirements for state matching of funds and established an FY1982
funding ceiling of $2.4 billion, which has since been set at $1.7 billion. Estimates of any
recent state supplementary funding are not available. (A voluntary survey conducted by the
American Public Welfare Association, forerunner of the American Public Human Services
Association, indicated that state-local spending of 31 states on social services in FY1990
equaled 156% of their Title XX block grant allotments. Previous editions of this report
used this percentage to estimate state social service funding.)
2 TANF funds transferred to Title XX must be spent only on children and families with
income below 200% of the poverty income guideline.
3 Regulations governing social services block grants to states are found in 45 C.F.R. Part 96,
Subpart G (2002). This program is no. 93.667 in the Catalog of Federal Domestic
Assistance. It is codified at 42 U.S.C. 1397-1397f.

Note: For more details about SSBG, see CRS Report 94-953, Social Services
Block Grants (Title XX of the Social Security Act).



67. TANF Child Care
Funding Formula
See TANF block grant entry (program no. 12).
In FY2002, expenditures for TANF child care were estimated at $2.3 billion,
$1.6 billion (68%) from federal funds and $0.750 billion from state-local funds. This
excludes TANF funds transferred to the Child Care and Development Block Grant
(CCDBG) — program no. 64. It also excludes TANF state maintenance-of-effort
expenditures that could also count toward state spending required to qualify for
entitlement matching funds under the CCDBG.1
Eligibility Requirements2
TANF-funded child care consists of care for children in TANF families, former
TANF families, and other low-income families. The law permits states to use block
grant funds to provide child care to recipient families and to various groups of
“needy” families not enrolled in the cash program, so long as the child care can be
expected to lead toward ending the dependence of needy parents on government
benefits by promoting work or job preparation, one of the program’s goals. States
decide what income limits to set for TANF-funded child care (i.e., how “needy” the
parents must be).
In their TANF plans, most states said they provide free or subsidized child care
to three groups of needy families: recipient families who needed it to work, study, or
undergo training, former cash recipient families (for a transition period), and families
“at risk” of becoming income-eligible for cash aid. Generally income limits for
families not enrolled in the cash program range from 150% to 250% of federal
poverty guidelines (in 2003, from $22,890 to $38,150 for a family of three).
However, some states use a relative standard (a percentage of state median income)
as the income test for families not in the cash program. For instance, Connecticut’s
initial income limit is 50% of the state’s median income, adjusted for family size;
eligibility ends when income reaches 75% of the median. Wisconsin provides
subsidized child care for all needy Wisconsin families: for initial eligibility, 185%
of the federal poverty guideline, for continued eligibility, 200%. Massachusetts
provides child care to those with income below 85% of the state median income.
Illinois sets the income limit at 200% of the poverty guideline


1 Required state spending to qualify for entitlement matching funds under CCDBG does not
itself count toward the maintenance-of-effort (MOE) state spending requirement for the
TANF block grant.
2 Eligibility criteria for families served in programs/activities for which the state claims
expenditures countable toward required state spending (maintenance-of-effort requirement)
must be shown in annual state reports unless the information is provided in the state TANF
plan. 45 CFR Part 265.9(c)(6) (2002). The TANF block grant is program no. 93.558 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 601 et seq.

Many states set the usual age cutoff for TANF-funded care at 13 years, the
general limit of the Child Care and Development Block Grant (CCDBG), but the
TANF plan of California promises child care only for children under age 10 (older,
if funds are available).
TANF repealed a requirement that states “guarantee” child care needed to
enable welfare parents to work or study. However, TANF provides that single
parents who receive TANF assistance cannot be punished for refusal to perform
required work if they are unable to obtain needed care for a child under age 6 for a
specified reason.
Benefit Levels
States decide what charges, if any, to impose for TANF child care and for how
long to offer “transitional” child care to families who have left the cash welfare rolls.
They also decide whether to provide care directly or to issue vouchers for care.
Connecticut limits child care subsidies to $325 per child monthly ($425 for a child
with special needs). A few states reimburse families for child care expenses by
adding the amount to the cash benefit (i.e., by disregarding income used for child
care costs when calculating benefits). Some states use the same free or co-pay rules
as those adopted by the state for the CCDBG; state TANF plans indicate that Illinois,
Michigan, and South Carolina do so.



68. Homeless Assistance Grants
Funding Formula
Under a consolidated budget account for Homeless Assistance Grants,1 the
Department of Housing and Urban Development (HUD) provides funding for four
programs aiding the homeless that are authorized under the Stewart B. McKinney
Homeless Assistance Act (P.L. 100-77). They are the Emergency Shelter Grants
program, Section 8 Moderate Rehabilitation Assistance for Single-Room Occupancy
(SRO) Dwellings, the Shelter Plus Care program, and the Supportive Housing
program.
Federal funding for the Emergency Shelter Grants program is provided through
formula grants to states, cities, and counties in accordance with the distribution
formula used for Community Development Block Grants (CDBG). Money for the
other programs is awarded through competitive grants to states, local governments,
nonprofit organizations, and public housing authorities.
Grantees must match federal dollars (except in the case of the SRO program).
Under the Emergency Shelter Grants program, a one-for-one match is required
(although the first $100,000 granted to a state need not be matched); under the
Shelter Plus Care program, grantees must match federal funds provided for shelter
with equal money for services; and under the Supportive Housing program, dollar-
for-dollar cash matching is required for grants involving acquisition, rehabilitation,
or new construction of housing units. HUD homeless assistance funds also are used
for “Supportive Services Only” projects that are linked to housing provided by other
organizations. The 2002 Appropriations Act required a 25% match for all HUD-
funded services. Outlays for the Homeless Assistance Grants program in 2002 were
$1 billion.
Eligibility Requirements
Under a “continuum of care” strategy developed by HUD, grantees generally
must develop and maintain (or participate in) consolidated plans for the integration
of programs and services for the homeless, including the four programs noted above.
Grantees under the Emergency Shelter Grants program (governmental entities)
receive their grants by formula. In the other programs, grantees (both governmental
and nongovernmental agencies) must compete for HUD approval of their grant
proposal. Individual eligibility for assistance from any Homeless Assistance Grant
project generally depends on decisions made by the local sponsor. However, some
programs restrict beneficiary eligibility to specific categories. The Shelter Plus Care


1 The programs making up Homeless Assistance Grants appear in the Catalog of Federal
Domestic Assistance at 14.231, 14.235, 14.238, and 14.249. In the Code of Federal
Regulations, they are found at 24 CFR Parts 576, 582, and 583 (2003). The Stewart B.
McKinney Homeless Assistance Act is codified at 42 U.S.C. 11371-11378.

program is limited to homeless persons with very low incomes2 who have disabilities,
chronic substance abuse problems, or AIDS and related diseases. The SRO program
is limited to single homeless persons. Permanent housing under the Supportive
Housing program is available only to the disabled.
Benefit Levels
Homeless Assistance grantees can use funding for a range of activities on behalf
of homeless persons. Under the Emergency Shelter Grants program, activities
include renovation, major rehabilitation, or conversion of buildings for use as
emergency shelters or transitional housing for the homeless, essential social services,
operating costs of facilities for the homeless, and initiatives to prevent homelessness.
Supportive Housing program money may be used to assist homeless persons in
transition to independent living through provision of transitional housing, follow-up
services, permanent housing (as well as services) for those with disabilities,
supportive services to those in housing supported by other programs, “alternative”
housing for the long-term homeless, and “safe havens” for homeless individuals. The
Shelter Plus Care and SRO programs provide rental assistance.
Note: For more details about homeless assistance grants, along with other
targeted homelessness programs sponsored by the federal government, see CRS
Report RL30442, Homelessness: Recent Statistics and Targeted Federal Programs.


2 Very-low income is defined as income below 50% of the area median, adjusted for family
size. A higher income limit, 80% of the area median, may be used for the Single Room
Occupancy (SRO) component of this program.

69. Community Services Block Grant1


Funding Formula
The Community Services Block Grant Act (CSBG)2 authorizes 100% federally
funded block grants to states for community-based antipoverty activities. State
allocations are based on the percentage of funds received in the state in FY1981 from
the former Community Services Administration (CSA) under Section 221 of the
Economic Opportunity Act. Of total appropriations, half of 1% is reserved for
allotment to the territories, and the Secretary of Health and Human Services also
must reserve 1.5% for training, technical assistance, planning, evaluation and data
collection. For FY2003, $650 million was appropriated for the block grant, plus
$89.4 million for several smaller related activities, such as community economic
development, job opportunities for low-income individuals (JOLI), grants for rural
community facilities, the national youth sports program, community food and
nutrition activities and individual development accounts.3
Eligibility Requirements4
In general, beneficiaries of programs funded by CSBG must have incomes no
higher than the federal poverty income guidelines. For FY2003, the guidelines were
$18,400 for a family of four and $8,980 for a single person in the 48 contiguous
states.5 Amendments enacted in 1984 allow states to increase eligibility criteria to
125% of the poverty guidelines “whenever the state determines that it serves the
objectives of the block grant.” The program has no rules regarding assets.
Benefit Levels
Programs funded by the Community Services Block Grant operate a wide
variety of antipoverty activities, including local program coordination, nutrition,
emergency services, and employment services. CSBG grantees also receive funds
from many other sources (such as Head Start, weatherization assistance, low-income
home energy assistance, emergency food and shelter programs, employment and
training, and legal services) to operate antipoverty programs,


1 Beginning in FY1982, under terms of P.L. 97-35 (Section 672), this program replaced the
formerly independent Community Services Administration (CSA), which had been
established in 1964 as the Office of Economic Opportunity and was renamed CSA in 1975.
2 This block grant is codified at 42 U.S.C. 9901 et seq.
3 Amounts do not reflect 0.65% rescission included in FY2003 appropriations law.
4 Regulations governing community services block grants (scope and audit requirements)
are found at 45 CFR Part 96, Subpart I (2002). It is program no. 93.569 in the Catalog of
Federal Domestic Assistance.
5 Poverty income guidelines are higher in Alaska and Hawaii.

Note: For more details about the Community Services Block Grant, see CRS
Report RS20124, Community Services Block Grants: Background and Funding.



70. Legal Services (LSC)


Funding Formula
The law provides 100% federal funding. Funds are allocated among local legal
services programs on the basis of state shares of the poverty population. The FY2003
appropriation was $338.8 million,1 up $9.5 million from the FY2002 sum. The
increase was to provide supplemental funding for states that were scheduled to
receive a cut in FY2003 funding because of use of data from the 2000 Census, which
showed a shift in state poverty populations.
Eligibility Requirements2
The Legal Services Corporation Act of 19743 provides financial aid to programs
that offer legal services in noncriminal proceedings to low-income persons. The law
makes eligible “any person financially unable to afford legal assistance” and says the
Corporation should take into account not only income, but liquid assets,4 fixed debts,
cost of living, and other factors in determining an individual’s capacity to pay for a
lawyer. The law requires the Corporation to set national maximum income limits and
to establish guidelines that will insure preference for those least able to afford an
attorney. Regulations of the Corporation have established the maximum income
limit for eligibility at 125% of the federal poverty income guidelines. Thus, the
income limit was $23,000 for a family of four, and $11,225 for a single individual
in calendar year 2003 in the 48 contiguous states, the District of Columbia, and the
outlying areas. Higher limits apply in Alaska and Hawaii. Regulations permit
exceptions to the income limit in specified circumstances. For example, the
regulations permit legal services on behalf of a person whose income falls between
125% and 150% of the poverty line if the purpose is to obtain benefits from a
“governmental program for the poor,” or if warranted by certain factors such as the
individual’s current income prospects, medical expenses, fixed debts and obligations,
child care and other work-related expenses, expenses associated with age or
infirmity, and other factors related to financial inability to afford legal assistance.
Benefit Levels
Beneficiaries receive legal aid in noncriminal proceedings. Most cases concern
these areas of law: family, employment, consumer, housing, civil rights, public


1 A 0.65% across-the-board rescission reduced the Legal Services Corporation
appropriation for FY2003 to $336.6 million.
2 Regulations governing eligibility for legal services are found at 45 CFR Part 1611 (2002).
The Legal Services Corporation Act is codified at 42 U.S.C. at 2996 et seq.
3 Title X of the Economic Opportunity Act, as added by P.L. 93-355.
4 Regulations require the governing bodies of those who receive funds from the Legal
Services Corporation to establish “specific and reasonable” asset ceilings each year and, in
doing so, to give special consideration to the legal needs of the elderly, institutionalized, and
handicapped.

benefit programs such as cash welfare, Social Security, Supplemental Security
Income (SSI), workers’ compensation, unemployment compensation, Medicare, and
Medicaid. The Legal Services Corporation’s stated goal is to provide “minimum
access to legal services for all poor persons,” defined as the equivalent of two
attorneys for every 10,000 poor persons; however, that goal was achieved only once,
in FY1980. Corporation grantees are not allowed to give legal aid in criminal
proceedings nor in most civil cases that are fee-generating in nature, such as accident
damage suits. Additional restrictions include prohibitions against lobbying activities,
class action lawsuits, litigation related to abortion, and representation of prisoners.
On February 28, 2001, the U.S. Supreme Court invalidated a restriction that
Congress had imposed on LSC in every annual appropriations act since 1996. This
was a prohibition against LSC funding of any organization that represented clients
in an effort to amend or otherwise challenge existing welfare law. By a 5-4 vote, the
Court found that this restriction violated the First Amendment (freedom of speech).
The Court held that restricting LSC attorneys in advising their clients and in
presenting arguments and analyses to the courts distorted the legal system by altering
the attorneys’ traditional role (Legal Services Corporation v. Velazquez, 121 S.Ct.

1043 [2001]).


Note: For more details about this program, see CRS Report 95-178, Legal Services
Corporation: Basic Facts and Current Status.



71. Social Services for Refugees, Asylees,


Other Humanitarian Cases
Funding Formula
The Immigration and Nationality Act as amended by the Refugee Act of 1980
(P.L. 96-212) authorizes 100% federally funded social services to assist refugees and
asylees become self-sufficient. Other legislation authorizes similar assistance for
certain Cuban and Haitians entrants1 and for certain Amerasians.2 The refugee,
asylee and entrant social services funds are distributed among the states under
formulas that usually take into account each state’s proportion of persons in eligible
groups who entered the United States within the previous 36 months. Social services
for these groups have been authorized through FY1999. The Department of Health
and Human Service’s Office of Refugee Resettlement (ORR) administers this
program. For social services, ORR expenditures amounted to $144 million in3
FY2000, $144 million in FY2001, and $159 million in FY2002.
Eligibility Requirements4
A person must (a) have been admitted to the United States as a refugee or asylee
under the Immigration and Nationality Act or have been paroled as a refugee or
asylee under the Act, (b) be a Cuban or Haitian paroled into the United States
between April 15 and October 20, 1980, and designated a “Cuban/Haitian entrant,”
or be a Cuban or Haitian national paroled into the United States after October 10,
1980, (c) be a person who has an application for asylum pending or is subject to
exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
Any person mentioned above generally is eligible for social services financed
by refugee program funds, but some activities so funded may have eligibility
limitations such as age. The above groups also may benefit from services financed
under the Social Security Act (Title XX), but generally would have to meet the
state’s Title XX eligibility requirements. Exceptions to Title XX rules can be made
so that refugees, asylees and entrants can receive certain particular services such as
language training, vocational training, and employment counseling.


1 Title V of the Refugee Education Assistance Act (P.L. 96-422).
2 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
3 This amount includes $65 million in reappropriated funding to open a resettlement facility
for Kosovar refugees at Fort Dix, New Jersey.
4 Regulations for this program are found at 45 C.F.R. Parts 400-401 (2002). This program
is no. 93.566 in the Catalog of Federal Domestic Assistance.

Benefit Levels
States determine what social services are offered. All social services funded by
the refugee program are considered refugee social services rather than Title XX
social services even if they also qualify under Title XX rules.



72. Emergency Food and Shelter Program
Funding Formula
Congress has established by statute a National Board of charitable and religious
organizations to coordinate and monitor the Emergency Food and Shelter program1
(the EFS program) under the authority and direction of the Federal Emergency
Management Agency (FEMA).2 The National Board awards EFS funds to local
boards for allocation to direct service providers. To qualify for funds, a local
jurisdiction must have a relatively high rate of unemployment for the most current
12-month period with available data and a high poverty rate (as measured by the most
recent census). The National Board allocates funds to local jurisdictions on the basis
of their share of the total number of unemployed persons in all qualifying areas.
The National Board also uses a portion of EFS appropriations for state set-aside
programs, which allow state boards to select jurisdictions for funding using a formula
established by the state boards. These funds are intended to enable state boards to
target pockets of homelessness or poverty in areas not qualifying under the regular
national formula. Examples include areas that suffer sudden economic changes such
as plant closings, areas with high levels of unemployment or poverty that do not meet
the minimum level of unemployment, or jurisdictions that have documented
measures of need that are not adequately reflected in unemployment and poverty
data. Federal EFS outlays for FY2002 were $143 million.
Eligibility Requirements3
Public and private organizations that provide shelter and food to the homeless
and hungry receive federal funds under this program. Providers include food banks,
soup kitchens, shelters, and other organizations serving the homeless. The program
is designed to purchase food and shelter to supplement and expand current available
resources to target special economic, not disaster-related, emergencies. The
eligibility of direct service providers to receive EFS funds is determined by each local
board. EFS-funded assistance is available for any individual or family whom the
local board determines to be in need.


1 Congress established this program in March 1983 (P.L. 98-8) with appropriations of $50
million for FY1983 grants and continued it with annual appropriations thereafter. In 1987,
Congress authorized the program through FY1988 in the Stewart McKinney Homeless
Assistance Act (P.L. 100-77) and in 1992 reauthorized it through FY1994 (P.L. 102-550).
2 The National Board is composed of the following organizations specified in statute: United
Way of America, The Salvation Army, National Council of Churches, Catholic Charities
USA, Council of Jewish Communities, American Red Cross, and FEMA.
3 The Emergency Food and Shelter National Board program is no. 83.523 in the Catalog of
Federal Domestic Assistance.

Benefit Levels
The EFS program provides food and feeding related expenses (such as transport
of the food and food preparation and serving equipment), mass shelter, other shelter
(such as hotels and motels), rent/mortgage and /or utility assistance for 1 month only
to avert homelessness, and limited repairs to feeding and sheltering facilities.
Note: For further general information and individual county grant information,
see the EFS program homepage at [http://www.efsp.unitedway.org].



Job and Training Programs



73. TANF Work Activities
Funding Formula
See TANF block grant entry (program no. 12).
In FY2002, expenditures for TANF work programs and activities were reported
at $2.7 billion, $2.1 billion (78%) from federal funds and $ 0.6 billion from state-
local funds. (This excludes funding for the separate Welfare-to-Work grant program
administered by the Department of Labor — program no.78 in this report.)
Eligibility Requirements4
To enforce a focus on work, TANF law allows parents and other caretakers of
TANF children a maximum of 24 months of benefits without “work,” as defined by
the state. It also requires states to achieve minimum rates of participation by TANF
families in federally recognized work activities.5 States may use TANF block grant
funds to provide work programs and activities for recipient families and various
groups of “needy” families not enrolled in the cash program, so long as the services
can be expected to lead toward ending the dependence of needy parents on
government benefits by promoting job preparation and work, one of the program’s
goals. States decide eligibility limits, and they may tailor activities to the needs of
individual families. If they offer work activities to noncustodial parents of TANF
children, they may choose whether or not to include them in calculating work
participation rates of two-parent families.
Benefit Levels
TANF reporting forms require states to break down TANF expenditures on
work-related activities into three categories: work subsidies, education and training,
and other work activities/expenses. The FY2002 composition of spending from6
FY2002 TANF grants: Education and training, 14.8%; work subsidies, 2.7%, and
other work activities/expenses, 82.5%. Nineteen states reported making outlays for
work subsidies and 34, for education and training. In a guidance for use of TANF
funds (Helping Families Achieve Self-Sufficiency), HHS lists numerous ways to
support work activities, including job search and placement, job skills training, work
experience, job retention services and counseling, and specialized training for
supervisors.


4 Eligibility criteria for families served by programs/activities for which the state claims
expenditures countable toward required state spending (maintenance-of-effort requirement)
must be shown in annual state reports unless the information is provided in the state TANF
plan. 45 CFR §265.9(c)(6)(2002). The TANF block grant is program no. 93.558 in the
Catalog of Federal Domestic Assistance.
5 For details of work rules and the list of countable work activities, see Work/conduct
requirements under program no. 12.
6 FY2002 spending from cumulative FY1997-FY2002 TANF grants showed a negative
total for work subsidies because of accounting revisions made for earlier years.

Note: For more information, see CRS Report RL30767, Welfare Reform: Work
Activities and Sanctions in State TANF Programs.



74. Job Corps
Funding Formula
The Job Corps is 100% federally funded. The Job Corps is authorized by Title
I, Subtitle C of the Workforce Investment Act (WIA).1 FY2002 Job Corps
appropriations were $1.5 billion.
Eligibility Requirements2
Those eligible for the Job Corps are “low-income” youths aged 16-24 (only 20%
of enrolles may be older than 21) who have one or more of the following
characteristics: deficient in basic reading, writing, or computing skills; a school
dropout; homeless, a runaway, or a foster child for whom state or local government
payments are made; a parent; in need of additional education, vocational training, or
intensive counseling and or help to accomplish regular schoolwork or to secure and
hold employment.
WIA defines a low-income person as one who (a) receives cash welfare or is a
member of a family that receives cash welfare, (b) receives food stamps or is a
member of family that was eligible to receive food stamps in the previous 6 months;
(c) had family income3 for the preceding 6 months no higher than the federal poverty
guideline (a limit in 2003 throughout the 48 contiguous states and the District of
Columbia4 of $ 18,400 for a family of four persons and $8,980 for a single person)
or no higher than 70% of the lower living standard income level (LLSIL) (a ceiling
that ranged, effective on May 30, 2003, for a four-person family from $18,270 in
non-metropolitan areas of the South to $22,230 in metropolitan areas of the Northeast
— and higher in Alaska, Hawaii and Guam); (d) is homeless, as defined in the
Stewart McKinney Homeless Assistance Act; (e) is a foster child on behalf of whom
state or local government payments are made; or (f) is a disabled person whose own
income meets the program limit, but whose family income exceeds it.
The Job Corps has no asset rules.


1 Until July 1, 2000, the Job Corps was authorized by the Job Training Partnership Act
(JTPA) (Title IV-B). Effective on that date, JTPA was replaced by the Workforce
Investment Act (WIA), P.L. 105-220. The transition period for implementation of WIA was
from July 1,1999 to June 30, 2000.
2 Regulations for Job Corps are found at 20 CFR Part 670 (2002).
3 Excluded from counted family income are unemployment compensation, child support
payments, cash welfare benefits, and social security benefits.
4 Poverty guidelines are 25% higher in AK, 15% higher in HI.

Benefit Levels
Job Corps enrollees are served primarily in residential centers where they
receive basic education, vocational skills training, counseling, work experience, and
health services. Enrollees receive personal allowances while participating in the
program and readjustment allowances upon successful completion of the program.
Job Corps centers are required to provide child day care, to the extent practicable, at
or near the centers.
WIA forbids needs-tested programs to take its allowances, earnings, and
payments into account in determining eligibility for benefits and their amount.5
Enrollees may remain in the Corps for up to 2 years; the average stay is about

7 months.


Note: For further information about Job Corps see CRS Report 97-536, Job
Training Under the Workforce Investment Act: An overview; and CRS Report
RS20244, The Workforce Investment Act: Training Programs under Title I at A
Glance, CRS Report RS21484: Workforce Investment Act of 1998 (WIA):
Reauthorization of Title I Job Training Programs. For further information about Job
Corps under JTPA see CRS Report 94-862, The Job Training Partnership Act: A
Compendium of Programs.


5 This rule is found at Section 181 of WIA. Note: Before the 1996 welfare reform law,
which repealed AFDC, states were required to count most JTPA earnings and payments in
determining AFDC eligibility and benefit amounts. However, AFDC law gave states the
option, for no more than 6 months, to disregard JTPA earnings of a child.

75. Youth Activities
Funding Formula
This program is 100% federally funded. Youth Activities are authorized under
Subtitle B, Chapter 4 of the Workforce Investment Act (WIA).1 Funds are allocated
to states on the basis of a three-part formula: state shares of the national distribution
of “substantial” unemployment (unemployment rate of at least 6.5%), “excess”
unemployment (rate above 4.5%) and the population of “disadvantaged” youth
(family income below the federal poverty guideline or 70% of the lower living
standard income level).2 FY2002 appropriations were $1 billion.
Eligibility Requirements3
Those eligible for WIA youth activities are “low-income” youths aged 14
through 21 who have one or more of the following characteristics: deficient in basic
literary skills; a school dropout; homeless, a runaway, or a foster child; pregnant or
a parent; or a youth offender, in need of additional assistance to complete an
educational program or to secure and hold employment.
WIA defines a low-income person as one who (a) receives cash welfare or is a
member of a family that receives cash welfare, (b) receives food stamps or is a
member of family who was eligible to receive food stamps in the previous 6 months;
(c) had family income4 for the preceding 6 months no higher than the federal poverty
guideline (a limit in 2003 throughout the 48 contiguous states and the District of
Columbia5 of $ 18,400 for a family of four persons and $8,980 for a single person)
or no higher than 70% of the lower living standard income level (LLSIL) (a ceiling
that ranged, effective on May 30, 2003, for a four-person family from $18,270 in
non-metropolitan areas of the South to $22,230 in metropolitan areas of the Northeast
— and higher in Alaska, Hawaii and Guam); (d) is homeless, as defined in the
Stewart McKinney Homeless Assistance Act; (e) is a foster child on behalf of whom
state or local government payments are made; or (f) is a disabled person whose own
income meets the program limit, but whose family income exceeds it.
The program has no asset rules.


1 Effective July 1, 2000, the program of youth training under Title II-C of the Job Training
Partnership Act (JTPA) was repealed. Youth Activities is a new replacement training
program for youth. The transition period for implementation of the Workforce Investment
Act (WIA) (P.L. 105-220) was July 1, 1999 to June 30, 2000.
2 The allocation formula is the same under WIA as it was under JTPA.
3 Regulations for youth activities are found at 20 CFR Part 664 (2003). This program is no.

17.259 in the Catalog of Federal Domestic Assistance.


4 Excluded from counted family income are unemployment compensation, child support
payments, cash welfare benefits, and social security benefits.
5 Poverty guidelines are 25% higher in Alaska, 15% higher in Hawaii.

Benefit Levels
WIA Program of Youth Activities. Local youth programs must include the
following 10 services: tutoring, study skills training, and instruction leading to
secondary school completion; alternative secondary school offerings; summer
employment opportunities directly linked to academic and occupational learning;
paid and unpaid work experience, including internships and job “shadowing,”
occupational skill training; leadership development opportunities, including
community service and peer-centered activities; supportive services; adult mentoring
for at least 12 months; followup services for at least 12 months, and comprehensive
guidance and counseling, including drug and alcohol abuse counseling. At least 30%
of local allotments must be used to provide activities to out-of-school youth. Local
boards may determine how much of available youth funds to use for summer and for
year-round activities, and local programs have discretion to decide what specific
services to provide to a participant.
Note: CRS Report RS20244, The Workforce Investment Act: Training Programs
under Title I at A Glance, and CRS Report RS21484: Workforce Investment Act of

1998 (WIA): Reauthorization of Title I Job Training Programs.



76. Adult Activities
Funding Formula
This program is 100% federally funded. Adult Activities are authorized under
Subtitle B, Chapter 5 of the Workforce Investment Act.1 Funds are allocated to states
on the basis of a three-part formula: state shares of the national distribution of
“substantial” unemployment (unemployment rate of at least 6.5%), “excess”
unemployment (rate above 4.5%) and the “disadvantaged” adult population (family
income below the federal poverty guideline or 70% of the lower living standard
income level).2 FY2002 appropriations were $950 million.
Eligibility Requirements3
Those eligible for adult activities are persons at least 18 years old. Any
individual may receive “core” services (for example, job search assistance). For
intensive services, such as individual career planning, and for job training, a person
must need the services in order to become employed or to obtain or retain a job that
allows for self-sufficiency. If funds are limited, priority must go to recipients of cash
welfare and other low-income persons.
The program has no asset rules.
Benefit Levels
The law requires that most services for adults be provided through One Stop
Career Centers. It authorizes three levels of services: “core” services, “intensive”
services, and training services. Available to all job seekers are core services, which
include outreach, job search and placement assistance, and labor market information.
“Intensive” services are available only to persons who have received at least one core
service and need further services to obtain or retain a job. Intensive services include
more comprehensive assessments, development of individual employment plans, and
counseling and career planning. Training services linked to job opportunities in the
community are available for persons who cannot find a job through intensive
services. Both occupational training and training in basic skills may be offered. To
promote individual choice, participants use an “individual training account” to select


1 Effective July 1, 2000, the program of adult training under Title II-A of the Job Training
Partnership Act (JTPA) was repealed. Adult Activities is a new replacement training
program for adults. The transition period for implementation of the Workforce Investment
Act (WIA) (P.L. 105-220) was July 1, 1999 to June 30, 2000. The program has no income
test but requires priority for low income persons in the event of limited funds
2 The allocation formula is the same under WIA as it was under JTPA.
3 Regulations for the repealed JTPA adult training program are found at 20 CFR Part 628,
Subpart F (2002). The WIA program of adult activities is no. 17.258 in the Catalog of
Federal Domestic Assistance. Final regulations for the WIA program (20 CFR Part 664) are
found in the Federal Register of Aug. 11, 2000, p. 49402, Apr. 1, 2003.

a program from a qualified training provider. The law also authorizes supportive
services, such as child care and transportation aid, to enable a person to participate.
WIA forbids needs-tested programs to take its allowances, earnings, and
payments into account in determining eligibility for benefits and their amount.4
However, an exception applies to food stamp recipients, aged 19 or older, who are
enrolled in on the-job-training. Food stamp rules treat the earnings of on-the-job
trainees as earned income.
Note: For more information see CRS Report RL30929, Job Training:
Characteristics of Workforce Training Participants. For more historical information
about the adult and youth training programs under JTPA, see CRS Report 94-862,
The Job Training Partnership Act: A Compendium of Programs. For more
information about the programs under WIA see CRS Report 97-536, Job Training
Under the Workforce Investment Act: An Overview, CRS Report RS20244, The
Workforce Investment Act: Training Programs under Title I at A Glance.


4 This rule is found at Section 181 of WIA. Note: Before the 1996 welfare reform law,
which repealed AFDC, states were required to count JTPA payments to an adult in
determining AFDC eligibility and benefit amounts.

77. Senior Community Service Employment
Program (SCSEP)
Funding Formula
The law provides 90% federal funding (up to 100% in disaster or economically
depressed areas) for this program. The non-federal share can be cash or in kind. The
state allocation formula has three elements: a hold harmless factor (the 2000 level
of funding); a state’s relative share of persons aged 55 years and older; and a state’s
relative per capita income. For FY2003, $442 million was appropriated.
Eligibility Requirements1
Title V of the Older Americans Act makes eligible for the Senior Community
Service Employment Program (SCSEP), persons aged at least 55 with low incomes.
The Act defines low income as not exceeding 125% of the poverty guidelines
established by the Department of Health and Human Services (HHS). Department
of Labor (DOL) regulations provide eligibility for a person who is a resident of the
state and a member of a family that either (a) received countable income in the
previous 6 months on an annualized basis, or actual income during the preceding 12
months, whichever is most beneficial to the applicant, that is not higher than 125%
of the HHS poverty guidelines or (b) receives regular cash welfare payments. The
2003 income eligibility ceilings were $11,225 for an individual and $15,150 for a
two-person family (higher in Alaska and Hawaii). There is no asset test.
Regulations give first priority to persons with the greatest economic need,
second priority to persons aged 60 years or older, and third priority to eligible persons
seeking reenrollment within a year of leaving the program because of no fault of their
own, or illness. Regulations forbid an upper age limit, and they require annual
recertification of income.
The DOL instructions2 require SCSEP project sponsors to disregard various
kinds of income of applicants and recipients, including welfare payments, disability
payments, one-quarter of Social Security benefits, unemployment benefits,
employment and training benefits, trade adjustment benefits, capital gains, the first
$3,000 in dividend and interest income, certain veterans’ benefits, one-time unearned
income payments or unearned income payments of fixed duration. In addition, $500
of otherwise includable income is not counted as annual family income for
reenrollees who were previously dropped from the program because of illness or
movement to unsubsidized employment. However, support received from absent
family members, such as adult children supporting their aged parents, is included in
deciding eligibility.


1 Regulations are found in 20 CFR Part 641 (2003). This program is no. 17.235 in the
Catalog of Federal Domestic Assistance.
2 Older Workers’ Bulletin, no. 95-5 (June 20, 1995), published by DOL.

Benefit Levels
Participants are placed in part-time community service jobs, for which their
wages are subsidized by the federal government; when possible, project sponsors are
encouraged to place enrollees in unsubsidized jobs. Upon placement in a job,
enrollees receive no less than the highest of: the federal minimum wage, the state or
local minimum wage, or the prevailing wage paid by the same employer for similar
public occupations. Hours of unsubsidized work per enrollee are limited to 1,300 in
any 12-month period. In 2002, wages under the program averaged $5.35-$5.40 per
hour.
Note: For more information, see CRS Report 95-917, Older Americans Act:
Programs and Funding and CRS Report RL30055, Older Americans Act: 106th
Congress Legislation.



78. Welfare-to-Work Grants
Note: No part of the original TANF block grant was earmarked for work
programs, but in 1997, Congress added a 2-year $3 billion program of welfare-to-
work (WtW) grants to help states meet TANF work requirements.
Funding Formula
The Balanced Budget Act of 1997 (P.L. 105-33) created a $3 billion welfare-to-
work (WtW) grant program for 2 years, FY1998 and FY1999. Although WtW is a
component of TANF (Section 403(a)(5) of the Social Security Act), it is administered
by the Department of Labor (DOL). After set-asides,1 75% of WtW funds were
designated for matching formula grants (66.7% federal matching rate) and 25% for
competitive grants. Formula grants were allocated by DOL to states on the basis of
their shares of the national adult TANF population and the poverty population.
States were required to distribute 85% of the formula grants to local workforce2
investment areas. DOL awarded a total of $2 billion in formula grants (to 48 states
in 1998 and 45 in FY1999) and $712 in competitive grants to localities and nonprofit
organizations. The original law gave WtW grantees 3 years from the date of an
award in which to spend WtW funds, but Congress extended the deadline 2 years,
allowing WtW expenditures to continue through FY2004 (Consolidated
Appropriations for 2001, P.L. 106-554).
Eligibility Requirements3
WtW funds are focused on hard-to-employ TANF recipients. As first enacted,

70% of funds had to be used for the benefit of TANF recipients (and TANF non-


custodial parents) with at least two specified barriers to work who themselves (or
whose minor children) were long-term recipients (30 months of AFDC/TANF
benefits) or were within 12 months of reaching the TANF 5-year time limit or a
shorter state time limit. The target groups had to have at least two of these three
work impediments: lack a high school diploma and have low skills in reading or


1 Set-asides: Indian tribe programs, $15 million in each of FY1998 and FY1999; WtW
program evaluations, $9 million in each of FY1998 and FY1999; and abstinence program
evaluations, $3 million in each of FY1998 and FY1999. Congress cut funds set aside for
WtW performance bonuses from $100 million to $50 million (Consolidated Appropriations
Act, 2000, P.L. 106-113) and subsequently eliminated the bonuses (Consolidated
Appropriations Act, 2001, P.L. 106-554).
2 At least half of the state’s substate allocation formula had to be based on the workforce
investment area’s “high poverty” population (defined as the number of persons in poverty
in excess of 7.5% of the area’s total population), and the rest on its population of long-term
welfare recipients and/or unemployed persons.
3 WtW regulations are found at 20 CFR 20, Part 645 (2003). This program is no. 17.253 in
the Catalog of Federal Domestic Assistance.

mathematics, require substance abuse treatment for employment, and/or have a poor
work history. WtW eligibility was liberalized by P.L. 106-554. Grantees now4 may
use WtW funds (and state matching funds) on behalf of four new groups: long-term
TANF recipients without specified work barriers, former foster care youths 18 to 24
years old, TANF recipients who are determined by criteria of the local private
industry council to have significant barriers to self-sufficiency, and non-TANF
custodial parents with income below the poverty line. However, at least 70% of
WtW funds must be spent on long-term TANF recipients and/or noncustodial parents
without specified work barriers.
The 1999 law also set special rules for noncustodial parents. To be eligible for
WtW, noncustodial parents must be unemployed, underemployed, or having
difficulty paying child support and they must comply with an oral or written personal
responsibility contract. They also must meet one of these conditions: their minor
child (or the child’s custodial parent) must be a long-time TANF recipient or within

12 months of reaching a TANF time limit, the child must be a recipient of income-


tested aid (TANF, food stamps, SSI, Medicaid or S-CHIP), or the child must have
left TANF within the last 12 months.
Benefit Levels
Activities that may receive WtW funds are: the conduct and administration of
community service or work experience programs; job creation through wage
subsidies, on-the-job training, contracts with providers of readiness, placement, and
post-employment services, job vouchers for placement, readiness, and post-
employment services, job retention or support services if these services are not
otherwise available; and, added by P.L. 106-113, up to 6 months of vocational
educational or job training (effective July 1, 2000). The law specifies that a work
activity paid with WtW funds may not violate an existing contract for services or a
collective bargaining agreement and that a WtW worker cannot fill a vacancy
resulting from cutting the hours of a job below full time. In FY2002, WtW spending
totaled $413 million ($342 million from formula grants and $71 million from
competitive grants). As of September 30, 2002, unspent WtW funds totaled about
$416 million — $293 million in formula grants and $123 million in competitive
grants.
Note: For more detail, see CRS Report RS20134, Welfare Reform: Brief
Summary of the Welfare-to-Work Grant Program.


4 The expanded eligibility rules took effect upon enactment (Nov. 29, 1999) for Native
American WtW grants and on Jan. 1, 2000 for competitive grants. For formula grants, funds
could be obligated on behalf of the new groups effective July 1, 2000, but federal
expenditures for them were deferred until Oct. 1, 2000.

79. Food Stamp Employment and Training Program1


Funding Formula2
The Food Stamp Act provides for annual grants to state agencies administering
the Food Stamp program to conduct employment and training activities for food
stamp recipients. These grants, which are automatically reserved from annual food
stamp appropriations, are set at $90 million a year. They are not limited by fiscal
year, and unspent amounts can be carried over and accumulated for use in a future
year or reallocated to states that have spent their allocation of funds. In addition,
states may receive a portion of an additional $20 million a year if they agree to serve
all recipients who are able-bodied adults without dependents (ABAWDS).
Employment and training grants generally are allocated among states on the basis of
their proportion of persons to which food stamp work rules apply, with special
emphasis on the estimated number of able-bodied adults without dependents
(ABAWDs) in each state’s food stamp caseload as a proportion of the national total.3
In addition to the above-noted unmatched federal grants for operating their
employment and training programs, the federal government pays states 50% of (1)
any additional operating costs and (2) any participant support costs (e.g., child care,
transportation); in FY2002, these payments exceeded $110 million.
Eligibility Requirements4
As detailed in the description of the Food Stamp program (program no. 21),
certain nonworking able-bodied adult recipients must register for employment, accept
a suitable job if offered one, and fulfill any work, job search, or training requirements
(participate in employment and training programs) established by administering state
agencies.5 Major exemptions from this requirement incorporated in food stamp law
include persons caring for dependents (disabled or under age 6) and those already
subject to another program’s work requirement. In addition, states may choose not
to require participation of otherwise covered individual recipients. Nonworking
ABAWDs, on the other hand, must participate in an employment or training activity
under conditions noted in the description of the Food Stamp program — unless they


1 In versions of this report before 2001, this program was subsumed under entries for the
Food Stamp program.
2 Funding for the FY2002 employment and training program was available (and spent) under
the terms of two different sets of law. P.L. 107-171 established the funding and other rules
described here. However, previous law provided some additional money in FY2002.
3 Federal payments from these grants are, in most cases, limited to $30 a month for each
employment/training placement (“slot”) offered to a recipient and $175 a month for each
slot that is filled.
4 Food stamp employment and training regulations are found at 7 CFR Part 273 (2001). The
Food Stamp program is no. 10.551 in the Catalog of Federal Domestic Assistance.
5 State agencies may offer employment/training placements to “volunteer” food stamp
recipients (persons not required to participate).

reside in an area for which the state agency has obtained a waiver because of very
high unemployment levels or the lack of available jobs or they have been individually
exempted by the state agency under its authority to exempt up to 15% of those
potentially subject to ABAWD work/training rules.6 In FY2002, states reported some
2.3 million new work registrants (i.e., persons potentially subject to required
participation in employment and training programs); approximately 1.2 million
(including about 450,000 ABAWDs) were subject to employment and training
requirements.
Benefits
State agencies have a great deal of flexibility in the types of employment and
training activities they can require of food stamp recipients. These include: job
searches and training for job searches, educational activities to improve basic skills
and employability (e.g., literacy training, high school equivalency preparation),
vocational training, workfare or work experience programs. Almost two-thirds of
employment/training program participants are typically assigned to job search or job
search training, and another 30% are placed in workfare/work experience “slots.”
Fewer than 5% participate in educational or vocational training activities.


6 In FY2001, 36 state agencies had waivers covering part of their jurisdictions, and estimates
place the proportion of ABAWDs actually required to participate in employment/training
programs at approximately 70%.

80. Foster Grandparents
Funding Formula
The Domestic Volunteer Service Act of 1973, as amended (P.L. 103-82)
provides 90% federal funding for developing and/or operating a foster grandparents
project (up to 100% in special situations). The local project may provide its
matching share in kind or cash. Appropriated for FY2002 was $107 million.
Eligibility Requirements1
The law makes eligible as foster grandparents persons at least 60 years old who
are no longer in the regular workforce. Individuals must have an annual income,
after deducting allowable medical expenses, that does not exceed 125% of the federal
poverty guideline (or 135% of the poverty line in the case of volunteers living in
areas determined by the Corporation for National and Community Service to have a
higher cost of living).2 For 2003, the 125% of poverty limit was $11,225 for a single
person and $15,150 for a two-person family in the 48 contiguous states (higher in
Alaska and Hawaii). Allowable medical expenses are annual out-of-pocket medical
expenses for health insurance premiums, health care services, and medications that
were not and will not be paid by Medicare, Medicaid, other insurance or other third
party payor, and which do not exceed 15% of the applicable income guideline. Once
enrolled, a person remains eligible so long as his countable income does not exceed
150% of the poverty guideline (or, in high cost areas, 162%). The program has no
asset rules.
Benefit Levels
The law requires low-income volunteers to be provided with a stipend plus
transportation and meal costs. The stipend is set at $2.65 per hour. Stipends are
tax-free and cannot be treated as wages or compensation for the purposes of any
public benefit program. Volunteers also receive annual physical examinations and
accident and personal liability insurance. Foster grandparents provide services to
children with exceptional or special needs.
Note: For more information about the Foster Grandparent program, see CRS
Report RL30186, Community Service: A Description of AmeriCorps, Foster
Grandparents, and Other Federally Funded Programs, and CRS Report RS20419,
VISTA and the Senior Volunteer Service Corps: Description and Funding Levels.


1 Regulations for Foster Grandparents are found at 45 CFR Part 2552 (2002). The program
is program no. 94.011 in the Catalog of Federal Domestic Assistance.
2 Originally limited to low-income seniors, the program was amended in 1986 (P.L. 99-551)
to permit persons whose income exceeds program limits to become foster grandparents
under certain conditions, but not to receive a stipend.

81. Senior Companions
Funding Formula
The Domestic Volunteer Service Act of 1973, as amended (P.L. 103-82),
provides 90% federal funding for developing and/or operating a senior companion
project (up to 100% in special situations). The local project may provide its
matching share in kind or cash. Appropriated for FY2002 was $44.4 million.
Eligibility Requirements1
The law authorizes support for senior companions persons at least 60 years old
who are no longer in the regular workforce. Individuals must have an annual income,
after deducting allowable medical expenses, that does not exceed 125% of the federal
poverty guideline (or 135% of the poverty line in the case of volunteers living in
areas determined by the Corporation for National and Community Service to have a
“higher” cost of living).2 For 2003, the 125% of poverty limit was $11,225 for a
single person and $15,150 for a two-person family in the 48 contiguous states (higher
in Alaska and Hawaii). Allowable medical expenses are annual out-of-pocket
medical expenses for health insurance premiums, health care services, and
medications that were not and will not be paid by Medicare, Medicaid, other
insurance or other third party payor, and which do not exceed 15% of the applicable
income guideline. Once enrolled, a person remains eligible so long as his countable
income does not exceed 150% of the poverty guideline (or, in higher cost areas,

162%).


Benefit Levels
The law requires low-income volunteers to be provided with a stipend plus
transportation and meal costs. The stipend is set at $2.65 per hour. Stipends are
tax-free and cannot be treated as wages or compensation for the purposes of any
public benefit program. Volunteers also receive annual physical examinations and
accident and personal liability insurance. Senior companions provide supportive
services to vulnerable, frail adults who are homebound and who usually live alone.
Note: For more information about the Senior Companion program, see CRS
Report RL30186, Community Service: A Description of AmeriCorps, Foster
Grandparents, and Other Federally Funded Programs, and CRS Report RS20419,
VISTA and the Senior Volunteer Service Corps: Description and Funding Levels.


1 Regulations for Senior Companions are found at 45 CFR Part 2551 (2002). This program
is no. 94.016 in the Catalog of Federal Domestic Assistance.
2 Originally limited to low-income seniors, the program was amended in 1986 (P.L. 99-551)
to permit persons whose income exceeds program limits to become senior companions
under certain conditions, but not to receive a stipend.

82. Targeted Assistance to Refugees, Asylees,


Other Humanitarian Cases
Funding Formula
Subject to available appropriations, the Immigration and Nationality Act
authorizes 100% federally funded targeted assistance (primarily for employability-
related services) for refugees and asylees. Other legislation authorizes similar
assistance for certain Cuban and Haitians entrants1 and for certain Amerasians.2 The
Department of Health and Human Service’s Office of Refugee Resettlement (ORR),
which administers the program, awards grants to designated state agencies on behalf
of counties with high concentrations of refugees, asylees or other eligible groups.
States must allocate at least 95% of funds to counties. For refugee targeted
assistance, ORR benefit expenditures amounted to $49.5 million in FY2002.
Eligibility Requirements3
A person must (a) have been admitted to the United States as a refugee or asylee
under the Immigration and Nationality Act or have been paroled as a refugee or
asylee under the Act, (b) be a Cuban or Haitian paroled into the United States
between April 15 and October 20, 1980, and designated a “Cuban/Haitian entrant,”
or be a Cuban or Haitian national paroled into the United States after October 10,
1980, (c) be a person who has an application for asylum pending or is subject to
exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
In allocating targeted assistance funds, states must give priority to the following
groups, in order: (a) cash assistance recipients, particularly long-term recipients; (b)
unemployed individuals who are not cash recipients; (c) employed individuals who
need services to retain jobs or become economially independent.
Benefit Levels
Counties develop their own plans for targeted assistance, which must be
approved by the state. Targeted assistance funds must be used primarily for
employability services designed to enable beneficiaries to obtain jobs within a year.
They may not be used for long-term training programs lasting more than a year or for
educational programs that are not intended to lead to employment within a year.


1 Title V of the Refugee Education Assistance Act (P.L. 96-422).
2 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
3 Regulations for this program are found at 45 CFR § 400.310 et seq. This program is no.

93.584 in the Catalog of Federal Domestic Assistance.



83. Native Employment Works Program
Funding Formula
The 1996 welfare law (P.L. 104-193), which abolished the Job Opportunities
and Basic Skills (JOBS) training program, established the Native Employment
Works (NEW) Program1 to continue tribal work and training grants that existed
under JOBS. Administered by HHS, the NEW program is 100% federally funded.
The law appropriated $7.6 million annually for FY1997-FY2002. This equals the
sum received by Indian tribes and Alaska native organizations to operate their own
JOBS programs in FY1994. (Funding was extended through March 30, 2004, by a
series of laws.) In the year ending June 30, 2001 (program year 2000-2001) about
one-third of the78 tribal grantees transferred their NEW funding to demonstration
projects administered by the Bureau of Indian Affairs under P.L. 102-477 (Indian
Employment, Training, and Related Services Demonstration Act).
Eligibility Requirements2
The NEW program is not subject to federal definitions of TANF work activities,
TANF work requirements, or to old JOBS rules. Indian tribes design their own NEW
programs, define who will be eligible, decide what benefits and services to provide,
and specify the population and geographic area to be served. Target groups generally
include TANF recipients, non-custodial parents, recipients of General Assistance
(GA) from the Bureau of Indian Affairs (BIA), and unemployed parents. Of NEW
participants in program year 2000-2001, about 70% also were enrolled in TANF and
6% in BIA general assistance. (In early 2003, 38 tribal TANF plans were in
operations, covering about 27,000 families in 15 states.)3 Also, as noted in the entry
on General Assistance to Indians (program no.18 in this report), some tribes operate
Tribal Work Experience Programs (TWEP), which pay a monthly $115 supplement
to GA cash benefits.
Benefit Levels
In program year 2000-2001, about 23% of the reported total of 5,615 NEW
participants received child care; 35%, transportation assistance; 17%, counseling;

16% other supportive/job retention services (such as equipment, tools and uniforms)


and 4%, medical services. Major program activities included job search (40% of
clients); classroom training (5%); work experience (26%); on-the job training (3%);


1 This name was given to the continued program of tribal work grants by HHS upon the
recommendation of Indian tribes.
2 NEW regulations are found at 45 CFR Part 287 (2002). This program is no. 93.594 in the
Catalog of Federal Domestic Assistance.
3 Tribal TANF funds are deducted from the family assistance grant of the state(s) in which
they are located. As of early 2003, these deductions totaled $115 million.

and other tribal work activity (12%).4 A total of 1,565 NEW participants, including
616 TANF recipients, began unsubsidized jobs during the year. According to the
Fifth annual TANF report, many tribes with NEW programs co-located training,
employment, and social services, often in “one-stop” centers. Some grantees
established information/resource centers and learning centers, which provided a
variety of job preparation services and worked closely with local colleges.


4 These data apply only to NEW programs that did not transfer funding to BIA
demonstration projects of integrated employment, training, and related services under P.L.
102-477. According to BIA summary information, the 25 NEW grantees that included their
NEW programs in demonstration projects served a combined total of 17,732 clients under
all programs in their projects; and of these persons, 27% entered unsubsidized employment
during the year.

Energy Assistance



84. Low-Income Home Energy Assistance (LIHEAP)


Funding Formula
The Low-Income Home Energy Assistance Act (Title XXVI of P.L. 97-35, as
amended) provides 100% federal funding for the Low-Income Home Energy
Assistance Program (LIHEAP).1 through annual block grants to states, the District
of Columbia, more than 100 eligible Indian tribes, two commonwealths, and four
territories.2 The Department of Health and Human Services (HHS) distributes annual
federal appropriations using an allocation formula established in law.
P.L. 103-252, which reauthorized the program through FY1999, authorized a
special fund of $600 million annually for emergencies (contingency funding). P.L.
105-285 reauthorized LIHEAP at $2 billion annually for FY2002-FY2004. This law
also expanded the criteria for LIHEAP contingency funding and added a section
concerning natural disasters. In FY2002, 29 states received contingency funds
totaling $100 million. Federal outlays for LIHEAP totaled $1.8 billion in FY2000,
$1.9 billion in FY2001, and $1.8 billion in FY2002.
Eligibility Requirements3
States and other grantees design and administer their own programs under
general federal guidelines. These guidelines set maximum and minimum income
eligibility standards, and allow jurisdictions operating the LIHEAP to make
categorically eligible most households receiving Temporary Assistance for Needy
Families (TANF), Supplemental Security Income (SSI), Food Stamps, veterans’
pension, or compensation benefits.4 Income eligibility standards vary, but they may
not be above 150% of the federal poverty income guidelines (a 2003 limit of $27,600
for a family of four in the 48 contiguous states), or 60% of the jurisdiction’s median


1 In the late 1980s, LIHEAP also received significant funding from court-ordered oil-price
overcharge settlements, but most of these settlements have been completed.
2 When the regular annual federal appropriation is below $1.975 billion, as has been the case
for regular funds every year since FY1986, each state (including the District of Columbia)
receives an allotment equal to its percentage share in FY1981 under LIHEAP’s predecessor
(the Low Income Energy Assistance Program); the same is true for Puerto Rico, Guam,
American Samoa, the Virgin Islands, and the Northern Mariana Islands. If the regular
appropriation were to exceed $1.975 billion, a different formula would take effect. Indian
tribes may receive allotments directly from the HHS (rather than through a state) if the HHS
determines that this would best serve the tribe; these allotments are equal to their share of
eligible low-income households in their state (or any larger amount agreed on by the tribe
and the state).
3 Regulations governing the LIHEAP are found at 45 CFR Part 96, Subpart H (2002). This
program is no. 93.568 in the Catalog of Federal Domestic Assistance. It is codified at 42
U.S.C. 8621 et seq.
4 Excluded from this categorical eligibility are: TANF foster care children, and SSI
recipients in institutions or living in shared housing (i.e., if SSI benefits have been reduced
or if they are children living at home).

income (adjusted for family size). In addition, they may not be below 110% of the
federal poverty income guidelines. The law requires that benefits and outreach
activities be targeted to those with the greatest home energy needs (as well as costs)
particularly households with young children, frail elderly, and disabled individuals.5
Eligibility for LIHEAP benefits is typically determined on a “household” basis, and
grantees may establish eligibility standards in addition to income. A household can
be an individual, or group of individuals who are living together as one economic
unit for whom residential energy is customarily purchased in common or who make
undesignated rent payments for energy.
Benefit Levels
Grantees operating the LIHEAP decide benefit levels and the manner in which
payments are made. However, to the extent permitted by efficient administration,
jurisdictions are required to provide the highest benefits to households with lowest
incomes and highest energy costs in relation to their income. They also must set
aside a “reasonable” portion of their allotment for energy-related emergencies (basing
the set-aside on past experience). LIHEAP funds may be used to help pay residential
heating or cooling costs, purchase/install low-cost weatherization materials, and
assist households facing energy-related emergencies.
Operating jurisdictions can use a maximum of 15% of their LIHEAP allotment
for weatherization activities (or 25% if a federal waiver is granted). LIHEAP
obligations for weatherization totaled $159 million in FY2000 and $234 million in
FY2001, exceeding outlays for the weatherization program of the Department of
Energy (program no. 85).
Benefits most commonly take the form of cash payments to households, vendor
“lines of credit,” vouchers, and tax credits. In FY2000, some 3.9 million households
are estimated to have received home heating benefits (and, in 17 states, cooling
assistance was given to 318,438 households). In FY2002, heating benefits went to an
estimated 4.7 million households. The program includes a Residential Energy
Assistance Challenge (REACH) grant program, established by 1994 law, to increase
efficiency of energy usage by low-income households.
Grantees may use up to 10% of their LIHEAP allotments for administrative
expenses and may carryover up to 10% of 1 year’s funds for use in the next year.
Note: For more information, see CRS Report RL31865, The Low-Income Home
Energy Assistance Program (LIHEAP): Program and Funding Issues.


5 Provision of P.L. 103-252.

85. Weatherization Assistance
Funding Formula
The Energy Conservation and Production Act of 1976 (P.L. 94-385), as
amended, provides 100% federal funding for weatherization assistance to
low-income persons through grants administered by the Department of Energy
(DOE).6 Administrative costs may not exceed 10% of grant funds. Weatherization
funds are allocated among the states on the basis of factors that include: number of
heating degree days and cooling degree days, number of low-income owner-occupied
and renter-occupied dwellings, percentage of total residential energy used for space
heating and space cooling. Although states are not required to provide matching
funds,7 state and local funds often supplement federal amounts. Appropriations
totaled $230.0 million in FY2002.
Eligibility Requirements8
States and other grantees design and administer their own programs under
general federal guidelines. The law makes eligible all “low-income” households and
offers alternate definitions of this term. States are permitted to give DOE
weatherization assistance to households whose (a) combined income falls at or below
125% of the federal poverty income guidelines, a ceiling equal in the 48 contiguous
states to $23,000 for a family of four in 2003 (at state option, the ceiling can be lifted
to 150% of the poverty guideline, if the state has adopted that income limit for
LIHEAP) and (b) families with a member who received cash welfare payments
during the previous 12 months from TANF, SSI, or state assistance programs.
Benefit Levels
Legislation allows a maximum average expenditure, adjusted annually for price
inflation ($2,614 in FY2003), per dwelling unit for weatherization materials, labor,
and related matters (such as transportation of materials and workers; maintenance,
operation and insurance of vehicles; maintenance of tools and equipment; purchase
or lease of tools, equipment and vehicles; employment of on-site supervisors; and
storage of weatherization materials). DOE reports that it weatherized more than

97,000 homes in FY2001 and 5.2 million over the 27-year history of the program.


The Low-Income Home Energy Assistance Program (LIHEAP) usually spends more
funds on weatherization assistance than the DOE program. For information about
LIHEAP weatherization assistance, see program no. 84.


6 Weatherization assistance also is provided under the Low-Income Home Energy
Assistance Program (LIHEAP) administered by the Department of Health and Human
Services (HHS).
7 P.L. 106-113 required states to begin providing a 25% match beginning on Oct. 1, 2000,
but this was repealed by P.L. 106-649.
8 Regulations governing this program are found at 10 CFR Part 440 (2003). This program
is no. 81.042 in the Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 7101
et seq.

Note: For more information, see CRS Report RS20373, The Department of
Energy’s Weatherization Assistance Program and CRS Issue Brief IB10020, Energy
Efficiency: Budget, Oil Conservation, and Electricity Conservation Issues. For DOE
summary, see [http://www.eere.energy.gov/buildings/weatherization/about.html].



Table 14. Need-Based Benefits: Expenditures and Enrollment
Data, by Programs and Form of Benefits FY2000-FY2002
Federal Expenditures
State-Local Expenditures
Number of Recipients
Data in this table are based on program reports and budget documents, including
departmental justifications of appropriations estimates. Details of sources are
available upon request.
Note: Programs are listed in descending order of total FY2002 expenditures. Except
for sums below $100 million, figures shown are rounded to the nearest million.
Totals reflect rounding of sums below $100 million to the nearest million. N.A =
means “not available.” N.P.= means no program. To conserve space, names of some
programs have been shortened in the table.



CRS-228
MEDICAL BENEFITS
Recipients
Federal expendituresState-local expenditures(average monthly number unless
(millions of current dollars)(millions of current dollars)otherwise indicated — in thousands)
F Y 2000 F Y 2001 F Y 2002 F Y 2000 F Y 2001 F Y 2002 F Y 2000 F Y 2001 F Y 2002
a$116,894 b$129,840b$146,643b$89,189c$98,199c$111,573c44,297d44,600d50,900d
gg g
eterans without service-e7,215f7,731f8,185f1,3161,4791,640
ram 1,929 h 2,672 h 3,776 h 853i 1,154i 1,631i 3,334j 4,601j 5,315j
HIP)
eneral Assistance (medical carek0003,8374,7054,956n.a.n.a.n.a.
ponent)
iki/CRS-RL32233ndian health servicese2,3912,6292,7580001,500+1,6001,600
g/we l l l
s.or 1,018 1,164 1,328 0 0 0 9,600 10,500 11,550
leakices block709714731532m536m548m8,5008,7079,038
nte
://wikiily planning servicese2392542650004,692l4,792l4,858l
http
ees, asylees,n66 7274000n.a.n.a.n.a.
anitarian casesooo
130,461 145,076 163,760 94,411 104,594 118,708
nded program costs.
cludes these sums for administration: 2000, $5,892 million; 2001, $6,555 million; 2002, $6,601 million.
cludes these sums for administration: 2000, $4,685 million; 2001, $5,325 million; 2002, $5,330 million.
uplicated annual number of persons ever enrolled during the year, regardless of whether they received a service funded by the program.
ppropriatio ns.
cludes these sums for administration: 2000, $23 million; 2001, $24 million; 2002, $25 million.
A makes grants to states to help finance construction of some states’ veterans’ homes and pay per diem expenses for some veterans in state homes, but state and local expenditures
are not known.
ata include these sums for administrative costs: 2000, $116.5 million; 2001, $ 191 million; 2002, $251 million. Federal benefit expenditures are from state claims for federal
matching dollars, submitted to HHS on Form 21C (as of 11/30/02), and may include Medicaid administrative costs at an enhanced federal matching rate.
ctual state and local share of administrative costs for FY2000-FY2002 are not available.



CRS-229
mber ever enrolled during the year.
rom the Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.
nnual count.
nimum match required by law for block grant amount (75% of Federal sum) and SPRANS grants (50% of Federal sum). States may spend more, but data are not available.
cludes these estimated sums for administration: 2000, $23 million; 2001, $20 million; 2002, $21 million. Refugee cash and medical administrative expenditures actually are
combined. Estimates are based on the 1998-1999 proportion of benefit dollars in each program.
ecause of a high degree of overlap (and in some cases, a mixture of monthly and annual numbers), recipient totals are not shown.


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CASH BENEFITS
Recipients,
average monthly number unless
Federal expendituresState-local expendituresotherwise indicated,
(millions of current dollars)(millions of current dollars)(in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
pplemental Security Income (SSI)a$30,718b$32,584b$33,871b$4,255c$4,496c$4,651c6,692d6,751d6,887d
ed Income Tax Credit (EITC)e 28,02529,42827,83000016,215f16,827fn.a.
undable part)
ANFg6,852h 6,731h6,481h7,638i6,865i6,554i5,943j5,420j5,147j
ter carek4,255l4,395l4,523l3,723m3,916m4,095m288265254
Child tax creditn (refundable part)9075,0155,0600001,034f8,634fn.a.
iki/CRS-RL32233eral assistance (nonmedical care0002,9682,9563,251n.a.n.a.n.a.
g/wponent) o
s.or Pensions for needy veterans, their dependents2,9683,0183,177000635p602p581p
leakurvivors
://wikidoption assistance1,012q1,201q1,342q849r1,009r1,130r228258286ooo
httpdency and indemnity compensation and1301128400012.510.57.5
th compensation for parents of veterans (DIC)
eral Assistance to Indianss70.87666.5000414145
ash assistance to refugees, asylees, othert36404100010.111.684
anitarian cases uuu
h Aid Total*74,97482,60082,47619,43319,24219,681
e other programs provide aid in the form of cash intended for specific goods or services. Examples are the Low-Income Home Energy Assistance Program and educational loan
rant programs.
FY2000, 13 monthly payments of SSI were made, and in FY2001, 11 monthly payments. Expenditure data in this table have been adjusted to a 12-payment basis for each year.
cludes these sums for administration: 2000, $2,321 million; 2001, $2,397 million; 2002, $ 2,522 million. Excludes these amounts for beneficiary services: 2000, $54 million;
2001, $44 million; 2002 $ 54 million.
cludes these estimated sums (calendar year) for state administration of state SSI supplements: $71 million; $72 million; $ 68 million (estimates equal 8% of state-administered
b e ne fits) .



CRS-231
clude recipients of non-federally administered payments (state-administered SSI supplements only, data as of December of each year): 2000, 83,483; 2001, 87,059; 2002,
151,989. In 2002, Texas began reporting on state-administered supplements, which increased estimated numbers above those of previous years.
ata for 2000 and 2001 are from U.S. Treasury, Internal Revenue Service, and refer to the calendar year (tax year ) to which the EITC applied. Benefits exclude tax expenditures
(reductions in tax owed), which totaled $4,492 million in 2000 and $ 4,376 million in 2001 Data for 2002 are estimates from the FY2004 Budget of the United States, Analytical
Perspectives, and exclude tax expenditures of $4,450 million.
stimated annual number of tax units (chiefly families). 2001 number is preliminary.
cludes basic cash assistance, refundable tax credits, short-term nonrecurring benefits (example, diversion payments), and contributions to individual development accounts.
Excludes transfers to CCDBG and SSBG. Excludes spending for TANF child care, TANF work activities, and TANF services (reported separately under those programs).
Excludes separate Welfare-to-Work grants administered by the Labor Department. However, includes administrative costs for all TANF-funded benefits and services.
cludes these sums for overall TANF administrative costs (for all benefits and services): 2000, $1,506 million; 2001, $1,598 million; 2002, $1,633 million.
cludes these sums for overall TANF administrative costs (all benefits and services): 2000, $889 million; 2001, $1,042 million; 2002, $983 million.
mber of recipients. Number of families: 2000, 2.265 million; 2001, 2.116 million; 2002, 2.064. Number of children: 2000, 4.385 million; 2001, 4.055 million; 2002, 3.839
millio n.
oster care benefit expenditures do not include child support payments collected on behalf of foster care children, which are used to reimburse state and federal costs for foster care
maintenance payments. For FY2000, child support payments received on behalf of foster care children totaled $45 million; for each of FYs 2001 and 2002, $49 million.
cludes these sums for administration, data collection, training, and demonstration (waiver) costs: 2000, $2,376 million; 2001, $2,473 million; 2002, $2,641 million. Note: before
iki/CRS-RL32233FY2000, states were not asked to separately classify demonstration spending, which may be used for either benefits or administration. Waiver expenditures included in the
g/wforegoing sums were: 2000, $136 million; 2001, $148 million; 2002, $191 million.
s.orcludes these estimated sums for administration, data collection, training, and demonstration (waiver) costs: 2000, $2,224 million; 2001, $ 2,311 million; 2002, $2,474 million.
leakWaiver costs included in the preceding totals were: 2000, $131 million; 2001, $142 million; 2002, $186 million.
ata for 2000 and 2001 are from U.S. Treasury, Internal Revenue Service, and refer to the calendar year (tax year ) to which the child tax credit applied. Benefits exclude tax
://wikiexpenditures (reductions in tax owed), which totaled $19.7 billion in 2000 and $ 22.5 billion in 2001. Data for 2002 are estimates from the FY2004 Budget of the United States,
httpAnalytical Perspectives, and exclude tax expenditures of $22.2 billion.
pending data relate to state fiscal years. 2000 and 2001 spending data are based on reports from the U.S. Census Bureau (state and local government expenditures for noncategorical
cash assistance payments). 2002 amount is an estimate, based on data obtained from 4 states that accounted for 33% of the 2000 Census-reported total. Data from these states
indicated that GA cash expenditures rose about 10% from 2000 to 2002.
nnual count.
cludes these sums for administration, data collection, training, and demonstration (waiver) costs: 2000, $286 million; 2001, $299 million; 2002, $305 million. Waiver spending
included in foregoing totals: 2000, $90,000; 2001, $240,000; 2002, $1 million.
cludes these estimated sums for administration, data collection, training, and demonstration (waiver) costs: 2000, $255 million; 2001, $ 271 million; 2002, $277 million. Waiver
spending included in foregoing totals: 2000, $90,000; 2001, $235,000; 2002, $729,000.
ligatio ns.
timates. Includes these estimated sums for administration: 2000, $12 million; 2001, $11 million; 2002, $12 million. Refugee cash and medical administrative expenditures actually
are combined. Estimates are based on the 1998-1999 proportion of benefit dollars in each program.
ient totals are not shown because data include monthly and annual numbers.



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FOOD BENEFITS
Recipients
Federal expendituresaState-local expenditures(average monthly number unless
(millions of current dollars)(millions of current dollars)otherwise indicated — in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
ood stamps b$18,255c$18,813c$21,657c$2,086$2,233$2,39718,200d18,400d20,150d
chool lunch program(free and reduced5,5095,6596,064fff15,400g15,500g16,000g
ponents) iii
Special supplemental nutrition program for3,954h4,123h4,350h7,2007,3007,500
en, infants, and children (WIC)
hild and adult care food program (lower —j1,479k1,533k1,638k1,900l1,900l2,000l
e components)
iki/CRS-RL32233chool breakfast (free and reduced price1,3491,4021,515 6,300g6,400g6,700g
g/wponents) j
s.or Nutrition program for the elderly (no income661n680n716n79o80o85o2,700p2,700p2,900p
leakm
rrrn. a . n. a . n. a .
://wikihe Emergency Food Assistance ProgramAP) q305475361
httpummer food service for children284s292s307siii2,100t2,199t1,900t
ommodity supplemental food programu9291105389407427
) www
ood distribution program on Indianv757774121113110
rvations (FDPIR)yyy
Farmers’ market nutrition programs x1931361,9002,500n.a.iii
pecial milk program (free part)11130z30z30zaaaaaa
Aid Total*31,98333,17736,8242,1652,3132,482
so program no. 72, Emergency Food and Shelter.
eral expenditures represent obligations unless otherwise marked.
tamp data include spending for (1) state-financed benefits for non-citizens, to the extent that they are funded through transfers to the federal government (2) Puerto Ricos
nutrition assistance program (over $1.2 billion yearly), and (3) nutrition assistance grants to American Samoa and the Northern Marianas totaling about $10 million yearly. State-



CRS-233
local expenditure estimates are for administration and do not include amounts transferred to the federal government to finance benefits for non-citizens ($35 million in 2000,
$34 million in 2001, and $78 million in 2002), or amounts spent directly by states for benefits to non-citizens.
cludes sums spent for food stamp work/training, reported under that program (no. 79 ). Includes these sums for food stamp administration: 2000, $1,935 million; 2001, $2,102
million; 2002, $2,264 million. Includes amounts for state-financed benefits for non-citizens.
cludes persons receiving nutrition assistance in Puerto Rico: 2000, 1.1 million; 2001, 1.1 million; 2002, 1 million.
timated cash and commodity assistance for free and reduced price lunches and after-school snacks. Includes federal funds for state administrative expenses for school lunch and
other child nutrition programs. These administrative funds totaled: 2000, $120 million; 2001, $127 million; 2002, $ 132 million. Excludes cash assistance for “full-price”meals
(44% of total lunches served), which have no income test.
ot reported since 1980, when federal funds provided about half the total cost of the lunch program, and childrens meal payments, plus state/local revenues, the other half. A 1994
Agriculture Department survey indicates that 40% of the total operating costs of school meal programs come from childrens meal payments and state/local government sources.
The minimum state matching requirement totals just over $200 million annually.
timated average daily number of children receiving free and reduced-price meals in these programs.
ncludes these federal payments for state-local administration, nutrition services, infrastructure grants, and technical services: 2000, $1,108 million; 2001, $1,150 million; $2002,
$1,208 million.Administrative” expenses include costs of providing nutritional risk assessments, nutrition education, and other services such as breast feeding support services.
All figures have been adjusted for year-to-year carry overs of unspent funds.
one required. Contributions unknown.
iki/CRS-RL32233pending for state administrative costs included under program no. 21 (school lunch). See footnote e.
g/wstimates of funds (including the value of commodity assistance) for meals/snacks served to children and adults with family income not exceeding 185% of the poverty income
s.orguideline. Includes administrative payments for day care home sponsors and audit expenses: 2000, $136 million; 2001, $138 million; 2002, $138 million.
leakstimates of children from families who meet an income test (185% of the poverty income guideline) are based on the number of meals/snacks subsidized at the higher rate paid
for meals served to such children. However, a 1999 Agriculture Department survey indicates that the figures presented here may overstate the number of lower-income children
://wikiserved by approximately 200,000.
httphe law prohibits an income test, but requires preference for those with greatest economic or social need.
ums represent (1) appropriations of Administration on Aging (AoA) before transfer of funds among supportive service and nutrition service categories plus (2) USDA obligations
of funds for the elderly commodity program. For FY2002, AoA appropriations were $566.5 million, and USDA commodity obligations were $ 176.5 million.
he non-federal share for congregate and home-delivered nutrition is an estimate based on a 15% match requirements for these funds. No match is required for the nutrition services
incentive component of the program.
nnual unduplicated number. 2002 is an estimate.
ms represent the value of commodities plus appropriations for state and local administrative and distribution costs and the value ofbonus commodities provided without
appropriation. Includes commodities for soup kitchens and food bank programs.
must match, in cash or in-kind, administrative grants that they do not pass along to local agencies. Amounts, if any, are not known.
cludes payments to summer program sponsors for administrative costs and health inspection payments to states: 2000, $30 million; 2001, $30 million; 2002, $ 30 million.
uly participation.
cludes amounts obligated for administration and distribution costs): 2000, $20 million; 2001, $23 million; 2002, $23 million. Not adjusted for inter-year transfer of funds.
Because of carry overs of funds and commodity inventories among fiscal years, actual expenditures are higher than the new obligation amounts shown here. Does not include
the value ofbonus” commodities provided without appropriation, estimated at $1 to $5 million annually.



CRS-234
ms represent the value of purchased commodities plus administrative grants. Administrative costs: 2000, $21 million; 2001, $23 million; 2002, $ 23 million. Not adjusted for
inter-year transfers of commodities. Does not include the value ofbonus” commodities provided without an appropriation: estimated at $5 to $10 million annually. Because
of carry overs of funds and commodity inventories among fiscal years, actual expenditures are higher than the new obligation amounts shown here.
dian tribal organizations and state agencies operating the program must contribute up to 25% of administrative and distribution costs, but the amount of their contributions
(estimated at $5 to $10 million annually) are not known.
ll spending is shown as benefit expenditures. No information is available on the breakout between benefit and administrative spending, although administrative expenses generally
may not exceed 17% of a state’s grant.
lthough a 30% state match is required under the WIC component of the farmers’ market nutrition program, no information is available on the actual amount spent.
Average number of half-pints of free milk served daily to children whose family income does not exceed 130% of the poverty income guidelines. Excludes federally subsidized
milk served without regard to childs family income.
ients are not totaled because of a high degree of overlap (and/or in some cases, a mixture of monthly and annual numbers).


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CRS-235
HOUSING BENEFITS
Families or dwelling units
Federal expendituresState-local expenditures(total during year unless
(millions of current dollars)(millions of current dollars)otherwise indicated — in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
ection 8 low-income housing aid$15,972$16,720$18,499$0$0$03,196a3,310a3,326accc
ow-rent public housingb7,2177,5048,2131,267a1,219a1,209a
ural housing loans (Section 502)d3,2913,4063,49900045.645.543.1
Home investment partnerships (HOME)e1,6361,7961,79650374570485.9f81.5f84.1f
ousing for special populations (elderly and disabled)72077489500087.612
ural rental assistance payments (Section 521) d64067970500041.8g42.2g44.3g
ection 236 interest reduction596592579000446a415a392a
iki/CRS-RL32233sing Opportunities for People with AIDS (HOPWA)h215241314000n/a63.368.0
g/wural rental housing loans (Section 515)d1141141140001.714.2i14.5i
s.orural housing repair loans and grants (Section 504)d57.8j61.3j62.4j0009.8k11.8k11.8k
leakarm labor housing loans and grants (Sections 514 and 516)d48.1l41.2l61.8l0000.81.91.9
://wikiection 101 rent supplements54.153.753.700020.320.218.1nnn
httpural self-help technical assistance (Sections 523 and 524)d32.2m25.4m27m000
dian housing improvement15.519.619.60000.55o0.36o0.54o
ection 235 homeownership aid16.514.110.800026.517.713.0
ural housing preservation grants (Section 533)5.58.08.60001.41.72.1
omeownership and opportunity for people everywhere2521.03.06.35.30.8n/an/an/a
E) ppp
sing Aid Total*30,65632,07034,861509750705
so program no. 72, Emergency Food and Shelter, and program no. 68, Homeless Assistance Grants.
its eligible for payment at end of fiscal year.
tlay data include operating subsidies, capital grants, and HUD-administered Indian housing. Outlay and housing unit data exclude the Indian Housing Block Grant.
ocalities accept payments in lieu of property taxes that are lower than normal taxes (usually equal to 10% of shelter rent). No estimate is available of the value of this benefit.
ligatio ns.
local governments may use up to 10% of federal HOME funds for administrative costs.



CRS-236
nsists of housing units provided, constructed, or rehabilitated by HOME funds, plus tenant-based rental assistance. Housing units: 2000, 78,968; 2001, 69,712; 2002, 73,804.
Families receiving tenant-based rental assistance: 2000, 6,899; 2001, 11,756; 2002, 10,239.
nits assisted under this program also are counted under the Section 515 program (rural rental housing loans) or Section 514 program (farm labor housing loans).
mounts shown are appropriations.
eginning in FY2001, includes rehabilitation loans.
mount of rural housing repair loans and grants (Section 504) obligated: 2000, $27.4 million in loans and $30.4 million in grants; 2001, $ 30.3 and $31.1 million, respectively;
2002, $31.8 and $30.6 million, respectively.
umber of rural housing units repaired with loans and grants (Section 504): 2000, 4,321 units repaired with loans and 5,442 with grants; 2001, 5,431 and 6,331, respectively; 2002,
5,615 and 6,170, respectively. Note: Some units may receive both a loan and a grant.
mount of farm labor housing loans (Section 514) and grants (Section 516) obligated: 2000, $25.9 million in loans and $19.3 million in grants; 2001, $32.1 and $9.1 million,
respectively; 2002, $47.3 and $14.5 million, respectively.
mounts shown are self-help technical assistance grants (Section 523) and site loan obligations (Sections 523 and 524). Grants: 2000, $30.4 million; 2001, $17.6 million; 2002,
$26.5 million. Site loan obligations (Section 523): 2000, $1.2 million; 2001, $4 million; 2002, $0.0 million. Site loan obligations (Section 524):2000, $0.6 million; 2001, $3.7
million; 2002, $0.5 million.
hese programs provide for the development of building sites. Houses constructed on these ssites generally are financed (and counted) under the Section 502 program.
umbers represent new and repaired or renovated houses, as follows: 2000, 238 new and 310 repaired or renovated houses; 2001, 138 new and 225 repaired or renovated houses;
iki/CRS-RL322332002, 201 new and 327 repaired or renovated houses.
g/wlumns are not totaled because they are a mixture of numbers: dwelling units, loans, and grants. Further, some units are assisted by more than one program.


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EDUCATION BENEFITS
Recipients b
Federal expendituresaState-local expenditures(participants in the school year
(millions of current dollars)(millions of current dollars)in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
ederal Pell grants$8,756$11,314$11,364$0$0$03,8533,6964,812
c 5,267 6,200 6,538 1,317d 1,550 d 1,634 d 858 905 912
ubsidized Federal Stafford and Stafford/Ford loanse(2,217)3,5907,5230004,8365,0405,564
ederal work-study programf1,0001,0001,0000009129701,073
ederal Trio programsg730803827000717742865
upplemental educational opportunity grantsf6917257600001,0881,1691,189hhh
hap.I migrant educationprogram380396395720760738
iki/CRS-RL32233ins loans160168166000677711707
g/w Leveraging Educational Assistance Partnerships55676755i67i67i90135171
s.orP )
leakealth professions student loans and scholarships j41535800012.3k13.5k11.4k
l 41 45 45 0 0 0 774 m 142 m 57 m
://wikiellowships for graduate and professional study hhh
http Migrant high school equivalency program20232367.48.6
ollege assistance migrant program1015151.31.72.5
lose Up fellowships1.51.51.50002.5n.a.2.8n
cation Aid Total14,93624,40128,7831,3721,6171,70114,54714,29316,113
ederal expenditure data represent appropriations and, unless otherwise indicated, are based upon appropriations for the program in the school year ending in the fiscal year named.
For forward-funded programs, for example, “FY2002 expenditures are total FY2001 appropriations for the program (which generally were available for obligation from July
1, 2001 through Sept. 30, 2002). For current-funded programs, FY2002 expenditures are FY2002 appropriations, which generally were available for obligation throughout
FY2002.
he number of recipients is based upon counts or estimates of participants in the school year ending in the fiscal year named. For example, FY2002 recipients are students who
participated in (or received benefits from) programs during the 2001-2002 school year, or during the summer of 2002.
eral appropriations include funds for local administration. Note: Although Head Start is classified in this report as an education program, it provides many other services. It
is administered by HHS rather than ED.
timate. Based on requirement that non-federal funds equal 20% of total program costs (equivalent to 25% of federal sums).



CRS-238
are for the program in the fiscal year named. They are net program obligations for subsidized Stafford and Stafford/Ford loans. Data for FY2000 are negative: -$1.7 billion
for FFEL loans and -$0.6 million for Ford loans. Combined data for FY2001 are positive: $4.3 billion for FFEL and -$0.7 billion for Ford loans. FY2002 data are positive:
$3.4 billion for FFEL loans and $4.1 billion for Ford loans. Recipient data represent number of subsidized Stafford and Stafford/Ford loans made in the fiscal year.
his program also receives non-governmental funds.
ecipient data exclude TRIO staff who receive training.
ederal funds for these migrant education programs may be supplemented by states, local school districts, or public or nonprofit agencies. However, data are unavailable on this
support, which is voluntary.
ates. Based on requirement that non-federal funds at least equal the federal sum.
ata here apply only to scholarships and loans funded with appropriations. Revolving funds (from loan repayments) fund Health Professions Student Loans and Loans for
Disadvantaged Students.
ecipients 2000, 17,679 persons received scholarships and 588, loans; 2001, 13,477 and 35, respectively; 2002, 11,377 and 37, respectively.
he program of graduate assistance in subject areas of national need requires institutions to provide matching funds equal to 25% of the federal grant.
er to persons receiving new awards each year; they exclude persons with continuing fellowships.
chool year 2002-2003 recipients: 1,223 students, 1,246 teachers, and 250 new Americans.


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SERVICES
Recipients
Federal expenditures State-local expenditures(average monthly number unless
(millions of current dollars)(millions of current dollars)otherwise indicated in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2000 FY2000 FY2001 FY2002
hild care and development block grant (CCDBG)a $5,268$5,872$6,383$1,897$2,039$2,206.748b1.814bn.a.
ANF services c2,7054,200d4,413d982 1,328e1,734en.a.n.a.
Social services block grant (Title XX)2,854f 2,645f2,743fn.a.n.a.n.a.13,90412,826n.a.
ANF child care1,4111,5831,572897763g750gn.a.n.a.n.a.ii
Homeless assistance grantsh8859671,044i n.a.n.a.n.a.
ommunity services block granth594683739n.a.n.a.n.a.
egal servicesh304j 329l329j0001,012 k1,014 k979k
iki/CRS-RL32233ervices for refugees, asylees, and otherh,144144159000n.a.n.a.n.a.
g/wanitarian casesii
s.orergency food and shelter program h l 113m143m143m in.a.n.a.n.a.
leakces Totals14,27816,56617,525 3,7764,1304,690n.a.n.a.n.a.
://wikicludes expenditures made from funds transferred to CCDBG from TANF.
httpverage monthly number of children served.
cludes services provided solely under terms of pre-TANF law, supportive services, pregnancy prevention and family formation activities, and unclassified otherexpenditures.
cludes these sums for transportation and other supportive services for non-employed persons (classified asnon-assistance”): 2001, $524 million; 2002, $339 million
cludes these sums for transportation and other supportive services for non-employed persons (classified asnon-assistance”): 2001, $133 million; 2002, $245 million.
cludes transfers from TANF: 2000, $ 1,079 million; 2001, $920 million; 2002, $1,043 million. Excluded are transfers from LIHEAP and the Community Services Block Grant
(and reported under those programs).
t total TANF maintenance-of-effort (MOE) child care spending. To avoid double counting, reported here is only the amount by which TANF MOE spending exceeds CCDBG
MOE spending. 2002 sum is estimated.
ppropriatio ns
one required. Contributions unknown.
cludes administrative costs: 2000, $16 million; 2001, $20 million; 2002, $ 19 million.
ecipient count represents total number of cases closed during the fiscal year.
aw places these limits on administrative spending: local recipient organizations, 2% of their funds; National board, 1%; state set-aside committees, 0.5%. Note: Shelters, not
individuals, are fund recipients.
cludes these sums for administrative costs: FY2000, $2.6 million; FY2001, $3.3 million, and FY2002, $3.4 million.



CRS-240
JOBS AND TRAINING
Recipients
Federal expendituresaState-local expenditures(total annual number unless otherwise
(millions of current dollars)(millions of current dollars)indicated — in thousands)
FY20002 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
TANF work activitiesb$1,515$1,983$2,121$757$713$606n.a.n.a.n.a.
o rps 1 ,399 1,459 1,532 0 0 0 7 0 6 8 6 8
Youth activitiesc1,1281,1281,000000612721446
Adult activities950950950000380415393
enior community service440d440d445d48.9e48.9e49.4e100100100
oyment
fare-to-work grant programb568f591f342f176g288g71.4g198h206h117h
iki/CRS-RL32233ood stamp employment andningb, i200231294103104116n.a.n.a.n.a.
g/w j j j
s.oroster grandparents 9698.91073740.447.71630.234
leakenior companions39.240.444.424.4j 27.3j24.6j1615.517
argeted assistance for refugees,49.549.549.5000n.a.n.a.n.a.
://wikilees,and other humanitariana casesb
httpative employment works program7.67.67.60006.9k5.6kn.a.
and Training Total6,3926,9786,8931,1461,2229151,3991,5611,175
s unless otherwise marked.
pend itures.
fective July 1, 2000, includes funds for summer employment opportunities for youth (previously a separate program).
he law permits no more than 13.5% of federal funds to be used for administrative costs (but authorizes the Secretary of Labor to increase this to 15% under certain conditions).
ate, based on general requirement that non-federal funds equal at least one-ninth of federal funds (10% of total). State-local spending represents cash and in-kind amounts
and may include some private sums.
illion in formula grants and $164 million in competitive grants; 2001, $427 million in formula grants and $164 million in competitive grants; 2002, $ $329 million
in formula grants and $ 18.3 million in competitive grants.
atching funds for formula grants
ousand formula grant participants and 56.8 thousand competitive grant participants; FY2001, 170.4 thousand and 36.1 thousand participants, respectively; and
FY2002, 107.6 thousand and 10 thousand, respectively.



CRS-241
ding for administering and operating employment and training activities for food stamp recipients and for support costs like child care and transportation. Funding provided
(obligated) substantially exceeds expenditure amounts shown in this table. In editions of this report issued before 2001, funding for the employment and training programs for
food stamp recipients was included in figures shown for administration of the food stamp program, typically $150 — $200 million annually in federal funds and $50-$100 million
in state funds.
able shows non-federal funding (cash and in-kind amounts from state-local governments and some private sources), as reported in annual Budget Justifications of the Corporation
for National and Community Service. These amounts exceed the required minimum non-federal “matching share (10% of the total, one-ninth of the federal amount).
nnual number.


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CRS-242
ENERGY AID
Recipients
Federal expendituresState-local expenditures(number of households aided
(millions of current dollars)(millions of current dollars)during the year — in thousands)
FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002
ow-income home energy assistance program (LIHEAP)a d$1,844 b$1,856$1,800n.a.n.a.n.a.3,9004,8324,672c
eatherization assistanced135153230851181227478102eee
d total1,9792,0092,03085118122
ecipient numbers are households served during the year with heating and winter crisis aid. Outlay data include weatherization aid. Expenditures are from regular LIHEAP
appropriations plus contingency funds. In addition, some states may have access to oil price overcharge funds (under the Emergency Petroleum Allocation Act of 1975). Those
funds are limited, as most cases have been settled. In FY2000, 2 states obligated about $3 million of oil overcharge funds.
these funds, $400 million was released in the final weeks of FY2000, making them effectively available for FY2001.
iki/CRS-RL32233official estimate provided by the National Energy Assistance Directors Association (NEADO), based on a survey of the states. law, no more than 10% of federal funds may be used for administration.
g/wotal may include some duplication, as some households may receive aid from both programs.


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