Welfare payments

Time limits can have at least three effects. First, they stop welfare payments once recipients exhaust their benefits - mechanical effect (Grogger and Karoly 2005). Second, life-time limits, intermittent limits, and work trigger time limits can affect the behaviour of both current benefit recipients and potential benefit recipients (applicants) - needy families not yet receiving TANF benefits (Moffitt and Pavetti 2000). The threat of time limits may cause consumers to reduce their... 

The economic benefits of welfare reform to families—resulting mainly from increased employment—slighdy outweighed the losses in welfare payments and other income. 

Figure 7.1 Demand functions, co-payment levels and welfare loss...

In the 1970s and 1980s in the USA, the need for health cost containment and the alarming empirical estimates on the extent of moral hazard advised an increase in the co-payment rate for health services. Thus, Feldstein5 estimated that if the co-insurance rate were raised from 33 per cent to 67 per cent, the costs incurred due to welfare loss would fall much more than the benefits derived from reducing the risk. Subsequently, Feldman and Dowd,6 using data from the Rand experiment in the 1980s, reached similar conclusions. 

The United Nations Statistical Yearbook (2) contains statistics for countries throughout the world on population, manpower, land use, agriculture, forestry, and fisheries, mining and quarrying, manufacture (for a selected group of important products such as foods and fuels), external trade, balance of payments, national income, currency arid credits, public finance, social welfare, and education. Production statistic include data for suhuric, hydrochloric, and nitric acid, caustic soda, superphosphates, nitrogenous fertilizers, benzoV phosphate rock, potash, and sulfur. 

In the 1936 decision United States v. Butler m the US Supreme Court (SC) confirmed the federal power to tax for the purpose of providing funds for payment of the nation s debts and making provision for the general welfare (297 US 1, 56, 64 ff). Before this revolutionary decision, the constitutionality of a federal UI programme was in question. This may be one reason for the institutional design of the US UI system (namely a federal-state partnership) and the federal unemployment tax system.41... 

To illustrate the large volume of the federal provisions, we shall list some prohibitions and requirements for state TANF programmes. For example, states are not allowed to use their SFAG for benefit payments to individuals who have already received federally funded social welfare benefits for 60 months in their lifetime (TANF time limit) 70 no state shall make any payment from its SFAG to teen parents who do not live in an adult-supervised living environment (42 USC 608 (a)(5)) no state is allowed to pay TANF benefits to individuals without a dependent child (42 USC 608 (a)(1)) no state shall pay TANF benefits to individuals not participating in work activities although they are job-ready, nor shall it pay benefits for more than consecutive 24 months (42 USC 602 (a)(l)(A)(ii)). 

Also, when strictly enforced, sanctions can contribute to case load reductions and savings in assistance payments. Sanctions force participants to work, so that labour supply should be rising while benefit duration is falling. However, sanctions have been found to negatively affect income and self-sufficiency of welfare households. 

Despite the federal 60 months life-time limit on TANF benefits, states may set shorter life-time limits and may choose to also impose intermittent time limits, which restrict welfare receipt to a certain maximum number of months in any given time frame. For example, Louisiana limits benefit receipt to a maximum of 24 months in any 5-year period, while the life-time limit is a total of 60 months benefit payments. 

Since the enactment of PRWORA, there has been a shift from ongoing cash benefits to supportive services. While in 1995 states spent the great majority of AFDC funds for cash assistance, by 2003 states disbursed only 45% of TANF funds for cash benefits. Also a significant number of states award lump sum diversion payments to eligible families to overcome short-term financial crises thereby averting welfare dependency. 

Legally the most important change introduced by welfare reform was the discontinuation of the federal welfare entitlement. While an individual was entitled to receive AFDC payments once the eligibility criteria were met, federal government and most states mled out any entitlement to TANF benefits through the text of their laws. 

Under the new enhanced WOTC (the former Welfare to Work Tax Credit) payments are available for up to 2 years, with a maximum of 40% of USD 10,000 in first-year wages and 50% of USD 10,000 in second-year wages - maximum of USD 9,000 per new hire. New hires who qualify for the programme are members of a family that has received TANF benefits for at least 18 months ending on the hiring date. 

The welfare of the workmen was a particular concern of Major Minnis, whose wife was appointed as the first full-time welfare officer. Central to the welfare scheme were the numerous workmen s canteens established with money advanced personally by Major Minnis. The canteens, which provided wholesome, inexpensive food for the workers, were a huge financial success. All the profits were directed into the welfare fund, enabling the payment of a wide range of benefits at a level previously unknown in British industry. 

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