N.C. Welfare Program Could Lose Millions Under New Rules

N.C. Welfare Program Could Lose Millions Under New Federal Rules

POSTED: 11:39 pm EDT July 31, 2006
UPDATED: 11:39 pm EDT July 31, 2006

FAYETTEVILLE, N.C. -- North Carolina could lose up to $16.9 million for its welfare-to-work program when the federal government changes rules this fall, state officials said Monday.

The rules will make it more important that recipients of government assistance be on the job or get work training. The federal funding could be lost if North Carolina's Work First program fails to ensure that at least half of the welfare recipients are working or making themselves employable.

Most counties don't exceed 50 percent now, but the state has made up the difference by reducing its overall Work First caseload by 73 percent since 1995. The state has received a credit against the work participation rate because of its caseload reductions, according to the state Division of Social Services.

Beginning Oct. 1, states must determine their caseload levels compared to July 1, 2005. The new benchmark means North Carolina will only have a caseload reduction of 10 percent since that date, the division said Monday.

That means the federal government could begin penalizing North Carolina for having an average participation level in Work First at 41 percent. The state could see a decline in its federal grant for Work First and other public assistance, which totaled $338 million this year and was passed to counties for payments.

"I think we have a huge challenge ahead of us," state social services director Sherry Bradsher said. Her office is reviewing the federal rules announced June 28 and deciding how to respond.

Making the problem more difficult is that the Bush administration wants to eliminate some activities that North Carolina welfare officials identify as work or job training, including taking college courses or studying at home.

In Cumberland County, where about 1,800 families received Work First on July 1, about 800 of them include parents who must look for work, get training or be employed.

Julia Bishop, a substitute teacher who lives in Fayetteville with her two children, won't get credit anymore for going to Fayetteville State University or studying at home unsupervised to receive Work First payments.

Bishop, 40, said she was embarrassed when she first sought financial assistance.

"But I learned to get over that, because I know that everyone now and then needs help," said Bishop, who receives $236 per month and has two more semesters to get her bachelor's degree. "And I had to do what was best for my children."

Work First also limits cash payments to 24 months, which can be spread out over time, before being prevented from receiving such assistance for three years. Bishop has only one month left to work but intends to find more work rather than seek an extension.

"I'm not looking for sympathy," she said.

Cumberland County's work participation rate is 43 percent, so they county will have to work to meet the federal level of 50 percent, a county social services official said.

"The biggest thing is we are going to have to work smarter," said Richard Everett, assistant director of the economic independence section in the county's Department of Social Services.

Bradsher said the General Assembly agreed to spend $19 million this year to help counties improve their work participation rate. Details on how the money will be spent haven't been decided, she said.