TANF Continued Eligibility of Benefits Act Exposed

The TANF Continued Eligibility of Benefits Act is listed under ALEC's Health and Human Services Task Force, but does not include approval information. ALEC has attempted to distance itself from this piece of legislation after the launch of ALECexposed.org in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

ALEC Bill Text

Summary

This act would allow TANF recipients to establish trust accounts and the funds for education, purchasing a home, or an initial investment in a business. Individuals would be allowed to accumulate up to $15,000 before loosing eligibility for TANF payments. Trust accounts would encourage individuals to plan for their future and allow them to establish a means to move off of welfare and become contributing members of society.

Model Legislation

Section 1. {Short Title}

"This Act may be cited as the TANF Continued Eligibility of Benefits Act"

Section 2. {Legislative Declarations}

An Act allowing the Department of Health and Human Services, upon receiving the appropriate waiver from the federal government, to disregard certain income and resources when determining the continued eligibility of a person receiving aid to families with dependent children; repealing an obsolete provision that allows higher grants of assistance for job training purposes; and providing for an effective date.

Section 3. {Main Provisions}

Under regulations adopted by the department, the department shall, when determining the continued eligibility of a person receiving assistance, disregard from the assistance unit's income and resources, in addition to other income and resources that may be disregarded under other laws.

(A) earned income otherwise available to the assistance unit, up to a $200 monthly maximum for the assistance unit, that is deposited into a trust account approved by the department under this section;

(B) the amount in a trust account approved by the department under this section, up to a maximum of $15,000;

(C) money deposited into a trust account approved by the department under this section by a nonprofit organization to match, on a dollar-for-dollar basis, contributions to the account by the assistance unit; however, the amount disregarded under this paragraph, when added to the amount disregarded under A) of this subsection, may not exceed $200 monthly; and

(D) interest earned on money in a trust account approved under this section, subject to the requirement that the interest remain in the account until expended under this section and that only $15,000 of the account may be disregarded as a resource, regardless of interest income to the account.

Section 4.

The department shall adopt regulations under which a recipient of assistance may establish a trust account administered by a financial institution regulated under {insert state bill number} under which money in the account may be used only for;

(A) books, tuition, and required fees for attendance by a member of the assistance unit at a career education program, college, or university in the state that has been approved under {insert state bill number} and for room and board while attending the program, college, or university if the person does not live at home during attendance;

(B) books, tuition, and required fees for an adult member of the assistance unit who is attending a public secondary school or an equivalent level of vocational or technical training in the state;

(C) the down payment and closing costs for the purchase by an adult in the assistance unit of real property that includes a residence that will, upon purchase, be the primary residence of the adult and a minor who is or was a dependant child,;

(D) initial capitalization and the first three months of operating expenses for a business owned and managed by an adult in the assistance unit;

(E) expenses of the trustee in administering the trust; or

(F) other purposes, but only when circumstances arises after establishment of the trust that make disbursements under (A-D) of this subsection impossible or highly impractical, considering the changed circumstances; the trust documents must provide that, if circumstances change while the assistance unit is still receiving assistance, the department shall determine whether the requirements of this paragraph have been met; the trust documents must provide that the trustee shall make this determination, in the trustee's complete discretion, if the beneficiaries of the trust are not receiving assistance when circumstances change.

Section 5.

A person who intends to establish a trust account under this section shall submit the proposed trust agreement to the department for approval. The trust agreement must provide that the trustee may make payments from the trust only;

(A) for the purpose described in section 4,

(B) after 15 days prior to the notification to the department if payments under section 4 A-D are proposed to be made while the person who established the trust is a recipient of assistance.

Section 6.

The department shall adopt regulations specifying the requirements that must be met by a nonprofit organization that intends to make matching contributions to an account established under this section. The regulations may relate to only the manner in which the contributions are made.

Section 7.

The department may not approve more than one trust account under this section for an assistance unit, regardless of how many persons are in the unit or how many contribute earned income to the trust account.

Section 8. {Severability clause}

Section 9. {Repealer clause}

Section 10. {Effective date}