INCOME SECURITY FOR ALL
FUNDAMENTALLY MENDING THE SOCIAL SAFETY NET

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The Challenge 
The Recession
Things have become ever more difficult for the increasing number of low-income New Yorkers.  There are now more than 3 million New Yorkers with incomes below the federal poverty line, representing fully 15.8% of the State’s population.  Shockingly, 900,000 residents lived below 50% of poverty and 20% of New York’s children live in poverty. 

In the State’s major cities, the poverty rate ranges from 20% to more than 30%, with child poverty exceeding 40% in some cities.  At the same time, unemployment in New York State reached 8.3% (9.1% in New York City) in November 2010. And New York retains its dubious title as the state with the greatest disparities between highest and lowest incomes in the nation.

Exacerbating this situation, the social safety net has proven less responsive to this recession than in the past.  There are currently approximately 114,000 jobless people who are not receiving unemployment insurance and are potentially eligible for public assistance, but between January and September 2010, the number of people receiving public assistance in New York City decreased by 2%, or 6,589 recipients (including children).  During the same time period the number receiving Food Stamps increased by 7% and Medicaid increased by 1%.  The obstacles to obtaining public assistance have meant that this benefit no longer plays its traditional critical role as a buffer against such economic downturns.

The Welfare Grant
In 2009 and 2010, the first two phases of a scheduled 3-step increase in the public assistance grant took effect.  With these first increases in the basic allowance in 19 years, the grant for a family of three in Suffolk County, for example, still equals roughly half of the federal poverty level.  Even with the enacted grant increase, families in need will receive a grant that had lost half of its purchasing power relative to 1990.  It is essential that the phase-in be implemented as scheduled; any delay would intensify the hardship faced by some of our state’s poorest households.

Welfare and Earnings from Employment
Increasingly, public assistance recipients also have income from employment.  As of October 2010, there were nearly 15,000 households receiving public assistance combined with income from earnings.  New York policy theoretically enables a household to receive a cash assistance supplement until their income brings them above the federal poverty level.  Unfortunately, outdated “gross income tests” mean that most families in the state lose all assistance well before their earned income reaches the poverty level.  The gross income tests should be repealed.

ES2 Policy Recommendations
ES2 supports a social safety net that is accessible and adequate to meet the needs of New Yorkers who must rely upon it.  With high poverty rates and welfare grant levels at half of the poverty level, the state’s safety net needs to be fundamentally mended.   ES2 also believes that we should “make work pay” by supporting the working poor and increasing their earnings and income, and removing barriers to work for the unemployed and underemployed.  

The 2011-2012 Session
New York State should STRENGTHEN THE SAFETY NET FOR THOSE WHO CANNOT WORK by:

• Retaining the current schedule for implementing the welfare grant increase.  The recently enacted grant increase, while relatively modest, provides critically needed aid to poor families.  The phase-in of the increase must not be delayed.

• Oppose full family sanctions which create an immediate family crisis and put the welfare and safety of the children and the basic stability of families at risk.  Sanctioning children in poor families makes them two to five times more likely to suffer: stunted growth, lead poisoning, low birth weight, repeat of a grade, iron deficiency, expulsion from school, serious disabilities or to drop out of school. 

• Making sure people can obtain the benefits they need.  In the face of a dramatically increased need for public benefits, access to these benefits for low-income households must be protected and should be enhanced.  Measures should be adopted to facilitate the timely processing of applications and to reduce unnecessary and often punitively administered requirements. 

• New York should also adopt a Crisis Stabilization Program for welfare applicants that states such as Delaware, Nevada, New Hampshire and South Carolina have developed to provide specialized assessments and case management for families that need additional time and assistance to address their barriers and become work ready.

• New York should reform the application process to provide more supports so that people can better get back on their feet and not end up without a job or benefits.  {See FPWA's Policy Matters January 2011 document}

• New York should move to a system of online facilitated enrollment such as the Benefit Bank program for all government benefits.

• To adhere to Article XVII of the NYS Constitution, DSS offices should have sufficient staffing, hours and operations to process applications and serve existing clients in a timely and efficient manner.

New York State should MAKE WORK PAY by:

• Restoring the purchasing power of the minimum wage to $10/hour and indexing it for inflation to prevent future erosion.

• Providing assistance to the working poor by eliminating the 185% of the standard of need gross income test for welfare eligibility and by increasing the earned income disregard to 67% (A.3425).

• Creating a State-funded young worker Earned Income Tax Credit (EITC) (A.4875/S. 2720 of 2010) for low-income workers without children ages 17-24 who are currently ineligible for the EITC until they turn 25 to provide a financial benefit for these workers and an incentive for unemployed youth to enter the workforce. 

• Green Jobs/Green New York – This program should specify targets, such as 10-15%, for the number of public assistance recipients and others from low-income communities who can access training and job placement services.  We also urge the immediately passage of the “On-Bill Recovery” legislation that will enable households across New York State to make energy efficient upgrades to their homes using 100% Green Jobs/Green NY financing, and pay back the cost through an all-but-unnoticeable charge on their utility bills.

• Reforming the Unemployment Insurance system to increase the maximum benefit, increase benefits at the bottom of the income distribution and establish dependent allowances (A.4920/S.2245 of 2010).

• Increasing or eliminating the basic asset limit for public assistance recipients – New York State’s asset limit of $2,000 is one of the lowest of any state in the U.S.

New York State should ADDRESS BARRIERS TO WORK by:

• Expanding transportation programs for welfare recipients.  The Wheels to Work program should also include a job training component.

• Timely rolling out of the OTDA Employment Assessment tool, including adequate screening for mental health and learning disabilities.

• Making New York State’s hourly work requirements for public assistance recipients no higher than the levels set by Federal law for households with children.   Many counties require recipients to participate in work activities for more than the federally mandated 30 hours per week, despite the fact that the State gets full participation credit once these individuals participate for  twenty hours (if the household has a child under six) or thirty hours (for all other households with children).  By reducing the hourly requirements to the lower federal level, individuals will be better able to balance schooling and training with work and parenting.  

HOW CAN THE STATE PAY FOR THIS?

• First, the state should hold local social services districts accountable for use of the significant resources provided to them through the Flexible Fund for Family Services (FFFS).  If funds are being used for “fiscal relief” rather than the kinds of benefits, programs and services described here, OTDA should force counties to revamp spending plans and reconsider the block grant mechanism. 

• If there are still not sufficient funds in the TANF block grant and the FFFS to fund these services and benefits, the state should consider either financing the NYS EITC in the same way it finances other tax expenditures rather than taking the funds from the TANF block grant and/or financing all child welfare funding out of the general fund.  This could free up significant TANF block grant funds. 

• New York can use its TANF contingency funds to cover some of these costs.  In addition, as with the TANF block grant, TANF contingency funds should not be used to supplant funds from general revenue sources.  Properly applied, these funds could be used to, among other vital purposes, retain the currently scheduled phase-in of the public assistance grant increase.