Deficit Reduction Act of 1984: provisions related to the AFDC program

This article summarizes the provisions of the Deficit Reduction Act of 1984 that relate to the Aid to Families with Dependent Children (AFDC) program. Among other changes, the new legislation identifies certain individuals living in the same household with the dependent child who must file for assistance and have their income and resources considered in determining the child's eligibility for an AFDC payment. The new law requires that the States disregard, in determining AFDC eligibility and payment amounts, the first +50 per month of the current monthly support obligation of any child support collected on the family's behalf or received directly by the family. It also extends the +30 earned income disregard for an additional 8 months and exempts from countable resources burial plots, funeral agreements, and (for a limited period) real property that the family is making a good faith effort to sell. The legislation also broadens the types of work programs that the States may require AFDC recipients to participate in by allowing States to use AFDC payments to subsidize certain public and private sector employment. The new law also includes a provision based on a Grace Commission recommendation that requires the States to establish an income and eligibility verification system for certain Federal and federally assisted programs.