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In this issue:

Federal Welfare Reform:
Proposed Effects on Children With Disabilities

Federal Welfare Reform

This issue of FACT FIND highlights some of the effects of federal welfare reform on children with disabilities. Both the House and the Senate have passed bills with major changes in Supplemental Security Income (SSI) for children, including changes to basic eligibility requirements. These two bills now go on to Conference Committee and a compromise will be reached in the near future.

The House Personal Responsibility Act (H.R.4)

11,200 MN children will not receive SSI disability payments between the years 1996 and 2000.

State Block Grants

• States will receive a block grant totaling 75% of the cost of cash benefits to provide services to children beginning in FY 1997.
• Individual states would determine who is eligible for services as well as the types, amount and duration of services.

Eligibility Changes

• Eliminates "comparable severity" test and Individual Functional Assessment (IFA) step.
• Eligibility dependent upon having a medically determinable physical or mental impairment, or is equivalent in severity to such impairment.
• Children currently receiving SSI under an IFA would lose eligibility six months after enactment. These children may reapply under new criteria, but are not automatically eligible.
• Children currently receiving benefits, and who remain eligible under the new requirements, would continue to receive cash benefits.
• Children who become eligible in the future must also be institutionalized or in need of placement in an institution in order to receive cash benefits. All other children would receive services through a block grant administered by a state agency.
• Redetermination of eligibility every three years except for children whose medical condition is permanent and cannot improve. Eligibility for babies with low birth weight redetermined after 12 months.

Cost Savings

- $13.4 billion over seven years (1996-2002)

The Senate Work Opportunity Act of 1995 (S. 1120)

1,850 MN children, or 19% of all MN children receiving SSI in FY 1994, would lose all SSI benefits in FY 1997.

Between FY 1996-FY 2000, 2,652 MN children will be determined ineligible for SSI benefits. This amounts to 23% of all MN children who would have been eligible in the past.

Cash benefits retained for all children who meet the revised definition of disability-those currently eligible as well as children who qualify in the future. Cash benefits allow parents to make critical decisions about their child's needs, amount, type and duration of services not determined by a predetermined set of regulations at the state level.

Eligibility changes

• Eliminates "comparable severity" test and IFA step similar to House.
• Eligibility restricted to medically determinable physical or mental impairments which result in severe functional limitations, and can be expected to either last at least 12 continuous months or result in death.
• All children currently on SSI will reassessed to determine continuing eligibility within one year of enactment. Benefits would not terminate until January 1, 1997. - Continued eligibility will be reviewed every three years for children whose impairments 'may improve.'

Cost Savings

• $8.4 billion over seven years (1996-2002). These Congressional Budget Office (CBO) estimates assume that all children terminated from SSI or denied eligibility in the future would receive Medicaid benefits.

Based on the above information, many children with disabilities are in danger of losing their SSI benefits. MN Children's Defense Fund, April 1995 - US Department of Health and Human Services, Social Security Administration data stating that 10,160 blind and disabled children were served by this program in January 1994. HHS estimated the number of children who would lose eligibility in next six months, as well as the number of additional children who apply and will be turned down between 1996 and 2000.
Congressional Budget Office estimates. Preliminary Department of Health and Human Services and Social Security Administration analysis of the Work Opportunity Act of 1995 (S. 1120).

Fact Find is published by the Center for Early Education and Development (CEED), University of Minnesota, 1954 Buford Avenue, Suite 425, St. Paul, MN, 55108

ceed@umn.edu (email)
http://cehd.umn.edu/ceed (Web)

CEED provides information regarding young children (birth to age eight), including children with special needs, in the areas of education, child care, child development, and family education. CEED activities include research, training, and publications geared toward improving professional practices, supporting parents, and informing policy development.

The University of Minnesota is an equal opportunity employer and educator. The College of Education and Human Development is committed to recruiting, enrolling, and education a diverse population of students who represent the overall composition of our society. This publication is available in alternate formats upon request.

Copyright © 2004 by Center for Early Education and Development

These materials may be freely reproduced for education/training or related activities. There is no requirement to obtain special permission for such uses. We do, however, ask that the following citation appear on all reproductions:

Reprinted with permission of the Center for Early Education and Development (CEED), College of Education and Human Development, University of Minnesota, 1954 Buford Avenue, Suite 425, St. Paul, MN, 55108; phone: 612-625-2898; fax: 612-625-6619; e-mail: ceed@umn.edu, web site: http://cehd.umn.edu/ceed.