Summary: Congress passed legislation in 1996 to transform the welfare system into a work-focused, temporary assistance program for needy families. The program established work requirements, set time limits on cash assistance, and provided enhanced services aimed at furthering self-sufficiency. Welfare offices in the seven states GAO reviewed were being transformed into job placement centers, and, in some instances, applicants were expected to start looking for work as soon as they applied for assistance. Adults with mental and physical impairments and those with small children were less likely than before to be exempt from participating in work activities, and adults who failed to participate as required were more likely to have their assistance terminated. In the states GAO reviewed, the average proportion of adult recipients required to participate in work activities rose from 44 percent in 1994 to 65 percent in 1997. In addition, states have set time limits on receiving cash assistance--in some cases shorter than five years--and have sought to make welfare recipients better off financially if they obtain jobs than if they do not. States also have modified their programs to better support welfare recipients who are trying to become more self-sufficient. For example, states have used some of the additional funding available under the welfare reform law to beef up support services, such as transportation and child care, for welfare recipients. States were also trying to improve their ability to treat physical and mental health problems. In Oregon, state officials estimated that about half of the welfare caseload required drug or alcohol treatment. Nationwide, welfare dependence has decreased. Welfare caseloads fell by 30 percent between January 1994 and September 1997--and decreased by a larger percentage each year during this period. In addition, the seven states GAO reviewed generally increased their job placement rates.
