Earlier today at a ceremony in Winooski Governor Peter Shumlin signed H.790, An Act Relating to Reach Up, Reach Ahead and the Enhanced Child Care Services Subsidy Program, into law. The new policy measures are designed to soften the so‐called ‘benefits cliff’ for welfare recipients. As originally envisioned, the legislation would have allowed working Reach Up participants to earn and save more before benefits were reduced. The compromise that ultimately passed allows working participants to disregard an additional $50 earned each month before benefits are calculated and correspondingly reduced. In addition, it softens the off‐ramp from the program by:
• preserving eligibility for child care subsidies for an additional year for people leaving Reach Up through expansion of the Reach Ahead program (increased to 24 months from 12). Here are the details:
• Extends childcare benefit (100% subsidy) for a full second year for Reach Ahead participants
• Uses caseload savings to pay for childcare benefit; if there’s enough funding, the DCF and Finance Commissioners can jointly decide to extend the benefit beyond 24 months
• Increases the earned income disregard (EID) from $200 to $250 (percentage of remaining unsubsidized income remains the same at 25%; original proposal was to increase EID to $300 plus 50% of remaining income)
• Reduces 1st six months of Reach Ahead’s TANF‐funded food assistance from $100 to $50 a month to pay for part of the increased EID; keeps 2nd six months of Reach Ahead food benefit at $50
• Provides a nominal $5 per month food benefit for 2nd year Reach Ahead participants
• Food benefits for families in their first six months of Reach Ahead are grandfathered at $100 for the first six months and $50 for months 7 through 12
• Case managers are to meet with participating families to make them aware of program benefit changes and advise them on how to maximize new opportunities without a corresponding loss of benefits.
• DCF is to explore feasibility of transitional food benefit program that would allow drawing additional federal funds to offset food assistance during the first five months of Reach Ahead, freeing up State dollars to increase the EID; report due to the Health Care Oversight Committee by October 15.
• DCF also to report to the committee on the estimated cost of the EID and child care subsidies and projected caseload reduction savings.
• NO increase to the asset limit, which was originally proposed to increase from $2,000 to $5,000 (BUT: the cost of increasing the asset limit is modest and could easily be brought back next year, paid for through use of the additional federal $$ from the transitional food benefit program).
• NO across the board reduction in benefits (originally estimated to be $19 per household to pay for EID)
• Additional childcare subsidy and EID do not take effect until July 1, 2015; childcare subsidy only takes effect if there are sufficient savings from caseload reduction to pay for it
On Monday’s broadcast of Equal Time Radio on WDEV 96.1 FM/550 AM, Amy Shollenberger spoke with Chris Curtis, Staff Attorney at Vermont Legal Aid, and Erhard Mahnke, Coordinator for VAHC, about the bill, and a variety of issues related to combating poverty, including the Reach-Up Program and affordable housing in Vermont. Listen to the full broadcast here.