New York’s working families on welfare can expect smaller checks effective immediately, as the governor moves to weaken a once heralded state program.
Earned income disregard (EID), a pillar of welfare reform, was designed to give employed parents an incentive to choose work over welfare. It allows a certain portion of their salary (generally close to 50 percent) to be exempted when calculating their benefits.
The State Office of Temporary and Disability Assistance (OTDA) adjusts the percentage every June, usually raising it by a meager 1 or 2 percent. But on June 1 it was slashed from 53 percent to 41 percent, the first decrease since 1997, when the program began.
The reduction took many recipients and advocates by surprise and will likely have a major impact on the roughly 215,000 working families on temporary assistance in New York City. One Brooklyn mother of three received a notice in late April that her benefits were being cut from $480 to $445 a month, starting in June. Her food stamps were increased to help offset the difference, but not enough to cover the loss.
While the cut was unexpected, it stems from a formula used each year. Because the state raised rental assistance in November to just over $400 a month while the federal poverty level hasn’t changed, OTDA lowered the amount of earned income that could be disregarded.
Cristina Di Meo, a policy analyst at the Federation of Protestant Welfare Agencies, questions the use of the federal poverty level as a gauge for benefits in New York. She said, “Advocates have been saying for years that the poverty level is not an accurate measure of what you need to survive,” particularly in high-cost cities like New York.
Concerns about the annual adjustment process will be irrelevant, however, if Governor Pataki’s proposed budget goes through. Among other changes to welfare, it would do away with the annual adjustment process for EID. Instead, it would set the percentage of disregarded income at 50 percent for a family’s first two years on assistance, drop it to 25 percent for the next three years and eliminate it completely after five years on assistance. The clock would start in 1996, so some families could see their EID percentage drop to 25 percent or zero right away.
Michael Hayes, spokesperson for OTDA, said the time limits will encourage people to move permanently off welfare. He points out that they can still benefit from the earned income tax credit and food stamps, which, he said, “will more than counterbalance the changes to EID.”
But opponents of Pataki’s changes challenge that assertion. “If we want to assist people to get out of poverty, we should allow them to retain more of their earned income,” said State Assemblymember Deborah Glick, chair of the Social Services Committee, in a recent statement. “There is no conceivable justification for reducing the earned income disregard.”