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Foreword

This report provides information on the financial circumstances of families who received assistance payments in March 1977 under the AFDC program, including the unemployed father segment. Part 1 provides statistics on demographic and program characteristics of families.

The study was planned and carried out under the direction of Howard Oberheu, Chief of the Family Assistance Statistics Branch, Division of Family Assistance Studies. Henrietta Duvall, branch member, prepared the tabulations and produced this report.

The data came from a sample survey which included all States and jurisdictions, except Guam. The sample required from each State was 1/3 of 1 percent or larger so that reliable data could be presented for all States. Data are also shown for all 10 HHS regions. Sample data are inflated to represent all families receiving money payments during the study month. Therefore, the data are subject to sampling variability and, as in all surveys, the figures are subject to errors of response.

The Office of Research and Statistics gratefully acknowledges the cooperation of all State and local welfare agency personnel who provided the information needed for the study. State welfare agencies were responsible for completion of sample surveys for the study month. Information was obtained from case files and other records maintained by the agency.

John J. Carroll

Director

Office of Research and Statistics

August 1980

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This is a summary of some of the major findings about the financial circumstances of AFDC families. State programs vary considerably.

When a family applies for aid to families with dependent children, the local welfare agency considers the income and resources of the children's parents or other persons requesting and receiving assistance. All types of income must be counted, including social security and other benefits received regularly. Each State specifies the amounts and types of liquid assets and personal and real property that the family may retain for current and future needs. All States permit retention of real property used as a home, although some may limit its value. In addition to the cash assistance of AFDC, an eligible family may also be eligible for benefits under other programs, such as Medicaid (medical assistance), food stamps, and social services. With the establishment of the Child Support Enforcement program in 1975, AFDC applicants must assign support rights to the State. Thus, in contrast to earlier studies, such child support payments are not usually considered income to the family as the State is empowered to make the collections.

To determine the AFDC payment, the public welfare agency prepares a budget for the family. The major elements of the budget are (a) the need requirements established by the State, (b) nonassistance income, (c) nonassistance income disregards, and (d) the AFDC payment. To determine the amount of the AFDC payment, net nonassistance income (after income disregards) is subtracted from the requirements.

Budget Summary (tables 1-4)

Most of the 3.5 million families who received AFDC in March 1977 had little or no other income. Assistance payments totaled $843 million; nonassistance income was about $190 million. Over

one-half ($108 million) of the nonassistance income was not counted when determining the AFDC payment. On the average, AFDC families received $239 in cash assistance and had $54 in other income. The total income applied in the assistance budget represented about 90 percent of the established need requirements. The average need requirement and AFDC payment were considerably higher for families living in metropolitan areas than for those living in nonmetropolitan areas; $306 and $254 compared with $248 and $182, although the amount of nonassistance income was about the same.

Standard of Need (tables 5-7)

Each State is required to establish a standard in dollar terms to measure need. Some States budget only a single amount for all items, while other States budget separate amounts for such items as housing. Besides housing, the basic standard generally covers food, clothing, personal items, and utilities and varies by size and composition of family.

In March 1977, more than two-thirds of AFDC families had only one or two recipient children, and most. (79 percent) had only one adult. For families of one adult and one child (31 percent of the caseload), monthly requirements averaged $234, and for families of one adult and two children (22 percent of the caseload), requirements averaged $292. Fourteen percent of families had no adult recipient and seven percent had two.

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