Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2002-FY2004








Prepared for Members and Committees of Congress



More than 80 benefit programs provide aid—in cash and noncash form—that is directed
primarily to persons with limited or low income. Such programs constitute the public “welfare”
system, if welfare is defined as income-tested or need-based benefits. This definition omits social
insurance programs like Social Security and Medicare.
Income-tested benefit programs in FY2004 cost approximately $583 billion: $427 billion in
federal funds and $156 billion in state-local funds (Table 1). Spending on these programs
represented 18.6% of all federal spending, with medical aid accounting for 9% of the budget.
Total low-income spending in FY2004 equaled 5% of the gross domestic product and set a record
high, up $34 billion (6.2%) from the previous peak of FY2003. In current dollars, spending on
income-tested programs increased during the year for all forms of aid except jobs, training,
services, and energy aid. Higher medical spending accounted for $26 billion of the net increase in
FY2004, and 55 cents of every low-income dollar went for medical assistance. Expressed in
constant FY2004 dollars (Table 2), income-tested spending increased by 3.8% from the 2003
level.
The composition of low-income spending differed by level of government (Tables 3 and 4).
Medical aid consumed nearly 82% of state-local funds, but 46% of federal low-income dollars.
Most income-tested programs provide benefits in the form of cash, goods, or services to persons
who make no payment and render no service in return. However, in the case of the job and
training programs and some educational benefits, recipients must work or study for wages, grants,
or loans. Further, the block grant program of Temporary Assistance for Needy Families (TANF)
requires adults to start work after a period of enrollment, the food stamp program imposes work
and training requirements, and public housing requires residents to engage in “self-sufficiency”
activities or perform community service. Finally, the Earned Income Tax Credit (EITC) is
available only to workers.
An unduplicated count of beneficiaries of income-tested programs is not available. Enrollment in
TANF and food stamps remained below 1994-1995 peak levels during 2002-2004 (although food
stamp enrollment rose from the 2000-2002 period), while Medicaid enrollment set a record high.
Average 2004 monthly numbers: food stamps, 24.9 million; TANF, 4.7 million; and Supplemental
Security Income (SSI), 7.1 million. During the year, 56.1 million persons received Medicaid
services, and in calendar year 2004, EITC payments went to an estimated 19.2 million tax filers.
Census Bureau data indicate that 5.8 million families with children were poor in 2003 before
receiving cash aid from TANF, General Assistance (GA), or the EITC, compared with 6.7 million
in 1996 (the last full year of the pre-TANF welfare program). Among these families, the EITC
was received by 43.8% of those with a female head, and by 67.8% of those with a male present
(Figure 3).






Introduc tion ..................................................................................................................................... 1
Trends in Spending..........................................................................................................................4
Annual Spending Data..............................................................................................................4
Spending Trends by Level of Government.........................................................................6
Medical Benefits.................................................................................................................6
Means-Tested Share of Federal Budget..............................................................................7
Refundable Income Tax Credits..........................................................................................7
Composition of Spending..............................................................................................................13
Noncitizen Eligibility for Major Federal Benefits.........................................................................14
Aid Received by Poor Families With Children.............................................................................15
Income Tests of the Benefit Programs...........................................................................................16
Medical Aid...................................................................................................................................26
1. Medicaid....................................................................................................................................26
Funding Formula.....................................................................................................................26
Eligibility Requirements.........................................................................................................27
Families, Pregnant Women, and Children.........................................................................28
Aged and Persons with Disabilities..................................................................................30
The Medically Needy........................................................................................................33
Individuals Qualifying Under Demonstration Waivers.....................................................34
Aliens ................................................................................................................................ 34
Medicaid Purchase of COBRA Coverage.........................................................................34
Benefits ................................................................................................................................... 35
2. Medical Care For Veterans Without Service-Connected Disability..........................................36
Funding Formula.....................................................................................................................36
Eligibility Requirements.........................................................................................................36
Benefit Levels.........................................................................................................................37
3. State Children’s Health Insurance Program (SCHIP)................................................................38
Funding Formula.....................................................................................................................38
Eligibility Requirements.........................................................................................................40
Benefit Levels.........................................................................................................................41
4. Indian Health Services...............................................................................................................44
Funding Formula.....................................................................................................................44
Eligibility Requirements.........................................................................................................44
Benefit Levels.........................................................................................................................44
5. Consolidated Health Centers.....................................................................................................45
Funding Formula.....................................................................................................................45
Eligibility Requirements.........................................................................................................45
Benefit Levels.........................................................................................................................46
6. Maternal and Child Health Services Block Grant.....................................................................46
Funding Formula.....................................................................................................................46
Eligibility Requirements.........................................................................................................47
Benefit Levels.........................................................................................................................47

7. Title X Family Planning Services..............................................................................................48





Funding Formula.....................................................................................................................48
Eligibility Requirements.........................................................................................................48
Benefit Levels.........................................................................................................................48
8. Medical Assistance to Refugees, Asylees, Other Humanitarian Cases.....................................49
Funding Formula.....................................................................................................................49
Eligibility Requirements.........................................................................................................49
Benefit Levels.........................................................................................................................49
Cash Aid........................................................................................................................................50
9. Supplemental Security Income (SSI)........................................................................................50
Funding Formula.....................................................................................................................50
Eligibility Requirements.........................................................................................................50
Benefit Levels.........................................................................................................................51
10. Earned Income Tax Credit (EITC)..........................................................................................53
Funding Formula.....................................................................................................................53
Eligibility Requirements.........................................................................................................53
Benefit Levels.........................................................................................................................54
11. Temporary Assistance for Needy Families (TANF)................................................................56
Funding Formula.....................................................................................................................56
Federal Funding................................................................................................................56
State-Local Funding..........................................................................................................57
Eligibility Requirements.........................................................................................................57
Basic Eligibility................................................................................................................57
Ineligible Persons..............................................................................................................58
Work/conduct Requirements.............................................................................................58
Benefit Levels.........................................................................................................................59
Cash Assistance.................................................................................................................59
Related Programs..............................................................................................................59
Other Benefits...................................................................................................................59
12. Foster Care..............................................................................................................................60
Funding Formula.....................................................................................................................60
Eligibility Requirements.........................................................................................................60
Benefit Levels.........................................................................................................................61
13. Child Tax Credit......................................................................................................................61
Funding Formula.....................................................................................................................61
Eligibility Requirements.........................................................................................................61
Benefit Levels.........................................................................................................................62
14. Pensions for Needy Veterans, their Dependents, and Survivors..............................................62
Funding Formula.....................................................................................................................62
Eligibility Requirements.........................................................................................................63
Benefits ................................................................................................................................... 63
15. Adoption Assistance................................................................................................................64
Funding Formula.....................................................................................................................64
Eligibility Requirements.........................................................................................................64
Benefit Levels.........................................................................................................................64
16. Dependency and Indemnity Compensation (DIC) and Death Compensation for
Parents of Veterans.....................................................................................................................65





Funding Formula.....................................................................................................................65
Eligibility Requirements.........................................................................................................65
Benefit Levels.........................................................................................................................65
17. General Assistance to Indians..................................................................................................66
Funding Formula.....................................................................................................................66
Eligibility Requirements.........................................................................................................66
Benefit Levels.........................................................................................................................67
18. Cash Assistance to Refugees, Asylees, Other Humanitarian Cases.........................................68
Funding Formula.....................................................................................................................68
Eligibility Requirements.........................................................................................................68
Benefit Levels.........................................................................................................................69
Food Aid........................................................................................................................................69
19. Food Stamps............................................................................................................................69
Funding Formula.....................................................................................................................69
Eligibility Requirements.........................................................................................................70
Inco me ......................................................................................................................... ..... 70
Assets ......................................................................................................................... ....... 71
Employment-Related Requirements.................................................................................72
Other Limitations..............................................................................................................72
Benefit Levels.........................................................................................................................73
20. School Lunch Program (Free and Reduced-Price Components).............................................74
Funding Formula.....................................................................................................................74
Eligibility Requirements.........................................................................................................74
Benefit Levels.........................................................................................................................75
21. Special Supplemental Nutrition Program for Women, Infants, and Children (The WIC
Program) ..................................................................................................................................... 76
Funding Formula.....................................................................................................................76
Eligibility Requirements.........................................................................................................76
Benefit Levels.........................................................................................................................77
22. Child and Adult Care Food Program (Lower-Income Components).......................................77
Funding Formula.....................................................................................................................77
Eligibility Requirements.........................................................................................................78
Benefit Levels.........................................................................................................................78
23. School Breakfast Program (Free and Reduced-Price Components)........................................79
Funding Formula.....................................................................................................................79
Eligibility Requirements.........................................................................................................80
Benefit Levels.........................................................................................................................80
24. Nutrition Program for the Elderly...........................................................................................81
Funding Formula.....................................................................................................................81
Eligibility Requirements.........................................................................................................81
Benefit Levels.........................................................................................................................82
25. The Emergency Food Assistance Program (TEFAP)..............................................................82
Funding Formula.....................................................................................................................82
Eligibility Requirements.........................................................................................................83
Benefit Levels.........................................................................................................................83

26. Summer Food Service Program...............................................................................................83





Funding Formula.....................................................................................................................83
Eligibility Requirements.........................................................................................................84
Benefit Levels.........................................................................................................................84
27. Commodity Supplemental Food Program (CSFP)..................................................................84
Funding Formula.....................................................................................................................84
Eligibility Requirements.........................................................................................................85
Benefit Levels.........................................................................................................................85
28. Food Distribution Program on Indian Reservations (FDPIR).................................................85
Funding Formula.....................................................................................................................85
Eligibility Requirements.........................................................................................................86
Benefit Levels.........................................................................................................................86
29. Farmers’ Market Nutrition Programs......................................................................................86
Funding Formula.....................................................................................................................86
Eligibility Requirements.........................................................................................................87
Benefit Levels.........................................................................................................................87
30. Special Milk Program (Free Segment)....................................................................................88
Funding Formula.....................................................................................................................88
Eligibility Requirements.........................................................................................................88
Benefit Levels.........................................................................................................................88
Housing Aid...................................................................................................................................89
31. Section 8 Low-Income Housing Assistance............................................................................89
Funding Formula.....................................................................................................................89
Eligibility Requirements.........................................................................................................89
Benefit Levels.........................................................................................................................90
32. Low-Rent Public Housing.......................................................................................................91
Funding Formula.....................................................................................................................91
Eligibility Requirements.........................................................................................................91
Benefit Levels.........................................................................................................................92
33. Rural Housing Loans (Section 502)........................................................................................93
Funding Formula.....................................................................................................................93
Eligibility Requirements.........................................................................................................93
Benefit Levels.........................................................................................................................94
34. Home Investment Partnerships Program (HOME)..................................................................95
Funding Formula.....................................................................................................................95
Eligibility Requirements.........................................................................................................95
Benefit Levels.........................................................................................................................95
35. Housing For The Elderly and Persons With Disabilities.........................................................96
Funding Formula.....................................................................................................................96
Eligibility Requirements.........................................................................................................96
Benefit Levels.........................................................................................................................97
36. Rural Rental Assistance Payments (Section 521)....................................................................98
Funding Formula.....................................................................................................................98
Eligibility Requirements.........................................................................................................98
Benefit Levels.........................................................................................................................98
37. Section 236 Interest Reduction Payments...............................................................................99
Funding Formula.....................................................................................................................99





Eligibility Requirements.........................................................................................................99
Benefit Levels.........................................................................................................................99
38. Housing Opportunities for People with AIDS Program (HOPWA)......................................100
Funding Formula...................................................................................................................100
Eligibility Requirements.......................................................................................................100
Benefit Levels.......................................................................................................................101
39. Rural Rental Housing Loans (Section 515)...........................................................................101
Funding Formula...................................................................................................................101
Eligibility Requirements.......................................................................................................102
Benefit Levels.......................................................................................................................102
40. Rural Housing Repair Loans and Grants (Section 504)........................................................103
Funding Formula...................................................................................................................103
Eligibility Requirements.......................................................................................................103
Benefit Levels.......................................................................................................................103
41. Farm Labor Housing Loans (Section 514) and Grants (Section 516)...................................104
Funding Formula...................................................................................................................104
Eligibility Requirements.......................................................................................................104
Benefit Levels.......................................................................................................................105
42. Section 101 Rent Supplements..............................................................................................105
Funding Formula...................................................................................................................105
Eligibility Requirements.......................................................................................................105
Benefit Levels.......................................................................................................................106
43. Rural Housing Self-Help Technical Assistance Grants (Section 523) and Rural
Housing Site Loans (Sections 523 and 524)............................................................................106
Funding Formula...................................................................................................................106
Eligibility Requirements.......................................................................................................106
Benefit Levels.......................................................................................................................107
44. Indian Housing Improvement Grants....................................................................................108
Funding Formula...................................................................................................................108
Eligibility Requirements.......................................................................................................108
Benefit Levels.......................................................................................................................108
45. Section 235 Homeownership Assistance for Low-Income Families.....................................109
Funding Formula...................................................................................................................109
Eligibility Requirements.......................................................................................................109
Benefit Levels........................................................................................................................110
46. Rural Housing Preservation Grants (Section 533).................................................................110
Funding Formula....................................................................................................................110
Eligibility Requirements........................................................................................................111
Benefit Levels........................................................................................................................111
47. Homeownership and Opportunity for People Everywhere (HOPE) Programs......................112
Funding Formula....................................................................................................................112
Eligibility Requirements........................................................................................................112
Benefit Levels........................................................................................................................113
Educational Assistance.................................................................................................................113
48. Federal Pell Grants.................................................................................................................113
Funding Formula....................................................................................................................113





Eligibility Requirements........................................................................................................113
Benefit Levels........................................................................................................................114
49. Head Start...............................................................................................................................115
Funding Formula....................................................................................................................115
Eligibility Requirements........................................................................................................115
Benefit Levels........................................................................................................................116
50. Subsidized Federal Stafford and Stafford/Ford Loans............................................................116
Funding Formula....................................................................................................................116
Eligibility Requirements........................................................................................................116
Benefit Levels........................................................................................................................117
51. Federal Work-Study Program.................................................................................................118
Funding Formula....................................................................................................................118
Eligibility Requirements........................................................................................................118
Benefit Levels........................................................................................................................119
52. Federal TRIO Programs.........................................................................................................119
Funding Formula....................................................................................................................119
Eligibility Requirements........................................................................................................119
Upward Bound................................................................................................................120
Student Support Services................................................................................................120
Talent Search...................................................................................................................120
Educational Opportunity Centers....................................................................................120
Ronald E. McNair Postbaccalaureate Achievement........................................................120
Benefit Levels.......................................................................................................................121
53. Supplemental Educational Opportunity Grants.....................................................................121
Funding Formula...................................................................................................................121
Eligibility Requirements.......................................................................................................122
Benefit Levels.......................................................................................................................122
54. Title I Migrant Education Program........................................................................................122
Funding Formula...................................................................................................................122
Eligibility Requirements.......................................................................................................123
Benefit Levels.......................................................................................................................123
55. Perkins Loans........................................................................................................................123
Funding Formula...................................................................................................................123
Eligibility Requirements.......................................................................................................124
Benefit Levels.......................................................................................................................124
56. Leveraging Educational Assistance Partnerships (LEAP).....................................................124
Funding Formula...................................................................................................................124
Eligibility Requirements.......................................................................................................125
Benefit Levels.......................................................................................................................125
57. Health Professions Student Loans and Scholarships.............................................................126
Funding Formula...................................................................................................................126
Eligibility Requirements.......................................................................................................126
Loans ............................................................................................................................... 126
Scholar ships .................................................................................................................... 127
Loan Repayments............................................................................................................127
Benefit Levels.......................................................................................................................127
Loans...............................................................................................................................127





Loan Repayments............................................................................................................128
Scholar ships .................................................................................................................... 128
58. Fellowships for Graduate and Professional Study.................................................................129
Funding Formula...................................................................................................................129
Eligibility Requirements.......................................................................................................129
Javits Fellowships...........................................................................................................129
GAANN Fellowships......................................................................................................130
Thurgood Marshall Fellowships.....................................................................................130
Benefit Levels.......................................................................................................................130
Javits Fellowships...........................................................................................................130
GAANN Fellowships......................................................................................................131
Thurgood Marshall Fellowships.....................................................................................131
59. Migrant High School Equivalency Program (HEP)..............................................................131
Funding Formula...................................................................................................................131
Eligibility Requirement.........................................................................................................132
Benefit Levels.......................................................................................................................132
60. College Assistance Migrant Program (CAMP).....................................................................132
Funding Formula...................................................................................................................132
Eligibility Requirements.......................................................................................................132
Benefit Levels.......................................................................................................................133
61. Close Up Fellowships............................................................................................................133
Funding Formula and Eligibility Requirements....................................................................133
Ellender Fellowships.......................................................................................................133
Close Up Fellowships.....................................................................................................133
Benefit Levels.......................................................................................................................134
62. D.C. School Choice Incentive Program................................................................................134
Funding Formula...................................................................................................................134
Eligibility Requirements.......................................................................................................134
Benefit Levels.......................................................................................................................135
Services ....................................................................................................................................... 135
63. Child Care and Development Block Grant............................................................................135
Funding Formula...................................................................................................................135
Discretionary Funds........................................................................................................135
Entitlement Funds...........................................................................................................136
Eligibility Requirements.......................................................................................................136
Benefit Levels.......................................................................................................................137
64. TANF Services......................................................................................................................137
Funding Formula...................................................................................................................137
Eligibility Requirements.......................................................................................................137
Benefit Levels.......................................................................................................................138
65. Social Services Block Grant (Title XX)................................................................................138
Funding Formula...................................................................................................................138
Eligibility Requirements.......................................................................................................139
Benefit Levels.......................................................................................................................139
66. TANF Child Care...................................................................................................................139
Funding Formula...................................................................................................................139





Eligibility Requirements.......................................................................................................139
Benefit Levels.......................................................................................................................140
67. Homeless Assistance Grants..................................................................................................140
Funding Formula...................................................................................................................140
Eligibility Requirements.......................................................................................................141
Benefit Levels.......................................................................................................................141
68. Community Services Block Grant.........................................................................................142
Funding Formula...................................................................................................................142
Eligibility Requirements.......................................................................................................142
Benefit Levels.......................................................................................................................142
69. Legal Services (LSC)............................................................................................................143
Funding Formula...................................................................................................................143
Eligibility Requirements.......................................................................................................143
Benefit Levels.......................................................................................................................143
70. Social Services for Refugees, Asylees, Other Humanitarian Cases......................................144
Funding Formula...................................................................................................................144
Eligibility Requirements.......................................................................................................144
Benefit Levels.......................................................................................................................145
71. Emergency Food and Shelter Program..................................................................................145
Funding Formula...................................................................................................................145
Eligibility Requirements.......................................................................................................146
Benefit Levels.......................................................................................................................146
Jobs and Training Programs........................................................................................................146
72. TANF Work Activities...........................................................................................................146
Funding Formula...................................................................................................................146
Eligibility Requirements.......................................................................................................146
Benefit Levels.......................................................................................................................147
73. Job Corps...............................................................................................................................147
Funding Formula...................................................................................................................147
Eligibility Requirements.......................................................................................................147
Benefit Levels.......................................................................................................................148
74. Youth Activities.....................................................................................................................148
Funding Formula...................................................................................................................148
Eligibility Requirements.......................................................................................................149
Benefit Levels.......................................................................................................................149
WIA Program of Youth Activities...................................................................................149
75. Adult Activities......................................................................................................................150
Funding Formula...................................................................................................................150
Eligibility Requirements.......................................................................................................150
Benefit Levels.......................................................................................................................150
76. Senior Community Service Employment Program (SCSEP)................................................151
Funding Formula...................................................................................................................151
Eligibility Requirements.......................................................................................................151
Benefit Levels.......................................................................................................................152
77. Welfare-to-Work Grants........................................................................................................152
Funding Formula...................................................................................................................153





Eligibility Requirements.......................................................................................................153
Benefit Levels.......................................................................................................................154
78. Food Stamp Employment and Training Program..................................................................154
Funding Formula...................................................................................................................154
Eligibility Requirements.......................................................................................................155
Benefits ................................................................................................................................. 155
79. Foster Grandparents...............................................................................................................155
Funding Formula...................................................................................................................155
Eligibility Requirements.......................................................................................................156
Benefit Levels.......................................................................................................................156
80. Senior Companions...............................................................................................................156
Funding Formula...................................................................................................................156
Eligibility Requirements.......................................................................................................157
Benefit Levels.......................................................................................................................157
81. Targeted Assistance to Refugees, Asylees, Other Humanitarian Cases.................................157
Funding Formula...................................................................................................................157
Eligibility Requirements.......................................................................................................158
Benefit Levels.......................................................................................................................158
82. Native Employment Works Program.....................................................................................158
Funding Formula...................................................................................................................158
Eligibility Requirements.......................................................................................................159
Benefit Levels.......................................................................................................................159
Energy Assistance........................................................................................................................159
83. Low-Income Home Energy Assistance (LIHEAP)................................................................159
Funding Formula...................................................................................................................159
Eligibility Requirements.......................................................................................................160
Benefit Levels.......................................................................................................................161
84. Weatherization Assistance.....................................................................................................161
Funding Formula...................................................................................................................161
Eligibility Requirements.......................................................................................................162
Benefit Levels.......................................................................................................................162
Figure 1. Expenditures for Income-Tested Benefits, FY1975-2004................................................6
Figure 2. Composition of Income-Tested Benefits........................................................................13
Figure 3. Cash and Noncash Benefits Received by Poor Families with Children, 2003...............16
Table 1. Expenditures of Major Needs-Tested Benefit Programs, by Form of Benefit and
Level of Government, FY2002-FY2004......................................................................................3
Table 2. Total Expenditures for Need-Based Benefits, FY1968-FY2004.......................................4





Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968-
FY2004 ......................................................................................................................................... 8
Table 4. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY1968-
2004 .............................................................................................................................................. 9
Table 5. Total Spending for Income-Tested Benefits by Form of Benefit, FY1968-
FY2004 ........................................................................................................................................ 11
Table 6. Spending Trends by Form of Benefits, FY1978-2004.....................................................13
Table 7. Income Eligibility Tests Used by Benefit Programs........................................................17
Table 8. Bureau of the Census Poverty Thresholds for 2004........................................................23
Table 9. 2005 Federal Poverty Income Guidelines........................................................................23
Table 10. Eligibility Levels for Free and Reduced Price Meals for the Period of July 1,
2005-June 30, 2006....................................................................................................................24
Table 11. Lower Living Standard Income Level (LLSIL) for a Family of Four—Effective
July 22, 2005..............................................................................................................................25
Table 12. EITC Parameters for Tax Years 2003-2005...................................................................55
Table 13. Food Stamp Income Limits...........................................................................................71
Table 14. Need-Based Benefits: Medical Benefits—Expenditures and Enrollment Data,
by Program, FY2002-FY2004..................................................................................................163
Table 15. Need-Based Benefits: Cash Benefits—Expenditures and Enrollment Data, by
Program, FY2002-FY2004.......................................................................................................164
Table 16. Need-Based Benefits: Food Benefits—Expenditures and Enrollment Data, by
Program, FY2002-FY2004.......................................................................................................167
Table 17. Need-Based Benefits: Housing Benefits—Expenditures and Enrollment Data,
by Program, FY2002-FY2004..................................................................................................169
Table 18. Need-Based Benefits: Education Benefits—Expenditures and Enrollment Data,
by Program, FY2002-FY2004..................................................................................................171
Table 19. Need-Based Benefits: Services—Expenditures and Enrollment Data, by
Program, FY2002-FY2004.......................................................................................................174
Table 20. Need-Based Benefits: Jobs and Training—Expenditures and Enrollment Data,
by Program, FY2002-FY2004..................................................................................................175
Table 21. Need-Based Benefits: Energy Aid—Expenditures and Enrollment Data, by
Program, FY2002-FY2004.......................................................................................................176
Author Contact Information........................................................................................................178
Acknowledgments ....................................................................................................................... 178






More than 80 benefit programs provide cash and noncash aid that is directed primarily to persons
with limited income. These benefit programs cost approximately $583 billion in FY2004, a
record high. This sum was up $34 billion (6.2%) from the previous peak of FY2003, and it
equaled 5% of the gross domestic product (GDP). Federal funds provided 73.2% of the total.
Higher medical spending accounted for $26 billion of the net increase in FY2004, and 55 cents
out of every dollar spent on persons with limited income went for medical benefits. Federal low-
income spending represented 18.6% of the federal budget, with 9% attributed to medical
assistance. See Table 1 for an FY2002-FY2004 summary.
After adjustment for price inflation, 2004 spending on persons with limited income was up by
approximately $21.5 billion (3.8%) from that of 2003, the previous peak. Real spending increases
(2004 dollars) were dominated by medical assistance (up $19 billion). Other increases were in
food benefits, $3.3 billion; cash aid, $2.4 billion; and housing, $0.6 billion. Spending in real
terms dropped in the following areas: education benefits, by $2.3 billion; jobs and training, by
$0.9 billion; services, by $0.6 billion; and energy aid by $0.2 billion.
Spending for “human capital” programs (those providing education and employment and training
activities) accounted for 6.2% of all dollars spent on persons with limited income (compared with

19.2% for cash assistance and 55.3% for medical aid).


This report consists of a catalog of 84 need-based programs.1 For each program, the report
provides the funding formula, eligibility requirements, and benefit levels. At the end of the report,
Tables 14-21 provide expenditure data (federal and state/local) and recipient data for FY2002-
FY2004, program by program. One program is new to this series of reports: the D.C. School
Choice Incentive Program. In addition, two programs have been dropped because of the difficulty
of obtaining reliable current data: General Assistance (Medical Component) and General
Assistance (Nonmedical Component); spending for these programs was only from state and local
sources, rather than federal.
Most of these programs base eligibility on individual, household, or family income, but some use
group or area income tests (see Table 7), and a few offer help on the basis of presumed “need.”
Most provide income “transfers.” That is, they transfer income in the form of cash, goods, or
services to persons who make no payment and render no service in return. However, in the case
of the job and training programs and some educational benefits, recipients must work or study for
wages, training allowances, stipends, grants, or loans. Further, the TANF block grant program
requires adults to commence work (defined by the state) after a period of enrollment, the Food
Stamp program imposes work and training requirements, and public housing programs require
recipients to engage in “self-sufficiency” activities or to perform community service. Finally, the
Earned Income Tax Credit (EITC) is available only to workers.
This report excludes income maintenance programs that are not income-tested, including social
insurance and many veterans’ benefits, and all but two tax-transfer programs. Thus, it excludes
Social Security cash benefits, unemployment compensation, and Medicare. Outlays for the Old-

1 The number of programs in this report is somewhat arbitrary. For example, the Temporary Assistance for Needy
Families (TANF) program is listed under cash, services, child care, and work activities, but could also be viewed as a
single program.





Age, Survivors, and Disability Insurance programs (Social Security cash benefit programs) in
FY2004 totaled $502 billion, financed primarily from payroll tax collections. The report also
excludes payments, even though financed with general revenues, that may be regarded as
“deferred compensation,” such as veterans’ housing benefits and medical care for veterans with a
service-connected disability.
The report includes two tax-transfer programs, the EITC for low-income workers with children
and the child tax credit. The EITC reduces the taxes of working families with gross income below
specified limits and makes direct payments (“refunds”) to those whose income is below the tax
threshold or whose tax liability is smaller than their credit. Before the 2001 tax law, the child tax
credit was refundable only to some taxpayers with three or more children, but it now is
refundable (up to certain limits) for those with earnings above $10,000. This report treats the
direct payment component of these credits, but not the reduction in tax liability, as a welfare
expenditure. Other tax benefits are excluded from the report because they are not refundable
(make no direct payments). Further, in most cases they impose no income test for eligibility.
Examples of these other tax benefits are the deductibility of mortgage interest and property taxes
on owner-occupied homes (equivalent to outlays of $61.4 billion and $18.7 billion, respectively,
in 2004). These tax transfers increase families’ disposable income by reducing their tax liability,
and are known as “tax expenditures.” (The standard deduction and personal exemption in the
income tax code also decrease families’ taxable income.)




Table 1. Expenditures of Major Needs-Tested Benefit Programs, by Form of Benefit and Level of Government, FY2002-FY2004
(in millions of current dollars)
Federal expenditures State-local expenditures Total expenditures
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
Medical care 164,123 178,978 194,816 114,241 117,525 127,768 278,364 296,503 322,584
Cash aid 82,311 90,657 93,965 16,516 16,520 18,084 98,827 107,177 112,049
Food benefits 36,994 41,138 45,460 2,497 2,680 2,662 39,491 43,818 48,122
Housing aid 34,607 37,449 38,881 6 5 1 34,613 37,454 38,882
Education 24,754 29,062 27,435 1,701 1,734 1,760 26,455 30,796 29,195
Services 17,283 18,767 18,271 4,973 4,510 4,946 22,256 23,277 23,217
Jobs/training 7,179 6,646 6,131 934 1,045 876 8,113 7,691 7,007
iki/CRS-RL33340Energy aid 2,003 2,254 2,118 122 122 141 2,125 2,376 2,259
g/wTotal $369,254 $404,951 $427,077 $140,990 $144,141 $156,238 $510,244 $549,092 $583,315
s.orSource: Table prepared by the Congressional Research Service (CRS).
leak
Note: Program data on which this table is based are found in the summary tables (Tables 14-21) at the back of the report.


://wiki
http




Total expenditures on cash and noncash programs for low-income persons multiplied many times
between 1968 and 2004 (Table 2). Even after allowance for price inflation, spending more than
sextupled, rising 557% during the 36 years, a period when the U.S. population rose by an 23
estimated 46%. Measured in constant 2004 dollars, the annual rate of growth in spending over
the whole period was 5.4%. However, the growth pattern was uneven. Real spending almost
tripled in the first 10 years, declined in some years (1979, 1982, 1996, and 1997), and in the last
seven years rose at an annual rate of 3.7%. Total per capita spending for low-income programs
grew in real terms (constant FY2004 dollars) from $422 in FY1968 to a peak of $1,986 in
FY2004.
Table 2. Total Expenditures for Need-Based Benefits, FY1968-FY2004
(in millions of dollars)
Total spending
Fiscal Federal current State-local current Current Constant dollars
year dollars dollars dollars (2004)
1968 11,406 4,710 16,116 88,793
1973 27,294 10,054 37,348 163,449
1975 40,208 14,753 54,961 198,846
1976 50,506 16,990 67,496 228,027
1977 56,187 18,892 75,079 235,801
1978 64,432 20,151 84,583 248,190
1979 71,336 21,304 92,640 246,383
1980 81,403 24,633 106,036 248,270
1981 89,408 29,045 118,453 249,690
1982 90,543 31,706 122,249 239,986
1983 95,495 33,982 129,477 245,547
1984 100,837 36,191 137,028 249,596
1985 107,267 38,230 145,497 255,617
1986 109,476 40,811 150,287 257,694
1987 115,608 43,364 158,972 265,042
1988 126,098 46,580 172,678 276,462

2 Based on the resident U.S. population.
3 Current dollars were translated into FY2004 constant value dollars by use of the Consumer Price Index (CPI) for all
urban consumers.





Total spending
Fiscal Federal current State-local current Current Constant dollars
year dollars dollars dollars (2004)
1989 136,254 51,587 187,841 287,087
1990 153,673 61,065 214,738 312,619
1991 180,494 73,933 254,427 352,587
1992 211,121 88,146 299,267 402,565
1993 227,325 88,683 316,008 412,597
1994 250,405 102,421 352,826 448,888
1995 262,905 108,210 371,115 459,244
1996 268,823 107,213 376,036 452,673
1997 274,980 110,312 385,292 451,796
1998 280,965 114,554 395,519 456,351
1999 291,798 117,389 409,187 463,196
2000 305,659 122,897 428,556 470,217
2001 342,877 133,986 476,863 506,870
2002 369,254 140,990 510,244 534,343
2003 404,951 144,141 549,092 561,846
2004 427,077 156,238 583,315 583,315
Source: Table prepared by the Congressional Research Service (CRS). FY1968 and FY1973 data are from
Income Security for Americans: Recommendations of the Public Welfare Study. Report of the Subcommittee on Fiscal
Policy of the Joint Economic Committee. December 5, 1974. Table 4, p. 28 of Joint Economic Committee study
(the 1968 federal total has been increased by $54 million to correct a typographical error in that table, and the
1973 federal total has been increased by $101 million to include Title X family planning, previously omitted from
this report series). Data for FY1975-FY2001 are from previous editions of this report (revised to incorporate
public housing capital fund costs, to account for new estimates of some program outlays, and to provide
historical data for some newly added programs). Data for FY2002-FY2004 are from Table 1 of this report.
Figure 1 shows the course of expenditures for income-tested benefits from FY1975-FY2004. The
upper line shows total real spending (federal and state-local spending); the bottom line shows
state-local spending alone; the space between represents federal spending. Throughout this period
federal expenditures accounted for more than 70% of the total. The federal share rose above 76%
in 1978-1980, then began a general decline. In the 1995-2004 decade it averaged 71.9%, reaching
a peak of 73.7% in FY2003 and dropping slightly to 73.2% in FY2004.





Figure 1. Expenditures for Income-Tested Benefits, FY1975-2004
(in millions of constant 2004 dollars)
Source: Figure prepared by the Congressional Research Service.
Tables 3, 4, and 5 present 1968-2004 spending on low-income programs in constant 2004
dollars, by form of benefit; Table 3 displays federal spending; Table 4, corresponding state-local
data; and Table 5, total low-income spending amounts. Measured in constant 2004 dollars,
federal spending for income-tested benefits climbed from $63 billion in FY1968 to $427 billion
in FY2004, an increase of 580%. State-local spending (constant dollars) rose from $26 billion to
$156 billion during the same period, an increase of 502%. Total spending on means-tested
programs increased from $89 billion to $583 billion in these years, an increase of 557%.
Cash aid was the leading form of federal means-tested assistance until 1980, when it was
overtaken by medical benefits. Two years later, in 1982, federal spending declined for all forms of
aid except subsidized housing, in which case outlays reflected earlier commitments, and
education benefits. However, beginning in 1983, real federal spending for low-income programs
climbed steadily before declining in FY1996 and FY1997. Federal spending set successive new
record highs during FY1998-FY2004. State-local spending rose in all years after 1979, except for

1993, 1996, and 2003.


Since 1979, medical spending has accounted for more than 50 cents of every low-income
program dollar spent by state-local governments. In 1989, the share climbed to 60%; in 1997 it
exceeded 70%, and starting in 2002, spending on medical benefits has topped 80% of all state-
local spending on means-tested programs. Medical assistance has accounted for a much smaller—
but growing—share of federal expenditures for low-income programs: about 25% until the mid-
1980s, above 30% in the 1990s, and an average of 43% from 2000-2003, with an increase to
nearly 46% in 2004.





As a component of the federal budget, spending on means-tested programs for persons with
limited income averaged 13% from 1975-1979, dropped to 12% in the 1980s, and since 1994 has
equaled or exceeded 17% each year. In 2001 it rose above 18%, and in 2004 was 18.6%.
The earned income tax credit has become the nation’s largest program of income-tested cash
benefits for families with children. In FY2004, the U.S. Treasury paid out $34 billion in
refundable earned income tax credits (chiefly for earners with children) and $9 billion in child tax
credits. The total was almost 25% larger than federal SSI payments for the aged, blind, and
disabled ($35 billion), and was more than five and a half times as much as cash assistance from
federal TANF dollars ($6.5 billion). (TANF expenditures for work activities, child care, and other
services exceeded TANF cash aid.)




Table 3. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2004
(in millions of constant FY2004 dollars)
Medical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
1968 15,102 27,752 4,920 4,314 4,738 3,906 2,110 0 62,843
1973 29,142 37,527 16,871 16,525 7,969 4,039 7,374 0 119,449
1975 34,678 46,089 23,296 18,383 7,887 7,775 7,363 0 145,470
1976 36,976 50,409 26,105 19,804 12,480 15,561 9,199 95 170,628
1977 41,394 49,300 24,359 22,343 10,920 17,032 10,170 948 176,467
1978 42,741 47,086 24,968 22,914 11,934 28,462 10,156 801 189,061
1979 43,646 45,032 27,598 25,593 12,795 24,644 9,715 699 189,723
1980 45,420 44,435 30,646 25,675 11,449 20,194 8,745 4,030 190,595
iki/CRS-RL333401981 46,908 44,182 33,071 25,993 10,091 15,843 8,143 4,235 188,465
g/w1982 45,230 42,354 30,770 26,205 15,283 7,831 6,091 3,981 177,744
s.or
leak1983 44,707 42,482 34,318 26,823 14,077 8,547 6,266 3,880 181,102
1984 45,253 43,321 34,091 26,450 14,592 9,794 6,264 3,909 183,674
://wiki1985 48,981 43,018 34,016 28,665 16,718 6,843 6,239 3,972 188,452
http
1986 51,053 45,144 32,822 25,662 17,241 6,217 5,813 3,764 187,716
1987 58,593 45,780 33,166 23,314 16,285 6,305 6,014 3,286 192,744
1988 61,835 48,533 32,366 25,197 17,847 6,001 7,187 2,920 201,886
1989 64,814 50,685 31,843 26,668 19,080 5,831 6,833 2,490 208,244
1990 73,120 53,057 34,752 28,690 20,033 5,787 5,946 2,335 223,720
1991 86,545 58,581 38,810 29,798 20,597 6,082 7,215 2,503 250,130
1992 105,838 65,531 44,138 33,316 18,297 6,750 7,857 2,267 283,994
1993 111,048 69,657 45,404 36,143 18,688 6,229 7,635 2,003 296,808
1994 119,196 80,658 45,944 35,841 18,622 6,184 9,697 2,439 318,581
1995 125,496 84,053 45,544 36,368 18,732 5,725 7,440 1,981 325,337




Medical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
1996 125,105 84,280 44,747 37,031 18,566 4,863 7,598 1,419 323,610
1997 126,392 84,250 41,488 37,106 19,359 4,451 7,825 1,574 322,444
1998 127,970 84,162 38,283 35,992 19,597 4,818 11,905 1,450 324,178
1999 135,470 84,179 36,901 33,609 19,562 5,408 13,703 1,482 330,312
2000 143,144 82,262 35,092 33,636 16,388 7,013 15,666 2,171 335,373
2001 154,205 87,798 35,265 34,088 25,936 7,417 17,608 2,135 364,453
2002 171,875 86,199 38,741 36,241 25,923 7,518 18,099 2,098 386,694
2003 183,135 92,763 42,094 38,319 29,737 6,800 19,203 2,306 414,357
2004 194,816 93,965 45,460 38,881 27,435 6,131 18,271 2,118 427,077
Source: Table prepared by the Congressional Research Service. Rows may not add to totals shown because of rounding.
iki/CRS-RL33340Table 4. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY1968-2004
g/w(in millions of constant FY2004 dollars)
s.or
leakMedical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
://wiki
http1968 11,355 13,719 n.a. n.a. n.a. 237 639 0 25,950
1973 18,228 23,182 n.a. n.a. n.a. 245 2,346 0 44,000
1975 23,918 24,425 2,022 n.a. 517 141 2,352 0 53,376
1976 26,365 25,912 2,139 n.a. 527 132 2,324 n.a. 57,399
1977 27,918 25,675 2,553 n.a. 581 179 2,428 n.a. 59,334
1978 28,641 24,654 2,562 n.a. 695 185 2,391 n.a. 59,129
1979 29,617 22,803 1,051 n.a. 668 207 2,314 n.a. 56,660
1980 30,906 22,819 1,070 n.a. 670 190 2,021 n.a. 57,675
1981 32,947 23,181 1,223 n.a. 616 177 3,082 n.a. 61,225
1982 34,464 21,932 1,411 n.a. 528 147 3,730 29 62,242
1983 35,811 22,397 1,485 n.a. 573 150 3,983 47 64,445




Medical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
1984 37,397 22,563 1,730 n.a. 550 142 3,461 78 65,922
1985 37,878 23,103 1,808 n.a. 798 142 3,382 54 67,164
1986 39,554 24,215 1,891 n.a. 849 125 3,258 86 69,978
1987 41,025 24,708 1,946 n.a. 852 118 3,301 347 72,297
1988 43,476 24,645 1,824 n.a. 871 115 3,362 283 74,576
1989 47,400 25,201 1,776 n.a. 833 148 3,210 275 78,843
1990 53,277 25,928 1,798 n.a. 916 389 6,411 181 88,899
1991 65,755 26,817 1,818 n.a. 758 608 6,544 157 102,457
1992 76,909 28,393 1,941 3,094 826 640 6,651 118 118,571
1993 75,665 28,008 2,045 1,737 1,000 734 6,509 93 115,789
1994 86,201 29,163 2,252 2,055 1,149 832 8,557 98 130,306
iki/CRS-RL333401995 90,603 29,297 2,265 2,877 1,182 1,004 6,580 100 133,907
g/w
s.or1996 89,092 27,018 2,311 2,960 1,150 775 5,669 88 129,063
leak1997 91,784 24,899 2,315 2,880 1,203 209 5,989 75 129,353
://wiki1998 95,426 21,491 2,236 3,009 1,312 825 7,782 91 132,173
http1999 98,906 21,778 2,304 n.a. 1,347 989 7,462 96 132,883
2000 103,589 21,322 2,375 558 1,505 1,257 4,143 93 134,844
2001 111,176 20,453 2,459 797 1,719 1,299 4,390 125 142,417
2002 119,637 17,296 2,615 7 1,781 978 5,208 128 147,649
2003 120,255 16,904 2,742 5 1,774 1,069 4,615 125 147,489
2004 127,768 18,084 2,662 1 1,760 876 4,946 141 156,238
Source: Table prepared by the Congressional Research Service. Rows may not add to totals shown because of rounding.
Note: n.a.: Not available.




Table 5. Total Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY2004
(in millions of constant FY2004 dollars)
Medical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
1968 26,457 41,471 4,920 4,314 4,738 4,143 2,749 0 88,793
1973 47,370 60,709 16,871 16,525 7,969 4,284 9,720 0 163,449
1975 58,596 70,514 25,318 18,383 8,404 7,916 9,714 0 198,846
1976 63,341 76,321 28,243 19,804 13,007 15,693 11,524 95 228,027
1977 69,312 74,975 26,913 22,343 11,501 17,211 12,597 948 235,801
1978 71,382 71,740 27,529 22,914 12,629 28,647 12,547 801 248,190
1979 73,263 67,835 28,649 25,593 13,463 24,851 12,029 699 246,383
1980 76,326 67,254 31,716 25,675 12,119 20,384 10,766 4,030 248,270
1981 79,855 67,363 34,294 25,993 10,706 16,020 11,225 4,235 249,690
iki/CRS-RL333401982 79,694 64,285 32,181 26,205 15,811 7,978 9,821 4,011 239,986
g/w
s.or1983 80,518 64,880 35,803 26,823 14,650 8,697 10,248 3,928 245,547
leak1984 82,650 65,883 35,821 26,450 15,142 9,936 9,725 3,987 249,596
://wiki1985 86,859 66,121 35,824 28,665 17,516 6,985 9,621 4,027 255,617
http1986 90,607 69,359 34,714 25,662 18,090 6,343 9,071 3,849 257,694
1987 99,618 70,488 35,112 23,314 17,137 6,424 9,315 3,633 265,042
1988 105,311 73,178 34,190 25,197 18,718 6,116 10,549 3,204 276,462
1989 112,215 75,886 33,619 26,668 19,913 5,979 10,043 2,765 287,087
1990 126,397 78,985 36,550 28,690 20,949 6,176 12,357 2,516 312,619
1991 152,300 85,398 40,628 29,798 21,355 6,691 13,758 2,659 352,587
1992 182,747 93,924 46,079 36,410 19,123 7,390 14,508 2,385 402,565
1993 186,714 97,664 47,449 37,880 19,688 6,963 14,144 2,096 412,597
1994 205,397 109,821 48,196 37,896 19,771 7,017 18,254 2,537 448,888
1995 216,098 113,350 47,808 39,245 19,913 6,728 14,019 2,081 459,244
1996 214,198 111,298 47,058 39,992 19,716 5,639 13,267 1,507 452,673




Medical Housing Education
Fiscal year benefits Cash aid Food benefits benefits benefits Jobs/training Services Energy aid Total
1997 218,175 109,149 43,803 39,986 20,562 4,660 13,813 1,649 451,796
1998 223,397 105,652 40,519 39,001 20,909 5,643 19,687 1,541 456,351
1999 234,376 105,958 39,204 33,609 20,909 6,397 21,165 1,578 463,196
2000 246,732 103,585 37,468 34,195 17,893 8,271 19,809 2,265 470,217
2001 265,381 108,250 37,723 34,885 27,655 8,716 21,998 2,261 506,870
2002 291,511 103,495 41,356 36,248 27,704 8,496 23,307 2,225 534,343
2003 303,390 109,666 44,836 38,324 31,511 7,870 23,818 2,431 561,846
2004 322,584 112,049 48,122 38,882 29,195 7,007 23,217 2,259 583,315
Source: Table prepared by the Congressional Research Service (CRS). Rows may not add to totals shown because of rounding.


iki/CRS-RL33340
g/w
s.or
leak
://wiki
http




The dramatic change since 1978 in the composition of total spending for income-tested benefits is
shown in Figure 2 and in Table 6. In FY1978, spending for cash relief and medical aid was
nearly equal. Each accounted for 29% of total welfare spending covered by this report.
Thereafter, spending for medical benefits rapidly overtook cash aid, reaching 50% in FY1999 and
topping 55% in 2004.
Figure 2. Composition of Income-Tested Benefits
(in billions of constant 2004 dollars)
FY1978 F Y 2004
ServicesJobs/ Energy aidServicesJobs/ training
5.1%training0.3%4.0%1.2%Energy aid
11 .5 % E duc at i on5. 0 % 0. 4 %
EducationMedical aidHousing
5.1% 28 .8 % 6. 7%
HousingMedical aid
9.2%55.3%Food aid
Food aidCash8.2%
Cas h11 .1 % 19. 2%
28.9%
Source: Figure prepared by the Congressional Research Service.
Table 6. Spending Trends by Form of Benefits, FY1978-2004
(in billions of constant 2004 dollars)
FY1978 FY1988 FY1992 FY1996 FY2000 FY2002 FY2004
Medical aid 71.4 105.3 182.7 214.2 246.7 291.5 322.6
Cash 71.7 73.2 93.9 111.3 103.6 103.5 112.0
Food aid 27.5 34.2 46.1 47.1 37.5 41.4 48.1
Housing 22.9 25.2 36.4 40.0 34.2 36.2 38.9
Education 12.6 18.7 19.1 19.7 17.9 27.7 29.2
Jobs/training 28.6 6.1 7.4 5.6 8.3 8.5 7.0
Services 12.5 10.5 14.5 13.3 19.8 23.3 23.2
Energy aid 0.8 3.2 2.4 1.5 2.3 2.2 2.3
Total $248.2 $276.5 $402.6 $452.7 $470.2 $534.3 $583.3
Source: Table prepared by the Congressional Research Service.






Depending on the program, the eligibility of noncitizens for major federal means-tested benefit
programs—food stamps, Supplemental Security Income (SSI), Temporary Assistance for Needy
Families (TANF), Medicaid, and Section 8 housing assistance—varies with their immigration
status, work history, date of entry, date of enrollment in a benefit program, age, and length of
legal residence. The basic outline of current noncitizen eligibility rules was established by the
1996 welfare reform law (P.L. 104-193), although prior laws for these programs had contained
some limits on participation by noncitizens (typically barring temporary or illegal residents). This
law sharply restricted welfare eligibility for noncitizens, although the limits it put in place have
since been eased (in 1997, 1998, and 2002). The basic rules now are as follows.
• Nonimmigrants (those admitted temporarily for a limited purpose such as
students, visitors, and temporary workers) are ineligible for all major benefits, as
are unauthorized (“illegal”) aliens who are in the U.S. in violation of immigration
law and for whom no legal relief or recognition has been extended.
• Legal permanent residents with a substantial (generally, 10-year) work history
documented by Social Security and those with a military connection (legally
present active duty military personnel, honorably discharged veterans, and their 4
immediate families) are eligible for all major benefits.
• In the case of food stamps, legal permanent residents without a substantial work
history are eligible after five years lawful residence following entry. However,
this five-year ineligibility period does not apply to (1) persons lawfully resident
in the U.S. as of August 22, 1996 (the date of enactment of the welfare reform
law), and age 65+ at the time, (2) persons receiving government disability
benefits, and (3) children under age 18.
• In the case of SSI, legal permanent residents without a substantial work history
are eligible only if they are (1) persons who were receiving SSI benefits as of
August 22, 1996, or (2) individuals lawfully resident in the U.S. as of August 22,
1996, who are now disabled. [Note: Pre-1996 SSI law barred eligibility for those
with temporary or illegal status.]
• In the case of TANF, legal permanent residents without a substantial work history
are (1) eligible, at state option, if lawfully resident in the U.S. as of August 22,
1996, and (2) for post-August-1996 entrants, eligible, at state option, five years
after entry.
• In the case of Medicaid, eligibility rules for legal permanent residents without a
substantial work history are the same as for TANF, except that coverage is
required for SSI recipients.
• In the case of Section 8 housing assistance, legal permanent residents are eligible
(with no time, work history, or age restrictions), as are noncitizens who were
receiving benefits as of August 22, 1996. [Note: Pre-1996 housing law barred
eligibility for those with temporary or illegal status.]

4 In housing programs, legal permanent residents are eligible without regard to work history or military connection.





• In humanitarian cases—asylees, refugees, Cuban/Haitian entrants, parolees and
conditional entrants, victims of abuse (battery or cruelty by a family member),
victims of trafficking in persons, and certain persons with similar status—
individuals are (1) eligible for food stamps after entry or grant of status as an
asylee, refugee, Cuban/Haitian entrant, or other humanitarian category, (2)
eligible for SSI if they were SSI recipients as of August 22, 1996, or for seven
years after entry or grant of status, (3) eligible for TANF for five years after entry
or grant of status, and then eligible at state option, (4) eligible for Medicaid for
seven years after entry or grant of status, and then eligible at state option, and (5) 5
eligible for Section 8 housing assistance (with no time limits).

The Census Bureau reports that 7.6 million families (including 5.8 million with children) in 2003
had total pre-tax money income—after counting any cash from the programs of TANF,
Supplemental Security Income (SSI), and General Assistance (GA)—that was below their poverty 6
threshold. The Bureau found that the money income poverty rate among related children in
families was 17.2%, the highest since 1998 (18.3%).
Overall, 35.9 million persons were classified as poor on the basis of 2003 pre-tax money income
(compared with 31.1 million in 2000, the year preceding the most recent economic recession). Of
these persons, 68.0% were in households that received means-tested aid from at least one of eight
programs (TANF, SSI, GA, school lunch, food stamps, Medicaid, subsidized housing, low-
income home energy assistance). By race and ethnicity, the following percentages of poor persons
were in households that received pre-tax aid from one or more of the eight programs: non-
Hispanic whites, 55.2%; blacks, 80.9%; and persons of Hispanic origin, 80.3%.
Figure 3 depicts income-tested aid provided to families with children who were poor before
receiving any cash aid from TANF, GA, or the EITC. In 2003, these families totaled 6.1 million
(compared with 5.1 million in 2000): 3.7 million with a female householder and 2.4 million with
a male householder (chiefly two-parent families). These numbers, based on CRS estimates,
include unrelated subfamilies (the Bureau excludes these subfamilies from its “family” counts).
As the chart shows, all but 9.3% of the female-headed families and 12.0% of the male-present
families whose pre-tax, pre-welfare money income fell short of the poverty threshold received
means-tested aid. For male-present families, the EITC, which goes only to persons with earnings,
was the dominant form of aid. In all, 67.8% of male-present families who were poor before
transfers received the EITC (compared with 75.2% in 2000); for 23.8% the EITC was the only
aid. Among female-headed families who were poor before transfers, 43.8% received the EITC
(compared with 59.6% in 2000); for 10.4% the EITC was the only aid. Various combinations of
cash assistance (TANF, GA, EITC) and noncash aid—food stamps, housing subsidies, Medicaid,

5 This description of Section 8 rules for humanitarian cases assumes, as appears to be the practice of Public Housing
Agencies, that the noncitizen rules laid out under the 1996 welfare reform act applydespite potentially conflicting
law (for some limited noncitizen categories) contained in Section 214 of the Housing and Community Development
Act of 1980.
6 U.S. Bureau of the Census, Poverty in the United States: 2003. Current Population Reports, Series P-60, No. 226,
Aug. 2004, and unpublished table available at http://pubdb3.census.gov/macro/032004/pov/new04_100_01.htm.





or coverage under the State Children’s Health Insurance Program (SCHIP)—went to 27.1% of 7
female-headed families and to 9.2% of male-present families.
Figure 3. Cash and Noncash Benefits Received by Poor Families with Children, 2003
Source: Chart based on CRS analysis of March 2004 Current Population Survey data.
Notes: Cash welfare benefits shown are: Temporary Assistance to Needy Families (TANF) and General
Assistance (GA). Noncash benefits shown are: Food Stamps, Medicaid, State Children’s Health Insurance
Program (S-CHIP), and Housing Assistance.
Poor = poor before receiving cash welfare.

More than 90% of the programs in this report have an explicit test of income. The others base
eligibility on area of residence, enrollment in another means-tested program, or other factors that
presume need. The explicit income tests are of five kinds: income ceiling related to (1) one of the
federal government’s official poverty measures (federal poverty income guidelines or Census
Bureau poverty thresholds); (2) state or area median income; (3) the lower living standard income
level of the Bureau of Labor Statistics; (4) an absolute dollar standard; (5) a level deemed to
indicate “need.” Table 7 classifies the programs in this report by type of income test. Tables 8-11
present, respectively, Census Bureau poverty thresholds for 2004, federal poverty income
guidelines for 2005, income eligibility limits for subsidized meals (July 2005-July 2006), and
lower living standard income levels, effective in July 2005.

7 These combinations are shown in Figure 3 slices of the pie charts, labeled as (1) EITC and (other) cash benefits, (2)
TANF or GA, food stamps, and Medicaid or SCHIP; (3) TANF or GA, food stamps, and Medicaid or SCHIP and
housing assistance; and (4) other combinations of cash and noncash aid.




Table 7. Income Eligibility Tests Used by Benefit Programs
Limit related to:
Official State/area Enrollment/
poverty Lower living median Dollar Income Area of eligibility for other
Program measure income level income amount deemed needy residence program Other
Medical Benefits
1. Medicaid Xa Xb Xc
2. Veterans’ medical care (no service d
disability) X X
3. SCHIP X Xe
4. Indian health services X
5. Consolidated health centers Xf Xg
iki/CRS-RL333406. Maternal and child health services Xh
g/w7. Title X family planning Xf Xg
s.or8. Medical aid for refugees, asylees,
leakothers Xb
://wikiCash aid
http9. SSI Xi Xj
10. EITC (refunds) X
11. TANF Xb
12. Foster care XbXc
13. Child tax credit X
14. Veterans’ pensions X
15. Adoption assistance Xk Xb Xc,k
16. DIC (veterans’ parents) X
17. General assistance to Indians Xb
18. Cash aid—refugees, asylees, others Xb




Limit related to:
Official State/area Enrollment/
poverty Lower living median Dollar Income Area of eligibility for other
Program measure income level income amount deemed needy residence program Other
Food benefits
19. Food stamps X Xl
20. School lunch (free/reduced price) X Xm
21. WIC X Xn
22. Child and adult care food program X
23. School breakfast (free/reduced price) X Xm
24. Nutrition program for the elderly Xo
25. The emergency food assistance Xb
program
iki/CRS-RL3334026. Summer food service X
g/w27. Commodity supplemental food X X
s.or
leak28. Food distribution for Indians X
29. Farmers’ market nutrition programs X X
://wiki30. Special milk (free) X
http
Housing benefits
31. Section 8 low-income housing aid X
32. Public housing X
33. Rural housing loans (Section 502) X
34. HOME X
35. Housing for special groups
(aged/disabled) X
36. Rural rental assistance (Section 521) X X
37. Section 236 interest reduction
payments X
38. Housing for people with AIDS X




Limit related to:
Official State/area Enrollment/
poverty Lower living median Dollar Income Area of eligibility for other
Program measure income level income amount deemed needy residence program Other
39. Rural rental housing loans (Section
515) X
40. Rural housing repair loans and grants
(Section 504) X
41. Farm labor housing loans and grants
(sections 514 and 516) X
42. Section 101 rent supplements X
43. Rural self-help grants and site loans X
(sections 523 and 524) X
44. Indian housing improvement grants X
iki/CRS-RL3334045. Section 235 homeownership X
g/w46. Rural housing preservation grants
s.or(Section 533) X
leak47. HOPE X X
://wikiEducation
http48. Pell grants Xp
49. Head Start X
50. Stafford and Stafford/Ford loans Xp
51. Federal work-study Xp
52. TRIO programs X
53. Supplemental educational opportunity p
grants X
54 Chapter 1 migrant education Xq
55. Perkins loans Xp
56. Leveraging educational assistance b


(LEAP) X


Limit related to:
Official State/area Enrollment/
poverty Lower living median Dollar Income Area of eligibility for other
Program measure income level income amount deemed needy residence program Other
57. Health professions student loans and r s
scholarships X X
58. Fellowships for graduate/professional p
study X
59. Migrant high school equivalency Xt
60. College assistance migrant program Xt
61. Close Up fellowships Xu
62. D.C. school choice incentives X Xcc
Services
v
iki/CRS-RL3334063. Child care and development block grant XXw
g/w b
s.or64. TANF services (other than child care) X X X
leak65. Social services (Title XX) Xx b
://wiki66. TANF child care Xb X
http67. Homeless assistance Xy
68. Community services block grant X
69. Legal services X
70. Social services for refugees, asylees, b
others X
71. Emergency food and shelter Xy
Jobs and training
72. TANF work activities X
73. Job Corps Xz Xz X
74. Youth training Xzz X
75. Adult training Xaa




Limit related to:
Official State/area Enrollment/
poverty Lower living median Dollar Income Area of eligibility for other
Program measure income level income amount deemed needy residence program Other
76. Senior community service
employment X X
77. Welfare-to-work X
78. Food stamp employment/training X
79. Foster grandparents X
80. Senior companions X
81. Targeted aid for refugees, asylees, b
others X
82. Native employment works XbX
iki/CRS-RL33340Energy aid bb
g/w83. Low-income home energy assistance X X X X
s.or84. Weatherization assistance X X
leakNote: Short titles and abbreviations are used in this table. See the table of contents for full titles.
://wikia. States must extend Medicaid to certain persons whose income is below the federal poverty income guideline (or a multiple of it) but who do not receive cash aid.
httpThese persons are pregnant women, children born after September 30, 1983, the aged, the blind, and the disabled.
b. Need is decided by state, locality, Indian tribe (or Alaskan Native village).
c. Eligible for Medicaid, foster care, and adoption assistance are persons who do not qualify for TANF cash assistance but who would be income-eligible for AFDC under
the terms in effect on July 16, 1996 (with some modifications allowed for Medicaid) if that program had not been replaced by TANF. Also eligible for Medicaid in most
states are persons eligible for SSI.
d. Veterans receiving veterans’ pensions or eligible for Medicaid are automatically eligible for free VA medical care.
e. If a state’s Medicaid limit for children is at or above 200% of the poverty guideline, it may give SCHIP to children whose family income is within 150% of the Medicaid
limit (thus, up to 50% above the Medicaid limit).
f. The law limits free care to those below the federal poverty income guidelines.
g. All residents of the area served are eligible, but fees must be charged to the nonpoor.
h. The stated purpose of the Maternal and Child Health (MCH) Services Block Grant law is to enable states to assure access to quality MCH services to mothers and
children, particularly those with low income (or limited availability of health services). The law defines low income in terms of the federal poverty income guidelines.
This block grant, which took effect in FY1981, includes funding for crippled children’s services.




i. For basic federal SSI payment.
j. States decide need for an optional state supplement to SSI.
k. A blind or disabled child who is eligible for SSI also may be eligible for adoption assistance.
l. Households composed wholly of recipients of SSI or GA or of recipients of TANF cash or services automatically meet food stamp assets and income tests but their
benefits must be calculated by food stamp rules.
m. Food stamp eligibility is accepted as documentation of eligibility for the free school lunch and free school breakfast programs.
n. States may give automatic eligibility to public assistance recipients.
o. The law requires preference for those with greatest economic or social need.
p. Need is decided by a system known as the federal needs analysis methodology, which is set forth in Part F of Title IV of the Higher Education Act (HEA) as amended.
q. There is no income test. Migratory children are presumed to be needy.
r. For forgiveness of loans made to needy students who fail to complete studies.
s. Need for loans is decided by the educational institution, by use of a needs analysis system approved by the Secretary of Education “in combination with other
information” about the student’s finances. For all health professional scholarships and for loans to students of medicine and osteopathy, federal regulations define the
required “exceptional financial need.”
iki/CRS-RL33340t. Regulations require the educational institution to determine that migratory students need the financial assistance provided.
g/wu. Law makes eligible middle school and secondary students who are “economically disadvantaged.”
s.or
leakv. Federal income ceiling is 85% of state median for family of same size.
://wikiw. Under the law, at least 70% of entitlement Child Care Development Fund (CCDF) assistance must be used for families receiving TANF, trying to leave welfare through work, or at risk of becoming eligible for TANF.
httpx. Applies to families aided with TANF dollars transferred to Title XX (their income cannot exceed 200% of the federal poverty guidelines).
y. Need is decided by agencies administering the benefits.
z. The federal poverty income guideline is used if higher than 70% of the lower living standard income level of the Department of Labor.
aa. The law requires preference for “low-income” persons if funds are limited.
bb. States have the option of setting limits below outer federal ceilings (but cannot set a ceiling below 110% of the federal poverty income guideline).
cc. Eligible students must be residents of the District of Columbia. A lottery is used if more eligible students apply than can be accommodated with available funding.





Table 8. Bureau of the Census Poverty Thresholds for 2004
1 person (unrelated individual) $9,645
Under 65 years 9,827
65 years and over 9,060
2 persons 12,334
Householder under 65 years 12,714
Householder 65 years and over 11,430
3 persons 15,067
4 persons 19,307
5 persons 22,831
6 persons 25,788
7 persons 29,236
8 persons 32,641
9 persons or more 39,048
Source: U.S. Department of Commerce, Bureau of the Census (August 30, 2005).
Table 9. 2005 Federal Poverty Income Guidelines
Forty-eight contiguous
Size of family unit states and D.C. Alaska Hawaii
1 $ 9,570 $11,950 $11,010
2 12,830 16,030 14,760
3 16,090 20,110 18,510
4 19,350 24,190 22,260
5 22,610 28,270 26,010
6 25,870 32,350 29,760
7 29,130 36,430 33,510
8 32,390 40,510 37,260
For each additional
person, add 3,260 4,080 3,750
Source: Federal Register, vol. 70, no. 33, Feb. 18, 2005, p. 8374.





Table 10. Eligibility Levels for Free and Reduced Price Meals for the Period of July 1,
2005-June 30, 2006
Maximum annual income levels
Free meals: 130% Reduced price
Family size federal poverty meals: 185% federal
income guidelines poverty income guidelines
48 contiguous United States, District of Columbia, Guam, and territories
1 $12,441 $17,705
2 16,679 23,736
3 20,917 29,767
4 25,155 35,798
5 29,393 41,829
6 33,631 47,860
7 37,869 53,891
8 42,107 59,922
Add for each additional member +4,328 +6,031
Alaska
1 $15,535 $22,108
2 20,839 29,656
3 26,143 37,204
4 31,447 44,752
5 36,751 52,300
6 42,055 59,848
7 47,359 67,396
8 52,663 74,944
Add for each additional member +5,304 +7,548
Hawaii
1 $14,313 $20,369
2 19,188 27,306
3 24,063 34,244
4 28,938 41,181
5 33,813 48,119
6 38,688 55,056
7 43,563 61,994
8 48,438 68,931
Add for each additional member +4,875 +6,938
Source: Federal Register, vol. 70, no. 52, Mar. 18, 2005, p. 13162.





Table 11. Lower Living Standard Income Level (LLSIL) for a Family of Four—
Effective July 22, 2005
(For use in programs under the Workforce Investment Act and the Work Opportunity Tax Credit)
Area 2005 adjusted LLSILa 70% of LLSILb
Northeast
Metropolitan $33,280 $23,680
Non-Metropolitan 32,320 22,620
Midwest
Metropolitan 30,620 21,430
Non-Metropolitan 28,810 20,170
South
Metropolitan 28,980 20,290
Non-Metropolitan 27,560 19,2
West
Metropolitan 33,160 23,220
Non-Metropolitan 32,020 22,410
Alaska
Metropolitan 40,840 28,590
Non-Metropolitan 40,180 28,130
Hawaii/Guam
Metropolitan 41,890 29,330
Non-Metropolitan 42,900 30,030
Metropolitan Statistical Area (MSA)
Anchorage, AK $40,840 $28,590
Atlanta, GA 28,770 20,140
Boston-Brockton-Nashua, MA/NH/ME 37,100 25,970
Chicago-Gary-Kenosha, IL/IN/WI 32,110 22,480
Cincinnati-Hamilton, OH/KY/IN 30,390 21,280
Cleveland-Akron, OH 31,580 22,110
Dallas-Ft Worth, TX 27,840 19,490
Denver-Boulder-Greeley, CO 32,050 22,440
Detroit-Ann Arbor-Flint, MI 30,000 21,000
Honolulu, HI 41,890 29,330
Houston-Galveston-Brazoria, TX 26,990 18,900
Kansas City, MO/KS 29,650 20,760
Los Angeles-Riverside-Orange County, CA 34,270 23,990
Milwaukee-Racine, WI 30,170 21,120
Minneapolis-St. Paul, MN 31,020 21,710





Area 2005 adjusted LLSILa 70% of LLSILb
New York-Northern New Jersey-Long Island 35,480 24,840
Philadelphia-Wilmington-Atlantic City, PA/DE/NJ 32,850 23,000
Pittsburgh, PA 36,190 25,330
St. Louis, MO-IL 29,510 20,660
San Diego, CA 37,310 26,120
San Francisco-Oakland-San Jose, CA 35,490 24,850
Seattle-Tacoma-Bremerton, WA 35,880 25,120
Washington-Baltimore, DC-MD-VA 35,600 24,920
Source: U.S. Department of Labor http://www.doleta.gov/llsil/.
Notes: For LLSILs for other family sizes, see the Federal Register entry noted above. The LLSIL is used for several
purposes under the Workforce Investment Act (WIA). WIA defines “low income individual” for eligibility
purposes in terms of the LLSIL or the poverty line. For purposes of state formula allotments, it defines the terms
“disadvantaged adult” or “disadvantaged youth” in terms of the LLSIL or the poverty line.
a. To assess whether employment will lead to “self-sufficiency,” WIA sets 100% of the LLSIL as the minimum
pay needed.
b. WIA provides that the terms “low-income” person and “disadvantaged adult” may be defined as a member
of a family that received total family income that, in relation to family size, does not exceed 70% of the
LLSIL. Further, the Internal Revenue Code provides that the term “economically disadvantaged” may be
defined as 70% of the LLSIL for purposes of the Work Opportunity Tax Credit (WOTC).


The federal government shares in the cost of Medicaid services by means of a variable matching
formula. The formula is inversely related to a state’s per capita income and is adjusted annually.
The federal share of administrative costs generally is 50%, but can be as high as 100% for certain
items.
The federal share of a state’s medical vendor payments is called the federal medical assistance 9
percentage (FMAP). The FMAP is higher for states with lower per capita incomes and lower for
states with higher per capita incomes. If a state’s per capita income is equal to the national
average per capita income, its FMAP would be 55%. The law establishes a minimum FMAP of 10

50% and a maximum of 83% (though the highest rate in FY2005 was 77.08% for Mississippi).



8 Regulations governing Medicaid are found in 42 CFR Parts 430-456 (Oct. 2005). This program is No. 93.778 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 1396 et seq.
9 For a more detailed discussion of the FMAP, see CRS Report RL32950, Medicaid: The Federal Medical Assistance
Percentage (FMAP).
10 In FY2005, federal funds paid 50% of medical vendor payments in the 12 states with the highest per capita income
(continued...)





Federal matching for the territories is set at 50%, but a dollar-amount ceiling also applies. The
statutory formula for determining the FMAP follows.
FMAP = 100% − state share
(with a minimum of 50% and a maximum of 83%)
State share = (state per capita income)2 x 45% 2
(national per capita income)
The percentages are based on the average per capita income of each state and the United States
for the three most recent calendar years for which satisfactory data are available from the
Department of Commerce.
The law provides one exception to the FMAP for benefits. Family planning services (instruction
in contraceptive methods and family planning supplies) are federally matched at a 90% rate.
To provide fiscal relief to states, federal matching rates were changed temporarily by the Jobs and
Growth Tax Relief Reconciliation Act (P.L. 108-27), which altered the rates for certain
expenditures for the last two quarters of FY2003 and the first three quarters of FY2004. For these
five quarters, the federal matching rate for each state was held harmless for declines from the
prior fiscal year, and then was increased by 2.95 percentage points. A state was eligible for an
increase in its FMAP for any of the specified quarters only if eligibility under Medicaid in effect
for that quarter was no more restrictive than eligibility in effect on September 2, 2003. Federal
Medicaid outlays totaled $146.6 billion in FY2002 and $161.0 billion in FY2003. During
FY2002, the federal government financed about 57% of all Medicaid costs. During FY2003, the 11
federal government financed about 58% of all Medicaid costs. Estimated federal outlays for
Medicaid in FY2004 were $175.1 billion.

The requirements of federal law, coupled with the decisions of individual states in structuring
their Medicaid programs, determine who is actually eligible for Medicaid in a given state. Some
groups are mandatory, meaning all states must cover them; others are optional. In general, federal
law places limitations on the categories of individuals who can be covered and establishes
specific eligibility rules for groups within those broad categories. Traditionally, Medicaid
eligibility was limited to the following categories: low-income families with dependent children

(...continued)
(California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New
York, Virginia, and Washington) and 70% or higher in the 10 states with the lowest per capita income (Alabama,
Arkansas, Idaho, Louisiana, Mississippi, Montana, New Mexico, Oklahoma, Utah, and West Virginia). Effective in
FY1998, a special provision of P.L. 105-33 raised the federal share of Medicaid costs in D.C. from 50% to 70%.
11 This increase in FY2003 is likely the result of the temporary increase in the federal medical assistance percentage
(FMAP) enacted in May 2003 (P.L. 108-27).
12 Effective on July 1, 1997 (earlier in most states), P.L. 104-193 ended Aid to Families with Dependent Children
(AFDC), a cash assistance program under which recipients were automatically eligible for Medicaid. The replacement
block grant program of Temporary Assistance for Needy Families (TANF) does not entitle all TANF recipients to
Medicaid coverage. However, those who meet the income, resource, and categorical eligibility criteria of the former
AFDC program, as in effect in their state on July 16, 1996 (and subsequently modified, if applicable), are entitled to
Medicaid. The description below summarizes Medicaid as it operated after AFDC was replaced by TANF.





(in which one parent was absent, incapacitated, or unemployed), low-income persons with
disabilities, and low-income elderly. In addition, certain individuals with higher income,
especially those facing large costs for medical care, were eligible as “medically needy.”
Beginning in the 1980s, additional coverage groups were added to Medicaid for higher-income
children and pregnant women. Most recently, states were given the option to provide Medicaid to
other groups with specific characteristics, including certain women with breast or cervical cancer,
uninsured individuals with tuberculosis, and additional working individuals with disabilities.
More than 50 distinct population groups are identified in federal law.
Contributing to the complexity of the Medicaid program are financial criteria. Medicaid is a 13
means-tested entitlement program. To qualify, applicants’ income and resources must be within
certain limits, most of which are determined by states, again within federal statutory parameters.
States have flexibility in defining countable income and assets. Consequently, income and
resource standards vary considerably among states, and different standards apply to different
population groups within a state. In general, individuals in similar circumstances may be
automatically eligible for coverage in one state, may be required to assume a certain portion of
their medical expenses before they can obtain coverage in another state, and may not be eligible
at all in a third state.
Medicaid-eligible families, pregnant women, and children fall into two basic groups: those
meeting AFDC standards as of July 16, 1996, and those qualifying under a series of targeted
Medicaid expansions that began in the 1980s.
Medicaid eligibility for AFDC-related groups was affected significantly by both the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193),
which replaced the AFDC cash assistance program with the Temporary Assistance for Needy
Families (TANF) block grant program, and the Balanced Budget Act of 1997 (BBA 97, P.L. 105-

33).


Mandatory. Members of families that meet the eligibility requirements of the old AFDC programs
in effect in their states on July 16, 1996 must be covered under Medicaid. States may modify their
rules governing income and resource standards for such AFDC-related groups in three ways: (1)
income standards may be reduced below those in effect in 1996, but they cannot be lower than
those used on May 1, 1988; (2) income and resource standards may be increased for any period
after 1996, but by no more than the percentage increase in the Consumer Price Index (CPI) for the
same period; and (3) states may use less restrictive methods for counting income and resources
than those in effect on July 16, 1996.
States must provide Medicaid assistance for recipients of adoption assistance and foster care (who
are under age 18) under Title IV-E of the Social Security Act. Transitional or extended benefits
are available to families who lose Medicaid eligibility because of increased hours of employment,

13 Resources may include bank accounts and similar liquid assets, as well as real estate, automobiles, and other personal
property for which the value may not exceed specified limits. Certain resources, such as an individual’s home, are
excluded when determining eligibility.





increased earnings, loss of a time-limited earned income disregard, or increased child or spousal 14
support payments. If the family loses Medicaid eligibility because of increased earnings or 15
hours of employment, Medicaid coverage is extended for six to 12 months. (During the second
six months, a premium can be imposed, the scope of benefits might be limited, or alternate
delivery systems might be used.) If the family loses Medicaid because of increased child or
spousal support, coverage is extended for four months. Children and pregnant women are exempt
from TANF work requirements and retain their Medicaid eligibility.
Optional. States are permitted to cover additional AFDC-related groups. States may provide
Medicaid to former foster care recipients ages 18, 19 and 20, and may limit such coverage to
those eligible for Title IV-E before turning 18. States may also extend Medicaid to children under
age 21 in families whose income and resources are within AFDC standards (as of July 16, 1996),
but who do not meet the definition of a dependent child (also known as Ribicoff children), and 16
may limit this coverage to “reasonable” subgroups. Finally, states may deny Medicaid benefits
to nonpregnant adults and heads of households who lose TANF benefits because of refusal to
work.
Beginning in the mid-1980s, Congress gradually extended Medicaid coverage to groups of
pregnant women and children who are defined in terms of family income and resources rather
than in terms of their ties to cash welfare programs.
Mandatory. States must cover pregnant women and children under age 6 with family incomes
below 133% of the federal poverty income guidelines. (A state may impose a resource standard
that is no more restrictive than that for SSI, in the case of pregnant women, or AFDC as of July
16, 1996, in the case of children.) Coverage for pregnant women is limited to services related to
the pregnancy or complications of the pregnancy through 60 days postpartum. Children receive
full Medicaid coverage.

14 For a more detailed discussion of transitional benefits, see CRS Report RL31698, Transitional Medical Assistance
(TMA) Under Medicaid.
15 The requirement for six to 12 months of transitional Medicaid, which originally applied to families who lost AFDC
eligibility because of work, was carried over in the 1996 TANF law. It has been extended beyond Sept. 30, 2002 by
several laws, most recently by the Deficit Reduction Act of 2005 (P.L. 109-171), which extended it through calendar
year 2006. If the provision authorizing 12-month TMA is not extended beyond Dec. 31, 2006, states will still be
required to provide four months of TMA to families that lose Medicaid eligibility due to an increase in earned income,
hours of employment, or child or spousal support.
16 These Ribicoff children, named for the former Senator who sponsored legislation authorizing this group, are
individuals under age 21 who do not meet the dependency requirement, often because they do not live with their
families. In the past, this eligibility pathway had been used for children residing in institutions or in state-based foster
care or adoption assistance programs. But today, most of those children can qualify under other poverty-level eligibility
pathways, since those pathways do not include a family dependency requirement. Ribicoff, as a result, has little
meaning for most children under age 19. For children who are 19 or 20 or are inpatients in psychiatric facilities, on the
other hand, Ribicoff may still be a valuable pathway to Medicaid. Older children cannot qualify under the other
poverty-level groups because those pathways define eligible children to be under age 19. Institutionalized children who
are in families with income that exceeds the poverty level ceilings also cannot qualify as poverty-level children because
their parents income is deemed to be available to children under those pathways. Under Ribicoff, on the other hand,
parental income is not considered to apply to children who do not reside in their parents homes.





States are also required to cover all children under age 19 whose family income is below the
federal poverty level.
Optional. States may cover pregnant women and infants under age 1 with family incomes of up to

185% of the federal poverty level (FPL). In addition, through other provisions of Medicaid law,


states are permitted to cover additional pregnant women and children with incomes above
applicable federal mandatory minimum levels. Such key provisions include waivers of eligibility
rules (through Section 1115 of the Social Security Act), use of more liberal methods for
calculating income and resources for some categories of eligibles (through Section 1902(r)(2) of
the Social Security Act), as well as through Medicaid expansions under the State Children’s
Health Insurance Program (SCHIP; program No. 3 in this report). For example, under SCHIP,
most states now cover at least some groups of children under age 19 in families with income at or
above 200% of the federal poverty level.
Finally, states have the option of continuing Medicaid eligibility for current child beneficiaries for
up to 12 months without a redetermination of eligibility. States are also allowed to extend
Medicaid coverage to pregnant women and children under 19 years of age on the basis of
“presumptive” eligibility until formal determinations are completed.
In general, Medicaid provides coverage to certain groups of individuals receiving (or qualifying
for) cash assistance through the Supplemental Security Income (SSI) program. It also covers the
Medicare cost-sharing obligations for certain individuals. In addition, Medicaid covers certain
individuals needing institutional care or other types of long-term care services.
The SSI program was established in 1972, replacing previous federal-state cash assistance
programs for the aged, blind, and persons with disabilities. Income and resource standards are
defined in federal law. For 2005, individuals applying for SSI could not have countable monthly
income in excess of $579, and their countable resources could not exceed $2,000. Similar criteria
for couples were $869 in monthly income and $3,000 in resources. However, states have the
option of supplementing SSI payments (called state supplemental payments, or SSP) for aged
persons living independently, and using the resulting higher income levels as the applicable
financial standard for determining Medicaid eligibility.
Mandatory. States are generally required to cover SSI recipients under their Medicaid programs.
However, states may use more restrictive eligibility standards for Medicaid than those for SSI if
they were using those standards on January 1, 1972 (before the implementation of SSI), as
authorized under Section 209(b) of the Social Security Act. There were 11 such Section 209(b) 17
states in 2005. States using more restrictive income standards must allow applicants to “spend
down”—deduct incurred medical expenses from income before determining eligibility. For
example, if an applicant has a monthly income of $700 (not including any SSI or state

17 These 11 states are Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota,
Ohio, Oklahoma, and Virginia. Social Security Administration, “Medicaid and the SSI Program (August 16, 2005),
Section SI 01715.010, Program Operations Manual System http://policy.ssa.gov/poms.nsf/lnx/0501715010.





supplement payment) and the state’s maximum allowable income is $600, the applicant would
qualify for Medicaid after incurring $100 in medical expenses in that month.
States must continue Medicaid coverage for several defined groups of individuals who lose SSI or
SSP eligibility. The “qualified severely impaired” are persons with disabilities who return to work
and lose SSI eligibility because of earnings, but still have the condition that originally rendered
them disabled and who meet all nondisability criteria for SSI except income. Medicaid must be
continued for these persons if they need ongoing medical assistance to continue working and their
earnings are not sufficient to provide the equivalent of SSI, Medicaid, and attendant care benefits
for which they would qualify in the absence of earnings. States must also continue Medicaid
coverage for persons who were once eligible for both SSI and Social Security payments and who
lose SSI because of a cost-of-living adjustment (COLA) in their Social Security benefits. Similar
Medicaid continuations have been provided for certain other persons who lose SSI as a result of
eligibility for or increases in Social Security or veterans’ benefits. Finally, states must continue
Medicaid for certain SSI-related groups who received benefits in 1973, including “essential
persons” (persons who care for a person with a disability).
Optional. States are permitted to provide Medicaid to individuals who are not receiving SSI but
are receiving state-only supplementary cash payments. Effective in August 1997, under
provisions of the Balanced Budget Act of 1997 (BBA 97), states may make Medicaid available to
SSI beneficiaries with disabilities who have income up to 250% of the FPL. These individuals
may “buy into” Medicaid by paying a premium based on income as determined by the state. The
1999 Ticket to Work legislation (P.L. 106-170) further allows states to cover employed persons
with disabilities at higher income and resource levels (i.e., income over 250% of the FPL and
resources exceeding $2,000 for an individual or $3,000 for a couple). States may also cover
financially eligible working individuals whose medical condition has improved to the point that
they no longer meet the SSI definition of disability. Such individuals may have to buy into
Medicaid by paying premiums or other cost-sharing charges on a sliding fee scale based on
income, as established by the state. Finally, states have the option of extending Medicaid to
certain additional elderly persons or persons with disabilities. These include the elderly and
persons with disabilities whose income does not exceed 100% of the FPL and whose resources do
not exceed the SSI standard.
Certain low-income individuals who are aged or have disabilities as defined under SSI and who
are eligible for Medicare are also eligible to have some of their Medicare cost-sharing expenses
paid for by Medicaid. There are four categories of such persons:
• Qualified Medicare Beneficiaries (QMB). Qualified Medicare beneficiaries are
aged or disabled Medicare beneficiaries with incomes no greater than 100% of
the FPL and assets no greater than $4,000 for an individual and $6,000 for a
couple. States are required to cover, under their Medicaid programs, the costs of
Medicare premiums, deductibles, and coinsurance for Medicare-covered benefits
for such persons. Other Medicaid covered services, such as nursing facility care,
prescription drugs, and primary and acute care services, are not covered for these
individuals unless they qualify for Medicaid through other eligibility pathways
(e.g., via SSI, medically needy, or the special income rule for institutionalized
persons described below).





• Specified Low-Income Medicare Beneficiaries (SLMB). Specified low-income
Medicare beneficiaries meet QMB criteria, except that their income is greater
than 100% of the FPL but does not exceed 120% of the FPL. Under this
Medicaid pathway, states are required to cover only the monthly Medicare Part B
premium. Other Medicaid services are not covered for these individuals unless
they qualify for Medicaid through other eligibility pathways.
• Qualifying Individuals (QI-1). The QI-1 eligibility pathway18 applies to aged and
disabled Medicare beneficiaries whose income is between 120% and 135% of the
FPL. For these individuals, states are required to pay the monthly Medicare Part 19
B premium only until the federal allotment for this purpose is depleted. These
individuals are not otherwise eligible for Medicaid.
• Qualified Disabled and Working Individuals (QDWIs). States are required to pay
the Medicare Part A premiums for persons who were previously entitled to
Medicare on the basis of a disability, who lost their entitlement based on earnings
from work, but who continue to have a disabling condition. Such persons may
only qualify if their incomes are below 200% of the FPL, their resources are
below 200% of the SSI limit ($4,000), and they are not otherwise eligible for
Medicaid.
In December 2003, the President signed the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA 2003, P.L. 108-173). This act provides that, beginning in 2006,
Medicaid eligibles who are also eligible for Medicare will receive outpatient prescription drug
coverage through the new Medicare prescription drug benefit instead of through Medicaid. While
this act does not change Medicaid eligibility rules, it does affect the benefits that the Medicaid 20
program will be allowed to cover. Under MMA 2003, state Medicaid programs will no longer be
able to cover any drugs that are to be provided through the Medicare benefit, or pay the cost-
sharing amounts for those drugs.
States may provide Medicaid to certain otherwise-ineligible groups of persons who are in nursing
facilities (NFs) or other institutions, or who would require institutional care if they were not
receiving alternative services at home or in the community.
States may establish a special income standard for institutionalized persons, not to exceed 300%
of the maximum SSI benefit that would be payable to a person living at home and with no other
resources ($1,737 per month in 2005). In states without a medically needy program (described

18 The program known as Qualifying Individuals-2 (QI-2) ended on Dec. 31, 2002.
19 In general, Medicaid payments are shared between the federal government and the states according to the matching
formula described above. However, expenditures under the QI-1 program are paid 100% by the federal government
(from the Part B trust fund) up to the states allocation level. A state is only required to cover the number of persons
that would bring its spending on these population groups in a year up to its allocation level. This temporary program,
originally slated to end Sept. 30, 2002, was most recently extended through Sept. 30, 2007, by P.L. 109-91.
20 Medicaid eligibility may be affected for individuals who now qualify as medically needy byspending down” their
income on medical expenses. Those individuals may experience delayed Medicaid eligibility or no longer qualify at all
because Medicare Part D will pay some portion of the drug expenses that were formerly counted toward their spend-
down amounts.





below), this “300% rule” is an alternative way of providing NF coverage to persons with incomes 21
above SSI or State Supplementary Payment (SSP) levels.
Both the medically needy and those becoming eligible under the “300% rule” must contribute
their available income to the costs of their care. Medicaid has distinct post-eligibility rules to
determine how much of a beneficiary’s income must be applied to the cost of care before
Medicaid makes its payment. Special rules exist for the treatment of income and resources of
married couples when one of the spouses requires nursing home care and the other remains in the
community. These rules are referred to as the “spousal impoverishment” protections of Medicaid
law, because they are intended to prevent the impoverishment of the spouse remaining in the
community.
A state may obtain a waiver under Section 1915(c) of the Social Security Act to provide home
and community-based services to a defined group of individuals who would otherwise require
institutional care. The waiver coverage may include persons who would be eligible under the
“300%” rule if they were in an institution, or those eligible through a medically needy program.
A state may also provide Medicaid to several other classes of persons who need the level of care
provided by an institution and would be eligible if they were in an institution. These include
certain children who are being cared for at home, persons of any age who are ventilator-
dependent, and persons receiving hospice benefits in lieu of other covered services.
In 2003, the Centers for Medicaid and Medicare Services (CMS) reported that 35 states and the 22
District of Columbia provided Medicaid to at least some groups of “medically needy” persons.
These are persons who meet the nonfinancial standards for inclusion in one of the groups covered
by Medicaid, but who do not meet the income or resource requirements for such coverage. Under
medically needy programs, individuals can spend down to the medically needy standard set by
the state by incurring medical expenses, in the same way that SSI recipients in Section 209(b)
may spend down to Medicaid eligibility.
Under medically needy programs, states may set income standards at any level up to 133⅓% of
the standard used for the most closely related cash assistance program. For families with children,
the maximum applicable medically needy income standard would be up to one-third more than
that which was in effect for a similar family under the state’s former AFDC program. For
individuals who have a disability or are elderly, it would be up to one-third more than the SSI
income standard. States may limit the groups of individuals who receive medically needy
coverage. If the state provides any medically needy coverage, however, it must include all

21 Until OBRA-93, persons with incomes in excess of these limits could not qualify for Medicaid coverage for their
nursing home care, even if their income was insufficient to cover the costs of such care. OBRA-93 included provisions
that allow individuals to deposit excess income above the 300% limit into a trust, sometimes referred to as aMiller
Trust,” and receive Medicaid coverage. The funds in the trust are recoverable by the state after the person’s death. This
arrangement, which is essentially a delayed spend-down, has reduced access barriers that may have been encountered
by persons in states that do not otherwise permit spend-down under Medicaid.
22 These include Alaska, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New Hampshire, New Jersey,
New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont,
Virginia, Washington, West Virginia, and Wisconsin.





children under 18 who would qualify under one of the welfare-related groups, and all pregnant
women who would qualify under either a mandatory or optional group, if their income or
resources were lower.
Demonstration waivers available under the authority of Section 1115 (of the Social Security Act)
enable states to experiment with new approaches for providing health care coverage that promote
the objectives of the Medicaid program. Section 1115 allows the Secretary of Health and Human
Services (HHS) to waive a number of Medicaid rules—including many of the federal rules
relating to Medicaid eligibility. The Health Insurance Flexibility and Accountability (HIFA)
Initiative, introduced by the Bush Administration in 2001, is an explicit effort to encourage states
to seek Section 1115 waivers to extend Medicaid and SCHIP to the uninsured, with a particular
emphasis on statewide approaches that maximize private health insurance coverage options and
target populations with incomes below 200% of the FPL. Some states have used such waivers to
enact broad-based and sometimes statewide health reforms, although demonstrations under
Section 1115 need not be statewide. A number of the demonstrations extend comprehensive
health insurance coverage to low-income children and families who would not otherwise be
eligible for Medicaid.
Legal immigrants arriving in the United States after August 22, 1996 are ineligible for Medicaid
for their first five years in this country. Coverage of these persons after the five-year ban is a state
option. States are required to provide Medicaid to legal immigrants who resided in the country
and were receiving benefits on August 22, 1996 (and who continue to meet the criteria), and to
those residing in the country as of that date who become disabled in the future.
States are also required to provide coverage to (1) refugees for the first seven years after entry
into the United States, (2) asylees for the first seven years after asylum is granted, (3) individuals
whose deportation is being withheld by U.S. Citizenship and Immigration Services (formerly the
Immigration and Naturalization Service) for the first seven years after the deportation is first
withheld, (4) lawful permanent aliens after they have been credited with 40 quarters of coverage
under Social Security, and (5) immigrants who are honorably discharged U.S. military veterans or
active duty military personnel, and their spouses and unmarried dependent children who
otherwise meet the state’s financial eligibility criteria.
In addition, states are required to provide emergency Medicaid services to all legal and
undocumented non-citizens who meet the financial and categorical eligibility requirements for
Medicaid, without regard to time in this country.
COBRA23 provides that employees or dependents who leave an employee health insurance group
in a firm with 20 or more employees must be offered an opportunity to continue buying insurance
through the group for 18 to 36 months (depending on the reason for leaving the group). The

23 COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272).





employer may charge a premium of no more than 102% of the average plan cost (150% for
months 19 to 29 for certain persons with disabilities). State Medicaid programs may pay the
former employees’ premiums but only under the following circumstances:
• The employee or family member worked for a firm with 75 or more employees;
• The premium payment is “cost effective” (i.e., the premium paid for the
employer-based coverage is below the amount Medicaid would have otherwise
spent on Medicaid services for the individual);
• The employee entitled to elect COBRA coverage is in a family with income that
does not exceed 100% of FPL; and
• The individual or family’s resources do not exceed twice the SSI resource limit.
(The SSI resource limit is $2,000 for an individual and $3,000 for a couple.)
States are required to offer the following services to most groups of recipients: inpatient hospital
services (excluding inpatient hospital services for mental disease); outpatient hospital care,
Federally Qualified Health Center (FQHC) services and, if permitted under state law, rural health
clinic (RHC) services; laboratory and X-ray services; certified pediatric and family nurse
practitioners; nursing facility services for those aged 21 and over; early and periodic screening,
diagnosis, and treatment for those under age 21 (EPSDT); physicians’ services; family planning
services and supplies; medical supplies and surgical services of a dentist; home health services for
those entitled to nursing facility care; nurse-midwife services; pregnancy-related services
(including treatment for conditions that may complicate pregnancy); and 60 days of postpartum-
related services. States must also assure transportation of any Medicaid-eligible individual to and
from providers of medical care.
Federal law includes two basic coverage requirements for the medically needy. First, if a state
provides medically needy coverage to any group, it must provide ambulatory services to children
under 18 and individuals entitled to institutional services, prenatal and delivery services for
pregnant women (as well as 60 days of postpartum care for those eligible for and receiving
pregnancy-related services), and home health services to individuals entitled to nursing facility
services. Second, if the state provides medically needy coverage for persons in institutions for
mental diseases or intermediate care facilities for the mentally retarded (ICFs/MR), it must offer
to all groups covered in its medically needy program all of the mandatory services required for
the categorically needy (except services provided by pediatric and family nurse practitioners), or
alternatively, any of seven categories of care and services listed in Medicaid law defining covered
benefits.
Finally, states may also choose to provide one or more optional services to categorically and
medically needy beneficiaries. These additional services include, for example, prescription drugs,
eyeglasses, other dental services, physical therapy, and inpatient psychiatric care for individuals
under age 21 or over 65.
States may limit the amount, duration and/or scope of care provided under any mandatory or
optional service category (such as limiting the number of days of covered hospital care or number
of physical therapy visits). Federal law permits states to impose nominal cost-sharing charges on
some Medicaid beneficiaries and for some services.





In FY2002, the most recent year for which enrollment data are available, 51.5 million persons
were covered by Medicaid. While non-disabled children and adults under age 65 comprised the
majority of Medicaid enrollment, their costs were relatively small ($2,090 per adult and $1,397
per child) when compared with the per recipient cost of the elderly recipients ($13,313), and
recipients with disabilities ($12,394). The aged and persons with disabilities represented 23% of
Medicaid enrollment, but accounted for 68% of the program’s spending on services. Between
FY2002 and FY2004, total federal and state Medicaid spending increased by about 16%, from
$258.2 billion to $300.3 billion.
Note: For more information, see CRS Report RL32277, How Medicaid Works—Program Basics;
CRS Report RS21071, Medicaid Expenditures, FY2003 and FY2004; CRS Report RL33019,
Medicaid Eligibility for Adults and Children; CRS Report RL31413, Medicaid—Eligibility for the
Aged and Disabled; and CRS Report RL33202, Medicaid: A Primer.


Medical care from the Department of Veterans Affairs (VA) is funded by the federal government.
VA medical services are defined as discretionary in the federal budget. Appropriations requests
are guided by estimated patient demand and associated resource requirements. In FY2005,
Congress provided approximately $29.7 billion for veterans health care programs. VA is also 24
authorized to use proceeds of the Medical Care Collections Fund (MCCF) to provide care to
veterans. In FY2005, the amount of collections was estimated to be $1.98 billion.
In addition to care provided in VA facilities and under contract, VA provides per diem payments
to states for care of eligible veterans in veterans’ nursing homes. VA also provides medical care to
certain spouses and children of certain service-connected disabled veterans under the Civilian 25
Health and Medical Program (CHAMPVA).

Unlike other medical benefit entitlements such as Medicare or Medicaid, eligibility for medical
benefits from VA conveys varying degrees of rights. Although all veterans are eligible to receive
medical care from VA, under current law, no veteran is automatically “entitled” to VA health care, 27
as care is dependent upon the amount of funding available for health care. VA determines

24 The VA is authorized to bill some veterans and most health care insurers for nonservice-connected care provided to
veterans enrolled in the VA health care system to defray the cost of delivering medical services to veterans. The
Balanced Budget Act of 1997 (P.L. 105-33) gave VA the authority to retain these funds in the Medical Care
Collections Fund (MCCF).
25 For information on CHAMPVA see http://www.va.gov/hac/forbeneficiaries/champva/champva.asp.
26 Eligibility rules are set forth in 38 CFR Part 17.47 (2005). This program is No. 64.009 in the Catalog of Federal
Domestic Assistance.
27 See 38 U.S.C. §1710 (a) (1) (4) (the “shall language in statute is “effective in any fiscal year only to the extent and
(continued...)





eligibility primarily based on “veterans’ status” resulting from military experience. “Veterans’
status” is determined by active duty status in the military, naval, or air service and an honorable
discharge or release from active military service. After the VA establishes “veterans’ status,” VA
next places applicants into one of two categories.
The first category in general is composed of veterans with service-connected disabilities or with
lower incomes. These veterans are regarded by VA as “high priority” veterans, and they are
enrolled in Priority Groups 1-6. Veterans placed in the second group are veterans who don’t fall
into one of the first six priority groups. These veterans are primarily those with nonservice-
connected conditions and with income and net worth above the VA established means test
threshold, and in general these veterans are enrolled in Priority Group 7 or 8. Based on statutory
authority provided by the Veterans Health Care Eligibility Reform Act of 1996 (P.L. 104-262), the
Secretary of Veterans Affairs announced on January 17, 2003 that VA would temporarily suspend
the enrollment of Priority Group 8 veterans. Those who enrolled prior to January 17, 2003 in VA’s
health care system were not to be affected by this suspension. VA claims that, despite its funding
increases, it cannot provide all enrolled veterans with timely access to medical services because 28
of the tremendous increase in the number of veterans seeking care from VA.
Under current law, most veterans have to enroll to receive health care from VA. In some cases,
VA provides care to non-enrolled veterans in the following classes: veterans who need treatment
for a VA rated service-connected disability; veterans who are VA rated as 50% or more service-
connected disabled; and veterans who were released from active duty within the previous 12
months for a disability incurred or aggravated in the line of duty.
The largest category of veterans provided free medical care by VA consists of persons who
qualify for that care because their annual net income and net worth are below an established VA
Means Test Threshold (in 2005: single person, $25,842; with one dependent, $31,013; for each
additional dependent, $1,734), or veterans whose incomes in the previous calendar year were no
higher than the pension of a veteran in need of regular aid and attendance (in 2004: single person,
$16,955; with one dependent, $20,099; for each additional dependent, $1,734). These veterans are
enrolled in Priority Group 5. A veteran applying for care under the low-income eligibility test is
advised that reported income is subject to verification by matching the amount shown on the
application with income reported to the Internal Revenue Service (IRS). Once eligible under the
income rules, a veteran remains eligible until determined upon (annual) reevaluation to no longer
meet the income standard.
VA offers a standardized medical benefits package that includes a full range of outpatient and
inpatient services with an emphasis on preventive and primary care. As defined in regulations, VA
medical benefits include, among other things, preventive services, including immunizations,
screening tests, and health education and training classes; primary health care diagnosis and
treatment, prescription drugs, comprehensive rehabilitative services, mental health services,

(...continued)
in the amount provided in advance appropriations Acts for such purposes).
28 See U.S. Department of Veterans Affairs, “Annual Enrollment Level Decision,” 68 Federal Register 2669-2673 (Jan.
17, 2003).





including professional counseling, home health care, respite (inpatient), hospice, and palliative
care; and emergency care. Some veterans are also eligible to receive long-term care, including
nursing home care, domiciliary care, adult day care, and limited dental care. In FY2004, there
were 7.4 million enrolled veterans, and 4.7 million unique veteran patients received care from
VA. Of these, 2.5 million enrolled veterans and 1.6 million unique veteran patients were in
Priority Group 5. That same fiscal year, VA treated 760,519 inpatients, 93,271 veterans in nursing
home care units or in community nursing home facilities, and 25,523 veterans in home- and
community-based facilities. The VHA’s outpatient clinics registered more than 49 million visits
by veterans in FY2004.
During FY2004, the Veterans Health Administration (VHA) operated 157 hospitals, 134 nursing
homes, 42 residential rehabilitation treatment centers; 862 ambulatory care and community-based
outpatient clinics; and an extensive pharmaceutical supply apparatus. Veterans’ medical care
appropriations were $26.8 billion in FY2004 and $29.7 billion in FY2005.
Note: For more information, see CRS Report RL32975, Veterans’ Medical Care: FY2006
Appropriations.


The Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) established the State Children’s Health 29
Insurance Program (SCHIP) under Title XXI of the Social Security Act. The program offers
federal matching funds for states and territories to provide health insurance to targeted low-
income children. In the original law, Congress appropriated $39.7 billion in SCHIP federal 30
matching grants for 10 years, FY1998 through FY2007. The total annual allotment for each of
FY1998 through FY2001 was a little more than $4.2 billion. This annual total dropped to a little
under $3.2 billion in FY2002 through FY2004. Then the annual allotment rose to about $4.1
billion for FY2005 and FY2006, with a further increase to roughly $5.0 billion projected for
FY2007.
Allotment of funds among the states is determined by a formula set in law. This formula is based
on a combination of the number of low-income children and low-income uninsured children in
the state, and it includes a cost factor that represents average health service industry wages in the
state compared to the national average. All states have submitted SCHIP program plans to the
Centers for Medicare and Medicaid Services (CMS).

29 The program number for SCHIP in the Catalog of Federal Domestic Assistance is 93.767. It is codified at 42 U.S.C.
1397aa et seq. The final rule governing SCHIP was published on January 11, 2001 (42 CFR Parts 431, 433, 435, inter
alia.) and was revised by an interim final rule published June 25, 2001 (42 CFR Parts 431, 433, inter alia.), which took
effect on August 24, 2001.
30 From the original appropriated amounts specified in BBA 97, the law set aside 0.25% of SCHIP funds for five
territories (Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands). Later, funds
were added to the total annual appropriation and earmarked for the territories for each year beginning in FY1999. For
FY1998 through FY2002 only, $60 million annually was set aside for special diabetes grants.





States have three fiscal years in which to draw down a given year’s funding. Under SCHIP law as
enacted in 1997, allotments not spent by the end of the applicable three-year period will be
redistributed—by a method to be determined by the Secretary of Health and Human Services
(HHS)—to states that have fully spent their original allotments for that year. Redistributed funds
not spent by the end of the fiscal year in which they are reallocated will officially expire. The
rules regarding reallocation vary by fiscal year. In the first reallocation legislation for FY1998
and FY1999 (P.L. 106-554), redistribution states (12 in FY1998 and 13 in FY1999) were given
access to unspent funds from other states equal to their excess spending above their original
allotments during the applicable three-year period. After a set-aside of 1.05% of the total unspent
funds for territories that fully exhausted their original allotments, the remaining unused funds
were divided among the retention states in proportion to their contribution to the total pool of
unspent funds. In contrast, under the second reallocation legislation for FY2000 and FY2001
(P.L. 108-74), a different rule was used. A set-aside of 1.05% of the total unspent funds was made
for territories that fully exhausted their original allotments. Then, retention states kept one-half of
their unused funds. The remaining unspent funds were then distributed among redistribution
states (14 for FY2000 and 19 for FY2001) in proportion to their contribution to the total pool of 31
excess spending.
The final rule for reallocation of unspent FY2002 funds was published in the September 29, 2005 32
Federal Register. Because no law was enacted specifying otherwise, the reallocation process
followed BBA 97 requirements. Under this law, at the end of the applicable three-year period,
unspent allotments are subject to redistribution among only those states that fully expend their
allotments by the three-year deadline, by a method to be determined by the Secretary of Health
and Human Services. States that were projected to exhaust all of their available federal SCHIP
accounts in FY2005, based on their August FY2005 estimated expenditures, received access to
FY2002 redistribution money equal to that estimated shortfall. The five “shortfall states” were
Arizona, Minnesota, Mississippi, New Jersey, and Rhode Island. The remaining balance of
unspent FY2002 funds was then divided among a total of 28 redistribution states, including the
five shortfall states, based on each such state’s percentage of the total excess spending above the 33
FY2002 allotments during the three-year period of availability of these funds. Also according to
BBA 97, this reallocation pot was to expire at the end of one year, in this case, at the end of
FY2005.
Access to reallocated funds (i.e., redistributed and retained funds from prior years) has added
another layer of complexity to SCHIP financing. During FY2005, for example, states could
access reallocated FY2001 and FY2002 funds, plus original allotments from FY2003, FY2004,
and FY2005. Generally, when multiple accounts are available simultaneously, expenditures are
applied against reallocated and original allotments in chronological order from earliest to most

31 Finally, P.L. 108-74 also permits certain states to spend their available balances (i.e., up to a maximum of the lesser
of the following two amounts: (1) 20% of the states available FY1998-through-FY2001 original SCHIP allotments,
and (2) the states balance (calculated quarterly) of any available FY1998 to FY2001 federal SCHIP funds (original
allotments or reallocated funds from FY1998 through FY2001) for services delivered to Medicaid beneficiaries under
age 19 who are not otherwise eligible for SCHIP and have family income that exceeds 150% of the federal poverty
guideline. Subsequently, P.L. 108-127 modified the definition of a state that qualifies to make such expenditures.
32State Childrens Health Insurance Program (SCHIP); Redistribution of Unexpended SCHIP Funds From the
Appropriation for Fiscal Year 2002,” Federal Register, vol. 70, No. 188, Sept. 29, 2005, pp. 56901-56909.
33 All five territories also exceeded their FY2002 original allotments by the three-year deadline. As with prior
redistributions, 1.05% of all unspent FY2002 funds was set aside for the territories. Each received an amount equal to
its original allotment for FY2002 divided by the sum of FY2002 allotments among the territories.





recent. However, in regulations, CMS has allowed redistribution states only (i.e., states with
excess spending that qualified them for redistribution of unspent funds from other states) the
option of defining the order for applying expenditures against available accounts. That is, to
optimize the use of funds, such states were given the flexibility to decide whether to use
redistributed funds before or after other available funds/accounts. Once a specific order is chosen
for a given set of open accounts, such states are not allowed to change that order until a new
redistribution account is added to the set.
Like Medicaid, SCHIP is a federal-state matching program. For each dollar of state spending, the
federal government makes a matching payment, up to the state’s allotment. The state’s share of
program spending is equal to 100% minus the enhanced federal medical assistance percentage
(the enhanced FMAP). The enhanced FMAP is equal to the state’s Medicaid FMAP (for the
regular FMAP formula, see program No. 1 of this report), increased by the number of percentage
points that is equal to 30% multiplied by the number of percentage points by which the FMAP is 34
less than 100%. No more than 10% of the federal funds that a state draws down for SCHIP
benefit expenditures can be used for administrative expenses, which include activities such as
data collection and reporting, as well as outreach and education.
Each state defines the group of targeted low-income children who may enroll in SCHIP. The law
allows states to use the following factors in determining eligibility: geography, age, income and
resources, residency, disability status, access to other health insurance, and duration of eligibility
for SCHIP. In general, funds cannot be used for children who are eligible for the state’s Medicaid
program or for children covered by a group health plan or other insurance.
Under SCHIP, states may cover children in families with incomes that are either (1) above the
state’s applicable Medicaid eligibility standard under the rules in effect in the state on March 31, 35
1997, but less than 200% of the federal poverty level (FPL), or (2) in states with Medicaid
income levels for children already at or above 200% of FPL, within 50 percentage points over the
state’s Medicaid income eligibility limit for children. Many states cover at least some groups of
children in families with income at or above 200% FPL.
In addition, states that want to make changes to their SCHIP programs that go beyond what the
law will allow may do so through what is called a Section 1115 waiver (named for the section of
the Social Security Act that defines the circumstances under which such waivers may be granted).
The Secretary of Health and Human Services may waive certain statutory requirements for
conducting research and demonstration projects under SCHIP that allow states to adapt their
programs to specific needs. On August 4, 2001, the Bush Administration announced the Health

34 For example, if a state has a Medicaid FMAP of 60%, under Medicaid a state must spend 40 cents for every 60 cents
that the federal government contributes. The enhanced FMAP would be equal to the Medicaid FMAP increased by 12
percentage points (60% + [30% multiplied by 40 percentage points] = 72%.) The state share would be equal to 100% -
72% = 28%. Compared with the Medicaid FMAP, which ranges from 50% to 77.08% in FY2005, the enhanced FMAP
for SCHIP ranges from 65% to 83.96%. All SCHIP assistance for targeted low-income children, including coverage
provided under Medicaid, is eligible for the enhanced FMAP. The Medicaid FMAP and the enhanced SCHIP FMAP
are subject to a ceiling of 83% and 85%, respectively.
35 In 2005, 200% of the federal poverty guideline was $25,660 for a family of two, $32,180 for a family of three, and
$38,700 for a family of four (higher guidelines apply in Alaska and Hawaii). The federal poverty guideline is
sometimes referred to as the federal poverty level, or FPL.





Insurance Flexibility and Accountability (HIFA) Demonstration Initiative. Using Section 1115
waiver authority, this initiative is designed to encourage states to extend Medicaid and SCHIP to
the uninsured, with a particular emphasis on statewide approaches that maximize private health
insurance coverage options and target populations with income below 200% FPL.
As of May 2005, 15 states had approved SCHIP Section 1115 waivers.36 Six additional Section
1115 waiver proposals (three for new waivers and three for amendments to existing waivers) were
under review at that time. Eight states (Arizona, California, Colorado, Idaho, Illinois, Michigan,
New Jersey, and Oregon) have approved HIFA demonstrations. In nine states with approved
waivers (Arizona, California, Colorado, Illinois, Minnesota, New Jersey, Oregon, Rhode Island, 37
and Wisconsin), SCHIP coverage is expanded to include one or more categories of adults with
children, typically parents of Medicaid/SCHIP children, caretaker relatives, legal guardians,
and/or pregnant women. Three states (Arizona, Michigan, and Oregon) also cover childless adults
under their waivers.
In addition to expanding coverage to new populations under waivers, some states have used this
authority for other purposes. For example, two states (Alaska and New Mexico) require periods 38
of no insurance prior to enrollment under their waivers. New Mexico also modified its cost-
sharing rules for targeted low-income children under its Medicaid program. Three states (Idaho,
Illinois, and Oregon) offer premium assistance programs under waiver authority. New York’s
demonstration provided temporary disaster relief in New York City due to the events of
September 11, 2001. Finally, Ohio received approval to implement an annual enrollment fee and
to give 12 months of continuous eligibility for certain targeted low-income children in its 39
Medicaid program.
States may choose from three options when designing their SCHIP programs. They may expand
their existing Medicaid program, create a new “separate state” insurance program, or devise a
combination of both approaches. All 50 states, the District of Columbia, and five territories have
SCHIP programs in operation. As of August 2005, 17 use Medicaid expansions, 19 use separate 40
state programs, and 20 use a combination approach.
States that choose to expand their Medicaid programs by covering targeted low-income children
must provide the full range of mandatory Medicaid benefits as well as all optional services

36 The 15 states are Alaska, Arizona, California, Colorado, Idaho, Illinois, Michigan, Minnesota, New Jersey, New
Mexico, New York, Ohio, Oregon, Rhode Island, and Wisconsin. Five of these states (Michigan, Minnesota, New
Jersey, New Mexico, and Rhode Island) have had amendments to their waivers approved.
37 States have the option to purchase family coverage under a group health plan that may cover adults as long as it is
cost-effective to do so (relative to the amount paid for comparable coverage for the children only), and it must not
substitute for health insurance that would otherwise be provided to the children. For states seeking greater flexibility
both in selecting which adults to cover and in the benefit package offered to those adults, a waiver is required.
38 SCHIP separate state programs (described in theBenefit Levels section) have the authority to impose waiting
periods without seeking special approval, and many do so. In general, for Medicaid expansions under SCHIP, all
Medicaid rules apply. Thus, when states with SCHIP Medicaid expansions want to implement other rules (e.g.,
establish waiting periods before enrollment, implement enrollment fees, etc.), a waiver is required.
39 Due to a variety of budget and resource constraints, in May 2002, Ohio decided not to implement its waiver.
40 Centers for Medicare and Medicaid Services, State Childrens Health Insurance Program Plan Activity as of August
9, 2005 http://www.cms.hhs.gov/schip/chip-map.pdf.





specified in their state Medicaid plans. States that choose to create separate SCHIP programs may
elect any of three benefit options: (1) a benchmark benefit package, (2) benchmark equivalent
coverage, or (3) any other health benefits plan that the Secretary determines will provide
appropriate coverage to the targeted population of uninsured children.
A benchmark benefit package is one of the following three plans: (1) the standard Blue
Cross/Blue Shield preferred provider option plan offered under the Federal Employees Health
Benefits Program (FEHBP), (2) the health coverage that is offered and generally available to state
employees in the state involved, or (3) the health coverage that is offered by an HMO with the
largest commercial (non-Medicaid) enrollment in the state involved.
Benchmark equivalent coverage is defined as a package of benefits that has the same actuarial
value as one of the benchmark benefit packages. A state choosing to provide benchmark
equivalent coverage must cover each of the benefits in the “basic benefits category.” The benefits
in the basic benefits category are inpatient and outpatient hospital services, physicians’ surgical
and medical services, lab and X-ray services, and well-baby and well-child care, including age-
appropriate immunizations. Benchmark equivalent coverage must also include at least 75% of the
actuarial value of coverage under the benchmark plan for each of the benefits in the “additional
service category.” These additional services include prescription drugs, mental health services,
vision services, and hearing services. States are encouraged to cover other categories of services
not listed above. Abortions may not be covered, except in the case of a pregnancy resulting from
rape or incest, or when an abortion is necessary to save the mother’s life.
Title XXI gives states the authority to determine the amount, duration, and scope of the services
covered unless the state chooses to provide a benchmark plan. Benchmark equivalent plans may
limit their benefit packages in any way they choose as long as the entire package is certified to be
an actuarial equivalent of the benchmark plan.
While federal law permits states to impose cost sharing for some beneficiaries and services, cost
sharing is not permitted for well-baby or well-child care services, and American Indian and
Alaskan Native children are exempt from all cost sharing. Apart from these general exceptions,
states that choose to cover targeted low-income children under Medicaid must follow the cost-
sharing rules of the Medicaid program. Generally, Medicaid does not allow cost sharing (e.g.,
deductibles, co-payments, and co-insurance) for medical services, and cost sharing associated
with program participation (e.g., enrollment fees, and premiums) is limited to nominal amounts.
If the state implements SCHIP through a separate state program, premiums or enrollment fees
may be imposed, but they are subject to limits.
Under separate state programs, for families with incomes under 150% FPL income-related
charges (i.e., enrollment fees, premiums, or similar charges tied to the total gross family income) 41
may not exceed the amounts set forth in federal Medicaid regulations. For children whose
family income is at or below 100% FPL, service-related cost sharing is limited to nominal 42
amounts as defined in Medicaid regulations. For children whose family income is between 43

101% and 150% FPL, service-related cost sharing must meet “adjusted nominal amounts.”


These adjusted amounts reflect the enrollees’ increased ability to pay. Cumulative cost-sharing

41 42 CFR §447.52 (2004).
42 42 CFR §447.54 (2004).
43 42 CFR §457.555 (2004).





maximums for each 12-month enrollment period must not exceed 5% of the family’s annual 44
income.
For families with income above 150% FPL, service-related cost sharing may be imposed in any
amount, provided cost sharing for higher-income children is not less than cost sharing for lower-
income children. However, the total annual aggregate cost sharing (including premiums,
deductibles, co-payments and any other charges) for all children in any SCHIP family may not
exceed 5% of total family income for the year. Regardless of the family’s cumulative cost-sharing
maximum, states must (1) inform families of these limits, (2) provide a mechanism for families to
stop paying once the cost-sharing limits have been reached, and (3) provide reasonable notice of
any missed payments prior to disenrollment.
Early enrollment estimates indicated that nearly 1 million children (982,000) were enrolled in 45
SCHIP under 43 operational state programs as of December 1998. Nearly 2 million children 46
(1,979,450) were enrolled in SCHIP during FY1999 under 53 operational state programs. The
latest official numbers show that SCHIP enrollment reached a total of nearly 6.2 million children
in FY2004. Of this total, almost 4.4 million were covered in separate state programs, and 1.8
million were targeted low-income children under Medicaid. Total SCHIP enrollment for adults 47
reached 513,569 in FY2004.
Expenditures under SCHIP have been the subject of much debate and controversy almost since
the program’s inception. Despite the fact that most states began enrolling children in SCHIP in
late 1997 or 1998, new programs always take time to get off the ground and participation rates in
the early years of SCHIP rose more slowly than expected. As a consequence, spending was slow
to ramp up too, as evidenced by the fact that a minority of states (12 to 19, depending on the year)
fully expended their original FY1998-FY2001 allotments by the applicable three-year deadlines.
It was not until FY2005, when the redistribution of unspent FY2002 funds took place, that more
than half of the states (28) succeeded in qualifying for a portion of these unused funds.
A total of $26.4 billion, over one-half of the total federal SCHIP appropriation of nearly $40
billion to date, was made available to states and territories FY1998 through FY2004. By the end
of FY2004, nearly 70% ($18.3 billion) of these funds was spent. However, an additional $1.3
billion available to 11 states actually expired at the close of FY2004; these expired funds were
comprised of unspent FY1998, FY1999, and FY2000 reallocated monies. Thirty-three states
forfeited funds they were unable to spend within the applicable time limits.
Note: For more information about SCHIP, see CRS Report RL30473, State Children’s Health
Insurance Program (SCHIP): A Brief Overview; and CRS Report RL32807, SCHIP Financing:
Funding Projections and State Redistribution Issues.

44 42 CFR §457.560(a) (2004).
45 Centers for Medicare and Medicaid Services (formerly known as HCFA), A Preliminary Estimate of the Childrens
Health Insurance Program Aggregate Enrollment Numbers Through December 31, 1998 (background only), Apr. 20,
1999.
46 Centers for Medicare and Medicaid Services (formerly known as HCFA), The State Childrens Health Insurance
Program, Annual Enrollment Report, October 1, 1998-September 30, 1999.
47 Centers for Medicare and Medicaid Services, Revised FY2004 Number of Children Ever Enrolled in SCHIP by
Program Type, May 23, 2005 http://www.cms.hhs.gov/schip/enrollment/schip04rev.pdf.






Indian Health Service (IHS) appropriations are allocated among its 12 service areas through a
“historical,” or “program continuity” basis, under which each area can expect to receive its
recurring base budget from the previous year, plus an increase in certain mandatory cost
categories. Using a Resource Allocation Methodology (RAM), the Service distributes a small
portion of its appropriation to areas and tribes based on documented health deficiencies. Tribes
may assume from the IHS the administration and operation of health services and programs in
their communities, and about 52% of IHS funds are used by Indian tribes to deliver IHS services
to their own communities. The Service collects reimbursements from the Medicare and Medicaid
programs for services that it provides to members of its eligible population who are also eligible
for those programs. In FY2002, IHS collected $534.8 million in reimbursements; in FY2003, this
number increased to $591.7 million; and in FY2004, this number increased to $634.4 million. For
FY2005, collections are estimated to be $598.7 million. Total program appropriations (which
include both budget authority, collections, and a special diabetes program) were $3.392 billion in
FY2002, $3.541 billion in FY2003, $3.706 billion in FY2004, and $3.773 billion in FY2005.

Eligible under Public Health Service regulations are persons of American Indian or Alaskan
Native (AI/AN) descent who: (1) are members of a federally recognized Indian tribe; (2) reside
within an IHS Health Service Delivery Area (HSDA); or (3) are the natural minor children (18
years old or younger) of such an eligible member and reside within an IHS HSDA. The program
imposes no income test; any eligible AI/AN can receive health services. The program serves
Indians living on federal reservations, Indian communities in Oklahoma and California, and
Indian, Eskimo, and Aleut communities in Alaska. According to the 2000 census, more than 57%
of AI/AN reside in urban areas. Under the Indian Health Care Improvement Act of 1976, P.L. 94-
437, as amended, the IHS contracts with 34 urban Indian organizations at 41 sites throughout the
United States to make health services more accessible to 600,000+ urban Indians. Combined, all
IHS programs serve between 1.5 and 1.6 million AI/AN.
The IHS provides hospital, medical, and dental care and environmental health and sanitation
services as well as outpatient services and the services of mobile clinics and public health nurses,
and preventive care, including immunizations and health examinations of special groups, such as
school children. All services are provided free of charge to beneficiaries. If the eligible AI/AN has
private insurance, IHS will be reimbursed for the services provided. Benefits are provided
through 157 service units, 48 IHS hospitals, six school health centers, 238 health centers, and 167
smaller health stations and satellite clinics; 180 Alaskan village clinics; as well as contracts with

48 Regulations are found at 42 CFR Part 136 (2005). This program is No. 93.228 in the Catalog of Federal Domestic
Assistance.





non-federal hospitals, clinics, private physicians and dentists; and contractual arrangements with
state and local health organizations.
Note: For more information, see CRS Report RL33022, Indian Health Service: Health Care
Delivery, Status, Funding, and Legislative Issues.

The Health Care Safety Net Amendments of 2002, P.L. 107-251, amended the Public Health
Service Act (PHS Act) to reauthorize the health centers grant program through FY2006. The
health centers program includes community health centers, migrant health centers, health centers
for the homeless, and health centers for residents of public housing. They are codified under
Section 330 of the PHS Act. The program does not have a statutory formula. The grant applicant
must assume part of the project costs, which are determined on a case-by-case basis.
Centers receive grant money to provide primary care services to groups that are determined to be
medically underserved. Grants are awarded through the Bureau of Primary Health Care of the
Health Resources and Services Administration (HRSA) of the U.S. Department of Health and
Human Services (HHS). Centers are required to seek third-party reimbursement from other
sources, such as Medicare and Medicaid. State and local governments may also contribute.
Centers may receive one or more of the following types of grants: (1) planning grants, to plan and
develop health centers or a comprehensive service delivery network; (2) operating grants, to assist
with operation costs of a center; and (3) infant mortality grants, to assist in the reduction of infant
mortality and morbidity among children less than three years of age and to develop and
coordinate service and referral arrangements between health centers and other entities for the
health management of pregnant women and children. FY2005 appropriations were $1.7 billion.
The annual service population for FY2004 was an estimated 13.1 million persons.

A health center is an entity that provides health care services to a medically underserved
population, or a special medically underserved population comprised of migratory and seasonal
agricultural workers, the homeless, and residents of public housing by providing required primary
health services and additional health services as may be appropriate for particular centers. By
regulation, medically underserved areas are designated by the HHS Secretary on the basis of such
factors as: (1) ratio of primary care physicians to population, (2) infant mortality rate, (3)
percentage of population aged 65 and over, and (4) percentage of population with family income
below the poverty level. Profit-making organizations are not eligible for health center grants.
All residents of an area served by a health center are eligible for its services.

49 Regulations for community health centers are found at 42 CFR Subpart 51c (2005). This program is No. 93.224 in
the Catalog of Federal Domestic Assistance.





Regulations limit free service to families with income at or below the federal poverty income
guidelines. The 2005 federal poverty income guideline in the 48 contiguous states was $19,350
for a family of four. Nominal fees may be collected from these individuals and families under
certain circumstances. Individuals and families with annual incomes greater than the poverty
guideline but below 200% of it are required to pay for services from a fee schedule adjusted on
the basis of the patient’s ability to pay. Full payment is required from those with income that
exceeds twice the poverty level.
The centers provide a range of primary health services on an ambulatory basis, including
diagnostic, treatment, preventive, emergency, transportation, and preventive dental services. They
can arrange and pay for hospital and other supplemental services in certain circumstances if
approved by the Secretary.
Note: For more information, see CRS Report RL32046, Federal Health Centers Program,
available on request.

The Maternal and Child Health (MCH) Services Block Grant supports activities to improve the 50
health status of mothers and children. Most of the funds are distributed to state governments to
pay for services; however, some funds are set aside for use by the federal government to finance
special projects of regional and national significance (SPRANS) and the community integrated
service systems program (CISS). State allocations are based on two factors: (1) a state’s share of
FY1981 levels of funding for programs that were combined into the block grant when it was
authorized in 1981; and (2) the number of low-income children in the state. States must contribute
$3 for every $4 of federal funds awarded. States are required to use at least 30% of their block
grant allocations for preventive and primary care services for children and 30% for services for
children with special needs. States may use the remaining 40% for services for either of these
groups or for other appropriate maternal and child health services, including preventive and
primary care services for pregnant women, mothers, and infants up to age 1. States may use no
more than 10% of their allocations for administrative costs.
Federal law requires that 15% of the appropriation for the block grant up to $600 million be set
aside for SPRANS activities in categories that include research, training, genetic disease
programs and newborn genetic screening, hemophilia programs, and maternal and child health
improvement, especially infant mortality.

50 P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, established a Maternal and Child Health (MCH)
Services Block Grant under Title V of the Social Security Act. The block grant replaced the previous programs of
Maternal and Child Health Services and Crippled Children’s Services, also in Title V, and included the following other
existing federal programs: supplemental security income services for disabled children, lead-based paint poisoning
prevention, genetic diseases, sudden infant death syndrome, hemophilia centers, and adolescent pregnancy prevention.





When the appropriation for the block grant exceeds $600 million, the law requires that 12.75% of
the amount over $600 million be set aside for CISS projects. Funds from this set-aside are used
for initiatives that include case management, projects to increase the participation of obstetricians
and pediatricians in both the block grant program and Medicaid, integrated delivery systems,
rural or hospital-based MCH projects, and community-based programs including day care for
children who usually receive services on an inpatient basis. FY2004 appropriations were $730
million, and non-federal matching funds were estimated at $547 million. The FY2005
appropriation was $724 million.

States determine eligibility criteria for MCH block grant services. The law provides that block
grant funds are to be used by the states “to provide and to assure mothers and children (in
particular those with low income or with limited availability of health services) access to quality
maternal and child health services.” Low-income mothers and children are those with family
income below 100% of federal poverty guidelines—$19,350 per year for a family of four in 2005
(higher in Alaska and Hawaii).
States determine the level of services provided under the block grant. These services may include
prenatal care, well-child care, dental care, immunization, family planning, and vision and hearing
screening services. They may also include inpatient services for children with special health care
needs, screening services for lead-based paint poisoning, and counseling services for parents of
sudden infant death syndrome victims.
States are allowed to charge for services; however, they may not charge mothers and children
whose family incomes are below federal poverty guidelines. Charges must be based on a sliding
scale that reflects the income, resources, and family size for those with family incomes above
poverty.
In FY2003 Title V provided services to 2.5 million pregnant women, 3.9 million infants, almost
1.1 million children with special health care needs, and 3 million other women of child-bearing
age.
Note: For more information, see CRS Report 97-350, Maternal and Child Health Block Grant,
available on request.

51 Regulations are found at 45 CFR Part 96 (2005). This program is No. 93.994 in the Catalog of Federal Domestic
Assistance (CFDA). It is codified at 42 U.S.C.701 et seq.






Grants are provided for voluntary family planning services through the family planning program
established by Title X of the Public Health Service Act. There is no requirement that grantees
match federal funds at a specified rate, but regulations specify that no family planning clinic
project may be fully supported by Title X funds. Congress has continued to appropriate money for
the program even though Title X has not been reauthorized since FY1985. Grants for family
planning clinics are made to states and territorial health departments, hospitals, universities and
other public and nonprofit agencies. Appropriations for FY2005 were $286 million.

The law requires that priority for clinic services go to persons from low-income families. Clinics
must provide family planning services to all persons who request them, but the priority target
group has been women aged 15-44 from low-income families who are at risk of unplanned
pregnancy. Clinics are required to encourage family participation.
Clinics must provide services free of charge (except to the extent that Medicaid or other health
insurers cover these services) to persons whose incomes do not exceed 100% of the federal
poverty income guidelines ($19,350 for a family of four in the 48 contiguous states in 2005). A
sliding payment scale must be offered for those whose incomes are between 100% and 250% of
the poverty guideline.
Participating clinics must offer a broad range of family planning methods and services. Required
services include natural family planning methods and supplies, counseling services, physical
examinations (including testing for cancer and sexually transmitted diseases), infertility services,
services for adolescents, pregnancy tests, periodic follow-up examinations, referral to and from
other social and medical service agencies, and ancillary services. The law forbids use of any Title
X funds in programs where abortion is a method of family planning.
In FY2004, approximately 4.8 million persons received family planning services through 4,500
clinic sites supported by 86 service grantees. The clinics administered more than 2.9 million
cervical cancer screenings, 2.8 million breast cancer screenings, and 496,622 HIV tests. An
estimated one-third of all clients served at Title X clinics, 1.6 million per year, are adolescents.
Note: For more information, see CRS Report RL33644, Title X (Public Health Service Act)
Family Planning Program, by Angela Napili.

52 Regulations governing Title X family planning services are found in 42 CFR Part 59 (2005). This program is No.
93.217 in the Catalog of Federal Domestic Assistance.







Subject to available appropriations, the Immigration and Nationality Act (INA) authorizes 100%
federally funded medical assistance for needy refugees and asylees during their first three years in
the United States. Other legislation authorizes similar assistance for certain Cuban and Haitian 5354
entrants and for certain Amerasians. Since FY1992, funding has been appropriated to provide
medical care for the first eight months after entry. These benefits are administered by the
Department of Health and Human Service’s Office of Refugee Resettlement (ORR). For refugee 55
medical assistance (RMA), ORR expenditures amounted to $92 million in FY2004.

A person must (a) have been admitted to the United States as a refugee or asylee under the
Immigration and Nationality Act or have been paroled as a refugee or asylee under the act, (b) be
a Cuban or Haitian paroled into the United States between April 15 and October 20, 1980, and
designated a “Cuban/Haitian entrant,” or be a Cuban or Haitian national paroled into the United
States after October 10, 1980, (c) be a person who has an application for asylum pending or is
subject to exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
If a needy person in one of the above groups meets the income and assets tests prescribed by his
or her state for Medicaid eligibility but does not otherwise qualify for that program because of its
categorical requirements, such as family composition, the person is eligible for RMA. Under the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), as
amended by P.L. 105-33, these persons are now eligible for seven years after entry (earlier law
gave permanent eligibility). After seven years their continued participation is at state option, as it 57
is with other “qualified aliens.”
Medical benefits consist of payments made on behalf of needy refugees to doctors, hospitals, and
pharmacists. Federal law requires state Medicaid programs to offer certain basic services but
authorizes states to determine the scope of services and reimbursement rates, except for hospital
care.

53 Title V of the Refugee Education Assistance Act (P.L. 96-422).
54 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
55 Preliminary estimate of the Office of Refugee Resettlement.
56 Regulations governing this program are found in 45 CFR Parts 400-401 (2005). This program is No. 93.566 in the
Catalog of Federal Domestic Assistance.
57 Wyoming opted to limit noncitizens, including qualified aliens, to emergency Medicaid only.





Note: For more information, see CRS Report RL31269, Refugee Admissions and Resettlement
Policy.


Since its January 1974 beginning, Supplemental Security Income (SSI) has provided a minimum
income floor financed by U.S. general revenues and administered by the Social Security
Administration (SSA), to persons eligible under federal rules. Some states choose to provide
additional payments to SSI recipients at their own expense. In addition, a grandfather clause
requires states to provide supplements to a small number of persons previously enrolled in the
pre-SSI programs of federal-state cash aid for needy aged persons and blind or disabled adults, 58
whose income otherwise would fall below what it was in December 1973.
If a state chooses to have the federal government administer its supplements, it must agree to
provide supplements for all federal SSI recipients of the same class and pay an administration fee 59
to SSA for the service. If states administer their own supplements, they are generally free to
design their own supplementary programs and may adopt more restrictive eligibility rules than
those of SSI. As of January 2005, the federal government administered supplements for 15
jurisdictions.
Total SSI benefit outlays in CY2004 were $39.3 billion, with $34.2 billion (87% of the total)
from federal funds. The federal share of total state SSI benefits ranged from 48% in Alaska to

100% in the seven jurisdictions where no recipient received a supplement (Arkansas, Georgia,


Kansas, Mississippi, Tennessee, West Virginia, and the Northern Mariana Islands).

Title XVI of the Social Security Act entitles to SSI payments persons (1) who are aged 65 and
over, blind or disabled (adults and children of any age); (2) whose counted income and resources
fall within limits set by law and regulations; and (3) who live in one of the 50 states, the District
of Columbia, or the Northern Mariana Islands. Also eligible is a child who lives overseas with a

58 The U.S. Social Security Administration (SSA) reported the remaining number of recipients of mandatory state
supplementary payments at 982 in August 2005.
59 Since FY1994, Congress has required states to pay for federal administration of state supplementary payments. Fees
began at $1.67 per monthly payment in FY1994 and reached $8.50 in FY2002. P.L. 105-33 provided that after FY2002,
the rate was to be adjusted for changes in the Consumer Price Index or set at a level determined by the Commissioner
of Social Security. For FY2005, the fee was $9.06.
60 Federal regulations governing SSI are found in 20 CFR Part 416 (2005). Income and resources rules are in Subparts
K and L, respectively. This program is No. 96.006 in the Catalog of Federal Domestic Assistance. SSI is codified in 42
U.S.C. Section 1381 et seq.





parent who is on military assignment, provided the child received SSI before the parent reported
for overseas duty.
To be eligible for SSI on grounds of disability, an adult must be unable to engage in any 61
“substantial gainful activity” because of a medically determined physical or mental impairment
expected to result in death or that has lasted, or can be expected to last, for at least 12 months.
Under terms of the 1996 welfare reform law (P.L. 104-193), a child under age 18 may qualify as
disabled if he or she has an impairment that results in “marked and severe” functional limitations.
Previously a child could qualify if his impairment were of “comparable severity” to that of an
eligible adult.
In addition, to qualify for SSI a person must be (1) a citizen of the United States or (2) if not a
citizen, (a) an immigrant who was enrolled in SSI on August 22, 1996 or who entered the United
States by that date and subsequently became disabled; (b) a refugee or asylee who has been in the
country or granted asylum, respectively, for fewer than seven years, (c) a person who has worked
long enough to be insured for Social Security, usually 10 years (work test gives credit to work by
spouse or parent of an alien child); or (d) a veteran or active duty member of the armed forces
(spouses or unmarried dependent children of veterans/military personnel also qualify).
For basic federal benefits, countable income limits in 2005 are $579 monthly per individual and
$869 per couple. These income ceilings equal maximum federal benefits of the program (see
below for benefit details and for rules about what income is disregarded). For states with
supplementary SSI benefits, countable income limits are higher, ranging in 2004 up to $926
monthly per individual (living independently) in Alaska.
Since 1989, the countable resource limit has been $2,000 per individual and $3,000 per couple.
Excluded assets include a home; the first $2,000 in equity value of household goods and personal
effects; the full value of an auto if needed for employment or medical treatment, or if modified
for use by a handicapped person, otherwise, the first $4,500 in market value of the auto; and a life
insurance policy not exceeding $1,500 in cash surrender value and burial plots and funds, subject
to a limit.
P.L. 98-21 requires the Social Security Administration (SSA) to inform Social Security
beneficiaries aged 64 about SSI when notifying them about their approaching eligibility for
Medicare.
The Social Security Act establishes benefit levels and requires that whenever Social Security
benefits are increased because of an automatic cost-of-living adjustment (COLA), SSI benefits be
increased at the same time and by the same percentage.

61 Defined by regulation as monthly earnings, net of impairment-related expenses, of $830, effective January 1, 2005.
The amount is to be adjusted annually.





The following are the SSI basic monthly guarantees:62
1998 1999 2000 2001 2002 2003 2004 2005
Individual $494 $500 $513 $531 $545 $552 $564 $579
Couple 741 751 769 796 817 829 846 869
From 1975 through 1982, COLAs were paid each July. In passing the Social Security
Amendments of 1983, Congress accepted President Reagan’s proposal to delay the 1983 COLA
for six months, to January 1984, and thereafter to adjust benefits each January. At the same time it
voted an increase of $20 monthly in SSI benefits ($30 per couple), payable in July 1983.
States that supplement SSI benefits are required to “pass through” to recipients an increase in the 63
federal basic benefit. However, when Congress deferred the 1983 COLA and instead enacted
the $20 benefit increase (about 7%), it required states to pass through only about half this amount
(the 3.5% increase that the regular COLA would have yielded). As of January 2004, state
supplements for aged persons living independently were offered in 26 states and ranged from
$1.70 in Oregon to $362 in Alaska. Many states do not offer supplemental benefits for those
living independently.
To assure some gain from work, SSI disregards a portion of recipients’ earnings; namely, $65 per 64
month, plus 50% of the balance. Because of this rule, aged SSI recipients without Social
Security benefits or other unearned income who work remain eligible for a declining SSI payment 65
until gross earnings equal double their basic benefit plus $85 monthly. In a state that does not
supplement the basic federal benefit, the gross income limit in 2005 for an aged SSI recipient 66
with only wage income is $1,243 monthly in earnings. The gross income limit is higher in states
that supplement the federal benefit.
In all but 12 states,67 SSI recipients automatically are eligible for Medicaid. In the 12 states with
more restrictive eligibility rules, states must deduct medical expenses of SSI recipients in
determining their countable income.
Disabled SSI recipients whose counted monthly earnings exceed the $830 “substantial gainful
activity” test that determines disability status are eligible for special cash benefits (calculated as
though they still had disability status), as long as their gross earnings are below the regular SSI

62 The law requires a one-third SSI benefit reduction for those who live in another person’s household and receive
support and maintenance in kind from that person.
63 The requirement for passthrough can be satisfied by either of these conditions: (1) if a states total spending for SSI
supplements during the relevant 12-month period is not below that for the preceding 12 months (P.L. 94-585) or (2) if
state SSI supplementary payment levels equal those in effect in March 1983 (P.L. 98-21).
64 For blind or disabled recipients, the law provides additional deductions from earnings. Blind: disregard the first $65
earned, plus one-half of the rest, plus reasonable work expenses. Disabled: disregard the first $65 earned, work and
living expenses caused by the disability, plus one-half of the rest. For both blind and disabled SSI recipients, income
needed for the fulfillment of a self-support plan approved by the SSA Commissioner also is disregarded. (The special
expense deduction for the disabled was enacted in June 1980 as a provision of P.L. 96-265.)
65 The $85 disregard consists of the first $20 of any income (earned or unearned), plus $65 in earnings.
66 The earnings maximum is calculated by adding to the first $85 of excluded combined earned and unearned income,
two times the federal benefit standard, since one-half of the earned income amount over the exclusion must be
considered [$85 + (2 x $579) = $1,243].
67 CT, HI, IL, IN, MN, MO, NH, ND, OH, OK, VA, and WI.





ceiling ($1,243 in 2005 in a state without supplementation). The special cash benefit preserves 68
Medicaid eligibility for the disabled worker. In 1996 (P.L. 104-121), Congress ended SSI and
Social Security Disability Insurance benefits for persons disabled because of their addiction to
drugs or alcohol.
In July 2005, federally administered SSI benefits went to 7,082,237 persons, including 1,026,264
children. Benefits averaged $359 to aged recipients, $454 to the blind and disabled (and $523 for
children). As of that date, about 35% of the Nation’s SSI recipients of federally administered
payments also received Social Security, and SSI checks were supplementary to Social Security
benefits for 57% of aged SSI recipients and 27% of blind and disabled recipients. In December
2003, income was earned by 1.4% of aged recipients and by 6.4% and 4.5%, respectively, of
blind and disabled recipients. Social Security benefits of dual recipients averaged $422. Earnings 69
of SSI recipients averaged $310 monthly.
Note: See CRS Report 94-486, Supplemental Security Income (SSI): A Fact Sheet, and CRS
Report RS20294, SSI Income and Resource Limits: A Fact Sheet.

This benefit is 100% federally funded and is provided through the tax system.70 For tax year
2003, a total of $39.1 billion in EITC was claimed, with $3.7 billion used to offset taxes and
$34.4 billion issued as refunds. The refunded portion of the credit is a federal outlay.
Unlike most tax credits the EITC is a “refundable” credit. A person need not owe or pay any
income tax to receive the EITC. However, an eligible worker must apply for the credit by filing
an income tax return at the end of the tax year. A person may receive advance payment of the 71
credit by filing an earned income eligibility certificate with his or her employer. To be eligible
for the EITC, married couples generally must file a joint income tax return. The EITC is a
percentage of the person’s earnings, based on the number of children, up to a maximum earned
income amount. Beginning at a certain income level (i.e., the phase-out income level), the EITC
is reduced by the phase-out percentage for every dollar of earnings (or adjusted gross income,
whichever is greater) above the phase-out income level. Persons with earnings above the level at
which the EITC is reduced to $0 are not eligible for the EITC.

68 The Balanced Budget Act of 1997 permitted states to provide Medicaid to disabled persons who lost SSI eligibility
because of earnings, provided their incomes did not exceed 250% of the federal poverty guidelines. P.L. 106-170,
enacted in December 1999, allows states to provide Medicaid to disabled working persons with incomes above 250%
of the poverty guidelines.
69 Social Security Administration, Annual Statistical Supplement, 2004.
70 Called Earned Income Credit (EIC) by the Internal Revenue Service (IRS) in tax forms and literature.
71 The option for advance payments by an addition to paychecks is not available for childless couples or individuals.





The EITC is available to a parent (or parents) with earnings and a qualifying child. A qualifying
child must be (1) a son, daughter, grandson, granddaughter, stepson, stepdaughter or descendant
of such a relative; an adopted or foster child of the tax filer; (2) less than age 19 (24 if a full-time
student); and must reside with the tax filer for more than one-half of the tax year. The tax filer
does not have to meet a financial support test for the child. The tax filer must be a U.S. citizen or
resident alien and live in the United States for more than one-half of the tax year, unless the tax
filer is in the U.S. military and on duty overseas.
The EITC also is available to workers ages 25 through 64 who have no eligible children and
whose Adjusted Gross Income (AGI) is less than $11,750 ($13,750 for married couples) in tax 72
year 2005.
In 1995, Congress established a limit on investment income for EITC eligibility.73 The 1996
welfare reform law changed filing procedures to make it less likely that undocumented workers
could gain access to the EITC by requiring both the tax filer and qualifying children to have
social security numbers. In 1996 and 1997, Congress broadened the definition of income used to 74
phase out the EITC for filing units above the phase-out income threshold.
In response to an Internal Revenue Service (IRS) study indicating a high incidence of tax filers
claiming more in credits than is their right under the law, Congress enacted provisions against
fraud in the Taxpayer Relief Act of 1997 (P.L. 105-34). If a tax filer is found to have claimed the
credit fraudulently, the tax filer is barred from claiming the EITC for 10 years; if the tax filer
claimed the credit by reckless or intentional disregard of EITC rules, the tax filer is barred for two
years. The law also imposed a $100 penalty on paid preparers who fail to fulfill “due diligence
requirements” (as specified by IRS) in filing EITC claims.
While gross income for tax purposes does not generally include certain combat pay earned by
members of the armed forces, P.L. 108-311 allowed members of the armed forces to include this
combat pay for purposes of computing the earned income credit for tax years that ended after
October 4, 2004 and before January 1, 2006.
The EITC was enacted in 1975 as a temporary measure to return a portion of the employment
taxes paid by lower-income workers with children. The EITC became permanent in 1978, with a
maximum benefit of $500 with no expansion for family size. In the 1990s, Congress increased the
credit, provided expansion of the credit based on family size and extended the credit to childless
workers.

72 The EITC became available for adults with no eligible children in 1994.
73 P.L. 104-7 set a limit of $2,350 in annual income from interest and dividends. P.L. 104-193 changed this
disqualifying income limit, setting it at $2,200 in 1996 dollars (the limits are $2,400 for 2000 and $2,450 for 2001)
and applied it to net capital gains and net passive income as well as interest and dividends.
74 Effective in 1996, the income used to phase out the EITC was enlarged for some filers by the exclusion of certain
losses: net capital losses, net losses from nonbusiness rents and royalties, net losses from estates and trusts, and half of
net business losses (P.L. 104-193). The Taxpayer Relief Act of 1997 (P.L. 105-34) further modified the AGI definition
for the EITC phaseout by including nontaxable income from tax-free interest and nontaxable pensions, annuities, and
distributions from individual retirement plans in AGI calculations and by excluding 75% of net business losses.





The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16), contained
changes to the EITC with respect to married tax filers filing jointly. The law increased the
beginning and ending of the EITC phase-out range for married couples filing jointly by $1,000 in
taxable years beginning in 2002-2004; by $2,000 in taxable years 2005-2007; and by $3,000 in
years after 2007 (adjusted annually for inflation after 2008). The law also simplified the
definition and calculation of the credit: tax filers no longer have to include nontaxable income
from employment (e.g., excludable dependent care or education assistance benefits); and may use
adjusted gross income (AGI, a prominent line on all tax returns) rather than modified adjusted
gross income (which required a number of additions and subtractions to AGI).
Prior to 1996, the federal rules for treatment of the EITC in determining eligibility for means-
tested programs varied by program and changed several times. The Omnibus Budget
Reconciliation Act of 1990 (OBRA 1990, P.L. 101-508) provided that EITC payments were not to
be counted as income by the Aid to Families with Dependent Children (AFDC), Supplemental
Security Income (SSI), Medicaid, Food Stamps, and certain low-income housing programs. The
1996 welfare reform law (P.L. 104-193), by repealing AFDC, ended federal rules for the
treatment of the EITC by the family welfare program; thus, states may treat the EITC in any way
they wish in their Temporary Assistance to Needy Families (TANF) programs. However, P.L.
105-34 disallowed TANF recipients engaged in work experience or community service
(“workfare”) the EITC for TANF earnings to the extent the payments are subsidized.
The following table shows the parameters for the EITC for tax years 2003 through 2005
Note: For more information about EITC, see CRS Report RL31768, The Earned Income Tax
Credit (EITC): An Overview.
Table 12. EITC Parameters for Tax Years 2003-2005
2003 2004 2005 Credit Phase-
rate out
rate
No children 0.077 0.077
Maximum earned income amount 4990 5100 5220 —
Maximum credit 382 390 399 —
Phase-out income level 6240 6390 6530 —
Phase-out income level for married filing joint 7240 7390 8530
Income where EITC = $0 11230 11490 11750
Income where EITC = $0 for married filing joint 12230 12490 13750
One child 0.34 0.1598
Maximum earned income amount 7490 7660 7830 —
Maximum credit 2547 2604 2662 —
Phase-out income level 13730 14040 14370 —





2003 2004 2005 Credit Phase-
rate out
rate
Phase-out income level for married filing joint 14730 15040 16370
Income where EITC = $0 29666 30338 31030
Income where EITC = $0 for married filing joint 30666 31338 33030
Two or more children 0.4 0.2106
Maximum earned income amount 10510 10750 11000 —
Maximum credit 4204 4300 4400 —
Phase-out income level 13730 14040 14370 —
Phase-out income level for married filing joint 14730 15040 16370
Income where EITC = $0 33692 34458 35263
Income where EITC = $0 for married filing joint 34692 35458 37263
Disqualifying investment income level 2600 2650 2700


Note: This entry describes use of TANF block grant funds for cash aid. Federal plus state 75
expenditures in FY2004 for TANF cash aid were estimated at $10.4 billion (excluding
administrative costs). For TANF child care, TANF work programs and activities, and TANF
services, see separate entries in this report.
The 1996 welfare reform law (P.L. 104-193) repealed Aid to Families with Dependent Children
(AFDC), Emergency Assistance (EA), and the Job Opportunities and Basic Skills (JOBS) training
program, and combined federal funding levels for the three programs into a block grant ($16.5
billion annually) for Temporary Assistance for Needy Families (TANF). The law entitles each
state to an annual family assistance grant roughly equal to peak funding received for the repealed
programs in FY1992-FY1995. It also entitles the territories to TANF grants, and it permits Indian
tribes, defined to include Native Alaskan organizations, to operate their own tribal family
assistance plans with a block grant deducted from their state’s TANF grant.

75 Cash assistance reported here consists of basic ongoing cash aid, state contributions to Individual Development
Accounts, state earned income credits and other refundable tax credits, and short-term, non-recurring benefits (such as
diversion payments).





Added to the basic federal block grant for qualifying states are other funds of five kinds:76
supplemental grants for 17 states with low TANF grants per poor person when compared with the
national average and/or high population growth; bonuses for up to five states with the greatest
decline in non-marital birth ratios and a decline in abortion rates ($100 million per year); bonuses
for states with “high performance” in meeting program goals ($200 million per year); matching
grants (at the Medicaid matching rate) from a contingency fund for states with high
unemployment and/or increased food stamp caseloads; and Welfare-to-Work (WtW) grants (most
of which required 33.3% state matching funds) for efforts, including job creation, to move into 77
jobs long-term welfare recipients with barriers to employment ($3 billion for FY1998-FY1999).
For a description of the separate WtW program, which is administered by the Labor Department,
see program No. 77. TANF law also established a $1.7 billion revolving loan fund for state use in
TANF operations.
To avoid penalties, states must spend a specified amount of their own funds on TANF-eligible 78
families. The required “maintenance-of-effort” (MOE) level is from 75% to 80% of the state’s
“historic” expenditures, defined as the state share of FY1994 expenditures on AFDC, EA, JOBS,
and AFDC-related child care. Nationally, the 75% MOE level equals $10.4 billion annually; if a
state fails to meet work participation minimums, the MOE level rises to 80%. Expenditures of
state funds in separate state programs (or in TANF programs that segregate state funds from
federal funds) are countable toward the general TANF MOE rule. However, for the contingency 79
fund, a higher state spending requirement is imposed (100% of the historic level), and spending
in separate state programs cannot be counted toward this MOE.

TANF permits a state to give ongoing basic cash aid81 to any needy family that includes (a) a
minor child who lives with his/her parent or other caretaker relative; or (b) a pregnant woman.
States decide who is “needy,” having the freedom to set income and resource limits.

76 The Deficit Reduction Act (P.L. 109-171) made changes to this funding structure, effective in FY2006; the two
bonus payments were repealed and new grants established forHealthy Marriage” and “Responsible Fatherhood.” For
details, see CRS Report RS22369, TANF, Child Care, Marriage Promotion, and Responsible Fatherhood Provisions in
the Deficit Reduction Act of 2005 (P.L. 109-171).
77 P.L. 106-554 extended the deadline for spending WtW funds to September 30, 2004.
78 Qualifying to meet the state spending requirement are expenditures under all state programs for TANF-eligible
families on cash aid (including child support collections passed through to the family without reducing the TANF
benefit), child care, educational activities (excluding general public education spending), job training and work. For
this purpose, TANF-eligible families are defined to include those ineligible because of the five-year time limit or the
federal ban on benefits to new immigrants.
79 The contingency fund provides capped matching grants (a total of $2 billion) for use by state TANF programs in case
of recession.
80 TANF law is found in Title IV, Part A of the Social Security Act (and in Title 42, Section 601 et seq. of the U.S.
Code). TANF regulations are at 45 CFR Parts 260-270 (2005). This program is No. 93.558 in the Catalog of Federal
Domestic Assistance.
81 The law uses the term “assistance. See footnote 9 for a definition.





Federal law makes unwed mothers under 18 and their children ineligible for TANF-funded basic
ongoing cash aid unless they live in an adult-supervised arrangement and, if they are high school
dropouts, they attend school once their youngest child is 12 weeks old. Also ineligible are persons
convicted of a drug-related felony for an offense occurring after August 22, 1996 (date of
enactment of TANF) unless the state exempts itself by state law; aliens who enter the country
after August 22, 1996 (barred from TANF for five years after entry) and persons who fraudulently
misrepresented residence to obtain TANF, food stamps, SSI, or Medicaid in more than one state.
TANF may not be paid to a person who fails to assign child support or spousal support rights to 82
the state. Except for “hardship” exemptions, federal TANF funds may not be used for basic 83
ongoing aid to a family that includes an adult who has received 60 months of TANF assistance
while an adult, a minor household head, or a minor married to a household head. This is known as
the benefit cutoff time limit.
States must require a parent or caretaker who receives federally funded TANF basic ongoing aid
to engage in work, as defined by the state, after a maximum of 24 months of ongoing basic aid,
known as the work trigger limit; 25 out of the 54 TANF jurisdictions have chosen a shorter work
trigger limit. Adopting a work-first philosophy, many states require immediate work, and some
identify job search as the immediate work activity. To enforce the work requirement, the law sets 84
fiscal penalties for states that fail to achieve minimum participation rates. For this purpose, only 85
specified work activities are countable. Furthermore, to be counted as a participant, a TANF
recipient must work for a minimum average number of hours weekly. The work week is 20 hours
for single adults with a child under 6 years old (almost half of all TANF adults) and 30 hours for
single adults with an older child, effective in FY2000. A longer work week is imposed on two-
parent families. States may exempt single parents caring for a child under age 1 from work
requirements and disregard them in calculating work participation rates. According to the fifth
annual TANF report, 23 states exempt these parents, but 19 states require a caregiving parent to
work before the child is one, and four grant no exemptions.

82 Under ahardship” exemption, a state may provide federally funded assistance beyond 60 months for up to 20% of
its caseload. Also, a state may use its own MOE funds for aid beyond 60 months.
83 Assistance is defined by regulation as cash, payments, vouchers, and other forms of benefits directed at ongoing,
basic needs; it excludes non-recurrent, short-term benefits for crisis situations and various services.
84 Through FY2006, the statutory work participation rates were reduced for caseload declines from FY1995 average
levels. Beginning with FY2007, states will only receive credit for caseload reductions that occur from FY2005 forward.
Under the Deficit Reduction Act (P.L. 109-171), the FY2007 credit will be based on caseload declines (if any) that
occur from FY2005 to FY2006; the FY2008 credit will be based on caseload declines that occur from FY2005 to
FY2007; the FY2009 credit will be based on caseload declines that will occur from FY2005 to FY2008, and so on. The
statutory rates were set at 30% for all TANF families for FY1998 and rise by 5 percentage points yearly to a peak of
50% for FY2002. The rate for two-parent families was increased from 75% for FY1998 to a peak of 90% for FY1999
and thereafter.
85 Unsubsidized employment, subsidized private- or public-sector employment, work experience, on-the-job training,
job search and job readiness assistance (generally limited to six weeks), community service programs, vocational
educational training (12 months maximum), job skills training directly related to employment, education directly
related to employment (recipient without high school diploma or equivalent), satisfactory attendance at secondary
school (high school dropout), and provision of child care services to a TANF recipient engaged in community service.





The law imposes several sanctions for non-compliance with TANF rules. It requires states to
sanction TANF recipients for refusal to engage in required work by discontinuing aid or by
reducing aid to the family “pro rata” with respect to the period of work refusal. The law requires
TANF recipients to assign child support and spousal support rights to the state; if a recipient does
not cooperate in efforts to establish paternity or to establish or enforce a support order, the state
must reduce the family’s benefit by at least 25%. If a TANF family’s benefits are reduced because
of failure to perform a required action, the state may not give the family an offsetting increase in 86
food stamps, and it may reinforce the cash penalty by cutting food stamp benefits by up to 25%.
The law also allows states to reduce the family’s benefit for failure to comply with a signed 87
individual responsibility plan. Illustrative recipient obligations include school attendance,
immunization of children, attendance at parenting or money management classes, and needed
substance abuse treatment. On the other hand, states that adopt a provision known as the Family
Violence Option (FVO) are permitted under certain conditions to waive federal TANF rules
regarding work, time limits and child support cooperation for victims of domestic violence.
States determine amounts paid to families with no countable income and whether to disregard any
earnings as a work incentive and any assets as a savings incentive, and if so, how much. A CRS
telephone survey found that maximum benefits for a three-person TANF family in January 2004
ranged from $170 in Mississippi to $709 in Vermont and $923 in Alaska.
Although the 1996 law ended AFDC, it retained AFDC eligibility limits for use in Medicaid and
in the federal programs of foster care and adoption assistance. It requires states to provide
Medicaid coverage and benefits to children and family members who would be eligible for AFDC
cash aid (under terms of July 16, 1996) as if that program still existed. For this purpose, states
may increase AFDC income and resource standards by the percentage rise in the consumer price
index since enactment of TANF; they also may adopt more liberal methods of determining
income and resources. The law requires 12 months of medical assistance to those who lose TANF
eligibility because of earnings that lift counted income above the July 16, 1996 AFDC eligibility
limit. The law also makes federal foster care and adoption assistance matching funds available for
children who would be eligible for AFDC cash aid (under terms of July 16, 1996) as if that
program were still in effect.
Benefits other than basic ongoing assistance are known as “nonassistance.” They are not subject
to TANF’s time limits or work requirements, but they must promote one or more of the goals of

86 The law also permits states to end Medicaid for adults who refuse TANF work requirements, but it requires
continued Medicaid for their children.
87 Penalties for refusal to work, cooperate in child support efforts, and sign individual responsibility plans may be
waived for good cause established by the state.





TANF. States define who is eligible and may set different income limits for different services. See
entries on TANF child care, TANF work activities, and TANF services.
Note: For more detail, see CRS Report RL32748, The Temporary Assistance for Needy Families
(TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk,
and Section 7 of The 2004 Green Book: Temporary Assistance for Needy Families (TANF),
available on the House Ways and Means Committee’s website at http://waysandmeans.house.gov/
me dia/pdf/greenbook2003/Section7.pdf.

Title IV-E of the Social Security Act provides federal matching funds to states for maintenance
payments for the care of certain low-income children placed in licensed foster care homes, private
child care institutions (non-profit or for-profit), or public child care institutions that house no 88
more than 25 persons. The matching rate for a state is that state’s Medicaid matching rate (see
program No. 1). The FY2004 federal matching rate ranged from 50% to 77.08%. For certain
administrative costs of the program including data collection and expenses related to child
placement, the federal government offers 50% matching funds. States receive 75% federal
matching for certain training expenses. FY2004 expenditures were $8.6 billion, with $4.5 billion
(53%) from federal funds.

For a state to be eligible to claim federal foster care payments on behalf of a child, the child’s
removal from the home must be the result of a judicial determination that reasonable efforts have
been made to enable the child to remain home and that continuation in the home would be
contrary to the child’s welfare. A child’s continued eligibility is contingent on a judicial
determination within 12 months of the child’s removal from the home (and no less than every 12
months thereafter while the child remains in care) that reasonable efforts to find a permanent
placement for the child are being made. States also may claim federal payments for children
placed into foster care under a voluntary placement agreement between the child welfare agency
and the child’s parents, if certain judicial findings are made within 180 days of the child’s
placement. In addition, a child must meet the eligibility standards of the repealed AFDC program, 90
as it existed in his/her state on July 16, 1996. Finally, the child must be placed in a licensed
home or institution.

88 This program was established on October 1, 1980, under a new part (Part IV-E) of the Aid to Families with
Dependent Children (AFDC) title of the Social Security Act, by the Adoption Assistance and Child Welfare Act of
1980 (P.L. 96-272). Previously, foster care was a separate component of the regular AFDC program.
89 Regulations for this program are found in 45 CFR Parts 1355 and 1356 (2005). This program is No. 93.658 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 670 et seq.
90 This rule took effect on July 1, 1997, mandatory start date for TANF, which replaced AFDC. The TANF law (P.L.
104-193) originally established thelook-back AFDC eligibility date as June 1, 1995 for foster care and adoption
assistance use. However, it was changed to July 16, 1996 (the look-back date for Medicaid use) by the Balanced
Budget Act of 1997 (P.L. 105-33).





States determine payments to foster parents and institutions, and children are automatically
eligible for Medicaid. P.L. 96-272 requires that states make reasonable efforts to prevent the need
to place children in foster care, and to reunify children with their families when possible. (P.L.
105-89, enacted in 1997, allows certain exceptions to this requirement.) Each child in foster care
must have a written case plan, and states must hold administrative and judicial reviews of each
child’s case according to a prescribed schedule.
In FY2004, administrative costs (including training and data collection expenses) were estimated
to represent 57% of total federal spending for foster care. According to the most recent data
collected by the Child Welfare League of America, maintenance payments vary widely, ranging in
FY2002 from $222 monthly for a 2-year-old child in Nebraska to $791 for a 16-year-old in the
District of Columbia. Nationwide average monthly maintenance payments in FY2002 were $423
for a child age 2, $440 for a child age 9, and $497 for a child age 16.
Note: A related program, now known as the Chafee Foster Care Independence Program, was
created in 1986 (P.L. 99-272) and expanded in 1999 (P.L. 106-169) and 2001 (P.L. 107-133). As
most recently amended, Section 477 of the Social Security Act authorizes grants to states to assist
foster children who are likely to “age out” of foster care without returning to their original homes
or being placed for adoption, and former foster children, with their transition to independent
living. The law also authorizes a separate grant to states to provide education and training
vouchers to these youth. These programs are not means-tested, although it is assumed that the
majority of beneficiaries are low-income. Expenditures for these programs are not included in this
report.
Note: For more information, see CRS Report RL31242, Child Welfare: Federal Program
Requirements for States.

This benefit is 100% federally funded and is provided through the tax system. For tax year 2004,
a total of $31.9 billion was claimed in child credits, with $9.1 billion issued as refunds for the
refundable portion of the child credit (often referred to as the “additional child credit”). The
refundable portion of the child credit is a federal outlay.
To be eligible for the credit, taxpayers must have a child under age 17 at the close of the calendar
year in which their tax year begins. The taxpayer must be able to claim a dependent exemption
for the child, and the child must be the taxpayer’s son, daughter, grandson, granddaughter,
stepson, stepdaughter, or an eligible foster child. The credit is phased out at higher income levels.
P.L. 108-311 created a uniform definition of a child for tax purposes beginning in tax year 2005.
Under the uniform definition, a child for purposes of the child tax credit must be a qualifying
child as defined for the personal exemption.





The Taxpayer Relief Act of 1997 (P.L. 105-34) created a child credit of $400 in 1998, increasing
to $500 for 1999 and thereafter. The Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA, P.L. 107-16) increased the credit limit to $600 in tax years 2001 through 2004, to
$700 in tax years 2005 through 2008, $800 in tax year 2009, and $1,000 in tax year 2010. The
increases will expire in tax year 2011 with the credit reverting back to the prior law level of $500.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27) raised the maximum
credit to $1,000 per child for tax years 2003-2004.
The credit is refundable for up to 10% of the taxpayer’s earned income in excess of $10,000 for
calendar years 2001-2003, indexed for inflation beginning in 2002 (resulting in $10,500 for tax
year 2003). Beginning in 2004, the credit is refundable for up to 15% of the taxpayer’s earned
income above $10,000 (indexed). Prior to EGTRRA, the child credit was refundable in two ways:
(1) as a supplemental credit in coordination with the Earned Income Tax Credit (EITC) (the credit
was part of the child credit calculations, and had no separate form or calculation requirements for
taxpayers); and (2) as an additional credit for taxpayers with three or more children, limited to the 91
amount by which their social security taxes exceeded their EITC.
The credit is phased out at the rate of $50 for each $1,000 (or fraction thereof) by which modified
adjusted gross income exceeds certain thresholds: for singles and heads of households, $75,000;
for married couples filing jointly, $110,000; and for married couples filing separately, $55,000.
EGTRRA specified that the refundable portion of the child credit does not constitute income and
shall not be treated as a resource for purposes of determining eligibility or the amount or nature of
benefits under any federal program or any state or local program financed with federal funds.
Note: For more information, see CRS Report RL34715, The Child Tax Credit, by Maxim
Shvedov.


The federal government provides 100% funding for veterans’ and survivors’ pensions. Total
federal outlays for these pensions reached $3.391 billion during FY2004, and were expected to
reach $3.294 in FY2005.

91 The old rule will apply for taxpayers with three or more children if it provides a larger refundable credit than the new
general rule.






Eligibility for a veteran’s pension requires a discharge (other than dishonorable) from active
service of 90 days or more, at least one of which must have been served during a period defined
in law as a period of war. The veteran must be disabled for reasons neither traceable to military
service nor to willful misconduct. The survivor pension is provided to surviving spouses and
children of wartime veterans who died of nonservice-connected causes, subject to income
limitations. There is no disability requirement for eligible survivors.
After considering other sources of income, including Social Security, retirement, annuity
payments, and income of a dependent spouse or child, the Department of Veterans Affairs (VA)
pays monthly amounts to qualified veterans to bring their total incomes to specified levels 93
(maximum benefits), shown below. These levels are increased (by $2,305 in 2005) for veterans
with service in World War I or earlier in recognition of their lack of home loan and education
benefits made available to veterans of later wars. Countable income can be reduced for
unreimbursed medical expenses, as well as some educational expenses incurred by veterans or
their dependents. Pensions are not payable to veterans with substantial assets (when it is
“reasonable” that they use some of their net worth for their own maintenance).
Pensions awarded before 1979 were paid under one of two programs, referred to as Old Law and
Prior Law, both of which were governed by complex rules regarding countable income and
exclusions. Since January 1, 1979, applications have been processed under the Improved Law
program, which provides higher benefits but has eliminated most exclusions, offsetting countable
income dollar-for-dollar. The Improved Law program accounts for 98% of pension costs and
about 88% of beneficiaries.
Maximum annual benefits in 2004 Veteran Survivor
Beneficiary without dependent $10,162 $6,814
Beneficiary with one dependent 13,309 8,921
For each additional dependent 1,734 1,734
Needing regular aid and attendance without dependent 16,955 11,596
Estimated average benefits (Old, Prior, and Improved) 7,594 3,305

92 Eligibility rules of this program are found in 38 CFR Subpart A of Part 3 (2005). This program is No. 64.104 in the
Catalog of Federal Domestic Assistance.
93 See U.S. Department of Veterans Affairs, Improved Disability Pension Rate Table Veteran Alone and with
Dependants, December 2004, at http://www.vba.va.gov/bln/21/Rates/pen02.htm.






Title IV-E of the Social Security Act provides federal matching funds to states for payments to 94
parents adopting certain low-income children with “special needs.” The matching rate for a
given state is that state’s Medicaid matching rate (see program No. 1). The FY2004 federal
matching rate ranged from 50% to 77.08%. For administrative expenses and certain training
expenses, the federal matching rates are 50% and 75%, respectively. The 1986 tax reform
legislation (P.L. 99-514) amended the adoption assistance program by authorizing 50% federal
matching for reimbursement of certain non-recurring adoption expenses up to $2,000, such as
adoption and attorney fees and court costs. FY2004 expenditures were $2.9 billion, with $1.6
billion (54%) from federal funds.

A child must be eligible for SSI (see program No. 9) or meet the eligibility standards of the 96
repealed AFDC program, as it existed in his/her state on July 16, 1996, must be legally free for
adoption, and must have “special needs,” as determined by the state, that prevent adoption
without assistance payments. Such special needs may include mental or physical handicap, age,
ethnic background, or membership in a sibling group. (In addition, parents who adopt children
with special needs who are not AFDC or SSI eligible are entitled to assistance under the matching
program for non-recurring adoption expenses.)
The state adoption assistance agency, by agreement with the adoptive parents, decides the amount
of the adoption payment; however, the payment cannot exceed what would have been paid to
maintain the child in a foster family home. Children receiving federally subsidized adoption
assistance are automatically eligible for Medicaid. Benefits can continue until the child reaches
age 18 or, in cases where the child is mentally or physically handicapped, age 21.

94 This program was established in 1980 under the Adoption Assistance and Child Welfare Act of 1980 (P.L. 96-272)
as part of a new Title IV-E of the Social Security Act. States were required to have an adoption assistance program by
Oct. 1, 1982, in order to continue receiving AFDC matching funds. In 1996, P.L. 104-193 abolished the AFDC
program but required states to maintain their adoption assistance program as a condition of receiving funds under the
successor TANF block grant.
95 Regulations for this program are found in 45 CFR Parts 1355 and 1356 (2005). This program is No. 93.659 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 673 et seq.
96 This rule took effect on July 1, 1997, mandatory start date for TANF, which replaced AFDC. The TANF law (P.L.
104-193) originally established thelook-back AFDC eligibility date as June 1, 1995 for adoption assistance and
foster care use. However, it was changed to July 16, 1996 (the look-back date for Medicaid use) by the Balanced
Budget Act of 1997 (P.L. 105-33).








The federal government provides 100% funding for dependency and indemnity compensation, as 97
well as for death compensation. In FY2004, total DIC recipients numbered more than 315,000
(of which more than 8,000 were low-income parents receiving DIC). Information is not available
on spending for low-income parents only.

Under Title 38 of the United States Code, Section 1315, parents of veterans who died from a
service-connected cause are eligible for DIC if their counted income is below limits in federal law 99
and regulations. Countable annual income limits in 2004 were $11,560 for a sole surviving
parent unremarried; $15,538 for a sole surviving remarried parent living with a spouse; $11,560
for one of two parents not living with a spouse; and $15,538 for one of two parents living with a
spouse or other parent. Chief exclusions from countable income are cash welfare payments and

100% of retirement income, including Social Security.


Recipients of death compensation benefits are required to meet the net worth rules applicable to
veterans’ pensioners (see program No. 14). There are no net worth rules for the DIC program.
The Veterans’ and Survivors’ Pension Improvement Act of 1978 (P.L. 95-588) established DIC
rates for parents effective January 1, 1979, and required that thereafter, whenever Social Security
benefits were increased by an automatic cost-of-living adjustment (COLA), DIC rates must be
adjusted by the same percentage and at the same time.
The maximum benefit for a sole surviving parent unmarried or living with a spouse in 2004 was
$487 monthly. The maximum for one of two parents not living with a spouse was $352 per
month. The maximum payment to one of two parents living with a spouse or other parent of the
deceased veteran was $330 monthly. The minimum monthly payment was $5. Parents in need of
“aid and attendance” received an additional monthly allowance of $263 in 2004.

97 Dependents of veterans who died before 1957 are entitled to “death compensation or may elect to receive DIC.
Persons who choose to remain under the old program receive higher benefits than they would under DIC.
98 Eligibility rules are found in 38 CFR Subpart A of Part 3 (2005). DIC for parents of veterans is the income-tested
component of program No. 64.110 in the Catalog of Federal Domestic Assistance.
99 For VA charts indicating income limits and compensation amounts for Parent(s) DIC see U.S. Department of
Veterans Affairs, “Parent(s) Dependency Indemnity Compensation (DIC) Rate Table, at http://www.vba.va.gov/bln/
21/Rates/comp04.htm.






Note: This entry describes the program of General Assistance (GA) to Indians operated by the
Bureau of Indian Affairs (BIA). Tribes, however, may use the BIA funds to design their own GA
programs, changing eligibility rules and benefit levels, provided they pay any net cost increase,
use any savings for tribal needs, and receive BIA approval of their plan. Tribes may administer
their redesigned plan themselves or request BIA to do so.
The Snyder Act authorizes 100% federal funding for General Assistance (GA) to Indians, which
is administered by the Bureau of Indian Affairs (BIA). Federal obligations in FY2004 were $68.7
million.

Eligible are needy Indians who are members of a tribe that is recognized by the U.S. government
and also, in Alaska, Alaskan Natives with at least one-fourth degree Native blood (or who are
regarded as Natives by their Native village). Federally recognized tribes are located in 34 states,
of which a majority have BIA programs of GA.
Persons must be deemed needy on the basis of standards established under the state’s TANF
program. They must apply for aid from other governmental or tribal programs for which they are
eligible, and they may not receive TANF or Supplemental Security Income (SSI). They must
reside in the tribe’s service area and where non-federally funded aid from a state or local 101
government unit is not available to them. Able-bodied adults must actively seek work, make
satisfactory progress in an Individual Self-sufficiency Plan (ISP) jointly developed and signed by
the recipient and the social services worker, and accept available local and seasonal employment
unless they are enrolled at least half-time in a specified program of study, caring full-time for a
preschool child, or would have a minimum commuting time of one hour each way.
Certain sums of earned income are disregarded in determining benefits: federal, state, and local
taxes; Social Security taxes; health insurance payments; work-related expenses, including
reasonable transportation costs; child care costs (unless the other parent in the home is able-
bodied and not working); and the cost of special clothing, tools, and equipment directly related to
the person’s employment. Also deducted from countable income is an allowance for shelter costs;
namely, 25% of the total state TANF payment unless a smaller amount is designated for shelter in
the state TANF standard.

100 Revised regulations for this program took effect on Nov. 20, 2000. See 25 CFR Part 20, Subpart C (2005). This
program is No. 15.113 in the Catalog of Federal Domestic Assistance.
101 Such programs generally are known as “general assistance,” but various other names are used, including general
relief, poor relief, and safety net assistance.





Disregarded as income or resources is the first $2,000 in liquid resources annually available to the
household and any home produce from garden, livestock, and poultry used by the family. Specific 102
laws exempt certain other income.
Eligibility for GA must be reviewed periodically—every three months for persons not exempt
from seeking work and every six months for all participants.
BIA expects the GA caseload to increase from the FY2004 level of 30,000 persons to 33,000 in 103
FY2005 and 35,000 in FY2006. Because of the relatively high levels of unemployment on
Indian reservations, it was expected that many Indians enrolled in TANF would remain eligible
for that program, and hence be ineligible for GA, beyond TANF’s standard 60-month limit. (The
TANF 60-month limit does not apply to any month of aid during which the recipient lived in 104
Indian country, or in an Alaska Native village, where at least 50% of adults were unemployed
according to the most reliable available data.) The exclusion of months that an Indian recipient
spent in high-unemployment Indian country would extend that recipient’s eligibility for TANF
beyond 60 calendar months. As more Indian TANF recipients exceed their extended time limits
for TANF assistance, BIA estimates the GA caseload will rise.
General Assistance to Indians provides cash payments and work experience and training. The
regulations state that the program goal is to increase self-sufficiency. BIA GA payments are made
on the basis of state need standards under the TANF program unless the state “ratably reduces”
actual payments. In those cases, the Bureau must reduce GA payments by the same percentage.
This means that actual maximum payments in the GA program are the same as in the state TANF
program. For a family of three persons, maximum monthly TANF benefits ranged in January
2004 from $170 in Mississippi to $923 in Alaska. If the state TANF program has no assistance
standard for one adult, the Bureau standard for one adult is the greater of (a) the difference
between the standard for one child and that for a two-person household with an adult member or
(b) one-half the standard for a household of two persons.
A GA recipient who participates in the tribe’s Tribal Work Experience Program (TWEP) receives
an extra monthly payment ($115 in FY2002 and 2003). This program provides work experience
and job skills training. TWEP programs can be incorporated within self-determination contracts,
self-governance annual funding agreements and programs coordinated under P.L. 102-477, which
allows for integration of federally-funded employment and training programs.

102 P.L. 100-241 requires the BIA to exclude from countable income or resources up to $2,000 per year in corporate
dividends paid to an individual under the Alaska Native Claims Settlement Act (ANCSA). The Indian Tribe Judgment
Funds Distribution Act (P.L. 93-134, as amended by P.L. 97-458 and P.L. 103-66) and certain Indian claims settlement
acts also exclude various amounts from countable income or resources.
103 Bureau of Indian Affairs, Budget Justifications and Performance Information, Fiscal Year 2006, p. BIA-TPA-15.
104 Indian country is defined here to cover all lands in Indian reservations, off-reservation trust lands, and dependent
Indian commuinities.







Subject to available appropriations, the Immigration and Nationality Act authorizes 100%
federally funded cash assistance for needy refugees and asylees during their first three years in
the United States. Other legislation authorizes similar assistance for certain Cuban and Haitian 105106
entrants and for certain Amerasians. Since FY1992, funding has been appropriated to
provide cash assistance for the first eight months after entry. These benefits are administered by
the Department of Health and Human Service’s Office of Refugee Resettlement (ORR). For
refugee cash assistance (RCA), estimated ORR expenditures amounted to $41.6 million in 107
FY2004.

A person must (a) have been admitted to the United States as a refugee or asylee under the
Immigration and Nationality Act or have been paroled as a refugee or asylee under the act, (b) be
a Cuban or Haitian paroled into the United States between April 15 and October 20, 1980, and
designated a “Cuban/Haitian entrant,” or be a Cuban or Haitian national paroled into the United
States after October 10, 1980, (c) be a person who has an application for asylum pending or is
subject to exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
Under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA;
P.L. 104-193), as amended by P.L. 105-33, refugees, asylees, and others in the above groups are
eligible for Temporary Aid for Needy Families (TANF) for five years after entry, provided they
meet the income and asset tests prescribed by their state for TANF. Those who meet the state’s
financial eligibility tests but who are not categorically eligible for TANF or SSI qualify for RCA.
(For example, a single refugee or a childless couple could receive RCA if deemed needy by state
TANF standards.) At the end of the five-year period, their continued participation is at state 109
option, as it is with other “qualified aliens.” The law requires employable RCA applicants and
recipients to accept “appropriate” job offers and to register for employment to receive cash
assistance.
Under PRWORA, as amended, refugees who qualify for Supplemental Security Income (SSI) are 110
now eligible for seven years after entry, as opposed to permanently under prior law. At the end

105 Title V of the Refugee Education Assistance Act (P.L. 96-422).
106 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
107 Preliminary estimate of the Office of Refugee Resettlement.
108 Regulations for this program are found in 45 CFR Parts 400-401 (2005). This program is No. 93.566 in the Catalog
of Federal Domestic Assistance.
109 Most states have not exercised their option to bar qualified aliens from TANF.
110 Under prior law, refugees were eligible for SSI benefits on the same basis as citizens or permanent resident aliens
(see SSI program description).





of the seven-year period, they become ineligible until they naturalize or meet the work
requirement. However, if they were here and receiving SSI by August 22, 1996, the enactment
date of PRWORA, they remain eligible. If they were here by the enactment date and subsequently
become disabled, they are also eligible for SSI.
RCA payment levels are based on the state’s TANF payment to a family unit of the same size. For
example, an able-bodied couple below age 65 would receive an RCA benefit equal to that of a
two-person TANF family. (Benefit levels for persons who qualify for TANF and SSI are the
levels established for those programs.)
Note: For more information, see CRS Report RL31269, Refugee Admissions and Resettlement
Policy.


The Food Stamp Act generally provides 100% federal funding for food stamp benefits.111 Federal
funds also pay for (1) federal administrative costs, (2) 50% of state and local administrative 112
expenses and (3) the majority of costs associated with employment and training programs for 113
food stamp recipients. “States,” defined as the 50 states, the District of Columbia, Guam, and
the Virgin Islands, are responsible for the remainder of food stamp expenses. In Puerto Rico,
American Samoa, and the Northern Marianas, federal funds authorized under the Food Stamp Act
provide annual grants in lieu of food stamps to fund nutrition assistance benefits and associated
administrative costs. The grants for Puerto Rico and American Samoa are set by law and indexed
for inflation. In FY2004, they totaled $1.4 billion ($1.413 billion for Puerto Rico and $5.6 million
for American Samoa). The grant for the Northern Marianas is an annually negotiated amount 114
based on identified needs in the Commonwealth ($8.3 million in FY2004).

111 In a few cases, states have chosen to pay the cost of food stamp benefits (and related administrative expenses) for
households not eligible for federally financed benefits—e.g., certain noncitizens.
112 The 50% federal share of state/local administrative expenses is reduced by $197 million a year to account for costs
covered by grants for TANF, resulting in an actual federal share paid under the Food Stamp program that is slightly
below 50%.
113 See the Food Stamp Employment and Training Program (program No. 78) for more information about this aspect of
food stamp program funding.
114 The Commonwealth of Puerto Rico’s nutrition assistance program provides benefits (averaging $252 per household
per month in FY2003) to some 1.02 million low-income residents. It uses financial eligibility tests that are similar to
but more restrictive than those used for food stamps; benefits are provided through an electronic benefit transfer system
under which the majority of the benefit is earmarked to purchase food items, while the minority may be withdrawn as
cash. The Commonwealth of the Northern Mariana Islands receives a grant under the Food Stamp Act to operate a
program similar to the regular Food Stamp program, although some of the benefits are earmarked for local food
(continued...)






The Food Stamp program imposes four major tests for eligibility: income limits, liquid asset
limitations, employment-related requirements, and limits on the eligibility of noncitizens. In
addition, households composed of recipients of cash aid or services under state Temporary
Assistance for Needy Families (TANF) programs, the Supplemental Security Income (SSI)
program, or state/local General Assistance (GA) programs are, in most cases, automatically
eligible for food stamps. Automatic food stamp eligibility may continue for up to five months
after a household leaves a TANF program.
Households not automatically eligible because they receive TANF, SSI, or GA must have counted
(net) monthly income below the federal poverty income guidelines, which are adjusted annually
to reflect inflation measured by the Consumer Price Index (CPI). More importantly, households 116
without an elderly or disabled member must also have basic (gross) monthly income below
130% of the poverty guidelines in order to qualify. Changes in these income limits take effect
each October.
Basic (gross) monthly income includes all cash income of the household, except for certain
“vendor” payments made to third parties (rather than directly to the household); unanticipated,
irregularly received income up to $30 a quarter; loans (deferred payment education loans are
treated as student aid, see below); income received for the care of someone outside the household;
nonrecurring lump-sum payments such as income tax refunds (these are counted as liquid assets);
payments of federal earned income tax credits (these are not counted as either income or—for 12
months—as assets); federal energy assistance; reimbursements for certain out-of-pocket
expenses; income earned by children who are in school; the cost of producing self-employment
income; education assistance under Title IV of the Higher Education Act (e.g., Pell grants, student
loans); other student aid to the extent earmarked or used for tuition, fees, and education-related
expenses; certain payments under the Workforce Investment Act (WIA); income set aside by
disabled SSI recipients under an approved “plan to achieve self-sufficiency”; and some other
types of income required to be disregarded by other federal laws (e.g. military combat pay, certain
payments to Indians). In addition, states may, within certain limits, exclude income they disregard
when judging TANF or Medicaid eligibility.
Counted (net) monthly income subtracts from basic (gross) income the following “deductions”: 117
(1) a “standard” monthly deduction; (2) 20% of any earned income; (3) expenses for the care of

(...continued)
purchases; and American Samoa receives a grant to run a limited program providing aid to the elderly and disabled.
Additional funding, for an overall total of $10.9 million, was awarded to the Commonwealth of the Northern Mariana
Islands which suffered a major disaster in September 2004.
115 Regulations for food stamps and related programs are found at 7 CFR Part 271 et seq. (2004). They are Nos. 10.551,
10.561, and 10.566 in the Catalog of Federal Domestic Assistance.
116Elderly is defined as age 60 or older.Disabled” is generally defined as being a recipient of governmental
disability benefits such as Social Security disability or SSI payments.
117 Thestandard deduction varies by household size, is indexed for inflation, and differs for AK, HI, and the
territories. During FY2006, the standard deduction in the 48 states and D.C. is $134 a month for households of one to
four persons, $157 for five-person households, and $179 for households of six or more persons. For deductions in other
areas, see the U.S. Department of Agriculture website at http://www.fns.usda.gov/fsp/government/
(continued...)





a dependent (up to $200 per dependent per month for those under age two or $175 for other
dependents); (4) out-of-pocket medical expenses of elderly or disabled household members, to
the extent they exceed $35 per month; (5) shelter expenses, to the extent they exceed 50% of the
income remaining after all other potential deductions and excluded expenses have been subtracted 118
(up to an annually indexed ceiling standing at $400 a month in FY2006); and (6) amounts paid
as legally obligated child support payments.
The following table sets out the monthly net and gross income limits in the 48 contiguous states,
the District of Columbia, the Virgin Islands, and Guam for the period October 1, 2005 through 119
September 30, 2006.
Table 13. Food Stamp Income Limits
(October 2005 through September 2006)
Monthly counted (net) Monthly basic (gross)
Household size income limits income limits
1 person $ 798 $ 1,037
2 persons 1,070 1,390
3 persons 1,341 1,744
4 persons 1,613 2,097
5 persons 1,885 2,450
6 persons 2,156 2,803
7 persons 2,428 3,156
8 persons 2,700 3,509
Each additional person +272 +354
An eligible household’s liquid assets may not exceed $2,000 or $3,000 if the household includes
an elderly or disabled member. This asset test excludes the value of a residence, business assets,
household belongings, and certain other resources, such as Earned Income Tax Credits paid as a
lump sum. The extent to which the value of a vehicle owned by an applicant household is counted
as an asset varies by state, often conforming to the state’s rule for its TANF program. Under the
most stringent rule, the fair market value of any vehicle above $4,650 is counted; however, the
majority of states either disregard the value of at least one vehicle or apply a more liberal
threshold. The food stamp asset test does not apply to automatically eligible TANF, SSI, and GA

(...continued)
FY06_Income_Standards.htm.
118 The limit on the shelter expense deduction varies in AK, HI, and the territories, and does not vary by household size.
For the limit in other areas, see the U.S. Department of Agriculture website at http://www.fns.usda.gov/fsp/
government/FY06_Allot_Deduct.htm.
119 Limits are higher in AK and HI, by 25% and 15%, respectively. Puerto Rico’s nutrition assistance program uses a
gross income test only, set substantially below that used in the 48 states and DC. For income limits in AK and HI, see
the U.S. Department of Agriculture website at http://www.fns.usda.gov/fsp/government/FY06_Income_Standards.htm.





households; states also may, within certain limits, disregard assets that they do not count in their
TANF or Medicaid programs.
In order to maintain eligibility, certain nonworking able-bodied adult household members must
register for employment, accept a suitable job if offered one, fulfill any work, job search, or
training requirements established by administering welfare agencies, provide the welfare agency
with sufficient information to allow a determination with respect to their job availability, and not
voluntarily quit a job without good cause or reduce work effort below 30 hours a week. Exempt
from these requirements are: persons caring for dependents (disabled or under age six); those
already subject to another program’s work requirement; those working at least 30 hours a week or
earning the minimum-wage equivalent; the limited number of postsecondary students who are
otherwise eligible; residents of drug addiction and alcoholic treatment programs; the disabled;
and those under 16 or age 60 or older (those between ages 16 and 18 are also exempt if they are
not the head of a household or if they are attending school or a training program). If the
household head fails to fulfill any of these requirements, the state may disqualify the entire
household for up to 180 days. Individual disqualification periods differ according to whether the
violation is the first, second, or third; minimum periods range from one to six months and may be
increased by the welfare agency, in some cases to permanent disqualification.
In addition to the above work-related requirements, special rules apply to some persons without
dependents. Many able-bodied adults (between 18 and 50) without dependents are ineligible for
food stamps if, during the previous 36 months, they received food stamps for three months while
not working at least 20 hours a week or participating in an approved work/training activity
(including “workfare,” work in exchange for benefits). Those disqualified under this rule are able
to re-enter the Food Stamp program if, during a 30-day period, they work 80 hours or more or
participate in a work/training activity. If they then become unemployed or leave work/training,
they are eligible for an additional three-month period on food stamps without working at least 20
hours a week or enrolling in a work/training activity. But they are allowed only one of these
added three-month periods in any 36 months—for a potential total of six months on food stamps
in any 36 months without half-time work or enrollment in a work/training effort. [Note: At state
request, the special rule for able-bodied adults without dependents can be waived for areas with
very high unemployment (over 10%) or lack of available jobs. Moreover, states themselves have
authority to exempt up to 15% of those subject to the rule.]
States must operate work and training programs under which recipients not exempt by law or by
state policy must fulfill employment requirements (which can include workfare, training, job
search, education, or other activities) as established by the welfare agency. These programs are
described separately in this report (see program No. 78).
Categorical eligibility restrictions include (1) a ban on eligibility for many noncitizens;120 (2) a
ban on eligibility for households containing striking members, unless eligible prior to the strike;
(3) a ban on eligibility for most nonworking postsecondary students without families; (4) a ban on

120 This ban generally does not include children and noncitizens who have been legal residents for at least five years.





eligibility for persons living in institutional settings, except for those in special small group
homes for the disabled, persons living in drug addiction or alcoholic treatment programs, persons
in temporary shelters for battered women and children, and those in homeless shelters; (5) a state-
option ban on eligibility for those who have violated another welfare program’s rules and been
disqualified, (6) limits on participation by boarders; (7) a requirement that Social Security
numbers be provided for all household members; (8) denial of eligibility where assets have been
transferred to gain eligibility; (9) denial of eligibility where there has been intentional violation of
program rules or failure to cooperate in providing information needed to judge eligibility and 121
benefits; and (10) a ban on eligibility for SSI recipients in California.
The Food Stamp Act specifies that a household’s maximum monthly food stamp allotment be the
cost of a nutritionally adequate low-cost diet, as determined by the U.S. Department of
Agriculture’s Thrifty Food Plan, adjusted each October for changes in food prices. A participating
household’s actual monthly allotment is determined by subtracting, from the maximum allotment
for its size, an amount equal to 30% of its counted monthly income (after all applicable
deductions, see above), on the assumption that the household can afford to spend that amount of
its own income on food. Minimum benefits for households of one and two persons are
legislatively set at $10 per month; minimum benefits for other household sizes vary but generally
are somewhat higher. Maximum monthly food stamp allotments in FY2006 (October 2005
through September 2006) are shown in the following table.
48 states and Alaska abVirgin
Household size D.C. (urban) Hawaii Islands Guam
1 person $152 $181 $229 $195 $224
2 persons 278 333 421 358 410
3 persons 399 477 602 513 588
4 persons 506 606 765 651 746
5 persons 601 720 909 773 886
6 persons 722 864 1,090 928 1,064
7 persons 798 955 1,205 1,026 1,176
8 persons 912 1,091 1,378 1,172 1,344
Each additional person +114 +136 +172 +147 +168
a. Maximum allotment levels in rural AK are 27% to 55% higher than the urban AK allotments noted here.
Food stamp benefits are issued through electronic benefit transfer (EBT) cards. These cards are
used like “debit cards” to access food stamp recipients’ individual food stamp accounts when
purchasing food items at approved stores. Food stamp benefits can be used only to buy food
items; however, EBT cards often include access to cash benefit programs (in which case, the card
can be used to access cash).

121 Cash SSI payments have been increased in California to include an estimated value for food stamp benefits.







The Richard B. Russell National School Lunch Act provides a guaranteed federal subsidy for
each free or reduced-price lunch served to needy children in schools and residential child care
institutions (RCCIs) choosing to participate in the School Lunch program. A small subsidy also is
provided for “full-price” meals to non-needy children, but about 90% of lunch program costs are
for free or reduced-price meals served to needy children.
The cash subsidy for free and reduced-price lunches consists of two parts: a basic payment
authorized under Section 4 of the act for every lunch served, without regard to the family income
of the participant, and an additional special assistance payment authorized under Section 11 only
for lunches served free or at reduced price to lower-income children. Additionally, the federal
government provides significant commodity assistance for each meal served. The level of federal
cash subsidies and the value of federal commodity aid are legislatively set and annually indexed.
State and local government funds and children’s payments also help finance lunches. No charge
may be made for a free lunch, but a charge of up to 40 cents may be imposed for a reduced-price
lunch. Schools may set whatever charge they wish for lunches served to children who do not
qualify for free or reduced price lunches, or who do not apply for them, so long as this charge
does not result in a profit.
The law requires that states contribute to their lunch programs revenues equal to at least 30% of
the total Section 4 federal funding provided in the 1980-1981 school year (a fixed amount totaling
about $200 million a year nationwide). However, no matching funds are required for the extra
federal subsidy provided for free and reduced-price lunches, under Section 11 of the act.

All children are eligible to receive at least a partially subsidized lunch in participating schools and
RCCIs, although subsidies are higher for meals served free or at a reduced price. All public
schools, private nonprofit schools, and RCCIs are eligible to participate and receive federal
subsidies if they serve meals that meet nutrition requirements set by the U.S. Department of
Agriculture based on the Dietary Guidelines for Americans, offer free and reduced-price meals to
lower-income children, and agree not to make a profit on their meal program.
Children whose current annual family income is at or below 130% of the annually indexed
federal poverty income guidelines are eligible for a free lunch. Children whose family income is
more than 130% but not more than 185% of the guidelines are eligible for a reduced-price lunch.
For example, annual income limits for a family of four in the 2004-2005 school year were 123
$24,505 for free lunches and up to $34,873 for reduced-price lunches. In addition, most

122 School lunch regulations are found in 7 CFR Parts 210 and 245 (2004). This program is No. 10.555 in the Catalog
of Federal Domestic Assistance.
123 Higher limits apply in AK (+25%) and HI (+15%).





children from families receiving public assistance (e.g., cash welfare, food stamps) can be
certified for free school lunches based on their public assistance enrollment.
Benefits are provided to local “school food authorities” through state education agencies. Federal
cash subsidies are provided to participating schools and RCCIs for each lunch served. The law
establishes specific reimbursement (subsidy) rates for each type of lunch served (free, reduced-
price, “full-price”) and mandates that they be adjusted each July for inflation. Cash
reimbursement rates for the 2004-2005 school year were $2.24 for each free lunch, $1.84 for each 124
reduced-price lunch, and 21 cents for each full-price lunch.
In addition to the cash subsidies noted above, the federal government provides commodity
assistance for all meals served in participating schools and residential child care institutions. This
assistance rate is adjusted annually each July for inflation, and, for the 2004-2005 school year, it
was 17.25 cents a meal (e.g., the total value of cash and commodity assistance for free lunches
was approximately $2.41).
Schools and RCCIs in the School Lunch program also may expand their programs to cover
snacks (and, in some cases, suppers) served to children through age 18 in after-school programs.
Federal subsidies are paid at the highest snack/supper rate offered to child care providers if the
snack/supper is served free to children in lower-income areas. In other cases, federal subsidies
vary by the child’s family income. (See program No. 22, the Child and Adult Care Food Program,
for the various federal subsidy rates for snacks/suppers and additional authority for schools and
public and private nonprofit organizations to receive subsidies for snacks/suppers served in after-
school programs.)
In FY2004, more than 90% of schools and RCCIs received school lunch program subsidies—
some 95,000 schools, plus about 6,000 RCCIs. Average daily participation was about 29 million
children; 14.1 million received free lunches, 2.8 million ate reduced-price lunches, and lunches
for 12 million students were subsidized at the minimum full-price rate, for which no income test
is required. While children receiving free or reduced-price lunches made up 57% of those
participating, subsidies for their lunches accounted for just over 90% of federal spending on the
school lunch program.
Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.

124 An additional 2 cents is provided for each lunch served in schools where 60% or more of the school lunch
participants receive free or reduced-price meals. Significantly higher reimbursement rates apply in AK and HI.







The Child Nutrition Act provides 100% federal funding through grants to states for food costs and
nutrition services and administration (NSA); money also is provided to support breast-feeding
initiatives and the development of local agencies’ administrative infrastructure, small farmers’
market nutrition programs (see program No. 29), and research and evaluations. State allocations
are based on a formula that reflects food and NSA caseload costs, inflation, and “need” as
evidenced by poverty indices—although small amounts are set aside for infrastructure
development and other special initiatives. No state or local matching funding is required.

Section 17 of the Child Nutrition Act makes eligible for WIC benefits lower-income mothers,
infants, and children judged to be at “nutritional risk.” These include infants (up to age 1),
children up to 5 years old, pregnant women, non-nursing mothers up to six months after
childbirth, and nursing mothers up to one year after childbirth. A competent professional authority
on the staff of a participating local public or private nonprofit health clinic or welfare agency that
operates a WIC program must certify that the recipient is at nutritional risk through a medical or
nutritional assessment guided by federal standards.
In addition to meeting the nutritional risk criterion, WIC enrollees must have annual family
income below state-established limits, and public assistance recipients (such as Medicaid
beneficiaries) may be judged automatically income eligible. Income limits may not exceed those
for reduced-price meals under school meal programs—185% of the federal poverty income 126
guidelines (as annually adjusted)—e.g., $29, for a three-person family for July 2005 through
June 2006. States can set lower income limits, but these must not be lower than 100% of the
poverty guidelines (no state has taken this option).
Unlike most other nutrition assistance programs, the ability of the WIC program to serve all those
who apply and are judged eligible is largely limited by the annual amount of federal funding 127
made available, and not all eligible applicants are guaranteed benefits. State health departments
or comparable agencies determine which local health or welfare agencies are eligible for program
participation or expansion in order of greatest need based on economic and health statistics and
available funding. A priority system seeks to ensure that individuals at the greatest risk are served
first. The program is estimated to serve at least 80% of the eligible population. In FY2004,
average monthly participation was 7.9 million women, infants, and children.

125 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) regulations are found at 7 CFR
Part 246 (2004). This program is No. 10.557 in the Catalog of Federal Domestic Assistance.
126 This income ceiling is for the 48 contiguous states, DC, PR, GU and the VI. Higher limits apply in AK (+25%) and
HI (+15%).
127 Regular annual federal appropriations for the WIC program are supplemented by rebates from infant formula
companies, any unused money carried over from the prior year, and, in some cases, voluntary state contributions.





Beneficiaries receive selected supplemental foods, as called for in federal regulations, either in
the form of food packages or, most commonly, as vouchers/checks valid for the purchase of
specific prescribed food items in stores approved by state WIC agencies (under federal guidelines 128
to control costs). Federal regulations include requirements governing the types and quantities
of food to be made available and about tailoring food packages to meet the varying nutritional
needs of the infants, children, and pregnant and postpartum women participating in the program.
However, state WIC agencies have some leeway in designing specific food packages and
specifying which foods may be bought with WIC vouchers. In FY2004, the national average
monthly federal cost of food in a WIC food voucher/package was $38 (after an offset for rebates
by infant formula companies).
The law also requires that participants receive a nutritional risk evaluation (in order to qualify),
breast-feeding support, and nutrition education. Monthly NSA costs for these services averaged
$14 a recipient in FY2004.
In addition to the regular WIC program, a majority of states have chosen to operate a farmers’
market nutrition program that offers WIC applicants and recipients special vouchers that can be
used to buy fresh foods at participating farmers’ markets. (See program No. 29.)
Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.


The Richard B. Russell National School Lunch Act provides 100% federal funding for this
program in the form of legislatively set (and annually indexed) cash subsidies for all meals and
snacks served in participating child and adult day care centers and family/group day care homes
for children. Subsidies are entitlements to centers and homes, depend on the number of
meals/snacks served, and are varied by participants’ family income (in day care centers), or (in
the case of family day care homes) differ depending on whether the provider is low-income or is
located in a lower-income area. Separate administrative payments to sponsors of day care homes
(based on the number of homes sponsored), and limited federal commodity assistance also are
provided. Further, some subsidy payments for day care homes may be used for administration.
There is no requirement for matching funds from non-federal sources.

128 Items in WIC food packages vary by the type of recipient and include milk, cheese, eggs, infant formula, cereals,
peanut butter, fruit and vegetable juices, and other items keyed to specific dietary deficiencies.
129 Approximately 90% of this programs costs are for its lower-income components. The adult care component of this
program is relatively small. It provides federal subsidies for meals in nonprofit centers serving functionally impaired
adults age 60 and over. Adult recipients represent about 4% of total participation. The program operates in the same
manner for adult care centers as for child care centers.






Licensed (or otherwise government-approved) public and private nonresidential nonprofit child
care, adult care, and Head Start centers, sponsors operating after-school programs, and family and
group day care homes are eligible for federal subsidies for meals, snacks, and (in some cases)
suppers they serve that meet federal nutrition requirements. For-profit child care institutions also
are eligible, but their eligibility is limited based on the degree to which they serve lower-income
children (as measured by the centers’ receipt of government child care subsidies or by the degree
to which they serve those with low family income). Participation by centers and homes is
voluntary.
All children (and elderly clients) in participating programs operated in child and adult care
centers receive federally subsidized meals and snacks, although subsidies are higher for those
served free or at a reduced price to lower-income individuals. As with the School Lunch and
School Breakfast programs, centers receive the largest subsidies for meals/snacks served to those
whose household income is not above 130% of the federal poverty income guidelines (e.g.,
$24,505 for a family of four during the period July 2004-June 2005); meals/snacks served to
those whose household income is above 130%, but not above 185% of the poverty guidelines 131132
(e.g., $34,873 for a family of four) receive lesser subsidies. Meals/snacks for those from
households with income above these limits also are subsidized, but the subsidy rates are much
smaller. Unlike the school meal programs, while federal cash subsidies paid to centers differ
according to recipients’ family income, there is no requirement that “free” or “reduced-price”
meals/snacks be served. Centers may adjust their fees to account for federal subsidies or charge
(or not charge) separately for meals to account for the subsidies, but the program itself does not
regulate the fees they charge.
All children in participating family day care homes receive federally subsidized meals/snacks.
However, the subsidies are generally not differentiated by the child’s family income.

Federal subsidies are provided for up to two meals and one snack per day per recipient (or three
meals a day in homeless/emergency shelters). Participating centers receive cash subsidies for
meals that are the same as those provided for lunches or breakfasts under the School Lunch and
School Breakfast programs. For the period July 2004 through June 2005, these amounts were: (a)
for lunches/suppers, $2.24 each for those served to individuals with income under 130% of the
federal poverty guidelines, $1.84 for meals served to those with income between 130% and 185%
of the poverty guidelines, and 21 cents for all other meals; (b) for breakfasts, $1.23, 93 cents, and
23 cents. Cash subsidies for snacks ranged from 61 cents to 5 cents. Finally, centers may receive
federal commodity assistance (about 17 cents a meal), or cash in lieu of commodities. All subsidy
rates are annually indexed.

130 Regulations for this program are found in 7 CFR Part 226 (2004). This program is No. 10.558 in the Catalog of
Federal Domestic Assistance.
131 These income ceilings are for the 48 contiguous states, DC, GU, PR, and the VI. Higher limits apply in AK (+25%)
and HI (+15%).
132 Income eligibility guidelines are annually indexed.
133 All federal subsidy rates noted here are significantly higher in AK and HI.





The federal subsidy structure for family day care homes is different. Day care homes receive
subsidies that generally do not differ by the family income of individual recipients. Instead, there
are two distinct annually indexed subsidy rates. “Tier I” homes (those located in lower-income
areas or operated by lower-income providers) receive higher cash subsidies; for July 2004
through June 2005, all lunches/suppers were subsidized at $1.92, all breakfasts were subsidized at
$1.04, and all snacks were subsidized at 57 cents. “Tier II” homes (those not located in lower-
income areas or without lower-income providers) receive lower subsidies; for July 2004 through
June 2005, all lunches/suppers were subsidized at $1.16, all breakfasts at 39 cents, and all snacks
at 15 cents. Organizations sponsoring homes receive monthly payments for their
administrative/oversight costs, which vary by the number of homes sponsored; and Tier II homes
may seek higher Tier I rates for meals/snacks served to individual low-income children if the
proper documentation is provided.
In addition to the regular Child and Adult Care Food Program (CACFP), the law allows public
and private nonprofit organizations (including child care centers and schools) operating after-
school programs to receive federal CACFP subsidies for snacks served free in their programs to
children (through age 18) in lower-income areas—at the highest snack rate noted above. In some
cases, subsidies also are offered for suppers in after-school programs, again at the highest rate
noted above.
In FY2004, 46,000 child care centers and some 2,500 adult care centers (including for-profit
centers and Head Start and after-school programs) with an average daily attendance of 2 million
persons participated, and some 160,000 day care homes received subsidies for 900,000 children
in attendance.
Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.


The Child Nutrition Act provides a guaranteed federal subsidy for each free or reduced-price
breakfast served needy children in schools and residential child care institutions (RCCIs) that
choose to participate in the School Breakfast program. A small subsidy also is provided for “full-
price” breakfasts to non-needy children. Approximately 95% of breakfast program subsidy costs
are for free or reduced-price meals served to needy children. Certain schools, designated as 134
“severe need” schools, receive subsidies that exceed regular subsidies. State and local
government funds, as well as children’s meal payments, also help finance the cost of breakfast
programs, although there is no formal matching requirement. No charge may be made for a free
breakfast, but up to 30 cents may be charged for a reduced-price breakfast.

134 Severe need schools are defined as schools in which 40% or more of lunches under the School Lunch program are
served free or at a reduced price. The large majority of schools in the School Breakfast program are classified as severe
need schools.






As with the School Lunch program, all children are eligible to receive at least a partially
subsidized breakfast in participating schools and institutions, although subsidies are higher for
meals served free or at a reduced price. All public schools, private nonprofit schools, and RCCIs
are eligible to participate and receive federal subsidies if they serve meals that meet nutrition
requirements set by the U.S. Department of Agriculture based on the Dietary Guidelines for
Americans, offer free and reduced-price meals to lower-income children, and agree not to make a
profit on their meal program.
Children whose current annual family income is at or below 130% of the federal poverty income
guidelines are eligible for a free breakfast; those children whose family income is more than
130% but not more than 185% of the guidelines are eligible for a reduced-price breakfast. Income
eligibility guidelines are annually adjusted for inflation. For example, in the 2004-2005 school
year, annual income limits were $24,505 for free breakfasts and up to $34,873 for reduced-price 136
breakfasts. In addition, most children from families receiving public assistance (e.g., cash
welfare, food stamps) can be certified eligible for free breakfasts based on their public assistance
enrollment.
As with the School Lunch program, benefits are provided to local “school food authorities”
through state education agencies. The law provides a guaranteed federal cash reimbursement
(subsidy) to participating schools and RCCIs for each breakfast served. It establishes specific
reimbursement rates for each type of breakfast served (free, reduced-price, full-price) and
mandates that they be adjusted each July for inflation. Regular cash reimbursement rates for the

2004-2005 school year were $1.23 for each free breakfast, 93 cents for each reduced-price 137


breakfast, and 23 cents for each full-price breakfast.
In FY2004, 78% of schools in the School Lunch program (and virtually all RCCIs in the
program) also operated breakfast programs. Some 74,000 schools and roughly 6,000 RCCIs were
in the program, with a total average daily participation of 8.9 million children—6.5 million
received free breakfasts, 800,000 received reduced-price meals, and 1.6 million were subsidized
at the full-price rate.
Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.

135 School breakfast regulations are found in 7 CFR Parts 220 and 245 (2004). This program is program No. 10.553 in
the Catalog of Federal Domestic Assistance.
136 These income ceilings are for the 48 contiguous states, DC, GU, PR, and the VI. Higher limits apply in AK (+25%)
and HI (+15%).
137 An additional amount for each free or reduced-price meal is provided to severe need schools (see footnote number 1
in this section). This amount is adjusted annually and, for the 2004-2005 school year, stood at 24 cents per meal.
Significantly higher rates apply in AK and HI.






Nutrition services for the elderly under Title III of the Older Americans Act are supported by
grants to states and territories from the U.S. Department of Health and Human Services,
Administration on Aging (HHS/AoA). The nutrition services program includes three components:
congregate nutrition services, home-delivered nutrition services, and commodities or cash-in-lieu
of commodities.
The act specifies that the federal share of a state’s allotment for congregate and home-delivered
meal services may cover up to 85% of the cost of developing and/or operating local projects. The
non-federal matching share can be paid in cash or in-kind contributions. Federal funds are allotted
to the states on the basis of their share of the U.S. total population aged 60 and over, except that
the minimum state allotment is 0.5% of the U.S. appropriation for the year. (Minimums are
smaller for Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands.)
States also receive funds from HHS/AoA138 for commodities, or cash in lieu of commodities, to
supplement Title III grant funds for congregate and home-delivered meals. These funds are
allocated to states on a formula that is based on a state’s share of meals served by all states under
auspices of the Title III program for the preceding fiscal year.
FY2005 appropriations for the nutrition program totaled $719 million.

The Older Americans Act makes eligible persons aged at least 60 and their spouses. In addition,
congregate meals may be provided to persons with disabilities under age 60 who reside in
housing facilities occupied primarily by the elderly where congregate nutrition services are
provided, or who reside with and accompany older persons to meals. Eligible for home-delivered
meals are persons who are homebound by reason of illness or disability, or who are otherwise
isolated. The law requires that preference be given to those with the “greatest” (1) economic need
and (2) social need. The law defines group one to be persons whose income is at or below the
poverty guideline issued by HHS (the guideline issued in February 2005 was $9,570 for a “family
unit” of one person), and group two to be persons whose need for services is caused by 140
noneconomic factors that restrict their ability to perform normal daily tasks or that threaten
their capacity for independent living.

138 Up until FY2003, the U.S. Department of Agriculture (USDA) received appropriations of funds for allocation to
state agencies on aging under Title III for cash or cash-in-lieu of commodities. In FY2003, the program was transferred
to the Department of Health and Human Services, Administration on Aging.
139 Regulations concerning nutrition services are found at 7 CFR 250.42 (2004) and 45 CFR Parts 1321, 1326, 1328
(2005).
140 Listed as such factors are physical and mental disabilities, language barriers, and cultural, social, or geographical
isolation including that caused by racial or ethnic status.





The law requires that congregate meal services be located as close as possible to where most
eligible older persons live, preferably within walking distance. Means tests are prohibited.
The law requires providers to offer at least one meal daily, five or more days per week. If the
nutrition project serves one meal a day, each meal is to assure a minimum of one-third of the
daily recommended dietary allowances (RDAs) established by the Food and Nutrition Board of
the National Academy of Sciences-National Research Council. If the project serves more than one
meal daily, nutritional requirements are higher (two-thirds of RDA for two meals, 100% for
three). Nutrition services funds also may be used to provide support services such as outreach and
nutrition education.
The law requires that providers give participants an opportunity to contribute toward the cost of
the meal. Service providers may establish suggested contribution schedules, but each participant
is to decide for him/herself what, if anything, he/she is able to pay. A service provider may not
deny any older person nutrition services for failure to contribute to the cost of the service. The
law requires that voluntary contributions be used to expand services for which the contributions
were made.
Note: For more information about nutrition services for the elderly, see CRS Report RL31336,
The Older Americans Act: Programs, Funding, and 2006 Reauthorization (P.L. 109-365), by
Carol O'Shaughnessy and Angela Napili, and CRS Report RS21202, Older Americans Act:
Nutrition Services Program.


The Emergency Food Assistance Program (TEFAP) provides federally donated food commodities
to states for distribution to emergency feeding organizations (EFOs), including soup kitchens (or
other congregate feeding sites) and food banks, serving the homeless and other needy persons.
These commodities consist of those directly purchased for the program using annual
appropriations, plus food acquired for agricultural support reasons. Cash grants also are provided
to help states and local EFOs with the administrative costs of storing, transporting, handling, and
distributing the commodities. These administrative/distribution cost grants come from two
sources: a direct appropriation (typically $50 million a year) and authority to use some funding
provided for food purchases (typically $10 million a year) for administrative or distribution costs.
Commodities are allocated under a poverty-unemployment allotment formula: 60% of them are
distributed based on a state’s share of all persons with incomes below the poverty level, and 40%
based on its share of all unemployed persons. Administrative funding is distributed to states in the
same proportion as their share of commodities. To cover local EFO costs, states must distribute to
localities at least 40% of the administrative funding which they receive. Further, they are required
to match (in cash or in kind) funds that they do not pass along to local agencies.





In FY2004, the value of federally donated commodities distributed under TEFAP was $362
million, and federal support for distribution and administrative costs was $59 million—for a total
of $421 million.

State agencies administering TEFAP are responsible for selecting the emergency feeding
organizations that will distribute food/meals. There are no federal criteria for agency selection,
except that the feeding organization must serve needy persons and have the capacity to store and
handle commodities. Emergency feeding organizations include food banks and pantries, soup
kitchens, hunger centers, temporary shelters, community action agencies, churches, and other
nonprofit agencies offering food assistance to the indigent and needy. By law, those eligible to
receive commodity packages must be “needy,” but states set the criteria for individual eligibility
for benefits under federal regulations that require each state agency to establish uniform criteria
for determining household eligibility. The criteria must include income-based standards that
enable each agency to ensure that TEFAP commodities go only to households that are in need of
food assistance because of inadequate income.
The commodities donated for this program are bought by the U.S. Department of Agriculture
(USDA) with appropriated funds, purchased to reduce agricultural surpluses, or drawn from
excess holdings of the Commodity Credit Corporation when available. In recent years,
appropriated funds ($140 million a year) have been used to acquire between one-third and one-
half of the commodities distributed under TEFAP; the remainder were provided from surplus
purchases and Commodity Credit Corporation stocks. Benefits consist of commodities provided
to states for food banks, pantries, and other feeding agencies that distribute them to individuals
for at-home consumption, or to soup kitchens, homeless shelters, and central feeding centers
serving meals to the poor. Commodities are packaged in sizes appropriate for program use: small
package sizes for at-home consumption and larger, institutional sizes for meal service operations.
Traditionally, most commodities have gone for at-home consumption. The USDA provides
roughly three dozen types of food items, including canned and fresh fruits and vegetables and
juices, beans, canned meats, raisins, nuts, pasta, peanut butter, dairy products, and rice. Food
package size and value generally are the same for all recipients; there is no variation by income or
family size. By law, TEFAP benefits may not be treated as income or resources of a recipient for
any purpose.

The Richard B. Russell National School Lunch Act offers federal funding in the form of
legislatively set, annually indexed subsidies for all meals and snacks served under summer

141 Regulations for this program are found at 7 CFR Part 251 (2004). This program is No. 10.568 and 10.569 in the
Catalog of Federal Domestic Assistance.





programs for children, as well as administrative payments to program sponsors. No matching
funds are required from non-federal sources.

There are no individual income tests for participation. Eligibility for benefits normally is tied to
the location of the summer program. In general, eligible programs operate in communities where
at least 50% of the children are from families with incomes that meet the eligibility criteria for
free or reduced-price school lunches (that is, with income at or below 185% of the annually 143
updated federal poverty income guidelines: e.g., $35, for a four-person family in the summer of
2005). Summer program sponsors also may receive federal support if at least 50% of children
“enrolled” in the program meet the above-noted income eligibility test, regardless of where they
are located. Sponsorship is available to all public or private nonprofit schools, local municipal or
county governments, residential nonprofit summer camps, most private nonprofit organizations,
and colleges and universities participating in the National Youth Sports Program.
The law provides federal cash subsidies to sponsors for the cost of obtaining, preparing, and
serving food. They are undifferentiated by recipient child’s family income and may be
supplemented with a small amount of federally provided commodity assistance. The summer
2005 subsidy rates were $2.48 for each lunch or supper, $1.42 for each breakfast, and 58 cents for
each snack. Sponsoring agencies also receive funds for approved administrative costs based on
the number of meals/snacks served and the type of sponsor (sponsors located in rural areas and
those who prepare meals on site receive higher administrative payments). The number of
subsidized meals/snacks served is limited to two per day. In the summer of 2005, some 3,700
summer program sponsors operating 31,000 sites provided subsidized meals/snacks to 2 million
children in the peak month of July.
Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.

The Commodity Supplemental Food Program (CSFP) operates in 144 project areas in 31 states,
the District of Columbia, and two Indian tribal areas; these projects often offer other services to
program participants. The CSFP provides U.S. Department of Agriculture commodities and funds
for administrative and distribution costs to local agencies offering food packages to low-income
mothers, infants, young children, and elderly persons. Appropriations for the program finance

142 Regulations for this program are found in 7 CFR Part 225 (2004). This program is No. 10.559 in the Catalog of
Federal Domestic Assistance.
143 This amount is for the 48 contiguous states, DC, GU, PR, and the VI. The income limit is higher in AL (+25%) and
HI (+15%).





purchase of food products to be used in monthly packages distributed to participants, as well as
expenses associated with this distribution (typically, about 25% of total funding); in addition,
projects can receive “bonus” commodities provided without appropriated funds from Agriculture
Department stocks. Funding and commodities are distributed according to the caseload, or “slots”
allocated to each project. These allocations are based on previous participation levels of the
projects. However, “expansion” funding for new slots or new state projects is available if added
appropriations are provided. FY2004 funding (obligations) was approximately $109 million.

Eligible are pregnant women, breast-feeding women, postpartum women, infants, and children up
to age 6 who (a) qualify for food, health, or welfare benefits under a governmental program for
low-income persons, (b) are determined to be at nutritional risk (if the state agency has adopted
this requirement), and (c) live within the service area (if the state agency has adopted such a
residency rule). In general, women, infants, and children must live in households with income
below 185% of the federal poverty income guidelines (e.g., about $29,767 for a three-person
family in FY2005). More important, CSFP projects may serve elderly persons in their service
areas whose income does not exceed 130% of the federal poverty guideline (a ceiling of about
$12,441 for a single person in FY2005. The elderly make up over 85% of recipients. Persons may
not participate in the CSFP and the Special Supplemental Nutrition Program for Women, Infants,
and Children (the WIC program) at the same time; however they may participate in other
nutrition programs for the elderly.
Participants receive food commodities from local agencies. Agriculture Department guidelines
establish food packages for each category of participant. Commodities in the food packages
include items such as infant formula, cereals, canned and nonfat dry milk, canned meats and
stews, canned poultry and fish, egg mix, fruit and vegetable juices, potatoes, canned vegetables
and fruits, peanut butter, pasta, and dry beans.
In FY2004, a total of 522,000 individuals (63,000 mothers, infants, and children and 459,000
elderly persons) received commodity food packages valued at $17-$20 a month.


The Food Distribution Program on Indian Reservations (FDPIR) is an entitlement program that is
operated and funded under the aegis of the Food Stamp Act. It provides food packages in lieu of
Food Stamp benefits. Under FDPIR, the U.S. Department of Agriculture (USDA) acquires the

144 Federal regulations governing this program are found at 7 CFR Part 247 (2004). This program is No. 10.565 in the
Catalog of Federal Domestic Assistance.





food commodities to be included in the program’s monthly food packages either by direct
purchase (with appropriated funds designated for Indian food assistance) or, to a lesser degree,
through its agriculture support programs. The food acquired by the USDA is given to the 98
Indian Tribal Organizations (ITOs) and five state agencies operating FDPIR projects for
distribution to eligible households—based on the projects’ number of recipients. In addition, the
federal government pays at least 75% of administrative and distribution costs of the projects.

The FDPIR allows ITOs or state welfare agencies to operate food distribution programs in lieu of
the Food Stamp program. Recipients must reside on or near a participating reservation, or, in the
case of Oklahoma, reside within a stipulated service area. Eligible households not residing on a
reservation must include a Native American household member. Households must meet financial
needs tests: Households in which all members are included in a public assistance or SSI grant are
financially eligible for FDPIR; for non-assistance households, financial eligibility tests generally
are the income standard of the Food Stamp program, increased by the amount of that program’s
standard deduction. Except for the area of residence/Native American householder requirements,
eligibility rules are similar to those for the Food Stamp program. Grantee agencies are responsible
for certifying recipient eligibility, providing nutrition education, transporting and storing
commodities, and distributing them to recipient households. Both food stamps and the FDPIR
may be available in the same area, as long as no individual household participates in both
programs concurrently.
Benefits consist of monthly food packages that meet federal guidelines for nutritional adequacy.
Commodities contained in the monthly food packages consist of a variety of items, including
canned meats, fish, fruits, and vegetables, fruit and vegetable juices, cereals, rice, pasta,
cornmeal, cheese, butter, nonfat dry milk, flour, vegetable oil, peanut butter and peanuts, corn
syrup, and (in most projects) fresh fruits and vegetables. In FY2004, foods valued at about $40
per person per month were provided under the FDPIR.

Federal funding is provided to states (typically through state agriculture agencies that operate in
cooperation with state health or social services departments, or Indian Tribal Organizations) for
two farmers’ market nutrition programs: (1) a program for participants in (and those on a waiting
list for) the Special Supplemental Nutrition Program for Women, Infants, and Children (the WIC
Farmers’ Market Nutrition program) and (2) a Senior Farmers’ Market Nutrition program.
Money for the WIC Farmers’ Market Nutrition program is provided under an earmarked annual
appropriation under the Agriculture Department’s Commodity Assistance budget account, plus

145 Regulations for this program are found at 7 CFR Parts 253 and 254 (2004). This program is No. 10.567 in the
Catalog of Federal Domestic Assistance.





unused funding from prior years—e.g., a total of $28 million in FY2004 (made up of $23 million
in appropriations plus $5 million carried over from the prior year). Funds for the Senior Farmers’
Market Nutrition program are made available through a mandatory directive to spend $15 million
a year, plus sums that are carried over unused from prior years or newly appropriated by
Congress.
At the U.S. Department of Agriculture’s discretion, state grants are allocated based on the needs
described in state plans, the availability of new federal funds, and states’ past use of funds. Not all
states participate in these programs. In FY2004, 36 states, the District of Columbia, Guam, and
Puerto Rico—along with five Indian Tribal Organizations—participated in the WIC Farmers’
Market Nutrition program. This program requires that states contribute at least 30% of program
administrative costs (although Indian Tribal Organizations may contribute a smaller match). In
FY2004, 39 states, the District of Columbia, Puerto Rico, and six Indian Tribal Organizations
received grants under the Senior Farmers’ Market Nutrition program. This program requires no
state match. Expansion of both programs (both to additional participants and new states) depends
on the availability of additional federal funding.

Organized farmers’ markets (and, in some cases, roadside farm produce stands or special
community-supported nutrition projects) approved by administering state agencies (normally
state agriculture departments) are eligible to participate in the two farmers’ market nutrition
programs. In FY2003, a total of about 7,400 markets, roadside stands, and community projects
participated. For the WIC Farmers’ Market Nutrition program, WIC recipients (see program No.

21), or those approved but waiting for WIC benefits are eligible in participating jurisdictions.


Under the Senior Farmers’ Market Nutrition program, lower-income elderly persons—generally
defined as those at least 60 years of age who have household income of less than 185% of the
federal poverty income guidelines—are eligible for benefits. However, administering agencies
may accept proof of participation in a means-tested benefit program like food stamps or the
Supplemental Security Income (SSI) program when determining individuals’ eligibility.
Benefits under the two farmers’ market programs are issued as coupons or vouchers usable only
at participating markets. Vouchers/coupons may be redeemed for fresh, unprepared fruits,
vegetables, and herbs. Vouchers/coupons issued under the WIC Farmers’ Market Nutrition
program may not have a value of more than $30 per year per recipient (although participating
states may increase this value using non-federal funds). Vouchers/coupons issued under the
Senior Farmers’ Market Nutrition program are not limited in value by law, although budgetary
constraints typically require that they be limited to amounts similar to those under the WIC
Farmers’ Market Nutrition program. Nutrition education activities arranged by WIC program
operators and other sponsors also may be provided at farmers’ market sites.

146 Regulations for the WIC Farmers Market Nutrition program are found at 7 CFR Part 248 (2004). This program is
No. 10.572 in the Catalog of Federal Domestic Assistance. Information about the Senior Farmers’ Market Nutrition
program may be found at the U.S. Department of Agriculture’s website at http://www.fns.usda.gov/wic/SeniorFMNP.






The Child Nutrition Act provides 100% federal funding in the form of legislatively set, annually
indexed subsidies to cover the cost of free half-pints of milk served to low-income children by
schools and residential child care institutions (RCCIs) choosing to participate in this program.
Federal subsidies also are available for half-pints of milk served to non-needy children. In
FY2004, approximately 7% of the half-pints of milk subsidized under this program were served
free to low-income children. No matching funds are required from non-federal sources.

All children in participating schools and RCCIs are eligible to receive subsidized milk under this
program. Participating schools and RCCIs must have a policy of lowering any prices charged for
milk they serve to the maximum extent possible and using their federal payments to reduce the
selling price of milk to children. In addition, individual schools and RCCIs may choose to offer
free milk to low-income children. The program operates primarily in those schools and 148
institutions that do not participate in the school lunch or school breakfast programs. Each half-
pint served is federally subsidized at a different rate, depending on whether it is served free or
not—but provision of free milk is not required, and most children are charged.
To qualify for free milk (if offered), a child must meet the income eligibility standards for a free
meal under the School Lunch or Breakfast programs. That is, the child’s family’s income must
not exceed 130% of the federal poverty income guidelines. Non-needy children and needy
children in schools/RCCIs that do not offer free milk pay an amount determined by the school or
RCCI.
For the 2003-2004 school year, half-pints were subsidized at 13.9 cents each (if there was a
charge to the child) or the net cost to the school/RCCI, typically 1-2 cents higher (if the milk was
served free). In FY2004, 103 million subsidized half-pints (7% free) were served to roughly

500,000 children daily through some 7,000 schools and RCCIs.


Note: For more information, see CRS Report RL33307, Child Nutrition and WIC Programs:
Background and Recent Funding.

147 Regulations for this program are found at 7 CFR Part 215 (2004). This program is No. 10.556 in the Catalog of
Federal Domestic Assistance.
148 Schools with split (part-day) sessions for kindergartners or pre-kindergartners where the children do not have access
to regular school meal programs also may participate in this program.







This program is funded 100% by the federal government. Outlays were $22.4 billion in FY2004.

The Section 8 rental assistance program was authorized by the Housing and Community
Development Act of 1974 (P.L. 93-383). The program has two components, Section 8 project-
based rental assistance and Section 8 Housing Choice Vouchers. The project-based rental
assistance component is a set of rent subsidies attached to housing units owned by private
landlords. The vouchers are portable subsidies that eligible households take to private landlords
and use to subsidize their housing costs. Currently, HUD is not entering into any new contracts
under the project-based rental assistance component of Section 8, and when the existing contracts
expire, the households are given vouchers.
Low-income families and single persons150 are eligible for both forms of subsidies. Low income,
for the purpose of this program, is defined as income at or below 80% of the local area median
income, adjusted for family size. Although low-income households are eligible for Section 8
housing subsidies, extremely low-income households, defined as households with incomes at or 151
below 30% of the local area median income, are targeted for assistance. Forty percent of
available project-based rental assistance subsidies and 75% of vouchers must be targeted to
extremely low income households. In the project-based rental assistance program, project owners
maintain waiting lists and can give priority to working families. In the voucher program, quasi-
governmental local Public Housing Authorities (PHAs) maintain waiting lists for Section 8
vouchers and can develop a set of local preferences that can be used to prioritize the list.
In determining the annual countable income of a family, various deductions are made from gross 152
income. The chief ones are $480 per dependent, $400 for an elderly family, excess medical

149 Eligibility rules for Section 8 tenant-based assistance are found at 24 CFR Part 982 (2005). This program is No.
14.871 in the Catalog of Federal Domestic Assistance.
150 Before 1990, the law defined families to include two or more related persons, single persons at least 62 years old,
and younger single persons who were disabled, handicapped, displaced by governmental action or natural disaster, or
the remaining member of an eligible tenant family, and permitted no more than 15% of units to be made available to
other singles. The National Affordable Housing Act (P.L. 101-625) added other single persons to the definition of
family and removed their percentage limitation, but barred occupancy by these other (able-bodied younger) singles of
units with more than one bedroom.
151 The Department of Housing and Urban Development (HUD) estimates that low income limits (80% of median
family income) in FY2005 averaged $37,520 in nonmetropolitan areas and $48,960 in metropolitan areas. Extremely
low income limits (30% of median family income) averaged $14,070 in nonmetropolitan areas and $18,360 in
metropolitan areas. These amounts are averages for all family sizes.
152 Some items are excluded from gross income by definition. They include children’s earnings, certain lump-sum
payments, student financial assistance, and amounts received under HUD training programs. 24 CFR Section
5.609(c)(2005).





costs for an elderly family, and costs of child care and handicapped assistance.153 For families
with net family assets above $5,000, federal regulations include in “income” used to decide
eligibility and required rent the greater of (a) actual income from all net family assets, or (b) a 154
percentage of their value, based on the current passbook savings rate. Net family assets are
defined as net cash value (after costs of disposal) of real property, savings, stocks, bonds, and
other forms of investment. Not included are such “necessary items” as furniture and 155
automobiles. In 1990, the National Affordable Housing Act (P.L. 101-625) increased the
deductions from gross income for Section 8 housing and public housing, but made the changes
subject to approval in an appropriations measure. Through FY2005, no appropriation bill had
provided for the larger deductions, and old deductions still applied. Section 8 recipients must
recertify their incomes annually. Eligibility and rental charges are based on countable family
income expected in the 12 months following the date of determination.
Benefit levels for project-based rental assistance and vouchers are calculated using different
formulas.
Families who receive Section 8 project-based rental assistance pay towards rent the highest of (a)

30% of counted income, (b) 10% of gross income, or (c) a minimum rent of up to $50 monthly 156


set by the PHA. Exemptions to the minimum rent levels can be made for a variety of hardship
circumstances. The federal government then pays the difference between contract rent and the
rent paid by the tenant. The contract rent charged by the owner of Section 8 housing must be
within limits established by a HUD survey of fair market rents (FMRs) for standard units in each
metropolitan area or non-metropolitan county of the Nation. P.L. 98-181 revoked authority to
contract for additional Section 8 project-based rental assistance units.
Families who receive Section 8 Housing Choice Vouchers pay towards rent an amount between
30% and 40% of their adjusted income. The federal government pays a Housing Assistance
Payment (HAP) based on the difference between a predetermined maximum payment, called a
payment standard, and 30% of the household’s income. A payment standard is calculated by the
PHA as an amount between 90% and 110% of FMR, or the rent charged for the unit, whichever is
less.
Note: For more information about Section 8 rental assistance, see CRS Report RL32284, An
Overview of the Section 8 Housing Programs.

153 24 CFR Part 5.611 (2005).
154 24 CFR Section 5.609(b)(3)(2005).
155 24 CFR Section 5.603 (2005).
156 A fourth alternative applies to families who receive a cash welfare grant that includes a sum designated for housing
costs. These dual program families must pay the welfare housing sum if it exceeds either of the other measures.
Another exception applies to recipients of vouchers.






This program is funded 100% by the federal government. However, an indirect local contribution
results from the difference between full local property taxes and payments in lieu of taxes that are
made by local housing authorities. FY2004 federal outlays for public housing were $7.5 157
billion.

Public housing is publicly owned housing for low-income families that is managed by local,
quasi-governmental, Public Housing Authorities (PHA). The federal government subsidizes the
operating and capital costs of maintaining these buildings through regular subsidies, as well as
competitive subsidies paid to PHAs. The competitive subsidies include the HOPE VI
Revitalization of Distressed Public Housing Grants, which can be used to demolish and/or
revitalize troubled public housing developments, and the Public Housing Drug Elimination 159
Program (PHDEP), which can be used to promote safety in public housing. The public housing
program was authorized by the U.S. Housing Act of 1937 (P.L. 93-383), as amended.
Households160 are eligible to live in public housing if they are low-income, which is defined as
having income at or below 80% of the local area median income, adjusted for family size.
Although low-income families are eligible for public housing, since 1998, at least 40% of all
public housing units must be occupied by extremely low-income families, defined as families 161
with income at or below 30% of area median income. However, PHAs are directed not to
concentrate extremely poor families in public housing, rather to encourage an income mix.
In determining the annual countable income of a family, various deductions are made from gross 162
income. The chief ones are $480 per dependent, $400 for an elderly family, excess medical

157 Outlays consisted of capital grants (45% of the total), operating subsidies (46%), HOPE VI (8%), Public Housing
Drug Elimination Program [PHDEP] and loans (both less than 1%).
158 Regulations governing admission to, and occupancy of, public housing are found at 24 CFR Part 960 (2005). This
program is No. 14.850 in the Catalog of Federal Domestic Assistance.
159 PHDEP has not received any new appropriations since 2001, although outlays under earlier grants continue.
160 Before 1990, the law defined eligiblefamilies to include single persons who were at least 62 years old and
younger singles who were disabled, handicapped, displaced by governmental action, or the remaining member of a
tenant family, and permitted no more than 30% of units under the jurisdiction of the housing agency to go to other
singles. The National Affordable Housing Act (P.L. 101-625) added other single persons to the definition of family and
removed their percentage limitation, but barred occupancy by these other (able-bodied younger) single persons of units
with more than one bedroom.
161 The Department of Housing and Urban Development (HUD) estimates that low income limits (80% of median
family income) in FY2005 averaged $37,520 in nonmetropolitan areas and $48,960 in metropolitan areas. Extremely
low income limits (30% of median family income) averaged $14,070 in nonmetropolitan areas and $18,360 in
metropolitan areas. These amounts are averages for all family sizes.
162 Some items are excluded from gross income by definition. They include children’s earnings, certain lump-sum
payments, student financial assistance, and amounts received under HUD training programs. See 24 CFR Section
5.609(c)(2005).





costs for an elderly family, and costs of child care and handicapped assistance.163 For families
with net family assets above $5,000, federal regulations include as “income” (a) actual income
from all net family assets, or (b) a percentage of their value, based on the current passbook 164
savings rate. Net family assets are defined as net cash value (after costs of disposal) of real
property, savings, stocks, bonds, and other forms of investment. Not included are such “necessary 165
items” as furniture and automobiles. Eligibility and rental charges are based on countable
family income expected in the 12 months following admission or recertification. Income is
recertified annually.
In order to maintain eligibility to live in public housing, certain residents are required to
participate in an economic self-sufficiency program or contribute eight hours per month of
community service. This requirement was established by the Quality Housing and Work
Responsibility Act of 1998 (QHWRA) (P.L. 105-276). It was suspended during FY2002, but was
reinstated as of August 1, 2003. Exempt from this rule are persons who are engaged in an
educational program or work-related activity, have a disability that would prohibit them from
complying with the requirement or are 62 years of age or older. Those who do not comply with
the requirement could lose the right to renew their lease.
Households who live in public housing pay towards rent the highest of (a) 30% of counted 166
income, (b) 10% of gross income, or (c) a minimum rent of up to $50 monthly set by the PHA.
Exemptions to the minimum rent levels can be made for a variety of hardship circumstances.
Under P.L. 105-276, tenants are permitted to choose (annually) between paying either a flat rent
or an income-based rent. This provision is intended to encourage families to seek employment
and higher earnings. Also, if a family’s income does increase as a result of work, the increase is
not to be used to determine the family’s portion of rental payment for one year. After one year, the
rental increase is phased in.
The amount of subsidy paid by the federal government on behalf of the residents of public
housing is based on the difference between the cost of operating and maintaining a public housing
project and the amount collected in tenant rent.
FY2004 federal outlays for public housing (including capital grants, operating subsidies, PHDEP, 167168
HOPE VI, and the public housing loan fund), averaged about $6,298 per unit.

163 24 CFR § 5.611 (2005). In 1990, the National Affordable Housing Act (P.L. 101-625) increased the deductions from
gross income for Section 8 housing and public housing, but made the changes subject to approval in an appropriations
measure. Through FY2005, no appropriation bill had provided for the larger deductions, and old deductions still
applied.
164 24 CFR §5.609(b)(3)(2005).
165 24 CFR §5.603 (2005).
166 A fourth alternative applies to families who receive a cash welfare grant that includes a sum designated for housing
costs. These dual program families must pay the welfare housing sum if it exceeds either of the other measures.
Another exception applies to recipients of vouchers.
167 Editions of this report prior to the 2003 edition excluded PHDEP (first outlays in 1992), HOPE VI (first outlays in
1994), and the loan fund from outlays for public housing. Loan fund outlays peaked in 1985 (accounting for 80% of
total public housing outlays that year). Here are aggregate public housing outlay totals (in billions) from FY1977
through FY2002 (for years before 1994, the capital grants component of these totals represents an increase over figures
shown in the 2001 edition of this report): FY1977, $1.564; FY1978, $1.779; FY1979, $1.815; FY1980, $2.218;
(continued...)





Note: For more information on the HOPE VI component of public housing, see CRS Report
RL32236, HOPE VI Public Housing Revitalization Program: Background, Funding, and Issues.

This program is funded 100% by the federal government. The following factors are used to
allocate loan funds: states’ shares of rural occupied substandard units, rural population, rural
population in places of fewer than 2,500 persons, and low-income and very-low-income rural
households. Federal obligations for direct and guaranteed loans totaled $4.6 billion in FY2004.

The law permits loans for owners or potential owners of a farm, or owners of a home or nonfarm
tract in a rural area, who are without decent, safe, and sanitary housing and unable to obtain credit
elsewhere on reasonable terms. Both very-low- and low-income families are eligible for Section 170
502 loans and interest credits. The 1983 Housing and Urban-Rural Recovery Act (Titles I
through V of P.L. 99-181) requires that at least 40% of units nationwide and 30% of the units in
each state financed under this program be occupied by very-low-income families or persons.
The law defines low-income and very low-income families as those whose incomes do not exceed
limits established for these families in public housing and Section 8 housing (adjusted for family 171
size, these limits are 80% and 50% of the area median, respectively).
The Housing and Community Development Act of 1987 (P.L. 100-242)172 directed the Farmers 173
Home Administration (FmHA), since replaced by the Rural Housing Service (RHS), to carry

(...continued)
FY1981, $2.478; FY1982, $2.553; FY1983, $3.318; FY1984, $3.932; FY1985, $17,261; FY1986, $3,859; FY1987,
$3.517; FY1988, $3.699; FY1989, $3.774; FY1990, $4.331; FY1991, $4,786; FY1992, $5,182; FY1993, $6,447;
FY1994, $6,857; FY1995, $7.505; FY1996, $7.668; FY1997, $7.809; FY1998, $7.575; FY1999, $7.208; FY2000,
$7.217; FY2001, $7.504; and FY2002, $8.213. In this years report, as well as in the 2003 edition, these totals are used
in historical tables.
168 This estimate was obtained by dividing FY2004 total outlays for public housing ($7.488 billion) by the number of
public housing units under management in FY2004 (1,188,649).
169 Section 502 rural housing loan regulations are found at 7 CFR Part 3550 Subpart B and 7 CFR Part 1980 Subpart D,
(2005). This program is No. 10.410 in the Catalog of Federal Domestic Assistance.
170 P.L. 96-399, the Housing and Community Development Act of 1980, required that credits be made available to
moderate-income borrowers, but P.L. 97-35 made this a discretionary provision, and the Secretary of Agriculture in
December 1981 determined that such credits were not needed.
171 In FY2005, the low income limits for a family of four in nonmetropolitan areas ranged from $29,200 (parts of
Mississippi) to $58,000 (a Connecticut county); the corresponding very low income limits ranged from $18,250 to
$39,100.
172 Section 304.
173 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the Farmers Home
Administration (FmHA) and created the Rural Housing Service (RHS). The rural housing programs that were formerly
administered by FmHA are now administered by RHS.





out a three-year demonstration program under which moderate-income borrowers (with income at
or below the area median) might obtain guaranteed loans under Section 502 for the purchase of
single-family homes. The program was made permanent by the Cranston-Gonzalez National
Affordable Housing Act (P.L. 101-625). The Housing and Community Development Act of 1992
permits guaranteed loans to borrowers whose income does not exceed 115% of the area median.
Other eligibility requirements are set by RHS. Families must have sufficient income to make
mortgage payments and to pay premiums, taxes, maintenance, and other necessary living
expenses.
The 1983 Act required FmHA to define adjusted annual income in accordance with criteria used
by the Department of Housing and Urban Development (HUD) for Section 8 housing and public
housing. Accordingly, the chief deductions from countable income are $480 per year per
dependent, $400 for an elderly family, excess medical costs for an elderly family, and costs of 174175
child care and handicapped assistance. RHS regulations exclude some items by definition.
They also require that income from net family assets be counted in calculating income for
eligibility and loan repayment purposes and define net family assets to include the equity value of
real property other than the dwelling or site, savings, stocks, bonds, and other forms of
investment. Items not counted as assets include necessary items of personal property, assets that 176
are part of the business, trade, or farming operations, or irrevocable trust funds.
Residents of rural areas may qualify for direct loans from RHS to purchase or repair homes. The
homes must be “modest” in size, design, and cost. Section 502 direct loans generally have a term
of 33 years, but the term may be extended to 38 years for borrowers with incomes below 60% of
the area median. Depending on the borrower’s income, the interest rate may be subsidized to as
low as 1%. In a given fiscal year, at least 40% of the funding must be made available to very-low-
income borrowers (those with income of 50% or less of the area median).
In FY2004, direct loans from RHS totaled $1.4 billion and provided housing for 15,245 low-
income families. Private lenders made about $3.2 billion in guaranteed loans to 34,817 low- to
moderate-income families.

174 24 CFR§5.611 (2005).
175 Items excluded fromincome” by definition include irregular gifts, amounts that reimburse medical expenses, lump-
sum additions to family assets, full amount of any student aid, earned income tax credits, other tax refunds, earnings of
children, and payments received for the care of foster children. 7 CFR Part 3550.54(b) (2005).
176 7 CFR §3550.54(d) (2005).







Home Investment Partnerships Program (HOME) funds are allocated 40% to states and 60% to
units of general local government. Grant recipients, called Participating Jurisdictions (PJs), are
awarded funds based on a formula that is designed to measure relative housing need and that 177
includes poverty-related measures. PJs must contribute a 25% match, unless they are found to
be in fiscal distress, in which case the match requirement is reduced or eliminated. The HOME
program was established in 1990 by the Cranston-Gonzalez National Affordable Housing Act
(P.L. 101-625). In FY2004, federal outlays for the HOME program totaled $1.6 billion, which
were used by state and local governments to leverage an additional $4.2 billion in other public
and private funding.

To be eligible for HOME-funded assistance, families or individuals must meet an income test. For
rental housing and tenant-based rental assistance, at least 90% of recipient families must have
annual incomes that do not exceed 60% of the median family income for the area (adjusted for 179
family size); the remaining 10% of families may have incomes up to 80% of the area median.
For home buyers, the income limit is 80% of the area median.
One of three definitions of annual (gross) income may be adopted by HOME grantees: the
definition used in the Section 8 program, the federal income tax definition of adjusted gross 180
income, or income as reported on the long form of the most recent decennial census.
The goal of HOME is to increase the supply of affordable housing, especially rental housing, for
very low-income and low-income Americans. The maximum rental subsidy payable under
HOME is the difference between the rent standard established for the unit and 30% of the
family’s monthly adjusted income, as defined for the Section 8 and public housing programs.

177 As originally authorized by the National Affordable Housing Act of 1990, the program had a three-tiered matching
fund provision requiring state and local governments to provide matches of 50% for new construction, 33% for
substantial rehabilitation, and 25% for moderate rehabilitation and tenant-based assistance. The Housing and
Community Development Act of 1992 reduced the match rate for new construction to 30%. The Multi-family Housing
Property Disposition Act of 1994 changed the treatment of new construction by reducing its match rate to 25%, like
that for other eligible activities.
178 HOME regulations are found in 24 CFR Part 92 (2005). This program is No. 14.239 in the Catalog of Federal
Domestic Assistance.
179 For FY2005, this income limit (60% of median family income) averaged $28,140 in nonmetroplitan areas and
$36,720 in metropolitan areas, according to the Department of Housing and Urban Development (HUD). These
amounts are averages for all family sizes.
180 24 CFR § 92.203(b)(2005).





Rents paid by most of the extremely low-income families generally exceed 30% of income unless
they receive additional tenant-based rental assistance.
Over the course of the program, as of September 30, 2004, about $8.5 billion in HOME funds and
$26.8 billion in other leveraged public and private funds had assisted in the completion of
552,262 housing units and provided tenant-based assistance to 110,534 families. In the projects
completed through the end of FY2004, 97% of the tenants receiving rental assistance, 82% of the
tenants in assisted rental housing, 69% of the residents of repaired homes, and 30% of the assisted
home buyers had incomes of 50% or less of the area median income.


Note: These programs were inadvertently omitted from editions of this report prior to the 2003 181
edition. Program outlays for FY1996 through FY2002 were added to historical tables
beginning with the 2003 edition.
Both programs are funded 100% by the federal government. Combined outlays for the two
programs were $1.098 billion in FY2004.

Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons
with Disabilities both provide capital advances to finance the construction, rehabilitation, or
acquisition of structures that will serve as supportive housing for low-income elderly and/or 183
disabled households. The capital advance is interest-free and can be forgiven as long as the
property remains available for very low-income elderly or disabled households for at least 40
years. The capital advances are paired with rental assistance similar to Section 8 project-based
rental assistance. Each year since 1997, Congress has allocated up to 25% of Section 811 funds to
provide Section 8 Housing Choice Vouchers to persons with disabilities to allow them to search
for units in the private market.

181 FY1996, $720 million; FY1997, $820 million; FY1998, $824 million; FY1999, $761 million; FY1999, $761
million; FY2000, $720 million; FY2001, $774 million; and FY2002, $895 million.
182 Eligibility rules for Section 202 and Section 811 are found at 24 CFR Parts 891.100-891.865 (2005). Section 202 is
program No. 14.157 and Section 811 is program No. 14.181 in the Catalog of Federal Domestic Assistance.
183 The Section 202 program was established under the U.S. Housing Act of 1959 (P.L. 86-372) to serve both the
elderly and disabled. It is codified at 12 U.S.C. 1701q (2000). The program has been changed significantly from its
original structure. The National Affordable Housing Act of 1990 (P.L. 101-625) created the separate Section 811
Supportive Housing for the Disabled program and changed the Section 202 program into a program specifically for the
elderly. The Section 811 program is codified at 42 U.S.C. 8013 (2000).





Both programs184 restrict eligibility to households with income at or below 50% of the local area 185
median income, adjusted for family size. In determining the annual countable income of a 186
family, various deductions are made from gross income. The chief ones are $480 per
dependent, $400 for an elderly or disabled family, excess medical costs for an elderly or disabled 187
family, costs of child care, and costs of care for disabled family members. For families with net
family assets above $5,000, federal regulations include in “income” used to decide eligibility and
required rent the greater of (a) actual income from all net family assets, or (b) a percentage of 188
their value, based on the current passbook savings rate. Net family assets are defined as net
cash value (after costs of disposal) of real property, savings, stocks, bonds, and other forms of 189
investment. Not included are such “necessary items” as furniture and automobiles.
As in most HUD housing assistance programs, residents of Section 202 and Section 811
properties must recertify their incomes annually. Eligibility and rental charges are based on
countable family income expected in the 12 months following the date of determination.
In addition to income requirements, Section 202 and Section 811 are restricted to households who
are elderly or disabled. In order to live in a Section 202 property, a household must have at least
one member who is at least age 62 at the time of initial occupancy. In order to live in a Section
811 property, a household must have at least one member who has a disability, such as a physical
or developmental disability, or a chronic mental illness.
Households who live in a Section 202 or Section 811 property pay towards rent the higher of (a) 190
30% of counted income or (b) 10% of gross income. The benefit level paid by the federal
government to the landlord is equal to the difference between the contract rent for the unit and the
amount of rent paid by the tenant. The contract rent must be within limits established by a HUD
survey of fair market rents for standard units in each metropolitan area or non-metropolitan area
of the Nation.
In FY2004, HUD is estimated to have spent approximately $823 million for the Section 202 191
program and $275 million for the Section 811 program. In 2004, these programs supported

75,227 Section 202 units and 21,646 Section 811 units.



184 Some older Section 202 projects permit eligibility for households with no more than 80% of the area median
income.
185 In FY2005, this limit (50% of area median income) averaged $23,450 in nonmetropolitan areas and $30,600 in
metropolitan areas, according to the Department of Housing and Urban Development (HUD). These amounts are
averages for all family sizes.
186 Some items are excluded from gross income by definition. They include children’s earnings, certain lump-sum
payments, student financial assistance, and payments received for foster care. 24 CFR Part 5.609(c) (2005).
187 24 CFR Part 5.611 (2005). In 1990, the National Affordable Housing Act (P.L. 101-625) increased the deductions
from gross income but made the changes subject to approval in an appropriations measure. Through August 2005, no
appropriations bill had provided for the larger deductions, and old deductions still applied.
188 24 CFR Part 5.609(b)(3) (2005).
189 24 CFR Part 5.603 (2005).
190 A third alternative applies to families who receive a cash welfare grant that includes a sum designated for housing
costs. These dual-program families must pay the welfare housing sum if it exceeds either of the other two measures.
191 Actual outlays for FY2004 are not yet available. These estimates are arrived at by multiplying total HUD outlays of
(continued...)






This program is funded 100% by the federal government. The following factors are used to
allocate funds: state shares of rural population, rural housing units that are overcrowded and/or
lack plumbing, and the incidence of poor persons living in rural areas. Federal obligations for this
program totaled $580.6 million in FY2004.

Since 1974 the Farmers Home Administration (FmHA) and its successor, the Rural Housing 193
Service (RHS) have been authorized to make rental assistance payments to owners of RHS-
financed rural rental housing (Section 515) and farm labor housing (Sections 514 and 516) to
enable them to reduce rents charged to eligible tenants. Eligible tenants must have adjusted
family income that does not exceed the low-income limit established for the area by the
Department of Housing and Urban Development (HUD)—80% of the area median, adjusted for
family size. However, most assistance is targeted to tenants with very low income (50% of the 194
area median, adjusted for family size.) Owners must agree to operate the property on a limited
profit or nonprofit basis. The term of the rental assistance agreement is 20 years for new
construction projects and five years for existing projects. Agreements may be renewed for up to
five years. An eligible owner who does not participate in the program may be petitioned to
participate by 20% or more of the tenants eligible for rental assistance.
The rental assistance payments, which are made directly to the housing owners, make up the
difference between the tenants’ payments and the RHS-approved rent for the units. Originally, 195
tenants in the program paid no more than 25% of their income in rent. Amendments in the 1983
Housing Act provide that rent payments of eligible families are to equal the highest of (1) 30% of
monthly adjusted family income, (2) 10% of monthly income, or (3) for welfare recipients, the 196
portion of a family’s welfare payment, if any, that is designated for housing costs.

(...continued)
$1.098 billion for the two programs by the percentages of the total spent on Section 811 and Section 202 programs in
previous years.
192 Rules governing the program are found at 7 CFR Part 1930, Subpart C, Exhibit E (2005). This program is No.
10.427 in the Catalog of Federal Domestic Assistance.
193 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) replaced the Farmers Home
Administration (FmHA) with the Rural Housing Service (RHS).
194 In FY2005, the low income limits for a family of four in nonmetropolitan areas ranged from $29,200 (parts of
Mississippi) to $58,000 (a Connecticut county); the corresponding very low income limits ranged from $18,250 to
$39,100.
195 Authorized by Section 514 of P.L. 93-383.
196 Section 517(c) of P.L. 98-181.





In FY2004, this program provided assistance to about 48,056 families in rental assistance renewal
contracts and aid for newly constructed units.

This program is funded 100% by the federal government. Outlays in FY2004 totaled $559
million.

Authorized by the Housing and Community Development Act of 1974 (P.L. 93-383), the Section
236 Interest Reduction Payments (IRP) program provides mortgage subsidies to owners of
multifamily properties who agree to keep the property available to low-income families for a
specified number of years. Section 236 subsidized units often also receive some form of rent
subsidy, such as Section 8 rental assistance.
Households are eligible to live in Section 236 properties as long as their incomes are not in excess
of 80% of the area median income. The program is open to families and to single persons without
regard to age, except in units also subsidized by Section 8, where Section 8 regulations apply.
Until December 2, 1979, the law excluded from “income” for the purposes of determining
eligibility and subsidy levels 5% of gross income, all earnings of minor children living at home,
plus $300 for each child. For tenants admitted after December 21, 1979, P.L. 96-153 provided that
income should be defined in accordance with procedures and deductions permissible under the
Section 8 program. That program excludes some items (including earnings of children, lump-sum
payments, and payments for foster care) from “income” by definition. It also deducts some items
from income. The chief ones are $480 per dependent, $400 for an elderly family, excess medical 198
costs for an elderly family, and costs of child care and handicapped assistance. Income
recertification is required annually. Eligibility and subsidy amounts are based on anticipated
income in the year ahead, but a shorter accounting period is permitted by regulations.
A basic monthly rental charge is established for each unit on the basis of the costs of operating the
project with the debt service requirements of a mortgage bearing a 1% interest rate. The
Department of Housing and Urban Development (HUD) makes payments to a mortgagee to
reduce the effective interest rate of the project to 1%. A fair market rental charge is established for
each unit based on costs of operation with the debt service requirements of a mortgage at the full
market rate. The law provides that the tenant family shall pay the basic rent or an amount equal to

197 Regulations governing Section 236 interest reduction payments are found at 24 CFR Part 236 (2005). Because no
new mortgages are being issued under this program, it is no longer included in the Catalog of Federal Domestic
Assistance. Its catalog number was 14.103.
198 24 CFR 5.611 (2005).





30% of “adjusted gross income,”199 (countable housing income, as defined above), whichever is
greater, but not more than the market rent. However, 20% of tenants who cannot afford the basic 200
rent are to be provided additional help to lower their rental payment to 30% of income. Further,
elderly and handicapped families paying more than 50% of their income for rent can receive 201
Section 8 assistance.
In FY2004, benefits averaged $1,612 per dwelling unit, $134 monthly. These subsidies were paid 202
on behalf on families in 346,802 units.


This program is 100% federally funded.203 Ninety percent of appropriated funds are distributed by 204
formula and 10% by competitive awards. Three-fourths of formula grants are made to eligible
cities (those metropolitan statistical areas with a population of more than 500,000 and more than
1,500 AIDS cases) and to eligible states (those with more than 1,500 AIDS cases in areas outside
of MSAs eligible for HOPWA grants through a city). Remaining formula funds are allocated
among eligible cities that had a higher-than-average per capita incidence of AIDS during the year 205
previous to the appropriation year. The minimum formula grant is $200,000. The number of
jurisdictions that qualify for a formula allocation has been growing, from 97 in 1999 to 122 in
2005. Competitive awards are made for projects proposed by states and local governments for
areas not included in formula allocations. Competitive grants are also available for projects of
national significance proposed by nonprofit entities. HOPWA outlays for FY2004 were $254
million.
The AIDS Housing Opportunity Act (enacted as part of P.L. 101-625) makes eligible low-income
persons with AIDS or related diseases, including HIV infection, and their families. The law

199 Percentage of adjusted gross income was raised from 25% to 30% by P.L. 97-35, enacted in 1981. For then current
tenants this increase was phased in and completed by Sept. 30, 1985.
200 Before passage of P.L. 93-383, up to 40% were eligible for rent supplements, but only 10-20% received them.
201 Provision was added by P.L. 96-399.
202 The number of subsidized units is from FY2006 HUD budget documents; the average per unit subsidy was derived
by dividing the outlays in FY2004 by the number of units supported in FY2004.
203 The HOPWA program appears in the Catalog of Federal Domestic Assistance at 14.241. It is found at 24 CFR Parts
574.3-574.655 (2005). It is codified at 42 U.S.C. 12901-12912 (2000).
204 HOPWA formula funds are available through HUD’s Consolidated Plan Initiative. Jurisdictions applying for funds
from four HUD formula grant programs (Community Development Block Grant program, the Emergency Shelter Grant
program, the HOME Investment Partnerships program, and HOPWA), submit a single document. A consolidated plan
includes an assessment of community needs and a proposal that addresses those needs, using both federal funds and
community resources.
205 24 CFR Part 574.130 (2005).





defines low-income to mean a person or family whose income does not exceed 80% of the local 206
area median income. However, the law authorizes the Secretary of Housing and Urban
Development (HUD) to alter the income ceiling for family size in an area if this is found
necessary because of prevailing levels of construction costs or unusually high or low family
incomes. The program offers information about housing to all persons with AIDS regardless of
income.
According to a 2000 survey of providers, more than half of households served by HOPWA have 207
extremely low incomes, below 30% of the area median.
HOPWA funds may be used for numerous benefits and services, including housing information
services; acquisition, rehabilitation, conversion, lease, and repair of facilities to provide housing
and services; new construction (for single room occupancy (SRO) dwellings and community
residences only); project- or tenant-based rental assistance, including assistance for shared
housing arrangements; short-term rent, mortgage, and utility payments to prevent homelessness;
supportive services such as health and mental health services, drug and alcohol abuse treatment
and counseling, day care, nutritional services, intensive care when required, aid in gaining access
to other public benefits; operating costs; and technical assistance in establishing and operating a 208
community residence.
HUD data show that in FY2004, 78,000 households received housing assistance through
HOPWA. HUD has projected that in FY2005, 74,250 households will receive assistance through
HOPWA.
Note: For more details about HOPWA, see CRS Report RL34318, Housing Opportunities for
Persons with AIDS (HOPWA), by Libby Perl.

This program is funded 100% by the federal government. The state shares of the following factors
are used to allocate funds: rural population, rural housing units that are overcrowded and/or lack 209
plumbing, and poor persons living in rural areas. Federal obligations for this program totaled
$114.5 million in FY2004.

206 24 CFR Part 574.310(c)(2)(ii) (2005). The Department of Housing and Urban Development (HUD) estimates that
80% of median family income in FY2005 averaged $37,520 in non-metropolitan areas and $48,960 in metropolitan
areas. These amounts are averages for all family sizes.
207 National Evaluation of the Housing Opportunities for Persons with AIDS Program (HOPWA), prepared by ICF
Consulting for the U.S. Department of Housing and Urban Development, Dec. 2000, p. IV-2.
208 24 CFR Part 574.300(b) (2005).
209 7 CFR §1940.575 (2005).






The law permits loans for rural rental and cooperative housing units to be occupied by families
with “very low” or “moderate” income, or by handicapped or disabled persons or those aged at
least 62. The law requires that at least 40% of Section 515 units nationwide and 30% of units in
each state be occupied by “very-low-income” families or persons. Moreover, the Housing and
Community Development Act of 1987 restricts occupancy of Section 515 housing units, if
constructed with help of low-income housing tax credits, to families whose incomes are within 211
the limits established for the tax credits. However, this restriction does not apply if the Rural 212
Housing Service (RHS) finds that units have been vacant for at least six months and that their
continued vacancy threatens the project’s financial viability.
The law213 defines “low-income” and “very-low-income” families as those whose incomes do not
exceed limits established by the Department of Housing and Urban Development (HUD) for such
families in public housing and Section 8 housing (that is, up to 80% or 50% of area median 214
income, respectively, adjusted for family size). Federal regulations issued October 1, 1985,
provide that the moderate-income limits are $5,500 above the low-income ceilings (unless the
moderate income limit in use before October 1, 1985, was higher, in which case it is continued).
Sponsors can be nonprofit, profit oriented, or “limited profit,” must be unable to obtain credit
elsewhere on reasonable terms that would enable them to rent the units for amounts within the
payment ability of eligible tenants, and must have sufficient initial capital to make loan payments
and meet costs. Applicants must conduct market surveys to determine the number of eligible
occupants in the area who are willing and financially able to occupy the housing at the proposed
rent levels.
Nonprofit sponsors and state and local public agencies are eligible for loans up to 100% of the
appraised value or development cost, whichever is less. Purchase loans for buildings less than 1
year old are limited to 80% of the appraised value. Loan amounts and terms can be determined by
RHS.
In FY2004, Section 515 loans financed housing for about 7,639 families.

210 Regulations are found at 7 CFR Part 1930 Subpart C (2005) and 7 CFR Part 1944, Subpart E (2005). This program
is No. 10.415 in the Catalog of Federal Domestic Assistance.
211 Section 306 of P.L. 100-242.
212 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) replaced the Farmers Home
Administration (FmHA) with the Rural Housing Service (RHS).
213 The Rural Housing Amendments of 1985 (Title V of P.L. 98-181).
214 In FY2005, the low income limits for a family of four in nonmetropolitan areas ranged from $29,200 (parts of
Mississippi) to $58,000 (a Connecticut county); the corresponding very low income limits ranged from $18,250 to
$39,100.







This program is funded 100% by the federal government. Two factors are used to allocate loan
funds: state shares of rural occupied units and very-low income rural households. For grants, a
third factor is added: rural population aged at least 62. Federal obligations for this program
totaled $63.7 million in FY2004.

The law permits repair loans at a very low interest rate for “very low-income” owners of a farm
or rural home who cannot obtain credit on reasonable terms elsewhere. The program uses the very
low income limits established by the Department of Housing and Urban Development (HUD) for 216
the area. Income of borrowers must be insufficient to qualify for a Section 502 loan, but
adequate, including any “welfare-type” payments, to repay a Section 504 loan, as determined by 217
the Rural Housing Service (RHS). The law provides that farm housing programs are to use the
income definition of the Section 8 (and public housing) programs (see program No. 31). Grants 218
are made to elderly homeowners at least age 62 whose annual income prevents any loan
repayment.
Loans are limited to $20,000 and have a 20-year term at a 1% interest rate.219 Owners who are at
least age 62 may qualify for grants of up to $7,500. Depending on repair costs and the
homeowner’s income, the owner may be eligible for a grant for the full cost of repairs or for some
combination of a loan and a grant, not to exceed $20,000. In FY2004, $33 million in loans
repaired 5,594 homes. A total of $30.7 million in grants was used for the repair of 5,988 homes
owned by the elderly.

215 Regulations governing rural housing repair loans and grants are found at 7 CFR Part 3550, Subpart C (2005). This
program is No. 10.417 in the Catalog of Federal Domestic Assistance.
216 In FY2005, the extremely low income limits (30% of area median) for a family of four in nonmetropolitan areas
ranged from $10,950 (parts of Mississippi) to $23,450 (a CT county).
217 The Rural Housing Amendments of 1983 (Title V of P.L. 98-181).
218 Appropriation language restricts Section 504 grants to those aged at least 62.
219 More costly repairs may be financed through the Section 502 program.







This program is fully funded by the federal government. The funds for the programs are not
allocated to the states. The funds are kept in reserve at the RHS national office and are available
as determined administratively. Federal obligations for these loans and grants totaled $53.7
million in FY2004.

Individual farm owners, associations of farmers, local broad-based nonprofit organizations,
federally recognized Indian tribes, and agencies or political subdivisions of local or state
governments may be eligible for loans at a very low interest rate from the Rural Housing Service 221
(RHS), successor to the Farmers Home Administration (FmHA), to provide low-rent housing
and related facilities for domestic farm labor. Applicants must show that the farming operations
have a demonstrated need for farm labor housing, must agree to operate the property on a
nonprofit basis, and must be unable to obtain credit on terms that would enable them to provide
housing to farm workers at rental rates that would be affordable to the workers. Except for state
and local public agencies or political subdivisions, applicants must be unable to provide the
housing from their own resources and unable to obtain the credit from other sources on terms and
conditions that they could reasonably be expected to fulfill. The RHS state director may make
exceptions to the “credit elsewhere” test when (1) there is a need in the area for housing for
migrant farm workers and the applicant will provide such housing, and (2) there is no state or
local body or nonprofit organization that, within a reasonable period of time, is willing and able
to provide the housing.
Applicants must have sufficient initial operating capital to pay the initial operating expenses. It
must be demonstrated that, after the loan is made, income will be sufficient to pay operating
expenses, make capital improvements, make payments on the loan, and accumulate reserves.
Nonprofit organizations, Indian tribes, and local or state agencies or subdivisions may qualify for
Section 516 grants to provide low-rent housing for farm labor if there is a “pressing need” in the
area for the housing and there is reasonable doubt that it can be provided without the grant.
Applicants must contribute at least 10% of the total development costs from their own resources
or from other sources, including Section 514 loans.
The Housing and Community Development Act of 1987 redefined “domestic farm labor” to
include persons (and the family of such persons) who receive a substantial portion of their income

220 Regulations governing these loans and grants are found at 7 CFR Part 1944, Subpart D (2005). This program is No.
10.405 in the Catalog of Federal Domestic Assistance.
221 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the Farmers Home
Administration (FmHA) and created the Rural Housing Service (RHS). The rural housing programs that were formerly
administered by FmHA are now administered by RHS.





from the production or handling of agricultural or aquacultural products.222 They must be U.S.
citizens or legally admitted for permanent residence in the United States. The term includes
retired or disabled persons who were domestic farm labor at the time of retiring or becoming
disabled. In selecting occupants for vacant farm labor housing, RHS is directed to use the
following order of priority: (1) active farm laborers, (2) retired or disabled farm laborers who
were active at the time of retiring or becoming disabled, and (3) other retired or disabled farm
laborers.
Farm labor housing loans and grants to qualified applicants may be used to buy, build, or improve
housing and related facilities for farm workers and to purchase and improve the land upon which
the housing will be located. The funds may be used to install streets, water supply and waste
disposal systems, parking areas, and driveways, as well as to buy and install appliances such as
ranges, refrigerators, washing machines, and dryers. Related facilities may include the
maintenance workshop, recreation center, small infirmary, laundry room, day care center, and
office and living quarters for the resident manager.
Section 514 loans are available at 1% interest for up to 33 years. Section 516 grants may not
exceed the lesser of (1) 90% of the total development cost of the project, or (2) the difference
between the development costs and the sum of (a) the amount available from the applicant’s own
resources and (b) the maximum loan the applicant can repay given the maximum rent that is
affordable to the target tenants.
In FY2004, $36 million in loans and $17.7 million in grants financed the development of 2,642
housing units for farm workers and their families.

This program is funded 100% by the federal government. Outlays totaled $56 million in FY2004.
No new rent supplement contracts have been entered into since 1973, although spending in the
program continues to support existing contracts.

Section 101 of the Housing and Urban Development Act of 1965 (P.L. 89-117), as amended,
authorized the Department of Housing and Urban Development (HUD) to pay rent supplements
on behalf of low income tenants who lived in privately-owned housing or housing developed
under HUD’s Section 236 program. New families enter the program by moving into assisted units

222 Section 305 of P.L. 100-242, enacted Feb. 5, 1988.
223 Existing rent supplements are governed by 24 CFR Part 215 (1995), as in effect immediately before May 1, 1996.
Part 215 has been removed because no new rent supplement contracts are authorized under this program. Section 101 is
No. 14.149 in the Catalog of Federal Domestic Assistance.





when they become available. Income eligibility for new recipients of rent supplements is limited
to low-income families, defined as families whose incomes are 80% or less of the area median 224
income, adjusted for family size. Included in the definition of income are earnings from total
assets greater than $5,000. Income recertification is required annually.
Before 1979, families were eligible if they were aged 62 or over or handicapped, displaced by
governmental action or natural disaster, occupants of substandard housing, or military personnel
serving on active duty or their spouses.
The rent supplements paid by HUD under this program are set as the difference between 30% of a
tenant’s adjusted gross income (as defined above) or 30% of the market rent, whichever is higher,
minus a basic rent. The basic rent is established by HUD and is designed to cover the total
housing costs for each unit. In FY2004, 17,290 units received subsidies, which averaged about 225
$3,237 per unit.



These programs are funded 100% by the federal government. The funds for the programs are not
allocated to the states. The funds are kept in reserve at the Rural Housing Service (RHS) national
office and are available as determined administratively. Federal obligations for these grants and
loans totaled $40.9 million in FY2004.

States, political subdivisions, public nonprofit corporations (including Indian tribes and tribal 227
corporations), and private nonprofit corporations may receive Technical Assistance (TA) grants 228
from RHS, successor to the Farmers Home Administration (FmHA). The TA grants are used to

224 The Department of Housing and Urban Development (HUD) estimates that low income limits (80% of median
family income) in FY2005 averaged $37,520 in nonmetropolitan areas and $48,960 in metropolitan areas.
225 The number of subsidized units is from FY2006 HUD budget documents; the average per unit subsidy was derived
by dividing the outlays in FY2004 by the number of units supported in FY2004.
226 Regulations governing Section 523 Technical Assistance grants are found at 7 CFR Part 1944, Subpart I (2005).
Regulations governing Section 523 and 524 site loans are at 7 CFR Part 1822, Subpart G (2005). In the Catalog of
Federal Domestic Assistance, technical assistance grants and site loans are programs No. 10.420 and No. 10.411,
respectively.
227 Private nonprofit corporations must be legally precluded from distributing gains and profits to their members.
228 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the Farmers Home
Administration (FmHA) and created the Rural Housing Service (RHS). The rural housing programs that were formerly
(continued...)





pay all or part of the cost of developing, administering, and coordinating programs of technical
and supervisory assistance to families that are building their homes by the mutual self-help
method. This is the method whereby families, organized in groups of six or ten families, use their
own labor to reduce construction costs. Each family is expected to contribute labor on group 229
members’ houses to accomplish 65% of the tasks specified by RHS.
Applicants must demonstrate that (1) there is a need for self-help housing in the area, (2) the
applicant has or can hire qualified people to carry out its responsibilities under the program, and
(3) funds for the proposed TA project are not available from other sources.
The program is limited to very-low-income and low-income rural families, defined as those with 230
income below 50% and 80% of the area median, respectively, adjusted for family size.
The TA funds may not be used to hire construction workers or to buy real estate or building
materials. Private or public nonprofit corporations, however, may be eligible for two-year site
loans under Section 523 or Section 524. Private nonprofit organizations must have a membership
of at least 10 community leaders. The site loans may be used to buy and develop rural land, which
then is subdivided into building sites and sold on a nonprofit basis to low- and moderate-income
families. Generally, a loan will not be made unless it will result in at least 10 sites. The sites need
not be contiguous.
Sites financed through Section 523 may be sold only to families who are building homes by the
mutual self-help method. Section 524 site loans place no restrictions on construction methods.
Houses built on either kind of subsidized site usually are financed through the Section 502 rural
housing loan program (see program No. 33).
The RHS state director may approve TA grants of up to $200,000 to eligible organizations. The
state director must have written consent from the RHS national office for larger grants. Applicants
must demonstrate that the self-help method will result in net savings per house of at least $500.
The TA grants may be used for hiring personnel (director, coordinator, construction supervisor,
and secretary-bookkeeper), paying office and administrative expenses, buying and maintaining
specialty and power tools (participating families are expected to have their own basic hand tools),
and paying for technical and consultant services that are not readily available without cost to the
participating families.
Section 523 site loans are made at an interest rate of 3%, but the rate on Section 524 site loans is
the Treasury cost of funds. The loans may be used to buy and develop sites. Funds may be used to
construct access roads and utility lines, provide water and waste disposal facilities if such
facilities cannot reasonably be provided on a community basis with other financing, and to

(...continued)
administered by FmHA are now administered by RHS.
229 7 CFR §1944.403(k) (2005).
230 In FY2005, the low income limits for a family of four in nonmetropolitan areas ranged from $29,200 (parts of
Mississippi) to $58,000 (a Connecticut county); the corresponding very low income limits ranged from $18,250 to
$39,100.





provide landscaping, sidewalks, parking areas, and driveways. Common areas such as
playgrounds and “tot lots” may be funded if they are legally required as a condition of
subdivision approval.
In FY2004, organizations received $35.3 million in mutual and self-help housing grants, $2.4
million in self-help site development loans, and $3.2 million in Sec. 524 site development loans.
The count of families receiving assistance is reported under the Section 502 program.

This program is funded 100% by the federal government. Federal obligations for this program
totaled $19.4 million in FY2004.

Applicants must meet the following requirements: (1) they must be members of a federally
recognized American Indian Tribe or Alaska Native Village (2) they must live in an approved
tribal service area, (3) their annual income may not exceed 125% of the poverty income 232
guidelines of the Department of Health and Human Services, (4) their present housing must be
substandard, (5) they must meet the ownership requirements for the assistance needed, (6) they
must have no other resource for housing assistance, (7) they have not received assistance after
October 1, 1986, for repairs and renovation, replacement of housing, or down payment assistance,
and (8) they did not acquire their present housing through participation in a federal housing
program that includes the assistance referred to in item seven. Priority is given to families on the
basis of four factors: annual household income as a percent of the federal poverty income
guidelines, the age of elderly occupants, whether the property is occupied by disabled individuals
and the percent of the disability, and the number of unmarried dependent children.
The Housing Improvement Program (HIP) is operated by the Bureau of Indian Affairs (BIA) of
the Department of the Interior. In general, the program is administered through a servicing
housing office operated by a tribe or by the BIA.
HIP grants are made in one of three categories. Category A grants are used to make interim
repairs to properties that are to be made safe, more sanitary, and livable until standard housing is
available. The condition of the housing must be such that it is not cost effective to renovate the
property. These grants are limited to $2,500 per housing unit.

231 Regulations governing this program are found at 25 CFR Part 256 (2005). This program is No. 15.141 in the
Catalog of Federal Domestic Assistance.
232 For a family of four, this sum in calendar year 2005 was $24,188 in the 48 contiguous states, $27,825 in Hawaii and
$30,238 in Alaska.





Category B grants are made to qualified applicants who occupy housing that can economically be
placed in standard condition. Grants are limited to $35,000 for any one dwelling and the grants
may be made to homeowners or renters. Occupants of rental housing must have an undivided
leasehold (the applicants are the only lessees) and the leasehold must last at least 25 years from
the date that assistance is received. All applicants must sign a written agreement stating that the
grant will be voided if the house is sold within five years of completion of repairs, and that the
applicants will repay BIA the full cost of repairs that were made.
Category C grants are made to applicants who (1) own or lease homes which can not be brought
to applicable building code standards for $35,000 or less, or (2) who own or lease land that is
suitable for housing and the land has adequate ingress and egress rights. The grants are used to
provide modest replacement housing. Applicants who lease houses or land must have an
undivided leasehold and the leasehold must last at least 25 years from the date that assistance is
received. If the home is sold within 10 years, the full amount of the grant must be repaid. For th
each year after the 10 year, the grantee may retain 10% of the original grant amount and refund
the remainder if the home is sold. If the home is sold after 20 years, the grant does not have to be
repaid.
In FY2004, HIP grants assisted 430 families by providing for the renovation of 150 homes, and
the construction of 280 homes.


Note: P.L. 100-242 [Section 401(d)(1)] terminated authority to make additional Section 235 233
commitments, effective October 1, 1989.
This program is funded 100% by the federal government. Federal outlays for this program totaled
$4.8 million in FY2004.

The Section 235 program, created by the National Housing Act (P.L. 90-448), provides monthly
mortgage assistance to lower-income homeowners.
Families (two or more related persons) and singles who are elderly (at least 62 years old) or
handicapped; and whose adjusted annual incomes do not exceed 95% of the median family
income for the area, adjusted for family size, are eligible for Section 235 assistance. The HUD
regulations exclude from “income” for the purposes of determining eligibility and subsidy levels

233 The Section 235 program was suspended with other major subsidized housing programs on January 5, 1973. In
October 1975, $264.1 million that had not previously been used for the Section 235 program was released, to be used
according to revised regulations.
234 Regulations governing this program are found at 24 CFR Part 235 (2005).





5% of gross income, all earnings of minor children living at home, plus $300 for each such 235


child. Also excluded is unusual income or property income that does not occur regularly or
other income of a temporary nature.
To qualify for this program, housing units must be new or substantially rehabilitated single-family
units that were under construction or rehabilitated on or after October 17, 1975, condominium
units that have never been occupied, or family units (in existing condominium projects) that are
purchased by a displaced family.
The Section 235 program provides aid, in the form of monthly payments to the mortgagee on
behalf of the assisted home buyer, to reduce interest costs on an insured market rate home
mortgage to as low as 4%. The borrower must be able to pay toward his mortgage payments at 236
least 20% of his or her “adjusted gross income” (countable housing income, as defined above).
Mortgage amounts for commitments made after July 13, 1981, are limited to $40,000 for single-
family and condominium units with three bedrooms or less, and $47,500 for units with four or
more bedrooms. These limits may be raised by as much as $7,500 in high cost areas, and
additionally, by 10% for a dwelling to be occupied by a physically handicapped person, if the
larger mortgage is needed to make the dwelling accessible and usable to him.
Any assistance payment made pursuant to a commitment issued on or after May 27, 1981, is
subject to recapture upon (1) disposition of the subsidized property, (2) a 90-day cessation of
payments on its mortgage, or (3) its rental for longer than one year. The law provides that the
amount recaptured shall be equal to the assistance actually received or at least 50% of the net 237
appreciation in the value of the property, whichever is less.
Benefits averaged about $572 per dwelling unit in FY2004, about $48 monthly.238 Approximately

8,500 dwelling units received assistance in FY2004.



This program is funded 100% by the federal government. Grantees are encouraged, however, to
leverage the grants with funds from local, state, or other sources. The following factors used to
allocate funds: state shares of rural population, rural occupied substandard units, and rural poor
families. Federal obligations for this program totaled $9.3 million in FY2004.

235 24 CFR § 235.1206 (2005). The 5% income exclusion was established by regulation. It is not required by law.
236 Twenty-eight percent for those in the restructured program.
237 The recapture provision was added by P.L. 96-399, the Housing and Community Development Act of 1980.
238 The number of subsidized units was taken from FY2006 HUD budget documents; the average per unit subsidy was
estimated by dividing FY2004 outlays by the number of units supported that year.






States, local governments, nonprofit corporations, and Indian tribes, bands, or nations may be
eligible to receive grants to operate programs that finance the repair and rehabilitation of single-
family housing owned and occupied by families with “low” income (not above 80% of the area
median, adjusted for family size) or “very low” income (not above 50% of the area median). The
program uses the dollar limits established by the Department of Housing and Urban Development 240
(HUD) for the area. Grant applicants must have a staff or governing body with either (1)
proven ability to perform responsibly in the field of low-income rural housing development,
repair, and rehabilitation; or (2) management or administrative experience that indicates the
ability to operate a program offering funds for housing repair and rehabilitation.
The homes must be located in rural areas and must need housing preservation assistance. Assisted
families must meet the income restrictions and must have occupied the property for at least one
year. Occupants of leased homes may be eligible for assistance if (1) the unexpired portion of the
lease extends for five years or more, and (2) the lease permits the occupant to make modifications
to the structure and precludes the owner from increasing the rent because of the modifications.
The Rural Housing Service (RHS),241 successor to the Farmers Home Administration (FmHA), is
authorized to provide grants to eligible public and private organizations. The grantees may in turn
provide homeowners with direct loans, grants, or interest rate reductions on loans from private
lenders to finance the repair or rehabilitation of their homes. Many housing preservation activities
are authorized: (1) installation and/or repair of sanitary water and waste disposal systems to meet
local health department requirements; (2) installation of energy conservation materials, such as
insulation and storm windows and doors; (3) repair or replacement of the heating system; (4)
repair of the electrical wiring system; (5) repair of structural supports and foundations; (6) repair
or replacement of the roof; (7) repair of deteriorated siding, porches, or stoops; (8) alteration of
the interior to provide greater accessibility for any handicapped member of the family, and (9)
additions to the property that are necessary to alleviate overcrowding or to remove health hazards
to the occupants. Repairs to manufactured homes or mobile homes are authorized if (1) the
recipient owns the home and site and has occupied the home on that site for at least one year, and
(2) the home is on a permanent foundation or will be put on a permanent foundation with the
funds to be received through the program. Up to 25% of the funding to a dwelling may be used
for improvements that neither contribute to the health, safety, or well-being of the occupants; or
materially contribute to the long-term preservation of the unit. These improvements may include
painting, paneling, carpeting, air conditioning, landscaping, and improving closets or kitchen
cabinets.

239 Regulations governing Section 533 rural housing preservation grants are found at 7 CFR Part 1944, Subpart N
(2005). This program is No. 10.433 in the Catalog of Federal Domestic Assistance.
240 In FY2005, the low income limits for a family of four in nonmetropolitan areas ranged from $29,200 (parts of
Mississippi) to $58,000 (a Connecticut county); the corresponding very low income limits ranged from $18,250 to
$39,100.
241 The Department of Agriculture Reorganization Act of 1994 (P.L. 103-354) eliminated the Farmers Home
Administration (FmHA) and created the Rural Housing Service (RHS). The rural housing programs that were formerly
administered by FmHA are now administered by RHS.





The Section 533 program was authorized in 1983, and regulations for the program were published 242
in 1986. The RHS is authorized to make Section 533 grants also for rehabilitation of rental and 243
cooperative housing. Regulations to implement these grants were issued in spring 1993, even 244
though Congress had directed this action much earlier. Funding for this part of the Section 533
program became available in FY1994.
In FY2004, rural housing preservation grants financed home repairs for 2,105 families.


The Homeownership and Opportunity for People Everywhere programs (HOPE 1, 2, and 3) were 245
established in 1990 to help low-income, first-time homebuyers purchase housing owned by
federal, state, and local governments. Grants were awarded through FY1996 on a competitive
basis to nonprofit organizations, resident management corporations, cooperative associations,
public housing authorities, or other bodies who, in turn, carry out the economic development and
homeownership goals. Recipients of HOPE 3 implementation grants contribute $1 in matching
money for each $4 in federal funds awarded (for amounts granted before April 11, 1994, the
required match was higher, 33%). While there has been no new funding of the HOPE 1, 2, and 3
programs since FY1996 and no new grants are being made, some money already committed and
in the pipeline continues to be spent. According to figures from the Office of Management and
Budget, federal outlays from current balances were $3 million in FY2002, $2 million in FY2003,
and $2 million in FY2004.

In general, to be eligible to purchase an available home in HOPE 1, 2, or 3, a person or family
must be a tenant of an eligible property, a resident of other HUD assisted housing, or have an
income that does not exceed 80% of the median income for the area, adjusted for family size.

242 Section 522 of the Housing Urban-Rural Recovery Act of 1983 (P.L. 98-181, Nov. 30, 1983) added Section 533 to
the Housing Act of 1949.
243 Federal Register, v. 58, Apr. 26, 1993, p. 21891.
244 Section 310 of P.L. 100-242, the Housing and Community Development Act of 1987, enacted Feb. 5, 1988.
245 HOPE programs were authorized by the Cranston-Gonzalez National Affordable Housing Act of 1990 (P.L. 101-
625) and amended by the Housing and Community Development Act of 1992 (P.L. 102-550) and the Quality Housing
and Work Responsibility Act of 1998 (P.L. 105-276).
246 HOPE 3 regulations are found in 24 CFR Part 572 (2005). HOPE programs are no longer included in the Catalog of
Federal Domestic Assistance.





HOPE 1 authorizes funds to develop tenant management at public and Indian housing projects,
for project-related jobs, and for the eventual sale of the renovated units to tenants and other
qualifying households. HOPE 2 authorizes grants for the sale of multifamily properties that are
insured by the Department of Housing and Urban Development (HUD) or are owned by the
government, and for funds for small business startups and other economic development activities.
HOPE 3 provides funds for the purchase of single-family homes held or insured by federal, state,
or local governments.
Over the years, a variety of HUD programs have sold public housing units to tenants and other
low income households. Including HOPE 1, HUD has approved the sale of more than 4,700
public housing units since 1993. However, moving from the planning stage to actual sale of units
can take as many as 10 years. In many cases, grantees are devoting a portion of the grant to
support resident organizations, counseling, and training of residents, and other neighborhood
economic development activities.
HOPE 1 Implementation Grants of $82.4 million were made for 30 grants during FY1992 and
FY1994. Under HOPE 2, grants of about $75 million were made through FY1996.As of July
1997, the cumulative amount of HOPE 3 implementation grants was $210 million for 258
grantees. As of August 1995, 2,298 homes had been acquired under HOPE 3 and 1,234 247
transferred to new buyers.


Federal Pell Grants, the largest source of federal student grant assistance administered by the
Department of Education (ED), are 100% federally funded. These grants are authorized by Title
IV-A of the Higher Education Act. Appropriations for FY2004 were $12 billion.

Pell Grants, originally called “Basic Educational Opportunity Grants,” are available to
undergraduate students enrolled in an eligible institution of postsecondary education who meet a
needs test, the elements of which are prescribed in the Higher Education Act (Part F of Title IV).
Grantees must meet general student aid eligibility requirements including maintaining satisfactory
progress in their course of study, not being in default on a federally assisted student loan, not

247 For a detailed report on HOPE 3, see Evaluation of the HOPE 3 Program: Final Report, prepared for HUD by Abt
Associates, Aug. 1996.
248 Regulations for Pell Grants are found at 34 CFR Part 690 (2005). This program is No. 84.063 in the Catalog of
Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a et seq.





owing a refund on a Pell Grant or Supplemental Educational Opportunity Grant, and registering
for the Selective Service, if so required.
The federal need analysis methodology takes into account the income and assets of the student
and his or her family, and determines the amount that a student and his/her family might
reasonably be expected to contribute toward total costs for postsecondary education (the expected 249
family contribution or EFC). For a dependent student, the expected family contribution is based 250
on the student’s and his or her parents’ income and assets. For an independent student, the
expected contribution is based on the income and assets of the student, if single, and student and
spouse, if married. Included as income are welfare benefits, including TANF payments, child
support, the earned income tax credit, untaxed Social Security benefits, and some other untaxed
income and benefits.
On June 17, 2004, the Department of Education announced updates to the need analysis tables for 251
the 2005-2006 award year. The announcement provided inflation-adjusted updates to four
tables used in calculating the expected family contribution: the income protection allowance, the
adjusted net worth of a business or farm, the education savings and asset protection allowance,
and the assessment schedules and rates. The Department publishes an annual booklet explaining 252
the Expected Family Contribution (EFC) formula.
In FY1999, more than 90% of Pell Grant recipients considered to be dependent students had total
parental income below $40,000. Among independent student grantees, more than 90% had total 253
income below $30,000.
Pell Grant awards to students are the lesser of (1) a statutorily established maximum award
($4,050 for FY2004), minus the expected family contribution (see explanation under Eligibility
Requirements), or (2) the cost of attendance minus the expected family contribution.
For the academic year 2003-2004, an estimated 5.1 million students received Pell Grants
averaging $2,467.
The Higher Education Act forbids AFDC (and its successor, TANF), food stamps, or any other
governmental program that receives federal funds from taking Pell grants (or other student aid
provided under the act) into account when determining eligibility for benefits, or the amount of
benefits.

249 A student is considered dependent if he/she does not fall into any of the categories for anindependent student.”
250 A student is considered independent if he/she is age 24 or older, is a graduate, professional, or married student, or
has legal dependents other than a spouse. Also automatically considered independent are orphans (without an adoptive
parent or legal guardian), veterans, or wards of the court. Financial aid administrators may make a documented
determination of independence for other students by reason of other unusual circumstances.
251 Federal Register, v. 69, June 17, 2004, pp. 33890-33895.
252 The 2005-06 formula book and tables (in portable document format [PDF]) are available at http://www.ifap.ed.gov/
efcinformation/0506EFCFormulaGuide.html.
253 CRS Report RL31668, Federal Pell Grant Program of the Higher Education Act: Background and Reauthorization,
summary page.





Note: For more information, see CRS Report RL31668, Federal Pell Grant Program of the
Higher Education Act: Background and Reauthorization and CRS Report RL33040, The Higher
Education Act: Reauthorization Status and Issues. Also see the Federal Student Aid Handbook at
http://www.ifa p.ed.gov/ IFA PWe bApp/c urre ntSFAHandbooksPag.j sp.

Head Start funds are allocated among states by formula254 but awarded directly to local Head Start 255
agencies. Federal assistance for a Head Start program is limited to 80% of program costs, but
the law permits a larger share if the Secretary of HHS determines this to be necessary for Head
Start’s purposes. Federal regulations permit a higher federal share for a Head Start agency that is 256
located in a relatively poor county or one that has been “involved” in a major disaster if the
Secretary finds that the agency is “unable” to pay a 20% share despite a “reasonable effort” to do
so. Also, if a Head Start agency received more than an 80% federal share for any budget period
within FY1973 or FY1974, it is entitled by regulation to continue to receive the larger share. The
non-federal share may be paid in cash or in kind. It may be paid by the Head Start agency or by
another party. A Head Start agency is a local public or private nonprofit or for profit organization
designated to operate a Head Start program. FY2005 appropriations for Head Start were $6.8
billion.

Head Start is targeted by law to low-income families, but the law gives authority to HHS for
determining eligibility criteria. The regulations require that at least 90% of the children in each 258
Head Start program be from “low-income” families, defined as families with incomes below
the “official poverty line,” and including children from families receiving public assistance and
children in foster care. In addition, at least 10% of total Head Start enrollment opportunities in
each program must be made available for handicapped children. In 2005, federal poverty income
guidelines were $16,090 for a family of three and $19,350 for a family of four for the 48

254 The Head Start allotment formula, as amended by the Head Start Amendments of 1998, P.L. 105-285, provides that
13% of the Head Start appropriation shall be reserved by the Secretary for the following uses: (1) Indian and migrant
programs; (2) payments to the territories; (3) training and technical assistance; (4) discretionary payments by the
Secretary; and (5) payments for research, demonstration and evaluation activities. Additional amounts are set aside for
quality improvement. The remaining funds are distributed to the states as follows: Each state receives the amount it
received in FY1998, and any amounts available above the FY1998 level are distributed proportionately among states
on the basis of the number of children under 5 years old whose family income is below the federal poverty line.
255 Although Head Start is classified here as an educational program, it should be noted that it provides many other
services. It is administered by the Department of Health and Human Services (HHS) rather than the Department of
Education (ED).
256 Regulations define this as a county with annual personal per capita income below $3,000 [45 CFR §1301.21
(2005)].
257 Head Start eligibility rules are found at 45 CFR Part 1305 (2005). This program is No. 93.600 in the Catalog of
Federal Domestic Assistance. Head Start is codified at 42 U.S.C. 9801 et seq.
258 Under specified conditions, a Head Start program operated by an Indian tribe may enroll more than 10% of its
children from nonpoor families.





contiguous states and the District of Columbia. Head Start does not have asset rules restricting
eligibility.
The law allows certain small, remote communities to establish their own eligibility criteria as
long as at least half of the families are eligible under the income guidelines. To qualify for this
authority, communities must have a population no greater than 1,000, be medically underserved,
and lack other preschool programs or medical services within a reasonable distance.
Head Start provides comprehensive services to preschool children. Services include educational,
dental, medical, nutritional, and social services to children and their families. Head Start agencies
are forbidden by law from charging fees, although families who want to pay for services may
voluntarily do so.
Note: For further information about Head Start, see CRS Report RL30952, Head Start:
Background and Issues.


Subsidized Federal Stafford loans are provided to students by the Federal Family Education Loan 259
(FFEL) program and the Ford Federal Direct Student Loan (DL) program. Capital for FFEL
Stafford loans is provided by banks and other private lenders. Capital for Stafford/Ford loans is
provided directly by the federal government. In the FFEL program the federal government pays
the student’s interest during certain periods. It also provides interest subsidies to lenders, and
federal reinsurance against borrower default, death, disability, and bankruptcy. In the Ford direct
loan program, the government forgoes student interest payments during certain periods. These
subsidized loan programs are authorized by Title IV of the Higher Education Act of 1965, as
amended. Estimated net obligations for FY2004 were $5.3 billion.

FFEL and DL subsidized loans are available to undergraduate, graduate, or professional students
enrolled on at least a half-time basis at a participating college, university, or vocational/technical

259 The Federal Direct Student Loan (DL) program, established in 1993, originally was intended to gradually expand
and replace FFEL loans. It now accounts for more than one-third of total student loan volume.
260 Regulations for the FFEL programs are found at 34 CFR Part 682, and for the DL programs at 34 CFR Part 685
(2005). The FFEL subsidized Stafford Loan program is No. 84.032 in the Catalog of Federal Domestic Assistance. The
DL program is No. 84.268 in the Catalog of Federal Domestic Assistance. The FFEL program is codified at 20 U.S.C.
1071-1087-2; the DL program is codified at 20 U.S.C. 1087a et seq.





school. While eligibility is not restricted to individuals with limited income (almost a fifth of loan
recipients have incomes over $50,000), applicants must satisfy a test of need.
Institutions use the methodology described in Part F of Title IV as the need analysis system to
calculate an expected family contribution for educational expenses (known as the EFC). The
formulas in Part F use information about the student and his or her family’s income and assets to
determine the amount the student and family can reasonably be expected to contribute. This
amount is subtracted from the student’s cost of attendance to determine the amount of a
subsidized loan for which the student is eligible. On June 17, 2004, the Department of Education 261
announced updates to the need analysis tables for the 2005-2006 award year. The
announcement provided inflation-adjusted updates to four tables used in calculating the expected
family contribution: the income protection allowance, the adjusted net worth of a business or
farm, the education savings and asset protection allowance, and the assessment schedules and
rates. The Department publishes an annual booklet explaining the Expected Family Contribution 262
(EFC) formula. Undergraduate students must receive a determination of whether they are
eligible for a Pell Grant before applying for a subsidized loan. This rule is to assure that eligible
students receive grant aid before incurring loan debt.
A borrower’s interest rate for FFEL Stafford and Stafford/Ford loans varies annually during
repayment. The variable rate is calculated based upon the bond equivalent rate of the 91-day
Treasury bill plus a premium which differs depending on whether the borrower is in-school or in
repayment. For loans made from July 1, 1998, through June 30, 2006, the borrower interest rate is
based on the 91-day Treasury bill plus 1.7% for those in school, and the 91-day Treasury bill plus

2.3% for those in repayment. In the FFEL program, the lender is required to pay the 3%


origination fee to the federal government; the lender can choose whether or not to pass the entire
fee on to the borrower, within certain limitations. In the DL program, borrowers pay a 3%
origination fee to the federal government.
Undergraduates may borrow $2,625 for their first year of study, $3,500 for their second year, and
$5,500 per year for the next three years of study; for graduate and professional school students,
the limit is $10,500 per year for up to five years of school. The aggregate loan limit for
undergraduate, graduate and professional study is $65,500.
In FY2004, subsidized FFEL Stafford and DL Stafford/Ford loan disbursements totaled over
$52.1 billion. The main components of FFEL annual federal expenditures are the in-school, grace
period, and deferment interest payments to lenders on behalf of borrowers of subsidized loans,
special allowance payments to lenders, and reimbursements to guaranty agencies for losses due to
borrower defaults; guaranty agencies also receive allowances from the federal government for
administrative expenses. In the DL program, the main components of annual federal costs are the
foregone interest payments for subsidized loans while students are in school, during the grace
period, and deferments; defaults; and administrative costs of contracts for loan origination,
servicing and collections, and fees to schools who perform origination functions themselves. In
both programs, there are also certain annual revenues that offset some of these costs, including

261 Federal Register, v. 69, June 17, 2004, pp. 33890-33895.
262 The 2005-06 formula book and tables (in portable document format [PDF]) are available at http://www.ifap.ed.gov/
efcinformation/0506EFCFormulaGuide.html.





fees that students or parents pay when borrowing, as well as collections on defaulted loans. In
FFEL, other offsets include fees that are assessed on lenders/loan holders and guaranty agencies.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues; CRS Report RL30655, Federal Student Loans: Terms and
Conditions for Borrowers; and CRS Report RL30656, The Administration of Federal Student
Loan Programs: Background and Provisions.

The Higher Education Act of 1965, as amended, authorizes federal funding to partially finance
part-time employment for undergraduate, graduate, and professional students in eligible 263
institutions of post-secondary education who need earnings to attend. Students may work on-
campus or off-campus for a public or private nonprofit or a private for-profit organization. Since
October 1, 1993, institutions have been required to use at least 5% of their allocation of Federal 264
Work Study (FWS) funds for community service jobs; effective in FY2000, this rose to 7%.
Federal grants to institutions fund 50% to 75% of the student’s wages; the remainder is paid by
the post-secondary institution or other employer. Funds are allocated to institutions based on
previous year’s allocations, with priority going to institutions that participated in the program in
FY1999. These institutions are eligible to receive 100% of their FY1999 allocation as their base 265
guarantee. FY2004 appropriations were $999 million.

The law authorizes federally subsidized wages for students who are enrolled in a post-secondary
program, including proprietary institutions, who demonstrate financial need, as determined by the
statutory need analysis system set forth in Part F of Title IV of the Higher Education Act. This 267
system calculates an expected family contribution. Five percent of an institution’s FWS funds
must be used for students who are enrolled on a less than full-time basis if the total financial need
of these students exceeds 5% of the need of all students attending the institution.

263 The name of the program was changed from College Work-Study to Federal Work-Study by Congress in 1992.
264 This change was made by P.L. 105-244, which reauthorized the Higher Education Act.
265 P.L. 105-34 revised the allocation formula.
266 FWS regulations are found at 34 CFR Part 675 (2005). This program is No. 84.033 in the Catalog of Federal
Domestic Assistance. It is codified at 42 U.S.C. 2751-2756a.
267 On June 17, 2004, the Department of Education announced updates to the need analysis tables for the 2005-2006
award year (Federal Register, v. 69, June 17, 2004, pp. 33890-33895). The Department publishes an annual booklet
explaining the Expected Family Contribution (EFC) formula. The 2004-05 formula book and tables are available in
portable document format at http://www.ifap.ed.gov/IFAPWebApp/currentEFCInformationPag.jsp.





A student’s earnings under the FWS program are limited to his or her need, and the rate of
compensation must at least equal the minimum wage. The institution’s share of compensation
may be provided to the student through tuition payments, room and board, or books.
During the academic year 2003-2004, an estimated 857,740 students received FWS-supported
earnings averaging $1,394.
The Higher Education Act forbids AFDC (and its successor, TANF), food stamps, or any other
governmental program that receives federal funds from taking student aid provided under the act
into account when determining eligibility for benefits, or the amount of benefits.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RL31618, Campus-Based Student Financial
Aid Programs Under the Higher Education Act.

Note: The federal TRIO programs consist of six programs authorized by Title IV of the Higher
Education Act of 1965, as amended: Upward Bound, Student Support Services, Talent Search,
Educational Opportunity Centers, Ronald E. McNair Postbaccalaureate Achievement, and Staff 268
Development. The first three were the original “TRIO” programs. The Staff Development
activities provide short-term training for TRIO program staff; they are not described below.
FY2004 appropriations were $833 million.
These are categorical grant programs. They are 100% federally funded. In addition, institutions
conducting Student Support Services programs must provide assurances that each participating
student will be offered aid sufficient to meet his or her financial need for college attendance.
Eligibility requirements differ slightly from program to program and are described below. At the
outset it should be noted how the term “low-income” applies in these programs. The authorizing
statute for the TRIO programs defines a low-income individual as one whose family’s taxable
income in the preceding year did not exceed 150% of the poverty level as determined under
Bureau of the Census criteria. The program descriptions below are drawn from the authorizing
statute and program regulations.

268 Previously entitled “special programs for students from disadvantaged backgrounds.”






Not fewer than two-thirds of the participants in any project must be low-income potential first-
generation college-goers. The remaining one-third must be either low-income or potential first-
generation college-goers. All participants must need academic support in order to successfully
pursue an education beyond high school. With certain exceptions, participants must have
completed grade 8 but not entered grade 12 and be 13 to 19 years of age. For veterans there is no
age limit.

Not fewer than two-thirds of program beneficiaries must be either disabled or low-income first-
generation college-goers. The remaining participants must be disabled, or low-income, or first-
generation college-goers. All participants must need academic support in order to successfully
pursue a post-secondary education program.

No fewer than two-thirds of program beneficiaries must be low-income, potential first-generation
college-goers. The program requires that all participants must have completed the fifth grade or
be at least 11 years of age but generally not older than 27. For veterans there is no age limit.

No fewer than two-thirds of the beneficiaries served by each center must be low-income potential
first-generation college goers. In general, participants must be at least 19 years of age.

This program was authorized in 1986 to assist students in gaining admission to graduate
programs. At least two-thirds of the participants must be low-income first-generation college
students. The remaining participants must be from groups underrepresented in graduate
education.

269 Upward Bound eligibility rules for participants are found at 34 CFR Part 645 (2005). This program is No. 84.047 in
the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a-11 and 1070a-13.
270 Participant eligibility rules for Student Support Services are found at 34 CFR Part 646 (2005). This program is No.
84.042 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a-11 and 1070a-14.
271 Talent Search eligibility rules for participants are found at 34 CFR Part 643 (2005). This program is No. 84.044 in
the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a-11 and 1070a-12.
272 Participant eligibility rules for Educational Opportunity Centers are found at 34 CFR 644 (2005). This program is
No. 84.066 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a-11 and 1070a-16.
273 Rules for the Ronald E. McNair postbaccalaureate achievement program are found at 34 CFR 647 (2005). This
program is No. 84.217 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070a-11 and 1070a-
15.





Upward Bound and Student Support Services provide such services as instruction in reading,
writing, study skills, mathematics, and other subjects necessary for education beyond high school;
personal counseling; academic counseling; tutoring; exposure to cultural events and academic
programs; and activities acquainting students with career options.
Among its services, Talent Search provides participants with information on the availability of
student financial aid, personal and career counseling, and tutoring. The program’s projects
encourage qualified students or dropouts to complete high school and to undertake post-
secondary education.
Educational Opportunity Centers provide services such as information on financial and academic
assistance available for post-secondary study, assistance to participants in filling out college
applications and financial aid request forms, and tutoring and counseling.
McNair Postbaccalaureate Achievement provides services such as summer internships, tutoring,
counseling, and research opportunities.
In FY2004, an estimated 866,289 participants were served in the TRIO programs as follows.
• Upward Bound—60,548
• Student Support Services—196,289
• Talent Search—387,983
• Educational Opportunity Centers—217,265 and
• Ronald McNair Achievement Program—4,224
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RL31622, Trio and GEAR UP Programs:
Status and Issues.

This program allocates funds to eligible institutions of post-secondary education for grants to
needy undergraduates. The non-federal share must come from the institution’s own resources.
Funds are allocated to institutions first on the basis of their FY1985 award and then in proportion 274
to aggregate need. FY2004 appropriations were $771 million.

274 Federal regulations for this program are found at 34 CFR Part 676 (2005). This program is No. 84.007 in the
Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1070b.





The Higher Education Act of 1965, as amended, authorizes supplemental educational opportunity
grants for post-secondary undergraduate students with the greatest financial need as determined 275
by the need analysis system set forth in Part F of Title IV of the Higher Education Act.
Institutions’ financial aid administrators have substantial flexibility, however, in determining the
size of individual student awards. The first priority is for Pell Grant recipients with exceptional
need. An institution’s supplemental educational opportunity grant funds may be used for less than
full-time students.
The law sets minimum and maximum awards at $100 and $4,000, respectively. An estimated
1,253,547 students received average grants of $778 under the program during the 2003-2004
academic year.
The Higher Education Act forbids AFDC (and its successor, TANF), food stamps, or any other
governmental program that receives federal funds from taking student aid provided under the act
into account when determining eligibility for benefits or the amount of the benefits.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RL31618, Campus-Based Student Financial
Aid Programs Under the Higher Education Act.

The Department of Education makes annual formula grants, under Title I, Part C of the
Elementary and Secondary Education Act (ESEA), as amended, to state educational agencies for
programs designed to meet the special needs of migratory children of migratory agricultural
workers or fishermen. Through FY2002, funds were allocated among states on the basis of annual 276
counts of eligible children and a percentage of average per-pupil expenditures. Under P.L. 107-277
110, from FY2003 forward, states receive the same amount as in FY2002, plus a share of any
additional appropriations (allocated on the basis of the previous formula, with updated child
counts). Most programs are administered by local school districts, which receive subgrants from
the state educational agencies, though some are run by other public or private nonprofit agencies.
Discretionary grants and contracts are also available to state educational agencies to improve

275 On June 17, 2004, the Department of Education announced updates to the need analysis tables for the 2005-2006
award year (Federal Register, v. 69, June 17, 2004, pp. 33890-33895). The Department publishes an annual booklet
explaining the Expected Family Contribution (EFC) formula. The 2004-05 formula book and tables are available in
portable document format at http://www.ifap.ed.gov/IFAPWebApp/currentEFCInformationPag.jsp.
276 Three states received 52% of FY2001 funds: California, 31%; Texas, 14%, and Florida, 7%.
277 If appropriations fall short of the FY2002 level, the Secretary may proportionately reduce the amount allocated to
each state.





program coordination within and among states. As of 1995, record transfer is the sole
responsibility of the states. FY2004 appropriations were $394 million.

Eligible students are migratory children whose parents or guardians are migratory agricultural
workers or fishers and who have moved within three years from one school district to another to
enable a member of their immediate family to obtain temporary or seasonal employment in
agricultural or fishing activities.
Children who are 3 through 21 years of age are eligible to participate, though only younger
children may receive day care services. There is no income test, but migratory children are
presumed to need special educational and other services.
Title 1 migrant education programs commonly provide regular academic instruction, remedial or
compensatory instruction, bilingual and multicultural instruction, vocational and career education,
testing, guidance and counseling, and medical and dental screening. Preference is given to
students at risk of not meeting state academic standards or who moved during the school year.
According to the Office of Migrant Education, migrant education programs served about 737,600
students in FY2004.
Note: For more information, see CRS Report RL31325, The Federal Migrant Education
Program as Amended by the No Child Left Behind Act of 2001.

The Perkins Loan program, authorized by Title IV of the Higher Education Act (HEA) of 1965, as
amended, provides federal assistance to institutions of higher education to operate a revolving
fund providing low-interest loans to students. Federal funds provide new capital contributions and
pay for the cancellation of certain loans authorized in the law. Since academic year 1994-1995,
participating institutions have been required to provide a 25% annual match to the federal capital
contribution (previously, their match rate was 15%). FY2004 appropriations were $165 million.

278 Regulations for this program are found at 34 CFR §200.40 (2005). This program is No. 84.011 in the Catalog of
Federal Domestic Assistance. It is codified at 20 U.S.C. 6391-6399, 6511.






The law authorizes low-interest long-term loans for (1) undergraduate, graduate, or professional 280
students, (2) who are “in need” of the amount of the loan to pursue a course of study, and (3)
who maintain good academic standing. The need analysis system set forth in Part F of Title IV of
the HEA is used in calculating an expected family contribution under the Perkins Loan program.
On June 17, 2004, the Department of Education announced updates to the need analysis tables for 281
the 2005-2006 award year. The Department publishes an annual booklet explaining the 282
Expected Family Contribution (EFC) formula.
Effective October 1, 1981, the law authorized loans at a 5% interest rate. Loans are to be repaid
over a 10-year period beginning nine months after the end of study that is on at least a half-time
basis. No interest is charged until repayment of the principal begins, unless the payment is
deferred, as permitted under certain conditions. In addition, all or a portion of the loans may be
canceled for those who enter specific teaching jobs, law enforcement, or military service. Annual
loan limits are $4,000 for undergraduate students and $6,000 for graduate or professional
students. The aggregate limits are $20,000 for undergraduate students who have completed two
years of study, but who have not completed their baccalaureate degree; $40,000 for graduate and
professional students; and $8,000 for any other students. An estimated 673,537 students borrowed
loans averaging $1,875 under the program in the 2003-2004 school year.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RL31618, Campus-Based Student Financial
Aid Programs Under the Higher Education Act.


Note: This program was known as the State Student Incentive Grant (SSIG) program until
October 1, 1998, when it was revised and renamed by P.L. 105-244.
Under Leveraging Educational Assistance Partnerships, states receive federal formula grants
which are matched with equal state funds to provide for the establishment of state student aid
programs for needy post-secondary students. After each state’s program grant is combined with

279 Regulations for Perkins Loans are found at 34 CFR Part 674 (2005). This program is No. 84.038 in the Catalog of
Federal Domestic Assistance. It is codified at 20 U.S.C. 1087aa-1087hh and 20 U.S.C. 421-429.
280 Before July 1, 1987, students had to be enrolled on at least a half-time basis.
281 Federal Register, v. 69, June 17, 2004, pp. 33890-33895.
282 The 2005-06 formula book and tables (in portable document format [PDF]) are available at http://www.ifap.ed.gov/
efcinformation/0506EFCFormulaGuide.html.





the required non-federal matching funds, resulting “state aid” awards are made either directly to
students or indirectly through participating institutions. The law provides that no state shall
receive less from the federal government than it received in FY1979. Funds not used by one state
may be reallotted to others in proportion to their higher education enrollments. State allocations
are based on their share of the total number of eligible students in all states as determined by the
U.S. Secretary of Education. States are permitted to use 20% of funds for community service
work learning jobs for eligible students. The 1998 law, which reauthorized the program and
renamed it as LEAP, also authorized a new program of Special Leveraging Education Assistance
Partnerships (SLEAP), which receive a portion of LEAP appropriations above a certain 283
threshold. FY2004 LEAP appropriations were $66 million (of which SLEAP received $36.2
million).

To be eligible for a LEAP grant, post-secondary students must be enrolled in or accepted for
enrollment in an institution of post-secondary education, must meet citizen/resident requirements,
must demonstrate substantial financial need as determined in accordance with criteria of his/her
state and approved by the Secretary of Education, must maintain satisfactory academic progress,
and must not default on a student loan or owe a refund for student assistance. At state discretion,
part-time students may also be eligible. All public or private nonprofit institutions of higher
education as well as post-secondary vocational institutions are eligible to participate unless
prohibited by state constitution or state statute.
Maximum grants are $5,000 for full-time students and may be used, among other purposes, for
work-study jobs provided through campus-based “community service work learning study 285
programs.” (The regulations also call these work-study jobs “community service-learning”
jobs.) In academic year 2003-2004, approximately 168,517 students received average grants of
$1,000.
The Higher Education Act forbids AFDC (or its successor, TANF), food stamps, and any other
governmental program that receives federal funds from taking student aid provided under the act
into account when determining eligibility for benefits or the amount of the benefits.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RS21183, Leveraging Educational Assistance
Partnership Program (LEAP): An Overview.

283 For any fiscal year in which the appropriation exceeds $30 million, the excess is reserved for Special LEAP. Special
LEAP funds are allocated to the states in the same manner as LEAP grants to states. States participating in the Special
LEAP program must meet maintenance of effort (MOE) criteria and match the federal funds on a two-to-one basis (the
federal share of the Special LEAP programs activities will not exceed 33 1/3%). Special LEAP program funds are
authorized on behalf of students who demonstrate financial need. They support such activities as increasing the dollar
amount of grants awarded under LEAP to eligible students or creating other scholarship, early intervention, mentoring
or career education programs. Amounts for SLEAP included $37 million in FY2002 and $36.6 million in FY2003.
284 Regulations for this program are found at 34 CFR Part 692 (2005). This program is No. 84.069 in the Catalog of
Federal Domestic Assistance. It is codified at 20 U.S.C. 1070c-1070c-4.
285 Before July 23, 1992, maximum grants were $2,500.







Title VII of the Public Health Service Act provides 90% federal funding for student loans and

100% for scholarships for students pursuing a number of degrees in the health professions.


Eligible schools must contribute to the loan fund a minimum share equal to one-ninth of the
federal sum. The federal government’s share of the loan fund (its capital contribution) now is
financed by loan repayments from participating schools, not by appropriations. Appropriations for
scholarships (and some loan repayments) in FY2005 were $79.9 million. These programs are
administered by the Health Resources and Services Administration (HRSA) of the Department of
Health and Human Services (HHS).


The Health Professions Student Loan Program (HPSL) provides long-term, low-interest rate loans
to full-time, financially needy students to pursue a degree in an accredited public or nonprofit
school of medicine, dentistry, optometry, pharmacy, podiatric medicine, or veterinary medicine.
The Loans for Disadvantaged Students Program (LDS) provides long-term, low-interest rate
loans to full-time, financially needy students from disadvantaged backgrounds to pursue a degree
in allopathic medicine, osteopathic medicine, dentistry, optometry, podiatric medicine, pharmacy
or veterinary medicine. To be eligible for LDS funds, a participating school must carry out a
program for recruiting and retaining students from disadvantaged backgrounds, including racial
and ethnic minorities, and must operate a program to recruit and retain minority faculty. Students
at accredited public and nonprofit private schools of nursing are eligible for loans from the
Nursing Student Loan (N.L.) program. The school selects qualified loan applicants, makes
reasonable determinations of need, and determines the amount of student loans.
These loan programs no longer receive appropriations. Funds that are returned to the Government
by participating schools are re-awarded to schools that show a need for additional funds. Any
school that receives returned funds is required to deposit the school’s share of one-ninth of the
amount received into the loan fund for additional loans to students.

286 Regulations for these loans and scholarships are found at 42 CFR Part 57, Subparts C and D (loans), CC and DD
(scholarships) (2005).
287 In the Catalog of Federal Domestic Assistance (CFDA), the Health Professions Student Loan Program and the
Loans for Disadvantaged Students Program are listed together as program No. 93.342, and the Nursing Student Loan
program is No. 93.364.





The Scholarships for Disadvantaged Students (SDS) program makes grants to the following
accredited public or private nonprofit schools for scholarship assistance: allopathic medicine,
nursing, osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry, veterinary
medicine, chiropractic, allied health, or schools offering graduate programs in public health,
behavioral and mental health or physician assistants. At least 16% of SDS funds must be made
available to schools that will provide scholarships only for nurses, and schools must give
preference to former recipients of the following: (1) Scholarships for Students of Exceptional
Financial Need (EFN) and (2) Financial Assistance for Disadvantaged Health Professions 288
Students (FADHPS). Schools are required to agree that, in providing scholarships under SDS,
preference will be given to students from disadvantaged backgrounds for whom the costs of
attending the school would constitute a severe financial hardship. The Secretary of HHS may not
make a grant to a school unless the school is carrying out a program for recruiting and retaining
students from disadvantaged backgrounds, including racial and ethnic minorities.
Two programs provide loan repayments, funded by appropriations: (1) the Disadvantaged Health
Professions Faculty Loan Repayment and Fellowship Program (Faculty Loan Repayment
Program/FLRP), and (2) the Nursing Education Loan Repayment for Registered Nurses Entering
Employment at Eligible Health Facilities Program (Nursing Education Loan Repayment 289
Program/NELRP).
Eligible for FLRP are persons who (1) have a degree in medicine, osteopathic medicine, dentistry,
pharmacy, podiatric medicine, optometry, veterinary medicine, nursing, graduate public health,
allied health or graduate behavioral and mental health; (2) are enrolled in an approved graduate
training program in one of the health professions listed previously; or (3) are enrolled as full-time
students in accredited institutions described above and in the final course of study or program
leading to a degree.
Eligible for NELRP are persons who (1) have received a degree in nursing; (2) have unpaid
qualifying loans; (3) are a U.S. citizen, national or permanent legal resident; (4) are employed
full-time at an eligible health facility; (5) have a current unrestricted license in the state in which
they intend to practice; and (6) sign a contract to work full-time as a registered or advanced
practice nurse for two or three years at an eligible health facility.
Health Profession Student Loans and Loans for Disadvantaged Students may be made in amounts
that do not exceed the cost of attendance, including tuition, other reasonable educational

288 Authority for the EFN and FADHPS programs were repealed under P.L. 105-392, the Health Professions Training
Act of 1998.
289 The Faculty Loan Repayment Program is No. 93.923, and the Nursing Education Loan Repayment Program is No.
93.908 in the Catalog of Federal Domestic Assistance (CFDA).





expenses, and reasonable living expenses. Loans have a 5% interest rate and must be repaid over
a period ranging between 10 years and 25 years, at the discretion of the institution. Excluded from
the time period for repayment are certain periods of active duty performed by the borrower as a
member of a uniformed service; service as a Peace Corps volunteer; and periods of advanced
professional training, including internships and residencies.
The Secretary of HHS may, subject to the availability of funds, repay all or part of an individual’s
HPSL loan if the Secretary determines that the individual (1) failed to complete the health
profession studies leading to the individual’s first professional degree; (2) is in exceptionally
needy circumstances; (3) is from a low-income family (with income below the poverty guideline)
or a disadvantaged family; and (4) has not resumed or cannot reasonably be expected to resume
the course of study within two years of ending them.
Nursing Student loans have a maximum limit of $2,500 for an academic year, $4,000 for each of
the final two years, or the amount of the student’s financial need, whichever is less. The aggregate
of the loans for all years is limited to $13,000 for any student. Preference for these loans is given
to licensed practical nurses, to persons with exceptional financial need, and to persons who enter
as first-year students. Loans are repayable over a 10-year period, excluding periods for service
and study similar to those listed above. A school is authorized to extend the repayment period for
up to an additional 10 years for certain borrowers who failed to make consecutive payments.
The FLRP repays loans at a rate of up to $20,000 per year for persons who have agreed to serve
for at least two years as faculty members at an eligible school. The NELRP provides for
repayment of 30% of unpaid principal and interest for each qualified loan after the first year of
service, 30% of the principal and interest after the second year of service, and 25% of the
principal and interest after the third year of service. Appropriations in FY2005 were $1.3 million
for FLRP and $31.5 million for NELRP.
Scholarships are awarded for tuition expenses, other reasonable educational expenses, and
reasonable living expenses incurred while attending school for the year. In awarding grants to
eligible health professions and nursing schools, the Secretary must give priority to eligible entities
based on the proportion of graduating students going into primary care, the proportion of under-
represented minority students, and the proportion of graduates working in medically underserved
communities. Scholarship appropriations in FY2005 totaled about $47 million.
Note: For more information, see CRS Report RL32546, Title VII Health Professions Education
and Training: Issues in Reauthorization, and CRS Report RL32805, Nursing Workforce Programs
in Title VIII of the Public Health Service Act.







The Higher Education Act of 1965 (HEA), as amended, authorizes three need-based fellowship
programs: Javits Fellowships, Title VII-A, Subpart 1; Graduate Assistance in Areas of National
Need (GAANN), Title VII-A, Subpart 2; and the Thurgood Marshall Legal Educational 290
Opportunity Program, Title VII-A, Subpart 2. From FY1997 through FY2000, the Javits 291
Fellowships were funded under GAANN, then reverted back to separate funding in FY2001.
Beginning in FY2000, funding for Javits Fellowships was specifically dictated in appropriations
language to provide funds a year in advance of the academic year in which the fellowships would 292
be used. Institutions must match 25% of the federal GAANN fellowship grant. FY2004
appropriations were $40.5 million.
Title VII-A, Subpart 1, HE, authorizes the Javits Fellowships293 in the arts, humanities, and social
sciences. Title VII-A, Subpart 1 fellowship stipends are based on financial need, and recipients
are selected by panels appointed by the Javits Program Fellowship Board. Students who are
entering graduate school for the first time or who, at the time of application, have not completed
their first year of study are eligible to apply for a Javits Fellowship. Applicants must be accepted
at or attending a post-secondary institution in one of the selected fields of study. Twenty percent
of the fellowships are awarded in the social sciences, 20% in the arts, and 60% in the 294
humanities. Fellowships are awarded for a period of up to four years. Recipients are selected
through a national competition based on “demonstrated achievement, financial need, and 295
exceptional promise.” The program is limited to U.S. citizens and nationals, permanent

290 Several graduate fellowship programs previously authorized by the HEA no longer exist. Funding for Title IX-A
and Title IX-B programs, which provided grants to institutions of higher education to encourage women and minority
participation, ceased in FY1995. Title IX-A grants were used to identify talented needy undergraduates and to support
them during summer research internships and seminars designed to prepare them for graduate study. Title IX-B
authorized Patricia Roberts Harris Fellowships for pursuit of graduate degrees by under represented minorities and
women. For non-competing continuation awards only, the Patricia Roberts Harris Fellowships were consolidated into
Title IX-D by the last reauthorization by the Higher Education Amendments of 1998 (P.L. 105-244). Title IX-E, which
once provided need-based Faculty Development Fellowships for under represented groups, no longer makes new
awards.
291 U.S. Department of Education, Fiscal year 2001 Justifications of Appropriation Estimates to the Congress,
Washington, GPO., 2001, v. 2, p. S-92.
292 Ibid., p. S-93.
293 Regulations for the Javits Fellowships program are found at 34 CFR Part 650 (2005). This program is No. 84.170 in
the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1134-1134d.
294 U.S. Department of Education, Jacob Javits Fellowship Program website at http://www.ed.gov/programs/iegpsjavits/
index.html.
295 HEA, as amended, Section 701 (a).





residents, and citizens of the Freely Associated States (Republic of the Marshall Islands, Republic
of Palau, and the Federated States of Micronesia).
Title VII-A, Subpart 2, HE, authorizes a program of Graduate Assistance in Areas of National 296
Need (GAANN). Individual graduate students are eligible to receive a fellowship from an
assisted department if they demonstrate financial need, according to criteria determined by their
higher education institutions, and have excellent academic records. The Secretary of Education
designates areas of graduate study in which there are national needs. The Secretary makes grants
to academic departments providing courses of study leading to a graduate degree in one of these
areas. In addition, institutions must assure that they will seek talented students from backgrounds
traditionally under-represented in these fields of graduate study. For GAANN awards for
academic year 2003-04, the Secretary designated the following areas of national need: biology,
chemistry, computer and information sciences, engineering, geological and related sciences, 297
mathematics, and physics.
Title VII-A, Subpart 3, HE authorizes the Thurgood Marshall Legal Educational Opportunity
Program to assist minority, low-income or disadvantaged college graduates to prepare for and
complete law school. The Title VII-A, Subpart 3, program is administered by the Council on
Legal Education Opportunity (CLEO) through a single grant award by the Secretary of Education 298
for a period of not less than five years. CLEO, a nonprofit project of the American Bar 299
Association Fund for Justice and Education, began assisting disadvantaged students in 1968.
Each Javits Fellowship consists of an institutional payment covering tuition and fees and a
student stipend for living expenses. The amount of the stipend is based on either the student’s
financial need or the level of support provided by the National Science Foundation’s Graduate
Research Fellowship program, whichever is less. In FY2004, 54 new fellowship awards were
made.

296 Regulations for the Graduate Assistance in Areas of National Need program are found at 34 CFR Part 648 (2005).
This program is No. 84.200 in the Catalog of Federal Domestic Assistance. It is codified at 20 U.S.C. 1135-1135ee.
297 Federal Register, v. 68, August 12, 2003, p. 47915.
298 Beginning in 1974, funding for the single grant to CLEO was made under the Legal Training for the Disadvantaged
and Assistance for Training in the Legal Profession programs, precursors to the Thurgood Marshall Educational
Opportunity Program.
299 American Bar Association ABA network website at http://www.abanet.org/cleo/whatis.html.





The GAANN fellowships are provided under three-year grants to academic programs. Grants for
a fiscal year are for not less than $100,000 and not more than $750,000. Students may receive the
fellowships for up to five years of study. Students receive a stipend to cover living expenses,
while an institutional payment covers the fellow’s tuition, fees, and other expenses. The amount
of the student stipend is based on either the student’s financial need or the level of support
provided by the National Science Foundation’s Graduate Research Fellowship program,
whichever is less. The institutional 25% match of the federal grant can be used for additional
fellowships and to meet other costs not covered by the institutional payment. In FY2004, 51 new
awards were made.
The Thurgood Marshall Fellows receive counseling for study at accredited law schools,
preparation on selecting and applying to a law school, and financial assistance. A number of
services are available to Thurgood Marshall Fellows for meeting the competition of law school
and to improve the student’s retention and success in law school. These include a six-week pre-
law summer institute at law schools throughout the country; pre-law mentoring programs with
law school faculty, bar association members and judges; and tutoring, academic counseling,
midyear seminars, and preparation for bar examinations. Thurgood Marshall Fellows may also be
paid a stipend for participation in summer institutes and midyear seminars. The Thurgood
Marshall Legal Educational Opportunity Program was not funded in FY2004.
Note: For more information, see CRS Report RL33040, The Higher Education Act:
Reauthorization Status and Issues and CRS Report RS21436, Graduate Fellowship Programs
Under Title VII of the Higher Education Act (HEA): Background and Reauthorization.


The Department of Education makes discretionary grants to colleges and universities and other
public or private nonprofit agencies cooperating with such schools to help migrant students obtain 300
a high school equivalency certificate. Most grants are for a five-year period. FY2004
appropriations were $19 million.

300 This migrant education program is authorized under Title IV, Section 418A of the Higher Education Act (HEA), as
amended.






To be served, students or their parents must have spent a minimum of 75 days during the past 24
months in migrant and seasonal farmwork; alternatively, they must be eligible to participate (or
must have participated within the last two years) in the Title I Migrant Education program (see
program No. 54) or the Workforce Investment Act program for migrant and seasonal
farmworkers. They must be at least 16 years of age (or beyond the age of compulsory school
attendance in the state in which they reside), not enrolled in school, and not have a high school 302
diploma or its equivalent.
HEP projects typically provide instruction in reading, writing, mathematics, and other subjects
tested by equivalency examinations; career-oriented work-study courses; tutoring; and personal
and academic counseling. In addition, they provide financial assistance, housing, and various
support services. In the 2003-2004 school year, HEP served about 6,970 students at 52
institutions. The average federal contribution per student was approximately $2,700.

The Department of Education makes discretionary grants to colleges and universities and other
public or private nonprofit agencies cooperating with such schools to help migrant students 303
complete their first year in college. Most grants are for a five-year period. FY2004
appropriations were $16 million.

To be served, students or their parents must have spent a minimum of 75 days during the past 24
months in migrant and seasonal farmwork; alternatively, they must be eligible to participate in the
Title 1 Migrant Education program or the WIA program for migrant and seasonal farmworkers.
Students must be admitted to or enrolled as first year students at a participating college or 305
university.

301 Regulations for this program are at 34 CFR Part 206 (2005). This program is No. 84.141 in the Catalog of Federal
Domestic Assistance. It is codified at 20 U.S.C. 1070d-2(a).
302 Regulations define migrant farmworkers as seasonal farmworkers whose employment requires travel precluding
them from returning to their domicile (permanent place of residence) within the same day. Seasonal farmworkers are
defined as persons who, within the past 24 months, were employed at least 75 days in farmwork and whose primary
employment was in farmwork on a temporary or seasonal basis.
303 This migrant education program is authorized under Title IV, Section 418A of the Higher Education Act (HEA), as
amended.
304 Regulations for this program are at 34 CFR Part 206 (2005). This program is No. 84.149 in the Catalog of Federal
Domestic Assistance. It is codified at 20 U.S.C. 1070d-2(a).
305 Regulations define migrant farmworkers as seasonal farmworkers whose employment requires travel precluding
(continued...)





CAMP projects typically provide tuition and stipends for room and board and personal expenses;
they also provide academic and personal counseling, tutoring in basic skills and other subject
areas, and various support services. In the 2003-2004 school year, CAMP served about 2,500
students at eight institutions. The average federal contribution per student was approximately
$6,400.

Note: This program was formerly called Ellender Fellowships ( Title X, Part G of the Elementary
and Secondary Education Act of 1965). Close Up Fellowships now are authorized by Title I, Part
E, of the Elementary and Secondary Education Act (ESEA), as amended by the No Child Left
Behind Act (P.L. 107-10). This entry summarizes Ellender Fellowships and Close Up Fellowships
rules under both laws.
This program provided fellowships to economically disadvantaged students, secondary school
teachers, economically disadvantaged older Americans, and recent immigrants to spend one week
in Washington, D.C. attending seminars on government and current events and meeting with
leaders of the federal government. “Older American” was defined as an individual at least 55
years old. Economic disadvantage was not defined in the law, and the program had no 306
regulations. The Close Up Foundation administered the program.
The Close Up Foundation continues to administer the program by providing federal funding for
fellowships to middle and secondary school economically disadvantaged students, their teachers,
and recent immigrants to spend one week in Washington, D.C. attending seminars on government
and current events and meeting with leaders of the federal government.
Appropriations for FY2004 Close Up Fellowships were $1.48 million.

(...continued)
them from returning to their domicile (permanent place of residence) within the same day. Seasonal farmworkers are
defined as persons who, within the past 24 months, were employed at least 75 days in farmwork and whose primary
employment was in farmwork on a temporary or seasonal basis.
306 The Close Up Foundation is headquartered in Alexandria, VA. According to its website, it is the nation’s largest
nonprofit, nonpartisan citizenship education program. Founded in 1970, it promotesclose up” experience in
government through programs in DC and in state and local government. See http://www.closeup.org/.





Fellowships cover the costs of room, board, tuition, administration, and insurance for a week-long
series of meetings, tours, and seminars about public affairs in Washington, D.C., sponsored by the
Close Up Foundation. Students and their teachers meet with officials from the three branches of
the federal government and discuss pending issues. In the 2004-2005 school year, 2,030 students,
1,245 teachers, and 290 new American immigrants received fellowships. The federal share was
$453 per student, $350 per teacher, and $431 per new American.

This program is funded 100% by the federal government. Outlays for FY2005 were $13.9
million.
The D.C. School Choice Incentive Program was enacted as Title III of Division C of P.L. 108-307
199, the Consolidated Appropriations Act, 2004. Through a competitive grant process, the
Secretary of Education funds the operation of a tuition scholarship program that assists the
families of eligible District of Columbia students in meeting the costs of attendance at private
elementary or secondary schools in the district. Grantees are required to establish scholarship
programs that provide eligible students, who are residents of the District of Columbia, with
expanded school choice options. The program is structured to give priority in receiving a
scholarship to students who attended schools identified as needing improvement, corrective
action, or restructuring under Title I-A of the Elementary and Secondary Education Act (ESEA);
to target students from families with limited financial resources; and to provide students the
widest range of school choice options. This is a five-year demonstration program.
Initial eligibility is limited to students who are residents of the District of Columbia and whose
family income does not exceed 185% of the poverty level. A student remains eligible to receive
scholarships, in subsequent years, as long as the family income does not exceed 200% of the
poverty level. If the number of students eligible to receive scholarships exceeds available
funding, then students are selected through a lottery. In the first year of implementation, 2004-
2005, the number of students that met the eligibility requirements and applied for scholarships
exceeded the available slots in participating private schools; however, there was a mismatch
between scholarship applicants and available slots in schools across the various grade levels (with
an oversupply at the elementary level and a shortage at the secondary level).

307 118 Stat. 126. This is program No. 84.370A in the Catalog of Federal Domestic Assistance.





The scholarship covers tuition, fees, and any transportation costs to allow the student to attend the
private elementary or secondary school of his or her choice in the District of Columbia. The
amount of assistance provided to an eligible student, by the grantee, may not exceed $7,500 for
any academic year. Participating schools are not prohibited from charging tuition and fees in
excess of the scholarship amount; however, participating schools may not charge scholarship
recipients more than they customarily charge other students.
The scholarship is considered assistance to the student and not assistance to the school that
enrolls the student. Also, the scholarship is not treated as income for the parents for federal tax 308
laws or for determining eligibility for any other federal program.
Note: For a full description of the program, see CRS Report RL32019, Proposals to Establish a
K-12 Scholarship or Voucher Program in the District of Columbia: Policy Issues and Analysis.
For an overview of the program’s first year of operation, see CRS Report RL32994, District of
Columbia: FY2006 Appropriations, and U.S. Department of Education, Evaluation of the D.C.
Opportunity Scholarship Program: First Year Report on Participation, available at
http://www.ed.gov/rschs tat/eval/c hoice /dcchoi ce-yearone/i ndex.html .


The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) created the Child Care and
Development Block Grant (CCDBG), which provides 100% federally paid discretionary funds to 309
states and other entities. CCDBG also receives entitlement funds, some of which require state
matching funds (see below). Federal outlays in FY2004—from discretionary funds, entitlement
funds, and amounts transferred to CCDBG from the block grant for Temporary Assistance for
Needy Families (TANF)—totaled $6.9 billion.
Of discretionary CCDBG funds, 0.5% is reserved for allotment to the territories, and 1% to 2%
(determined by the Secretary of Health and Human Services) is reserved for payments to Indian
tribes and tribal organizations. Remaining discretionary funds are allocated among states, based

308 Sec. 308 (e) of P.L. 108-199. 118 Stat. 131.
309 For FY1991, FY1992, and FY1993, ceilings were imposed ($750 million, $825 million, and $925 million,
respectively); for FY1994 and FY1995, unlimited funds were authorized. In 1996, CCDBG was reauthorized in welfare
reform legislation (P.L. 104-193), with a yearly authorization ceiling of $1 billion in discretionary funds for FY1996-
FY2002. However, appropriations for FY2000 and FY2001 (at $1.2 billion and $2 billion, respectively) exceeded the
ceiling. Congress appropriated $2.1 billion in discretionary funds for each of fiscal years 2003, 2004, and 2005 (the
same level as FY2002), without passing a reauthorization bill.





on each state’s proportion of all children under age five, its proportion of all children who receive
free or reduced price school lunches, and its per capita income relative to that of the Nation.
Through FY1995, states were required to reserve 25% of their allocation to improve child care
quality and to increase availability of early childhood development programs and before- and
after-school services. Effective in FY1996, states could spend no more than 5% of their
allotments for administrative costs, and no less than 4% on efforts to improve the quality and
availability of child care.
Before October 1, 1997, states also received federal funds for child care services on behalf of
current, former, and potential recipients of Aid to Families with Dependent Children (AFDC). For
these funds states had to provide matching funds. The 1996 welfare reform law repealed the
AFDC-related child care programs and replaced them with entitlement funding to states for child
care services. The law appropriated $13.9 billion in entitlement child care funding for six years,
FY1997-FY2002, with annual amounts of $2.1 billion for FY1998, $2.2 billion for FY1999, $2.4
billion for FY2000, and $2.6 billion and $2.7 billion for FY2001 and FY2002, respectively.
Funding was continued via a series of temporary extensions at the FY2002 rate of $2.717 billion
annually through FY2005, and was subsequently extended through FY2010 at an annual rate of
$2.9 billion. These amounts are provided under Title IV-A of the Social Security Act (the part
governing TANF), but states are required to transfer them to the same agency that administers the
CCDBG and to spend them in accordance with CCDBG rules. The combined discretionary and
entitlement funding streams are referred to by HHS and federal regulations as the Child Care and
Development Fund (CCDF).
Of entitlement child care funding, between 1% and 2% is reserved for payments to Indian tribes
and tribal organizations. The rest is provided to states in two components. First, each state
receives a fixed amount each year, equal to the maximum annual amount received by the state
under the repealed AFDC child care programs in FY1994, FY1995, or in FY1992-FY1994, on
average. This amount is estimated to equal $1.2 billion each year; no state match is required to
receive these funds. Second, remaining entitlement funds are allocated to states according to each
state’s share of children under age 13. States must achieve maintenance-of-effort spending targets
to qualify for these funds; they also must provide matching funds for them, at the Medicaid match
rate, which varies among states and is related inversely to state per capita income (see program
No. 1). As with discretionary CCDBG funding, states may spend no more than 5% of their
entitlement funds for administrative costs, and no less than 4% on activities to improve the
quality and availability of child care. Note: States are authorized to transfer to the CCDBG up to

30% of their TANF block grants, which total $16.5 billion annually (P.L. 105-33).



To be eligible for subsidized child care, a child must (1) be less than 13 years old (or, at option of 311
the grantee, under 18, if disabled or under court supervision), and (2) live with at least one

310 Regulations governing child care and development block grants to states are found in 45 CFR Parts 98 and 99
(2005). This program is No. 93.575 in the Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 618,
9658.
311 Or under age 19, if the state extends TANF eligibility to achild” to this age.





parent who is working or attending a job training or educational program (unless the child is
receiving protective services or in need of them). In addition, the income of the child’s family
cannot exceed 85% of the state median for a family of the same size (before FY1996, the income
ceiling was 75% of the state median). The law requires that states give priority to children in very
low-income families and to those with special needs. According to statute, states must spend 70%
of entitlement funds on welfare recipients working toward self-sufficiency or families at risk of
welfare dependency. However, because all families with income below 85% of the state median
can be classified as “at risk,” the 70% targeting rule (for welfare and at-risk families) does not
necessarily mean that welfare families must be served. In theory, all funds may be used for low-
income, non-welfare, working families. However, state plans indicate that many states guarantee
child care to welfare families.
For subsidized child care services, states must establish a sliding fee schedule that requires cost
sharing unless the family’s income is below the poverty level. Parents must be given the option to
obtain care from a provider who is paid directly by the state, through a grant or contract, or
through certificates that are payable for child care from an eligible provider of the parents’ choice.
Child care services may include center-based care, group home care, family care, and “in-home”
care.
Note: See also CRS Report RL30785, The Child Care and Development Block Grant: th
Background and Funding and CRS Report RL32817, Child Care Issues in the 109 Congress.

See TANF block grant entry (program No. 11).
In FY2004, expenditures for TANF-funded services (other than child care, shown separately in
this report) were estimated at $6.3 billion, $4.9 billion (78%) from federal funds and $1.4 billion
from state-local funds. This excludes TANF funds transferred by states to the Social Services
Block grant.

TANF law permits states to use block grant funds to provide services to recipient families and to
various groups of other “needy” families, so long as the services can be expected to lead toward
ending the dependence of needy parents on government benefits or enabling needy families to
care for children at home, two of the program’s goals. States decide what income limits to set for
specific services, and they may tailor services to the circumstances of individual families. States

312 Eligibility criteria for activities funded with state maintenance-of-effort funds must be reported [45 CFR
§265.9(c)(6)(2005)]. The TANF block grant is program No. 93.558 in the Catalog of Federal Domestic Assistance. It is
codified at 42 U.S.C. 601 et seq.





also may provide services to non-needy families if they are directed at the goals of preventing and
reducing out-of-wedlock pregnancies or encouraging the formation and maintenance of two-
parent families. In their TANF plans, most states said they provide support services to recipient
families plus three categories of needy families not enrolled in cash aid: former cash recipient
families, families at risk of becoming eligible for cash aid, and unemployed or underemployed
non-custodial parents. Generally income limits range from 150% to 250% of federal poverty
guidelines (in 2005, from $24,135 to $40,225 for a family of three). However, some states have
higher flat annual income limits for some services.
Transportation subsidies, parental skill-building services, home energy aid, housing aid,
rehabilitation services (mental health/substance abuse counseling and treatment), and domestic
violence counseling are examples of benefits/services provided (other than child care, the most
frequently mentioned service). Examples of TANF-funded services that impose no income test
include teen pregnancy prevention programs, responsible parenthood counseling, abstinence
programs, and family planning services. A broad category of TANF expenditures is for services
authorized under pre-TANF law (such as services for children in the juvenile justice system and
certain child welfare and foster care services).
Note: For more information, see CRS Report RL32748, The Temporary Assistance for Needy
Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene
Falk.

The Social Security Act (Title XX) provides 100% federal funding313 to states for social services
up to a maximum ceiling level ($1.7 billion annually since FY2001, lowered from $2.38 billion in
FY2000). Funds are distributed among states on the basis of population. Funding for each fiscal
year since FY2002 has been maintained at $1.7 billion, the same level as the ceiling. Note that
since FY1997, states have had authority to transfer to the Social Services Block Grant (SSBG) up 314
to 10% of their TANF block grants, which total $16.5 billion annually (P.L. 105-33). Transfers
of TANF funds to SSBG totaled 6% of the annual TANF grant in FY2003 and 5% in FY2004.
The authorized transfer amount was scheduled to decline to 4.25% on October 1, 2001 under P.L.

105-178, but more recent legislation maintained the 10% transfer limit.



313 P.L. 97-35 ended requirements for state matching of funds and established an FY1982 funding ceiling of $2.4
billion, which has since been set at $1.7 billion. Estimates of any recent state supplementary funding are not available.
A voluntary survey conducted by the American Public Welfare Association, forerunner of the American Public Human
Services Association, indicated that state-local spending of 31 states on social services in FY1990 equaled 156% of
their Title XX block grant allotments. Previous editions of this report used this percentage to estimate state social
service funding.
314 TANF funds transferred to Title XX must be spent only on children and families with income below 200% of the
poverty income guideline.






States are free to establish their own eligibility criteria for Title XX social services. They decide
what groups to serve and what fees, if any, to charge.
State expenditure reports submitted to HHS provide national data on how states spent SSBG
funds in FY2002 and FY2003 (data from FY2004 are not yet available). The reporting form
includes a list of 29 eligible service categories in which funds may be spent. The list includes
categories such as child care, home-delivered meals for the elderly, foster care, housing services,
and family planning services. In FY2003, for the country as a whole, the services receiving the
greatest percentage of spending were as follows: special services for the disabled, (13.7%); child
protective services, (8.7%); foster care services for children, (13.3%); and home-based services,
(6.9%). For FY2002, the corresponding shares were 12.4%, 10.0%, 12.5%, and 8.5%,
respectively.
Note: For more details about SSBG, see CRS Report 94-953, Social Services Block Grant (Title
XX of the Social Security Act).

See TANF block grant entry (program No. 11).
In FY2004, expenditures for TANF child care were estimated at $2.5 billion, $1.4 billion (89%)
from federal funds and $1.047 billion from state-local funds. This excludes TANF funds
transferred to the Child Care and Development Block Grant (CCDBG), program No. 63. It also
excludes TANF state maintenance-of-effort expenditures that could also count toward state 316
spending required to qualify for entitlement matching funds under the CCDBG.

TANF-funded child care consists of care for children in TANF families, former TANF families,
and other low-income families. The law permits states to use block grant funds to provide child
care to recipient families and to various groups of “needy” families not enrolled in the cash

315 Regulations governing Social Services Block Grants to states are found in 45 CFR Part 96, Subpart G (2005). This
program is No. 93.667 in the Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 1397-1397f.
316 Required state spending to qualify for entitlement matching funds under CCDBG does not itself count toward the
maintenance-of-effort (MOE) state spending requirement for the TANF block grant.
317 Eligibility criteria for families served in programs/activities for which the state claims expenditures countable
toward required state spending (maintenance-of-effort requirement) must be shown in annual state reports unless the
information is provided in the state TANF plan. See 45 CFR Part 265.9(c)(6) (2005). The TANF block grant is program
No. 93.558 in the Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 601 et seq.





program, so long as the child care can be expected to lead toward ending the dependence of needy
parents on government benefits by promoting work or job preparation, one of the program’s
goals. States decide what income limits to set for TANF-funded child care (i.e., how “needy” the
parents must be).
In their TANF plans, most states said they provide free or subsidized child care to three groups of
needy families: recipient families who need it to work, study, or undergo training; former cash
recipient families, for a transition period; and families “at risk” of becoming income-eligible for
cash aid. Generally, income limits for families not enrolled in the cash program range from 150%
to 250% of federal poverty guidelines (in 2005, from $24,135 to $40,255 for a family of three).
However, some states use a relative standard (a percentage of state median income) as the income
test for families not in the cash program.
Many states set the usual age cutoff for TANF-funded care at 13 years, the general limit of the
Child Care and Development Block Grant (CCDBG), but the TANF plan of California promises
child care only for children under age 10 (older, if funds are available).
TANF repealed a requirement that states “guarantee” child care needed to enable welfare parents
to work or study. However, TANF provides that single parents who receive TANF assistance
cannot be punished for refusal to perform required work if they are unable to obtain needed care
for a child under age six for a specified reason.
States decide what charges, if any, to impose for TANF child care and for how long to offer
“transitional” child care to families who have left the cash welfare rolls.
Note: For more information, see CRS Report RL32748, The Temporary Assistance for Needy
Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene
Falk.

Under a consolidated budget account for Homeless Assistance Grants, the Department of Housing
and Urban Development (HUD) provides funding for four programs aiding the homeless that are
authorized under the Stewart B. McKinney Homeless Assistance Act (P.L. 100-77). They are the
Emergency Shelter Grants program, Section 8 Moderate Rehabilitation Assistance for Single-
Room Occupancy (SRO) Dwellings, the Shelter Plus Care program, and the Supportive Housing 318
program.

318 The programs making up Homeless Assistance Grants appear in the Catalog of Federal Domestic Assistance at
14.231, 14.249, 14.238, and 14.235. Regulations are found at 24 CFR Parts 576.1-576.67, 882.801-882.810, 582.1-
582.410, and 583.1-583.410 (2005). The Stewart B. McKinney Homeless Assistance Act is codified at 42 U.S.C.
11371-11378 for Emergency Shelter Grants, 11403-11407b for Shelter Plus Care, 11401 for SRO, and 11381-11389
for the Supportive Housing Program.





Federal funding for the Emergency Shelter Grants program is provided through formula grants to
states, cities, and counties in accordance with the distribution formula used for Community
Development Block Grants (CDBG). Money for the other programs is awarded through
competitive grants to states, local governments, nonprofit organizations, and public housing
authorities.
Grantees must match federal dollars (except in the case of the SRO program). Under the
Emergency Shelter Grants program, a one-for-one match is required (although the first $100,000
granted to a state need not be matched); under the Shelter Plus Care program, grantees must
match federal funds provided for shelter with equal money for services; and under the Supportive
Housing program, dollar-for-dollar cash matching is required for grants involving acquisition,
rehabilitation, or new construction of housing units. HUD homeless assistance funds also are used
for “Supportive Services Only” projects that are linked to housing provided by other
organizations. The FY2005 Appropriations Act required a 25% match for all HUD-funded
services. Outlays for the Homeless Assistance Grants program in 2004 were $1.238 billion.
Under a “continuum of care” strategy developed by HUD, grantees generally must develop and
maintain (or participate in) consolidated plans for the integration of programs and services for the
homeless, including the four programs noted above. Grantees under the Emergency Shelter
Grants program (governmental entities) receive their grants by formula. In the other programs,
grantees (both governmental and nongovernmental agencies) must compete for HUD approval of
their grant proposal. Individual eligibility for assistance from any Homeless Assistance Grant
project generally depends on decisions made by the local sponsor. However, some programs
restrict beneficiary eligibility to specific categories. The Shelter Plus Care program is limited to 319
homeless persons with very low incomes who have disabilities, chronic substance abuse
problems, or AIDS and related diseases. The SRO program is limited to single homeless persons.
Permanent housing under the Supportive Housing program is available only to the disabled.
Homeless Assistance grantees can use funding for a range of activities on behalf of homeless
persons. Under the Emergency Shelter Grants program, activities include renovation, major
rehabilitation, or conversion of buildings for use as emergency shelters or transitional housing for
the homeless; essential social services; operating costs of facilities for the homeless; and
initiatives to prevent homelessness. Supportive Housing program money may be used to assist
homeless persons in transition to independent living through provision of transitional housing,
follow-up services, permanent housing (as well as services) for those with disabilities, supportive
services to those in housing supported by other programs, “alternative” housing for the long-term
homeless, and “safe havens” for homeless individuals. The Shelter Plus Care and SRO programs
provide rental assistance.

319 Very-low income is defined as income below 50% of the area median, adjusted for family size. A higher income
limit, 80% of the area median, may be used for the Single Room Occupancy (SRO) component of this program.





Note: For more details about homeless assistance grants, along with other targeted homelessness
programs sponsored by the federal government, see CRS Report RL30442, Homelessness:
Targeted Federal Programs and Recent Legislation, by Libby Perl et al.


The Community Services Block Grant Act (CSBG)321 authorizes 100% federally funded block
grants to states for community-based antipoverty activities. State allocations are based on the
percentage of funds received in the state in FY1981 from the former Community Services
Administration (CSA) under Section 221 of the Economic Opportunity Act. Of total
appropriations, half of 1% is reserved for allotment to the territories, and the Secretary of Health
and Human Services also must reserve 1.5% for training, technical assistance, planning,
evaluation and data collection. For FY2005, $637 million was appropriated for the block grant,
plus $89.7 million for several smaller related activities, such as community economic
development, job opportunities for low-income individuals (JOLI), grants for rural community
facilities, the national youth sports program, community food and nutrition activities and
individual development accounts.

In general, beneficiaries of programs funded by CSBG must have incomes no higher than the
federal poverty income guidelines. For FY2005, the guidelines were $19,350 for a family of four 323
and $9,570 for a single person in the 48 contiguous states. Amendments enacted in 1984 allow
states to increase eligibility criteria to 125% of the poverty guidelines “whenever the state
determines that it serves the objectives of the block grant.” The program has no rules regarding
assets.
Programs funded by the Community Services Block Grant operate a wide variety of antipoverty
activities, including local program coordination, nutrition, emergency services, and employment
services. CSBG grantees also receive funds from many other sources (such as Head Start,
weatherization assistance, low-income home energy assistance, emergency food and shelter
programs, employment and training, and legal services) to operate antipoverty programs.

320 Beginning in FY1982, under terms of P.L. 97-35 (Section 672), this program replaced the formerly independent
Community Services Administration (CSA), which had been established in 1964 as the Office of Economic
Opportunity and was renamed CSA in 1975.
321 This block grant is codified at 42 U.S.C. 9901 et seq.
322 Regulations governing community services block grants (scope and audit requirements) are found at 45 CFR Part
96, Subpart I (2005). It is program No. 93.569 in the Catalog of Federal Domestic Assistance.
323 Poverty income guidelines are higher in Alaska and Hawaii.





Note: For more details about the Community Services Block Grant, see CRS Report RL32872,
Community Services Block Grants (CSBG): Funding and Reauthorization.

The law provides 100% federal funding. Funds are allocated among local legal services programs
on the basis of state shares of the poverty population. The FY2003 appropriation was $338.8 324
million, up $9.5 million from the FY2002 sum. The increase was to provide supplemental
funding for states that were scheduled to receive a cut in FY2003 funding because of use of data
from the 2000 Census, which showed a shift in state poverty populations.

The Legal Services Corporation Act of 1974326 provides financial aid to programs that offer legal
services in noncriminal proceedings to low-income persons. The law makes eligible “any person
financially unable to afford legal assistance” and says the Corporation should take into account 327
not only income, but liquid assets, fixed debts, cost of living, and other factors in determining
an individual’s capacity to pay for a lawyer. The law requires the Corporation to set national
maximum income limits and to establish guidelines that will insure preference for those least able
to afford an attorney. Regulations of the Corporation have established the maximum income limit
for eligibility at 125% of the federal poverty income guidelines. Regulations permit exceptions to
the income limit in specified circumstances. For example, the regulations permit legal services on
behalf of a person whose income falls between 125% and 150% of the poverty line if the purpose
is to obtain benefits from a “governmental program for the poor,” or if warranted by certain
factors such as the individual’s current income prospects, medical expenses, fixed debts and
obligations, child care and other work-related expenses, expenses associated with age or
infirmity, and other factors related to financial inability to afford legal assistance.
Beneficiaries receive legal aid in noncriminal proceedings. Most cases concern these areas of law:
family, employment, consumer, housing, civil rights, public benefit programs such as cash
welfare, Social Security, Supplemental Security Income (SSI), workers’ compensation,
unemployment compensation, Medicare, and Medicaid. The Legal Services Corporation’s stated
goal is to provide “minimum access to legal services for all poor persons,” defined as the

324 A 0.65% across-the-board rescission reduced the Legal Services Corporation appropriation for FY2003 to $336.6
million.
325 Regulations governing eligibility for legal services are found at 45 CFR Part 1611 (2005). The Legal Services
Corporation Act is codified at 42 U.S.C. at 2996 et seq.
326 Title X of the Economic Opportunity Act, as added by P.L. 93-355.
327 Regulations require the governing bodies of those who receive funds from the Legal Services Corporation to
establish “specific and reasonable asset ceilings each year and, in doing so, to give special consideration to the legal
needs of the elderly, institutionalized, and handicapped.





equivalent of two attorneys for every 10,000 poor persons; however, that goal was achieved only
once, in FY1980. Corporation grantees are not allowed to give legal aid in criminal proceedings
or in most civil cases that are fee-generating in nature, such as accident damage suits. Additional
restrictions include prohibitions against lobbying activities, class action lawsuits, litigation related
to abortion, and representation of prisoners.
On February 28, 2001, the U.S. Supreme Court invalidated a restriction that Congress had
imposed on LSC in every annual appropriations act since 1996. This was a prohibition against
LSC funding of any organization that represented clients in an effort to amend or otherwise
challenge existing welfare law. By a 5-4 vote, the Court found that this restriction violated the
First Amendment (freedom of speech). The Court held that restricting LSC attorneys in advising
their clients and in presenting arguments and analyses to the courts distorted the legal system by
altering the attorneys’ traditional role (Legal Services Corporation v. Velazquez, 121 S.Ct. 1043
[2001]).
Note: For more details about this program, see CRS Report 95-178, Legal Services Corporation:
Basic Facts and Current Status.


The Immigration and Nationality Act as amended by the Refugee Act of 1980 (P.L. 96-212)
authorizes 100% federally funded social services to assist refugees and asylees in becoming self-328
sufficient. Other legislation authorizes similar assistance for certain Cuban and Haitian entrants 329
and for certain Amerasians. The refugee, asylee, and entrant social services funds are
distributed among the states under formulas that usually take into account each state’s proportion
of persons in eligible groups who entered the United States within the previous 36 months. The
Department of Health and Human Services Office of Refugee Resettlement (ORR) administers
this program. Appropriations for social services were $152.2 million in FY2004.

A person must (a) have been admitted to the United States as a refugee or asylee under the
Immigration and Nationality Act or have been paroled as a refugee or asylee under the act, (b) be
a Cuban or Haitian paroled into the United States between April 15 and October 20, 1980, and
designated a “Cuban/Haitian entrant,” or be a Cuban or Haitian national paroled into the United
States after October 10, 1980, (c) be a person who has an application for asylum pending or is
subject to exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.

328 Title V of the Refugee Education Assistance Act (P.L. 96-422).
329 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).
330 Regulations for this program are found at 45 CFR Parts 400-401 (2005). This program is No. 93.566 in the Catalog
of Federal Domestic Assistance.





Any person mentioned above generally is eligible for social services financed by refugee program
funds, but some activities so funded may have eligibility limitations such as age. The above
groups also may benefit from services financed under the Social Security Act (Title XX) but
generally would have to meet the state’s Title XX eligibility requirements. Exceptions to Title XX
rules can be made so that refugees, asylees, and entrants can receive certain particular services
such as language training, vocational training, and employment counseling.
States determine what social services are offered. All social services funded by the refugee
program are considered refugee social services rather than Title XX social services even if they
also qualify under Title XX rules.

Congress has established by statute a National Board of charitable and religious organizations to 331
coordinate and monitor the Emergency Food and Shelter program (the EFS program) under the 332
authority and direction of the Federal Emergency Management Agency (FEMA). The National
Board awards EFS funds to local boards for allocation to direct service providers. To qualify for
funds, a local jurisdiction must have a relatively high rate of unemployment for the most current
12-month period, and a high poverty rate (as measured by the most recent census). The National
Board allocates funds to local jurisdictions on the basis of their share of the total number of
unemployed persons in all qualifying areas.
The National Board also uses a portion of EFS appropriations for state set-aside programs, which
allow state boards to select jurisdictions for funding using a formula established by the state
boards. These funds are intended to enable state boards to target pockets of homelessness or
poverty in areas not qualifying under the regular national formula. Examples include areas that
suffer sudden economic changes such as plant closings, areas with high levels of unemployment
or poverty that do not meet the minimum level of unemployment, or jurisdictions that have
documented measures of need that are not adequately reflected in unemployment and poverty 333
data. Federal EFS outlays for FY2004 were $152 million.

331 Congress established this program in March 1983 (P.L. 98-8) with appropriations of $50 million for FY1983 grants
and continued it with annual appropriations thereafter. In 1987, Congress authorized the program through FY1988 in
the Stewart McKinney Homeless Assistance Act (P.L. 100-77) and in 1992 reauthorized it through FY1994 (P.L. 102-
550). The Emergency Food and Shelter National Board Program is No. 97.024 in the Catalog of Federal Domestic
Assistance, and is codified at 42 U.S.C 11331-11352 (2000). The National Board establishes written guidelines in the
Federal Register, last updated in 1999, volume 64, pp. 22912-22947.
332 The National Board is composed of the following organizations specified in statute: United Way of America, The
Salvation Army, National Council of Churches, Catholic Charities USA, United Jewish Communities, American Red
Cross, and FEMA.
333 Federal Register pp. 22913-22914.





Public and private organizations that provide shelter and food to the homeless and hungry receive
federal funds under this program. Providers include food banks, soup kitchens, shelters, and other
organizations serving the homeless. The program is designed to purchase food and shelter to
supplement and expand current available resources to target special economic, not disaster-
related, emergencies. The eligibility of direct service providers to receive EFS funds is
determined by each local board. EFS-funded assistance is available for any individual or family
whom the local board determines to be in need.
The EFS program provides food and feeding related expenses (such as transport of the food and
food preparation and serving equipment), mass shelter, other shelter (such as hotels and motels),
rent/mortgage and/or utility assistance for one month only to avert homelessness, and limited
repairs to feeding and sheltering facilities. Estimated outlays for FY2005 are $153 million.
Note: For more information, see CRS Report RS22286, The Emergency Food and Shelter
Program.


See TANF block grant entry (program No. 11).
In FY2004, expenditures for TANF work programs and activities were reported at $2.2 billion,
$1.6 billion (75%) from federal funds, and $0.5 billion from state-local funds. (This excludes
funding for the separate Welfare-to-Work grant program administered by the Department of
Labor, program No.77 in this report.)

To enforce a focus on work, TANF law allows parents and other caretakers of TANF children a
maximum of 24 months of benefits without “work,” as defined by the state. It also requires states
to achieve minimum rates of participation by TANF families in federally recognized work 335
activities. States may use TANF block grant funds to provide work programs and activities for

334 Eligibility criteria for families served by programs/activities for which the state claims expenditures countable
toward required state spending (maintenance-of-effort requirement) must be shown in annual state reports unless the
information is provided in the state TANF plan. 45 CFR §265.9(c)(6)(2005). The TANF block grant is program No.
93.558 in the Catalog of Federal Domestic Assistance.
335 For details of work rules and the list of countable work activities, see Work/conduct requirements under program
(continued...)





recipient families and various groups of “needy” families not enrolled in the cash program, so
long as the services can be expected to lead toward ending the dependence of needy parents on
government benefits by promoting job preparation and work, one of the program’s goals. States
decide eligibility limits, and they may tailor activities to the needs of individual families. If they
offer work activities to noncustodial parents of TANF children, they may choose whether or not
to include them in calculating work participation rates of two-parent families.
TANF reporting forms require states to break down TANF expenditures on work-related activities
into three categories: work subsidies, education and training, and other work activities/expenses.
In a guidance for use of TANF funds (Helping Families Achieve Self-Sufficiency), HHS lists
numerous ways to support work activities, including job search and placement, job skills training,
work experience, job retention services and counseling, and specialized training for supervisors.
Note: For more information, see CRS Report RL32748, The Temporary Assistance for Needy
Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene
Falk.

The Job Corps is 100% federally funded. The Job Corps is authorized by Title I, Subtitle C of the 336
Workforce Investment Act (WIA). FY2004 Job Corps appropriations were $1.5 billion.

Those eligible for the Job Corps are “low-income” youths aged 16-24 (only 20% of enrollees may
be older than 21) who have one or more of the following characteristics: deficient in basic
reading, writing, or computing skills; a school dropout; homeless, a runaway, or a foster child for
whom state or local government payments are made; a parent; in need of additional education,
vocational training, or intensive counseling and or help to accomplish regular schoolwork or to
secure and hold employment.
WIA defines a low-income person as one who (a) receives cash welfare or is a member of a
family that receives cash welfare, (b) receives food stamps or is a member of family that was 338
eligible to receive food stamps in the previous six months; (c) had family income for the

(...continued)
No. 11.
336 Until July 1, 2000, the Job Corps was authorized by the Job Training Partnership Act (JTPA) (Title IV-B). Effective
on that date, JTPA was replaced by the Workforce Investment Act (WIA), P.L. 105-220. The transition period for
implementation of WIA was from July 1,1999 to June 30, 2000.
337 Regulations for Job Corps are found at 20 CFR Part 670 (2005).
338 Excluded from counted family income are unemployment compensation, child support payments, cash welfare
(continued...)





preceding six months no higher than the federal poverty guideline (a limit in 2003 throughout the 339
48 contiguous states and the District of Columbia of $ 18,400 for a family of four persons and
$8,980 for a single person) or no higher than 70% of the lower living standard income level
(LLSIL) (a ceiling that ranged, effective on May 30, 2003, for a four-person family from $18,270
in non-metropolitan areas of the South to $22,230 in metropolitan areas of the Northeast—and
higher in Alaska, Hawaii and Guam); (d) is homeless, as defined in the Stewart McKinney
Homeless Assistance Act; (e) is a foster child on behalf of whom state or local government
payments are made; or (f) is a disabled person whose own income meets the program limit, but
whose family income exceeds it.
The Job Corps has no asset rules.
Job Corps enrollees are served primarily in residential centers where they receive basic education,
vocational skills training, counseling, work experience, and health services. Enrollees receive
personal allowances while participating in the program and readjustment allowances upon
successful completion of the program. Job Corps centers are required to provide child day care, to
the extent practicable, at or near the centers. Enrollees may remain in the Corps for up to two
years; the average stay is about seven months.
WIA forbids needs-tested programs to take its allowances, earnings, and payments into account in 340
determining eligibility for benefits and their amount.
Note: For further information about Job Corps, see CRS Report RS22396, The Workforce
Investment Act (WIA): Program-by-Program Overview and FY2007 Funding of Title I Training
Programs.

This program is 100% federally funded. Youth Activities are authorized under Subtitle B, Chapter 341

4 of the Workforce Investment Act (WIA). Funds are allocated to states on the basis of a three-


part formula: state shares of the national distribution of “substantial” unemployment
(unemployment rate of at least 6.5%), “excess” unemployment (rate above 4.5%), and the

(...continued)
benefits, and social security benefits.
339 Poverty guidelines are 25% higher in AK, 15% higher in HI.
340 This rule is found at Section 181 of WIA. Note: Before the 1996 welfare reform law, which repealed AFDC, states
were required to count most JTPA earnings and payments in determining AFDC eligibility and benefit amounts.
However, AFDC law gave states the option, for no more than six months, to disregard JTPA earnings of a child.
341 Effective July 1, 2000, the program of youth training under Title II-C of the Job Training Partnership Act (JTPA)
was repealed. Youth Activities is a new replacement training program for youth. The transition period for
implementation of the Workforce Investment Act (WIA) (P.L. 105-220) was July 1, 1999 to June 30, 2000.





population of “disadvantaged” youth (family income below the federal poverty guideline or 70% 342
of the lower living standard income level). FY2004 appropriations were $995 million.

Those eligible for WIA youth activities are “low-income” youths aged 14 through 21 who have
one or more of the following characteristics: deficient in basic literary skills; a school dropout;
homeless, a runaway, or a foster child; pregnant or a parent; or a youth offender, in need of
additional assistance to complete an educational program or to secure and hold employment.
WIA defines a low-income person as one who
(a) receives cash welfare or is a member of a family that receives cash welfare;
(b) receives food stamps or is a member of family who was eligible to receive food stamps in the
previous six months;
(c) had family income344 for the preceding six months no higher than the federal poverty 345
guideline (a limit in 2003 throughout the 48 contiguous states and the District of Columbia of
$18,400 for a family of four persons and $8,980 for a single person) or no higher than 70% of the
lower living standard income level (LLSIL) (a ceiling that ranged, effective on May 30, 2003, for
a four-person family from $18,270 in non-metropolitan areas of the South to $22,230 in
metropolitan areas of the Northeast, and higher in Alaska, Hawaii, and Guam);
(d) is homeless, as defined in the Stewart McKinney Homeless Assistance Act;
(e) is a foster child on behalf of whom state or local government payments are made; or
(f) is a disabled person whose own income meets the program limit, but whose family income
exceeds it.
The program has no asset rules.
Local youth programs must include the following services: tutoring, study skills training, and
instruction leading to secondary school completion; alternative secondary school offerings;
summer employment opportunities directly linked to academic and occupational learning; paid
and unpaid work experience, including internships and job “shadowing,” occupational skill

342 The allocation formula is the same under WIA as it was under JTPA.
343 Regulations for youth activities are found at 20 CFR Part 664 (2005). This program is No. 17.259 in the Catalog of
Federal Domestic Assistance.
344 Excluded from counted family income are unemployment compensation, child support payments, cash welfare
benefits, and social security benefits.
345 Poverty guidelines are 25% higher in Alaska, 15% higher in Hawaii.





training; leadership development opportunities, including community service and peer-centered
activities; supportive services; adult mentoring for at least 12 months; followup services for at
least 12 months, and comprehensive guidance and counseling, including drug and alcohol abuse
counseling. At least 30% of local allotments must be used to provide activities to out-of-school
youth. Local boards may determine how much of available youth funds to use for summer and for
year-round activities, and local programs have discretion to decide what specific services to
provide to a participant.
Note: For more information, see CRS Report RS22396, The Workforce Investment Act (WIA):
Program-by-Program Overview and FY2007 Funding of Title I Training Programs.

This program is 100% federally funded. Adult Activities are authorized under Subtitle B, Chapter 346
5 of the Workforce Investment Act. Funds are allocated to states on the basis of a three-part
formula: state shares of the national distribution of “substantial” unemployment (unemployment
rate of at least 6.5%), “excess” unemployment (rate above 4.5%) and the “disadvantaged” adult
population (family income below the federal poverty guideline or 70% of the lower living 347
standard income level). FY2004 appropriations were $893 million.

Those eligible for adult activities are persons at least 18 years old. Any individual may receive
“core” services (for example, job search assistance). For intensive services, such as individual
career planning, and for job training, a person must need the services in order to become
employed or to obtain or retain a job that allows for self-sufficiency. If funds are limited, priority
must go to recipients of cash welfare and other low-income persons.
The program has no asset rules.
The law requires that most services for adults be provided through One Stop Career Centers. It
authorizes three levels of services: “core” services, “intensive” services, and training services.
Available to all job seekers are core services, which include outreach, job search and placement

346 Effective July 1, 2000, the program of adult training under Title II-A of the Job Training Partnership Act (JTPA)
was repealed. Adult Activities is a new replacement training program for adults. The transition period for
implementation of the Workforce Investment Act (WIA) (P.L. 105-220) was July 1, 1999 to June 30, 2000. The
program has no income test but requires priority for low income persons in the event of limited funds.
347 The allocation formula is the same under WIA as it was under JTPA.
348 Regulations for the repealed JTPA adult training program are found at 20 CFR Part 628, Subpart F (2005). The WIA
program of Adult Activities is No. 17.258 in the Catalog of Federal Domestic Assistance. Final regulations for the WIA
program (20 CFR Part 652 et. al.) are found in the Federal Register of Aug. 11, 2000, p. 49249. Final regulations for
WIA Adult Activities (20 CFR Part 663) are found in the Federal Register of Aug. 11, 2000, p. 49402.





assistance, and labor market information. “Intensive” services are available only to persons who
have received at least one core service and need further services to obtain or retain a job.
Intensive services include more comprehensive assessments, development of individual
employment plans, and counseling and career planning. Training services linked to job
opportunities in the community are available for persons who cannot find a job through intensive
services. Both occupational training and training in basic skills may be offered. To promote
individual choice, participants use an “individual training account” to select a program from a
qualified training provider. The law also authorizes supportive services, such as child care and
transportation aid, to enable a person to participate.
WIA forbids needs-tested programs to take its allowances, earnings, and payments into account in 349
determining eligibility for benefits and their amount. However, an exception applies to food
stamp recipients, aged 19 or older, who are enrolled in on the-job-training. Food stamp rules treat
the earnings of on-the-job trainees as earned income.
Note: For more information, see CRS Report RL30929, Job Training: Characteristics of
Workforce Training Participants. For more historical information about the adult and youth
training programs under JTPA, see CRS Report 94-862, The Job Training Partnership Act: A
Compendium of Programs. For more information about the programs under WIA, see CRS
Report RS22396, The Workforce Investment Act (WIA): Program-by-Program Overview and
FY2007 Funding of Title I Training Programs.



The law provides 90% federal funding for this program (up to 100% for activities in emergency
or disaster projects, for activities in economically depressed areas, and for private sector training 351
activities). The non-federal share can be cash or in kind. The state allocation formula has three
elements: a hold harmless factor (the 2000 level of funding); a state’s relative share of persons
aged 55 years and older; and a state’s relative per capita income. For FY2005, $437 million was
appropriated.
Title V of the Older Americans Act makes eligible for the Senior Community Service
Employment Program (SCSEP) persons aged at least 55 with low incomes. The act defines low

349 This rule is found at Section 181 of WIA. Note that before the 1996 welfare reform law, which repealed AFDC,
states were required to count JTPA payments to an adult in determining AFDC eligibility and benefit amounts.
350 Effective July 1, 2000, the program of adult training under Title II-A of the Job Training Partnership Act (JTPA)
was repealed. Adult Activities is a new replacement training program for adults. The transition period for
implementation of the Workforce Investment Act (WIA) (P.L. 105-220) was July 1, 1999 to June 30, 2000. The
program has no income test but requires priority for low income persons in the event of limited funds.
351 These private sector training activities are carried out under section 502(e) of the Older Americans Act.





income as not exceeding 125% of the poverty guidelines established by the Department of Health
and Human Services (HHS). Department of Labor (DOL) regulations provide eligibility for a
person who is a member of a family with an income that is not more than 125% of the HHS
poverty guidelines. In determining income eligibility, a person with a disability may be treated as
a “family of one.” The 2005 income eligibility ceilings were $11,962.50 for an individual and
$16,037.50 for a two-person family (higher in Alaska and Hawaii). The period for determining
income is the twelve months preceding the time of application. There is no asset test.
Regulations give first priority to veterans and qualified veteran spouses at least 60 years old,
second priority to other persons at least 60 years old, third priority to veterans and qualified
veteran spouses aged 55-59, and fourth priority to other persons aged 55-59. The regulations also
say that “special consideration” should be given to persons with incomes below the poverty level,
persons with poor employment prospects, persons with “the greatest social and/or economic
need,” eligible minorities, limited English speakers, and Indians. Regulations forbid an upper age
limit, and they require annual recertification of income.
The DOL instructions352 require SCSEP project sponsors to disregard various kinds of income of
applicants and recipients, including capital gains (or losses) from the sale of property,
withdrawals of bank deposits, money borrowed, tax refunds, gifts, lump-sum inheritances or
insurance payments, Supplemental Security Income, public assistance payments, disability
payments, child support, workers’ compensation, and the first $2,000 of certain per capita fund
distributions to Indians. However, unemployment compensation, veterans’ payments, Social
Security, pension income, interest, dividends, rents, and alimony, among other things, are
included in deciding eligibility.
Participants are placed in part-time community service jobs, for which their wages are subsidized
by the federal government; when possible, project sponsors are encouraged to place enrollees in
unsubsidized jobs. Upon placement in a job, enrollees receive no less than the highest of the
federal minimum wage, the state or local minimum wage, or the prevailing wage paid by the
same employer for similar public occupations.
Note: For more information, see CRS Report RL31336, The Older Americans Act: Programs,
Funding, and 2006 Reauthorization (P.L. 109-365), by Carol O'Shaughnessy and Angela Napili.

Note: No part of the original TANF block grant was earmarked for work programs, but in 1997,
Congress added a two-year $3 billion program of welfare-to-work (WtW) grants to help states
meet TANF work requirements.

352 Older Worker Bulletin, No. 04-5 (April 12, 2004), published by the U.S. Department of Labor
http://www.doleta.gov/Seniors/html_docs/Library.cfm.





The Balanced Budget Act of 1997 (P.L. 105-33) created a $3 billion welfare-to-work (WtW) grant
program for two years, FY1998 and FY1999. Although WtW is a component of TANF (Section

403(a)(5) of the Social Security Act), it is administered by the Department of Labor (DOL). After 353


set-asides, 75% of WtW funds were designated for matching formula grants (66.7% federal
matching rate) and 25% for competitive grants. Formula grants were allocated by DOL to states
on the basis of their shares of the national adult TANF population and the poverty population.
States were required to distribute 85% of the formula grants to local workforce investment 354
areas. DOL awarded a total of $2 billion in formula grants (to 48 states in 1998 and 45 in
FY1999) and $712 million in competitive grants to localities and nonprofit organizations. The
original law gave WtW grantees three years from the date of an award in which to spend WtW
funds. Congress eventually ended the program in 2004, rescinding remaining unspent funds in
P.L. 108-199.

WtW funds were focused on hard-to-employ TANF recipients. As first enacted, 70% of funds had
to be used for the benefit of TANF recipients (and TANF non-custodial parents) with at least two
specified barriers to work who themselves (or whose minor children) were long-term recipients
(30 months of AFDC/TANF benefits) or were within 12 months of reaching the TANF five-year
time limit or a shorter state time limit. The target groups had to have at least two of these three
work impediments: lack a high school diploma and have low skills in reading or mathematics,
require substance abuse treatment for employment, and/or have a poor work history. WtW
eligibility was liberalized by P.L. 106-554, to allow grantees to use WtW funds and state
matching funds on behalf of four new groups: long-term TANF recipients without specified work
barriers, former foster care youths 18 to 24 years old, TANF recipients who are determined by
criteria of the local private industry council to have significant barriers to self-sufficiency, and
non-TANF custodial parents with income below the poverty line. However, at least 70% of WtW
funds were requested to be spent on long-term TANF recipients and/or noncustodial parents
without specified work barriers.
The 1999 law also set special rules for noncustodial parents. To be eligible for WtW, noncustodial
parents had to be unemployed, be underemployed, or have difficulty paying child support, and
they must comply with an oral or written personal responsibility contract. They also had to meet
one of the following conditions: Their minor child or the child’s custodial parent must be a long-
time TANF recipient or within 12 months of reaching a TANF time limit; the child must be a

353 Set-asides include the following: Indian tribe programs, $15 million in each of FY1998 and FY1999; WtW program
evaluations, $9 million in each of FY1998 and FY1999; and abstinence program evaluations, $3 million in each of
FY1998 and FY1999. Congress cut funds set aside for WtW performance bonuses from $100 million to $50 million
(Consolidated Appropriations Act, 2000, P.L. 106-113) and subsequently eliminated the bonuses (Consolidated
Appropriations Act, 2001, P.L. 106-554).
354 At least half of the states substate allocation formula had to be based on the workforce investment areashigh
poverty population (defined as the number of persons in poverty in excess of 7.5% of the areas total population), and
the rest on its population of long-term welfare recipients and/or unemployed persons.
355 WtW regulations are found at 20 CFR 645 (2005). This program is No. 17.253 in the Catalog of Federal Domestic
Assistance.





recipient of income-tested aid (TANF, food stamps, SSI, Medicaid or SCHIP); or the child must
have left TANF within the last 12 months.
Activities that may receive WtW funds included the following: the conduct and administration of
community service or work experience programs; job creation through wage subsidies, on-the-job
training, contracts with providers of readiness, placement, and post-employment services; job
vouchers for placement, readiness, and post-employment services; job retention or support
services if these services are not otherwise available; and, added by P.L. 106-113, up to six
months of vocational educational or job training (effective July 1, 2000). The law specifies that a
work activity paid with WtW funds may not violate an existing contract for services or a
collective bargaining agreement and that a WtW worker cannot fill a vacancy resulting from
cutting the hours of a job below full time.


The Food Stamp Act provides for annual grants to state agencies administering the Food Stamp
program to conduct employment and training activities for food stamp recipients. These grants,
which are automatically reserved from annual food stamp appropriations, are set at $90 million a
year. They are not limited by fiscal year, and unspent amounts can be carried over and
accumulated for use in a future year or reallocated to states that have spent their allocation of
funds. In addition, states may receive a portion of an additional $20 million a year if they agree to
serve all recipients who are able-bodied adults without dependents (ABAWDs). Employment and
training grants generally are allocated among states on the basis of their proportion of persons to
which food stamp work rules apply, with special emphasis on the estimated number of ABAWDs 357
in each state’s food stamp caseload as a proportion of the national total.
In addition to the above-noted unmatched federal grants for operating their employment and
training programs, the federal government pays states 50% of (1) any additional operating costs
and (2) any participant support costs (e.g., child care, transportation); in FY2004, these payments
exceeded $160 million.

356 Funding for the FY2002 employment and training program was available (and spent) under the terms of two
different sets of law. P.L. 107-171 established the funding and other rules described here. However, previous law
provided some additional money in FY2002. Note that in versions of this report before 2001, this program was
subsumed under entries for the Food Stamp program.
357 Federal payments from these grants are, in most cases, limited to $30 a month for each employment/training
placement (“slot”) offered to a recipient and $175 a month for each slot that is filled.






As detailed in the description of the Food Stamp program (program No. 19), certain nonworking
able-bodied adult recipients must register for employment, accept a suitable job if offered one,
and fulfill any work, job search, or training requirements (participate in employment and training 359
programs) established by administering state agencies. Major exemptions from this
requirement incorporated in food stamp law include persons caring for dependents (disabled or
under age six) and those already subject to another program’s work requirement. In addition,
states may choose not to require participation of otherwise covered individual recipients.
Nonworking ABAWDs, on the other hand, must participate in an employment or training activity
under conditions noted in the description of the Food Stamp program—unless they reside in an
area for which the state agency has obtained a waiver because of very high unemployment levels
or the lack of available jobs or they have been individually exempted by the state agency under its 360
authority to exempt up to 15% of those potentially subject to ABAWD work/training rules. In
FY2004, states reported some 3.4 million new work registrants (i.e., persons potentially subject to
required participation in employment and training programs); approximately 2.3 million
(including about 450,000 ABAWDs) were subject to employment and training requirements.
State agencies have a great deal of flexibility in the types of employment and training activities
they can require of food stamp recipients. These include job searches and training for job
searches, educational activities to improve basic skills and employability (e.g., literacy training,
high school equivalency preparation), vocational training, workfare or work experience programs.
Almost two-thirds of employment/training program participants are typically assigned to job
search or job search training, and another 30% are placed in workfare/work experience “slots.”
Fewer than 5% participate in educational or vocational training activities.

The Domestic Volunteer Service Act of 1973, as amended (P.L. 103-82), provides 90% federal
funding for developing and/or operating a foster grandparents project (up to 100% in special
situations). The local project may provide its matching share in kind or cash. A total of $111
million was appropriated for FY2005.

358 Food stamp employment and training regulations are found at 7 CFR Part 273 (2004). The Food Stamp program is
No. 10.551 in the Catalog of Federal Domestic Assistance.
359 State agencies may offer employment/training placements to “volunteer” food stamp recipients (persons not
required to participate).
360 In FY2001, 36 state agencies had waivers covering part of their jurisdictions, and estimates place the proportion of
ABAWDs actually required to participate in employment/training programs at approximately 70%.






The law makes eligible as foster grandparents persons at least 60 years old who are no longer in
the regular workforce. Individuals must have an annual income, after deducting allowable
medical expenses, that does not exceed 125% of the federal poverty guideline (or 135% of the
poverty line in the case of volunteers living in areas determined by the Corporation for National 362
and Community Service to have a higher cost of living). For 2005, the 125% of poverty limit
was $11,962.50 for a single person and $16,037 for a two-person family in the 48 contiguous
states (higher in Alaska and Hawaii). Allowable medical expenses are annual out-of-pocket
medical expenses for health insurance premiums, health care services, and medications that were
not and will not be paid by Medicare, Medicaid, other insurance or other third party payer, and
which do not exceed 15% of the applicable income guideline. Once enrolled, a person remains
eligible so long as his countable income does not exceed 150% of the poverty guideline (or, in
high cost areas, 162%). The program has no asset rules.
The law requires low-income volunteers to be provided with a stipend plus transportation and
meal costs. The stipend is set at $2.65 per hour. Stipends are tax-free and cannot be treated as
wages or compensation for the purposes of any public benefit program. Volunteers also receive
annual physical examinations and accident and personal liability insurance. Foster grandparents
provide services to children with exceptional or special needs.
Note: For more information about the Foster Grandparent program, see CRS Report RL30186,
Community Service: A Description of AmeriCorps, Foster Grandparents, and Other Federally
Funded Programs, and CRS Report RS20419, VISTA and the Senior Volunteer Service Corps:
Description and Funding Levels.

The Domestic Volunteer Service Act of 1973, as amended (P.L. 103-82), provides 90% federal
funding for developing and/or operating a senior companion project (up to 100% in special
situations). The local project may provide its matching share in kind or cash. A total of $45.9
million was appropriated for FY2005.

361 Regulations for Foster Grandparents are found at 45 CFR Part 2552 (2005). The program is program No. 94.011 in
the Catalog of Federal Domestic Assistance.
362 Originally limited to low-income seniors, the program was amended in 1986 (P.L. 99-551) to permit persons whose
income exceeds program limits to become foster grandparents under certain conditions, but not to receive a stipend.






The law authorizes support for senior companions persons at least 60 years old who are no longer
in the regular workforce. Individuals must have an annual income, after deducting allowable
medical expenses, that does not exceed 125% of the federal poverty guideline (or 135% of the
poverty line in the case of volunteers living in areas determined by the Corporation for National 364
and Community Service to have a “higher” cost of living). For 2005, the 125% of poverty limit
was $11,962.50 for a single person and $16,037.50 for a two-person family in the 48 contiguous
states (higher in Alaska and Hawaii). Allowable medical expenses are annual out-of-pocket
medical expenses for health insurance premiums, health care services, and medications that were
not and will not be paid by Medicare, Medicaid, other insurance or other third-party payer, and
which do not exceed 15% of the applicable income guideline. Once enrolled, a person remains
eligible so long as his countable income does not exceed 150% of the poverty guideline (or, in
higher cost areas, 162%).
The law requires low-income volunteers to be provided with a stipend plus transportation and
meal costs. The stipend is set at $2.65 per hour. Stipends are tax-free and cannot be treated as
wages or compensation for the purposes of any public benefit program. Volunteers also receive
annual physical examinations and accident and personal liability insurance. Senior companions
provide supportive services to vulnerable, frail adults who are homebound and who usually live
alone.
Note: For more information about the Senior Companion program, see CRS Report RL30186,
Community Service: A Description of AmeriCorps, Foster Grandparents, and Other Federally
Funded Programs, and CRS Report RS20419, VISTA and the Senior Volunteer Service Corps:
Description and Funding Levels.


Subject to available appropriations, the Immigration and Nationality Act authorizes 100%
federally funded targeted assistance (primarily for employability-related services) for refugees
and asylees. Other legislation authorizes similar assistance for certain Cuban and Haitian 365366
entrants and for certain Amerasians. The Department of Health and Human Service’s Office

363 Regulations for Senior Companions are found at 45 CFR Part 2551 (2005). This program is No. 94.016 in the
Catalog of Federal Domestic Assistance.
364 Originally limited to low-income seniors, the program was amended in 1986 (P.L. 99-551) to permit persons whose
income exceeds program limits to become senior companions under certain conditions, but not to receive a stipend.
365 Title V of the Refugee Education Assistance Act (P.L. 96-422).
366 Section 584 of the FY1988 Foreign Operations Appropriations Act (P.L. 100-202).





of Refugee Resettlement (ORR), which administers the program, awards grants to designated
state agencies on behalf of counties with high concentrations of refugees, asylees or other eligible
groups. States must allocate at least 95% of funds to counties. For refugee targeted assistance,
ORR benefit expenditures amounted to $44.1 million in FY2004.

A person must (a) have been admitted to the United States as a refugee or asylee under the
Immigration and Nationality Act or have been paroled as a refugee or asylee under the act, (b) be
a Cuban or Haitian paroled into the United States between April 15 and October 20, 1980, and
designated a “Cuban/Haitian entrant,” or be a Cuban or Haitian national paroled into the United
States after October 10, 1980, (c) be a person who has an application for asylum pending or is
subject to exclusion or deportation and against whom a final order of deportation has not been
issued, or (d) be a Vietnam-born Amerasian immigrant fathered by a U.S. citizen.
In allocating targeted assistance funds, states must give priority to the following groups, in order:
(a) cash assistance recipients, particularly long-term recipients; (b) unemployed individuals who
are not cash recipients; (c) employed individuals who need services to retain jobs or become
economially independent.
Counties develop their own plans for targeted assistance, which must be approved by the state.
Targeted assistance funds must be used primarily for employability services designed to enable
beneficiaries to obtain jobs within a year. They may not be used for long-term training programs
lasting more than a year or for educational programs that are not intended to lead to employment
within a year.

The 1996 welfare law (P.L. 104-193), which abolished the Job Opportunities and Basic Skills 368
(JOBS) training program, established the Native Employment Works (NEW) Program to
continue tribal work and training grants that existed under JOBS. Administered by HHS, the
NEW program is 100% federally funded. Funding is authorized and pre-appropriated at $7.6
million for each fiscal year through FY2010. This equals the sum received by Indian tribes and
Alaska native organizations to operate their own JOBS programs in FY1995.

367 Regulations for this program are found at 45 CFR Part 400.310 et seq (2005). This program is No. 93.584 in the
Catalog of Federal Domestic Assistance.
368 This name was given to the continued program of tribal work grants by HHS upon the recommendation of Indian
tribes.






The NEW program is not subject to federal definitions of TANF work activities, TANF work
requirements, or to old JOBS rules. Indian tribes design their own NEW programs, define who
will be eligible, decide what benefits and services to provide, and specify the population and
geographic area to be served. Target groups generally include TANF recipients, non-custodial
parents, recipients of General Assistance (GA) from the Bureau of Indian Affairs (BIA), and
unemployed parents. Of NEW participants in program year 2000-2001, about 70% also were
enrolled in TANF and 6% in BIA general assistance. (In early 2003, 38 tribal TANF plans were in 370
operations, covering about 27,000 families in 15 states.) Also, as noted in the entry on General
Assistance to Indians (program No. 17 in this report), some tribes operate Tribal Work Experience
Programs (TWEP), which pay a monthly $115 supplement to GA cash benefits.
In program year 2000-2001, about 23% of the reported total of 5,615 NEW participants received
child care; 35%, transportation assistance; 17%, counseling; 16% other supportive/job retention
services (such as equipment, tools and uniforms) and 4%, medical services. Major program
activities included job search (40% of clients); classroom training (5%); work experience (26%); 371
on-the job training (3%); and other tribal work activity (12%). A total of 1,565 NEW
participants, including 616 TANF recipients, began unsubsidized jobs during the year. According
to the Fifth annual TANF report, many tribes with NEW programs co-located training,
employment, and social services, often in “one-stop” centers. Some grantees established
information/resource centers and learning centers, which provided a variety of job preparation
services and worked closely with local colleges.


The Low-Income Home Energy Assistance Act (Title XXVI of P.L. 97-35, as amended) provides 372

100% federal funding for the Low-Income Home Energy Assistance Program (LIHEAP)


through annual block grants to states, the District of Columbia, more than 100 eligible Indian

369 NEW regulations are found at 45 CFR Part 287 (2005). This program is No. 93.594 in the Catalog of Federal
Domestic Assistance.
370 Tribal TANF funds are deducted from the family assistance grant of the state(s) in which they are located. As of
early 2003, these deductions totaled $115 million.
371 These data apply only to NEW programs that did not transfer funding to BIA demonstration projects of integrated
employment, training, and related services under P.L. 102-477. According to BIA summary information, the 25 NEW
grantees that included their NEW programs in demonstration projects served a combined total of 17,732 clients under
all programs in their projects; and of these persons, 27% entered unsubsidized employment during the year.
372 In the late 1980s, LIHEAP also received significant funding from court-ordered oil-price overcharge settlements,
but most of these settlements have been completed.





tribes, two commonwealths, and four territories.373 The Department of Health and Human
Services (HHS) distributes annual federal appropriations using an allocation formula established 374
in law.
P.L. 103-252, which reauthorized the program through FY1999, authorized a special fund of $600
million annually for emergencies (contingency funding). P.L. 105-285 reauthorized LIHEAP at $2
billion annually for FY2002-FY2004. This law also expanded the criteria for LIHEAP
contingency funding and added a section concerning natural disasters. The Energy Policy Act of
2005 reauthorized LIHEAP from FY2005-FY2007 at $5.1 billion annually. In FY2005, LIHEAP
contingency funds totaling at least $250 million were released to all grantees (all states, tribes and 375
territories). Federal outlays for LIHEAP in FY2004 totaled $1.89 billion.

States and other grantees design and administer their own programs under general federal
guidelines. These guidelines set maximum and minimum income eligibility standards and allow
jurisdictions operating LIHEAP to make categorically eligible most households receiving
Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Food 377
Stamps, or veterans’ pension. Income eligibility standards vary, but the standard may not be set
above 150% of the federal poverty income guidelines (a 2005 limit of $29,025 for a family of
four in the 48 contiguous states), or 60% of the state’s median income adjusted for family size. In
addition, a household may not be excluded from eligibility if its income is below 110% of the 378
federal poverty income guidelines. The law requires that benefits and outreach activities be
targeted to those with the greatest home energy needs (as well as costs), particularly households 379
with young children, frail elderly, and disabled individuals. Eligibility for LIHEAP benefits is
typically determined on a “household” basis, and grantees may establish eligibility standards in
addition to income. A household can be an individual, or group of individuals who are living
together as one economic unit for whom residential energy is customarily purchased in common
or who make undesignated rent payments for energy.

373 Indian tribes may receive allotments directly from the Department of Health and Human Services (HHS) rather than
through a state if HHS determines that this would best serve the tribe; these allotments are equal to their share of
eligible low-income households in their state (or any larger amount agreed on by the tribe and the state).
374 When the regular annual federal appropriation is below $1.975 billion, as was the case for regular funds every year
from FY1986 through FY2005, each state (including the District of Columbia) receives an allotment equal to its
percentage share in FY1981 under LIHEAP’s predecessor (the Low Income Energy Assistance Program); the same is
true for Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Northern Mariana Islands. If the regular
appropriation exceeds $1.975 billion, a different formula takes effect. In FY2006, a total of $2.48 billion was
appropriated, triggering the different formula.
375 This figure is accurate as of September 2005. The total amount of Emergency Contingency funds appropriated for
FY2005 was $298 million.
376 Regulations governing LIHEAP are found at 45 CFR Parts 96.80-96.89 (2005). This program is No. 93.568 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 8621-8629.
377 Excluded from this categorical eligibility are TANF foster care children and SSI recipients in institutions or living in
shared housing (i.e., if SSI benefits have been reduced or if they are children living at home).
378 The income and categorical eligibility guidelines are available at 42 U.S.C. 8624(b)(2) and 8624(i).
379 42 U.S.C. 8622(4).





LIHEAP grantee states, tribes, and territories decide benefit levels and the manner in which
payments are made. However, to the extent permitted by efficient administration, jurisdictions are
required to provide the highest benefits to households with lowest incomes and highest energy
costs in relation to their income. They also must set aside a “reasonable” portion of their
allotment for energy-related emergencies (basing the set-aside on past experience). LIHEAP
funds may be used to help pay residential heating or cooling costs, purchase/install low-cost
weatherization materials, and assist households facing energy-related emergencies.
Operating jurisdictions can use a maximum of 15% of their LIHEAP allotment for weatherization 380
activities (or 25% if a federal waiver is granted). LIHEAP obligations for weatherization
totaled $222 million in FY2003, nearly matching outlays of $223 million for the weatherization
program of the Department of Energy (program No. 81.042).
Benefits most commonly take the form of cash payments to households, vendor “lines of credit,”
vouchers, and tax credits. In FY2003, some 4.4 million households are estimated to have received
home heating benefits (and, in 15 states, cooling assistance was given to an estimated 493,694
households). The program includes a Residential Energy Assistance Challenge (REACH) grant
program, established by 1994 law, to increase efficiency of energy usage by low-income
households.
Grantees may use up to 10% of their LIHEAP allotments for administrative expenses and may
carryover up to 10% of one year’s funds for use in the next year.
Note: For more information, see CRS Report RL31865, The Low-Income Home Energy
Assistance Program (LIHEAP): Program and Funding, by Libby Perl.

The Energy Conservation and Production Act of 1976 (P.L. 94-385), as amended, provides 100%
federal funding for weatherization assistance to low-income persons through grants administered 381
by the Department of Energy (DOE). Administrative costs may not exceed 10% of grant funds.
Weatherization funds are allocated among the states on the basis of factors that include number of
heating degree days and cooling degree days, number of low-income owner-occupied and renter-
occupied dwellings, percentage of total residential energy used for space heating and space 382
cooling. Although states are not required to provide matching funds, state and local funds often
supplement federal amounts. Appropriations totaled $227 million in FY2004.

380 42 U.S.C. 8624(k).
381 Weatherization assistance also is provided under the Low-Income Home Energy Assistance Program (LIHEAP)
administered by the Department of Health and Human Services (HHS).
382 P.L. 106-113 required states to begin providing a 25% match beginning on Oct. 1, 2000, but this was repealed by
P.L. 106-649.






States and other grantees design and administer their own programs under general federal
guidelines. The law makes eligible all “low-income” households and offers alternate definitions
of this term. States are permitted to give DOE weatherization assistance (a) to households whose
combined income falls at or below 125% of the federal poverty income guidelines, a ceiling equal
in the 48 contiguous states to $23,563 for a family of four in 2004 (at state option, the ceiling can
be lifted to 150% of the poverty guideline, if the state has adopted that income limit for LIHEAP)
and (b) to families with a member who received cash welfare payments during the previous 12
months from TANF, SSI, or state assistance programs.
Legislation allows a maximum average expenditure, adjusted annually for price inflation, per
dwelling unit for weatherization materials, labor, and related matters (such as transportation of
materials and workers; maintenance, operation and insurance of vehicles; maintenance of tools
and equipment; purchase or lease of tools, equipment and vehicles; employment of on-site
supervisors; and storage of weatherization materials). DOE reports that this program weatherized
more than 94,000 homes in FY2004 and 5.4 million over the 28-year history of the program. The
Low-Income Home Energy Assistance Program (LIHEAP) usually spends more funds on
weatherization assistance than the DOE program. For information about LIHEAP weatherization
assistance, see program No. 83.
Note: For more information, see CRS Issue Brief IB10020, Energy Efficiency: Budget, Oil
Conservation, and Electricity Conservation Issues. For a DOE summary, see
http://www.eere.energy. gov/buildings /weatherizati on/a bout.html.

383 Regulations governing this program are found at 10 CFR Part 440 (2005). This program is No. 81.042 in the
Catalog of Federal Domestic Assistance. It is codified at 42 U.S.C. 7101 et seq.




Table 14. Need-Based Benefits: Medical Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004
(federal expenditures, state-local expenditures, and number of recipients)
MEDICAL BENEFITS
Recipients
Federal expenditures State-local expenditures (average monthly number
(millions of current (millions of current unless otherwise indicated—in
dollars) dollars) thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
1. Medicaid $146,643a 161,026a 175,100b $111,573a 115,134a 125,200b 51,499c 53,700d 56,100d
2. Medical care for veterans without service-connected disability 7,071e 7,596e 8,725 1,543f 4,572f 1,630f
3. State children’s health insurance program (SCHIP) 4,610g 4,276g 4,612g 2,120h 1,843h 2,021h 5,727i 6,469i 6,799i
4. Indian health services 3,392j 3,541j 3,706j — 1,500 1,500 1,600
iki/CRS-RL333405. Consolidated health centersk 1,328 1,465 1,573 11,550l 12,500l 13,200l
g/w6. Maternal and child health services block grantk 731 731 730 548m 548m 547m 9,791 10,470 n.a.
s.or7. Title X family planning servicesk 265 273 278 4,858l 4,875l 4,792l
leak
8. Medical assistance to refugees, asylees, other humanitarian 83.3n 70.2n 92.0n — 21.8 16.9 20.9
://wikicases
httpMedical Care Total 164,123 178,978 194,816 114,241 117,525 127,768 o o o
Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
available upon request.
Except for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
a. Expenditures for FY2002 and FY2003 are taken from official Centers for Medicare and Medicaid Services (CMS) expenditure reports (Form CMS-63). Amounts shown
under federal expenditures include these sums for administration: FY2002, $6,601 million; FY2003, $7,602 million. Amounts shown under state-local expenditures
include these sums for administration: FY2002, $5,330 million; FY2003, $5,982 million.
b. Expenditures for FY2004 are not available from CMS. Estimates are derived from CBO’s March 2005 baseline. Amount shown under federal expenditures includes
$8,200 million for administration. Amount shown under state-local expenditures includes $6,500 million for administration.
c. Unduplicated annual number of persons ever enrolled during the year, regardless of whether they received a service funded by the program. FY2002 data are from the
CMS Medicaid Statistical Information System (MSIS).
d. Unduplicated annual number of persons ever enrolled during the year, regardless of whether they received a service funded by the program. FY2003 and FY2004
projections are from Table 11 in 2005 CMS Statistics (U.S. Department of Health and Human Services, 2005).




e. Total expenditures for Priority Group 5 veterans. Includes imputed values for non-enrolled patients in FY2003 and FY2004. Data only available by request to the VA.
f. Total number of Priority Group 5 users for fiscal year.
g. From FY2002-FY2004 CMS Form 64 FMR net expenditure reports. May include Medicaid Expansion administrative costs at state option. Figures include the following
totals for federal administration: FY2002, $227 million; FY2003, $261 million; FY2004, $227 million.
h. From FY2002-FY2004 CMS Form 64 FMR net expenditure reports. May include Medicaid Expansion administrative costs at state option. Figures include the following
totals for state administration: FY2002, $100 million; FY2003, $116 million; FY2004, $100 million.
i. Unduplicated number of persons ever enrolled in the year. This number represents a count of persons enrolled in the program at any time during the federal fiscal
year. Each person is counted only once regardless of the number of times he or she was enrolled or re-enrolled in the program during the year. Data from Centers
for Medicare and Medicaid Services, SCHIP Enrollment reports http://www.cms.hhs.gov/schip/enrollment/. Includes the following adults ever enrolled in SCHIP
demonstrations: FY2002, 373,509; FY2003, 483,728; FY2004, 646,159.
j. Total program level includes Medicare and collections budget authority and special diabetes fund.
k. Appropriations.
l. Annual count.
m. Minimum match required by law for block grant amount (75% of federal sum). States may spend more, but data are not available.
n. Includes these estimated sums for federal administration: FY2002, $19.85 million; FY2003, $20.1 million; FY2004, $22.4 million.
iki/CRS-RL33340o. Because of a high degree of overlap (and in some cases, a mixture of monthly and annual numbers), recipient totals are not shown.
g/w
s.or
leakTable 15. Need-Based Benefits: Cash Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004
(federal expenditures, state-local expenditures, and number of recipients)
://wiki
httpCASH BENEFITS
Recipients,
Federal expenditures State-local expenditures average monthly number unless
(millions of current (millions of current otherwise indicated,
dollars) dollars) (in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
9. Supplemental Security Income (SSI)a $32,421b $33,344b $34,693b $4,736c $4,990c $5,146c 6,940d 7,052d 7,139d
10. Earned Income Tax Credit (EITC)e (refundable part) 29,043 33,737 34,012 16,631f 18,780f 19,163f
11. TANFg 6,481h 7,734h 6,485h 6,555i 6,230i 7,582i 5,148j 4,967j 4,746j
12. Foster carek 4,523l 4,485l 4,524l 4,095m 4,061m 4,040m 254 242 233
13. Child tax creditn (refundable part) 4,995 6,416 9,113 8,563 10,937 12,571
14. Pensions for needy veterans, their dependents and survivors 3,317o 3,371o 3,469o581p 571p 562p




CASH BENEFITS
Recipients,
Federal expenditures State-local expenditures average monthly number unless
(millions of current (millions of current otherwise indicated,
dollars) dollars) (in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
15. Adoption assistance 1,342q 1,463q 1,561q 1,130r 1,239r 1,316r 286 315 332
16. Dependency and indemnity compensation and death 84 n.a.s n.a.s7.5t 7.6t 8.3t
compensation for parents of veterans (DIC)
17. General Assistance to Indians 70.8 76 66.5 41 41 45
18. Cash assistance to refugees, asylees, other humanitarian cases 34.5u 31.1u 41.6u — 8.4 6.7 10
Cash Aid Totalv 82,311 90,657 93,965 16,516 16,520 18,084 w w w
Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
iki/CRS-RL33340available upon request.
g/wExcept for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.= means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
s.or
leaka. All data for this program are computed in calendar years instead of fiscal years.
://wikib. Includes the following sums for administration: 2002, $2,522 million; 2003, $2,656 million; 2004, $2,806 million. Excludes the following amounts for beneficiary services: 2002, $54 million; 2003, $37 million; 2004, $39 million.
httpc. Includes these estimated sums (calendar year) for state administration of state SSI supplements: 2002, $68 million; 2003, $73 million; 2004, $72 million (estimates equal
8% of state-administered benefits).
d. Data include recipients of non-federally administered payments (state-administered SSI supplements only, data as of December of each year): FY2002, 151,989; FY2003,
149,621; FY2004, 150,838.
e. Data are from U.S. Treasury, Internal Revenue Service, and refer to the calendar year (tax year ) to which the EITC applied.
f. Estimated annual number of tax units (chiefly families).
g. Includes basic cash assistance, refundable tax credits, short-term nonrecurring benefits (e.g., diversion payments), and contributions to individual development
accounts. Excludes transfers to CCDBG and SSBG. Excludes spending for TANF child care, TANF work activities, and TANF services (reported separately under
those programs). Excludes separate Welfare-to-Work grants administered by the Labor Department. However, includes administrative costs for all TANF-funded
benefits and services.
h. Includes these sums for overall TANF administrative costs (for all benefits and services): FY2002, $1,633 million; FY2003, $1,592 million; FY2004, $1,471 million.
i. Includes these sums for overall TANF administrative costs (for all benefits and services): FY2002, $983 million; FY2003, $859 million; FY2004, $828 million.




j. Number of recipients. The numbers of families were as follows: FY2002, 2.065 million; FY2003, 2.032 million; FY2004, 1.987 million. The numbers of children were as
follows: FY2002, 3.841 million; FY2003, 3.731 million; FY2004, 3.617 million.
k. State and federal foster care expenditures do not include child support payments collected on behalf of foster care children. These support payments are used to
reimburse state and federal costs for foster care maintenance payments. For FY2002, child support payments received on behalf of foster care children totaled $49
million; for FY2003, $57 million; and for FY2004, $74 million.
l. Includes the following sums for administration, data collection, training, and demonstration (waiver) costs: FY2002, $2,641 million; FY2003, $2,795 million; FY2004,
$2,727 million. Waiver expenditures included in the foregoing sums were as follows: FY2002, $191 million; FY2003, $208 million; FY2004, $142 million.
m. Includes these estimated sums for administration, data collection, training, and demonstration (waiver) costs: FY2002, $2,474 million; FY2003, $ 2,656 million; FY2004,
$2,561 million.
n. Fiscal year data are for prior tax year (for example, FY2004 shows data for tax year 2003). Recipients is number of annual tax returns with refundable child credit.
o. Amount refers to total mandatory outlays (net). Amounts given in previous editions of this report refer to appropriations and not outlays.
p. Annual count.
q. Includes the following sums for administration, data collection, training, and demonstration (waiver) costs: FY2002, $305 million; FY2003, $300 million; 2004, $299
million.
r. Includes the following sums for state and local administration: FY2002, $277 million; FY2003, $297 million; FY2004, $280 million.
iki/CRS-RL33340s. Outlays specifically for the needy parent portion of DIC are no longer available.
g/wt. Number of parents receiving DIC payments in August of indicated year.
s.or
leaku. Estimates. Includes the following estimated sums for administration: FY2002, $10.7 million; FY2003, $10.8 million; FY2004, $12 million. Refugee cash and medical
administrative expenditures actually are combined. Estimates are based on the 1998-1999 proportion of benefit dollars in each program.
://wikiv. Some other programs provide aid in the form of cash intended for specific goods or services. Examples are the Low-Income Home Energy Assistance Program and
httpeducational loan and grant programs.
w. Recipient totals are not shown because data include monthly and annual numbers.




Table 16. Need-Based Benefits: Food Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004
(federal expenditures, state-local expenditures, and number of recipients)
FOOD BENEFITS
aRecipients
Federal expenditures State-local expenditures (average monthly number unless
(millions of current (millions of current otherwise indicated—in
dollars) dollars) thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
19. Food stampsb $21,657c $25,155c $28,431c $2,397 $2,580 $2,562 20,150d 22,300d 24,900d
20. School lunch program (free and reduced price components)e 6,186 6,453 6,816 f f f 16,000g 16,460g 16,930g
21. Special supplemental nutrition program for women, infants, and 4,350h 4,508h 4,899h i i i 7,490 7,630 7,900
children (WIC)
22. Child and adult care food program (lower-income components)j 1,712k 1,788k 1,962k — — — 2,000l 2,100l 2,220l
iki/CRS-RL3334023. School breakfast (free and reduced price components)j 1,489 1,596 1,715 — — — 6,730g 6,960g 7,310g
g/w24. Nutrition program for the elderly (no income test) 716.2m 714.3m 714.5m 100.0n 99.8n 99.9n 2,906o 2,787o 2,500p
s.or25. The Emergency Food Assistance Program (TEFAP)q 361 431 421 r r r n.a. n.a. n.a.
leak s s s i i i t t t
26. Summer food service for children 307 267 267 1,900 2,100 2,000
://wiki27. Commodity supplemental food program (CSFP)u 105 103 109 i i i 427 455 522
http28. Food distribution program on Indian reservations (FDPIR)v 74 82 81 w w w 110 108 n.a.
29. Farmers’ market nutrition programsx 36 40 43 y y y 2,700 3,200 n.a.
30. Special milk program (free part) 1 1 1 i i i 27z 32z 31z
Food Aid Totalaa 36,994 41,138 45,460 2,497 2,680 2,662 bbbb bb bb
Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
available upon request.
Except for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
a. Federal expenditures represent obligations unless otherwise marked.
b. Food stamp data include spending for (1) state-financed benefits for non-citizens, to the extent that they are funded through transfers to the federal government (2)
Puerto Rico’s nutrition assistance program (over $1.4 billion yearly), and (3) nutrition assistance grants to American Samoa and the Northern Marianas totaling about
$13 million yearly. State-local expenditure estimates are for administration.




c. Excludes sums spent for food stamp work/training, reported elsewhere (program No. 78). Includes the following sums for food stamp administration: FY2002, $2,283
million; FY2003, $2,437 million; FY2004, $2,427 million. Includes amounts for state-financed benefits for non-citizens.
d. Includes persons receiving nutrition assistance in Puerto Rico, one million persons each year.
e. Estimated cash and commodity assistance for free and reduced price lunches and after-school snacks. Includes federal funds for state administrative expenses for
school lunch and other child nutrition programs. These administrative funds were as follows: FY2002, $132 million; FY2003, $133 million; FY2004, $140 million.
Excludes cash assistance for “full-price”meals (41% of total lunches served), which have no income test.
f. Not reported since 1980, when federal funds provided about half the total cost of the lunch program, and children’s meal payments, plus state/local revenues, the
other half. A 1994 Agriculture Department survey indicates that 40% of the total operating costs of school meal programs comes from children’s meal payments and
state/local government sources. The minimum state matching requirement totals just over $200 million annually.
g. Estimated average daily number of children receiving free and reduced-price meals in these programs.
h. Includes these federal payments for state-local administration, nutrition services, infrastructure grants, and technical services: FY2002, $1,208 million; FY2003, $1,303
million; FY2004, $1,316 million. “Administrative” expenses include costs of providing nutritional risk assessments, nutrition education, and other services such as
breast feeding support services. All figures have been adjusted for year-to-year carry overs of unspent funds.
i. None required. Contributions unknown.
j. Federal spending for state administrative costs included under program No. 22 (school lunch). See footnote e.
iki/CRS-RL33340k. Estimates of funds (including the value of commodity assistance) for meals/snacks served to children and adults with family income not exceeding 185% of the poverty income guideline. Includes administrative payments for day care home sponsors and audit expenses: FY2002, $140 million; FY2003, $140 million; FY2004, $144 million.
g/w
s.orl. Estimates of individuals from families who meet an income test (185% of the poverty income guideline) are based on the number of meals/snacks subsidized at the
leakhigher rate paid for meals served to them.
m. Sum represents appropriations for congregate meals, home-delivered meals, and nutrition services incentive grants.
://wikin. Non-federal share for congregate and home-delivered nutrition is an estimate based on a 15% non-federal match required for these funds. There is no non-federal
httpmatch required for nutrition services incentive grants.
o. Annual unduplicated number of persons served.
p. Preliminary estimate of annual unduplicated number of persons served.
q. Sums represent the value of commodities plus appropriations for state and local administrative and distribution costs and the value of “bonus” commodities provided
without appropriation. Administrative/distribution costs were as follows: FY2002, $54 million; FY2003 and FY2004, $59 million.
r. States must match, in cash or in kind, administrative grants that they do not pass along to local agencies. Amounts, if any, are not known.
s. Includes payments to summer program sponsors for administrative costs and health inspection payments to states, approximately $30 million per year.
t. July participation.
u. Includes amounts obligated for administration and distribution costs: FY2002, $23 million; FY2003, $27 million; FY2004, $29 million. Not adjusted for inter-year
transfer of funds. Because of carryover of funds and commodity inventories among fiscal years, actual expenditures are higher than the new obligation amounts shown
here. Does not include the value of “bonus” commodities provided without appropriation: $40 million in FY2004, less in earlier years.




v. Sums represent the value of purchased commodities plus administrative grants. Administrative costs were as follows: FY2002, $23 million; FY2003, $26 million;
FY2004, $27 million. Not adjusted for inter-year transfers of commodities. Does not include the value of “bonus” commodities provided without an appropriation,
estimated at $1 million to $5 million annually. Because of carry over of funds and commodity inventories among fiscal years, actual expenditures are higher than the
new obligation amounts shown here.
w. Indian tribal organizations and state agencies operating the program must contribute up to 25% of administrative and distribution costs, but the amount of their
contributions (estimated at $5 to $10 million annually) are not known.
x. All spending is shown as benefit expenditures. No information is available on the breakout between benefit and administrative spending, although administrative
expenses generally may not exceed 17% of a state’s grant.
y. Although a 30% state match is required under the WIC component of the farmers’ market nutrition program, no information is available on the actual amount spent.
z. Average number of half-pints of free milk served daily to children whose family income does not exceed 130% of the poverty income guidelines. Excludes federally
subsidized milk served without regard to child’s family income.
aa. See also program No. 71, Emergency Food and Shelter.
bb. Recipients are not totaled because of a high degree of overlap (and/or in some cases, a mixture of monthly and annual numbers).
Table 17. Need-Based Benefits: Housing Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004
iki/CRS-RL33340(federal expenditures, state-local expenditures, and number of recipients)
g/wHOUSING BENEFITS
s.or
leak Families or dwelling units
Federal expenditures State-local expenditures (total during year unless
://wiki(millions of current dollars) (millions of current dollars) otherwise indicated—in thousands)
http FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
31. Section 8 low-income housing aid $18,499 $20,950 $22,356 3,326a 3,371a 3,387a
32. Public housingb 8,213 7,848 7488 c c c 1,209a 1,207a 1,189a
33. Rural housing loans (Section 502)d 3,500 4,124 4584 — — 43.1e 46.7e 50.1e
34. Home investment partnerships (HOME)f 1,541,616 1597 g g g 84.1h 111.4h 63.9h
35 Housing for special populations (elderly and disabled) 895 992 1098 94.4 104.9 111.3
36. Rural rental assistance payments (Section 521)d 704.6 721.3 580.6 44.3i 44.3i 48.1i
37. Section 236 interest reduction 579.3 566.1 559.2 392.2a 369.0a 346.8a
38. Housing Opportunities for People with AIDS (HOPWA) 314 254 254 75 78.5 78
39. Rural rental housing loans (Section 515)d 114 115 114.5 — — 7.3 7.0 7.6
40. Rural housing repair loans and grants (Section 504)d 62.4j 63.1j 63.7j — — 11.8k 11.7k 11.6k




HOUSING BENEFITS
Families or dwelling units
Federal expenditures State-local expenditures (total during year unless
(millions of current dollars) (millions of current dollars) otherwise indicated—in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
41. Farm labor housing loans and grants (Sections 514 and 516)d 61.8l 61.7l 53.7l — — 1.9 3.4 2.6
42. Section 101 rent supplements 53.7 55.4 56 18.6 18.1 17.3
43. Rural self-help technical assistance (Sections 523 and 524)d 26.9m 42.2m 40.9m — — n n
44. Indian housing improvement 19.6 19.5 19.4 0.57o 0.59o 0.43o
45. Section 235 homeownership aid 10.8 8.4 4.8 13.0 10.2 8.5
46. Rural housing preservation grants (Section 533)d 8.6 10.1 9.3 — — 2.13 1.96 2.11
47. Homeownership and opportunity for people everywhere (HOPE) 3 2 2 $6.3 $5.3 $0.8 n/a n/a n/a
p 34,607 37,449 38,881 6.3 5.3 0.8 q q q
iki/CRS-RL33340Housing Aid Total
g/wNotes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
s.oravailable upon request.
leakExcept for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
://wikia. Units eligible for payment at end of fiscal year.
http
b. Outlay data include operating subsidies, capital grants, the Public Housing Drug Elimination Program, HOPE VI, and the public housing loan fund. Outlay and housing
unit data exclude the Indian Housing Block Grant and HUD-administered Indian housing.
c. Localities accept payments in lieu of property taxes that are lower than normal taxes (usually equal to 10% of shelter rent). No estimate is available of the value of this
benefit.
d. Obligations.
e. Numbers are for total units per year.
f. State-local governments may use up to 10% of federal HOME funds for administrative costs.
g. The 2003 edition of this report provided unpublished figures for state and local expenditures ($704 million in FY2002) under the HOME program; these data are no
longer available from the Department of Housing and Urban Development.
h. Consists of housing units provided, constructed, or rehabilitated by HOME funds, plus tenant-based rental assistance. Housing units included were as follows: FY2002,
73,814; FY2003, 100,671; FY2004, 48,460. The following total numbers of families received tenant-based rental assistance: FY2002, 10,239; FY2003, 10,731; FY2004,
15,479.
i. Units assisted under this program also are counted under the Section 515 program (rural rental housing loans) or Section 514 program (farm labor housing loans).




j. Section 504 obligated rural housing repair loans and grants in the following amounts: FY2002, $31.8 million in loans, $30.6 million in grants; FY2003, $31.6 million in
loans, $31.6 million in grants; FY2004, $33 million in loans, $30.7 million in grants.
k. The numbers of rural housing units repaired with loans and grants under Section 504 were as follows: FY2002, 5,615 units repaired with loans, 6,170 with grants;
FY2003, 5,409 with loans, 6,337 with grants; FY2004, 5,594 with loans, 5,988 with grants.
l. The amounts of farm labor housing loans (Section 514) and grants (Section 516) obligated were as follows: FY2002, $47.3 million in loans and $14.5 million in grants;
FY2003, $55.8 million and $5.9 million in grants; FY2004, $36 million in loans and $17.7 million in grants.
m. Amounts shown are self-help technical assistance grants (Section 523) and site loan obligations (Sections 523 and 524). Grants totaled as follows: FY2002, $26.5
million; FY2003, $40.1 million; FY2004, $35.3 million. Site loan obligations (Section 523) totaled as follows: FY2002, $0; FY2003, $1 million; FY2004, $2.4 million. Site
loan obligations (Section 524) totaled as follows: FY2002, $0.5 million; FY2003, $1.2 million; FY2004, $3.2 million.
n. These programs provide for the development of building sites. Houses constructed on these sites generally are financed and counted under the Section 502 program.
o. Numbers represent new and repaired or renovated houses, as follows: FY2002, 183 new and 389 repaired or renovated houses; FY2003, 185 new and 400 repaired or
renovated houses; FY2004, 280 new and 150 repaired or renovated houses.
p. See also program No. 71, Emergency Food and Shelter, and program No. 67, Homeless Assistance Grants.
q. Columns are not totaled because they are a mixture of numbers: dwelling units, loans, and grants. Further, some units are assisted by more than one program.
iki/CRS-RL33340Table 18. Need-Based Benefits: Education Benefits—Expenditures and Enrollment Data, by Program, FY2002-FY2004
g/w(federal expenditures, state-local expenditures, and number of recipients)
s.orEDUCATION BENEFITS
leak
://wiki Federal expendituresa State-local expenditures Recipients (participants in the school yearb
http(millions of current dollars) (millions of current dollars) in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
48. Federal Pell grants $11,314c $11,365c $12,006c— — 4,812 5,141 5,344
49. Head Start 6,538d 6,668d 6,775d $1,634e $1,667e $1,694e 912 910 906
50. Subsidized Federal Stafford and Stafford/Ford loansf 3,590 7,656 5,261 — — — 5,564 6,174 6,869
51. Federal work-study programg 1,011h 1,004h 999h— — 1,100 863 858
52. Federal Trio programsg 803i 827i 833i— — 866 857 866
53. Supplemental educational opportunity grantsg 725j 760j 771j— — 1,189 1,237 1,254
54. Title I migrant education program 396k 395k 394k l l l 738 738 738
55. Perkins loans 168m 166m 165m— — 707 641 674
56. Leveraging Educational Assistance Partnerships (LEAP) 67n 67n 66n 67o 67o 66o 90 135 171




EDUCATION BENEFITS
Recipients
Federal expendituresa State-local expenditures (participants in the school yearb
(millions of current dollars) (millions of current dollars) in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
57. Health professions student loans and scholarshipsp 57 69 76 — — — 12q 15q 14q
58. Fellowships for graduate and professional study 45 45.7 40.5 1,403r 1,174r 970r
59. Migrant high school equivalency program 23s 23s 19s l l l 8.6 8.6 7.0
60. College Assistance Migrant Program 15 15 16 l l l 2.5 2.5 2.5
61. Close Up Fellowships 1.5 1.49 1.48 2.8 2.8 3.57
62. D.C. School Choice Incentivet n.p. n.p. 12.5 n.p. n.p. n.p. n.p. n.a.
Education Aid Total 24,754 29,062 27,435 1,701 1,734 1,760 u u u
iki/CRS-RL33340Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are available upon request.
g/w
s.orExcept for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.= means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
leak
a. Federal expenditure data represent appropriations and, unless otherwise indicated, are based upon appropriations for the program in the school year ending in the
://wikifiscal year named. For forward-funded programs, “FY2004 expenditures” are total FY2003 appropriations for the program (which generally were available for
httpobligation from July 1, 2003 through Sept. 30, 2004). For current-funded programs, FY2004 expenditures are FY2004 appropriations, which generally were available for obligation throughout FY2004.
b. The number of recipients is based upon counts or estimates of participants in the school year ending in the fiscal year named. For example, FY2004 recipients are
students who participated in (or received benefits from) programs during the 2003-2004 school year, or during the summer of 2004.
c. Amounts for this program were incorrectly reported in the previous edition of this report (RL32233). Correct amounts are as follows: FY2000, $7,640 million;
FY2001, $8,756 million; FY2002, $11,314 million.
d. Federal appropriations include funds for local administration. Although Head Start is classified in this report as an education program, it provides many other services.
It is administered by HHS rather than ED.
e. Estimate. Based on requirement that non-federal funds equal 20% of total program costs.
f. Dollars are for the program in the fiscal year named. They are net program obligations for subsidized Stafford and Stafford/Ford loans. (Data components for FY2002
were as follows: $4.3 billion for FFEL loans and -$.7 billion for Ford loans. Data components for FY2003 were as follows: $3.4 billion for FFEL and $4.2 billion for Ford
loans. Data components for FY2004 data were as follows: $2.9 billion for FFEL loans and $2.4 billion for Ford loans.) Amounts for this program were incorrectly
reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure
Data, FY2000-FY2002. Correct amounts (net obligations) are as follows: FY2000, $1,028 million; FY2001, -$2,217 million; FY2002, $3,590 million. Recipient data
represent the number of subsidized Stafford and Stafford/Ford loans made in the fiscal year.




g. This program also receives non-governmental funds.
h. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $934 million; FY2001, $1,011 million; FY2002, $999
million.
i. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $645 million; FY2001, $730 million; FY2002, $803
million.
j. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $631 million; FY2001, $691 million; FY2002, $725
million.
k. Amounts for this program were incorrectly reported in the previous edition of this report,CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $355 million; FY2001, $380 million; FY2002, $396
million.
l. Federal funds for these migrant education programs may be supplemented by states, local school districts, or public or nonprofit agencies. However, data are
unavailable on this support, which is voluntary.
m. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
iki/CRS-RL33340Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $130 million; FY2001, $160 million; FY2002, $168 million.
g/w
s.orn. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $40 million; FY2001, $55 million; FY2002, $67 million.
leak
o. Estimates based on the requirement that non-federal funds at least equal the federal sum.
://wikip. Data apply only to scholarships and loans funded with appropriations.
http
q. In 2002, 11,377 persons received scholarships; in 2003, 14,485 persons received scholarships; and in 2004, 13,022 persons received scholarships.
r. Contains only GAANN and Javits fellowships.
s. Amounts for this program were incorrectly reported in the previous edition of this report, CRS Report RL32233, Cash and Noncash Benefits for Persons with Limited
Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-FY2002. Correct amounts are as follows: FY2000, $15 million; FY2001, $20 million; FY2002, $23 million.
t. This program was enacted in 2004.
u. Recipient numbers are not totaled due to possible duplication.




Table 19. Need-Based Benefits: Services—Expenditures and Enrollment Data, by Program, FY2002-FY2004
(federal expenditures, state-local expenditures, and number of recipients)
SERVICES
Recipients
Federal expenditures State-local expenditures (average monthly number unless
(millions of current dollars) (millions of current dollars) otherwise indicated in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
63. Child care and development block grant (CCDBG)a $6,384 $7,247 $6,864 $2,206 $2,221 $2,516 1,743 1,751 1,732
64. TANF services 4,414 4,884 4,867 1,734 1,424 1,383 n.a. n.a. n.a.
65. Social services block grant (Title XX) 2,647b 2,492b 2,493c n.a. n.a. n.a. 14,280 14,516 n.a.
66. TANF child care 1,572 1,698 1,427 1,033 865 1,047 n.a. n.a. n.a.
67. Homeless assistance grants 1,044 1,122 1,238 d d d n.a. n.a. n.a.
68. Community services block grant 594e 683e 739e — — n.a. n.a. n.a.
iki/CRS-RL3334069. Legal services 329e 338.8e 338.8e — — 979 936 901
g/w
s.or70. Social services for refugees, asylees, and other humanitarian cases 158.6e 150.1e 152.2e — — n.a. n.a. n.a.
leak71. Emergency food and shelter programg 140 152 152 f f f n.a. n.a. n.a.
://wikiServices Totals 17,283 18,767 18,271 4,973 4,510 4,946 g g g
httpNotes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
available upon request.
Except for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
a. Includes expenditures made from funds transferred to CCDBG from TANF.
b. Includes expenditures from TANF transferred funds as follows: $955 million in FY2002 and $806 million in FY2003. Administrative expenses were as follows: FY2002,
$234 million; FY2003, $214 million.
c. Expenditure data not yet available. Amount reflects $1.7 billion SSBG appropriation for FY2004 and $793 million transfer from TANF to SSBG. Federal administrative
expenditures for FY2004 are not yet available.
d. None required. Contributions unknown.
e. Appropriations
f. Law places the following limits on administrative spending: local recipient organizations, 2% of their funds; National Board, 1%; state set-aside committees, 0.5%.
g. Recipient numbers are not totaled due to possible duplication.




Table 20. Need-Based Benefits: Jobs and Training—Expenditures and Enrollment Data, by Program, FY2002-FY2004
(federal expenditures, state-local expenditures, and number of recipients)
JOBS AND TRAINING
aRecipients
Federal expenditures State-local expenditures (total annual number unless
(millions of current (millions of current otherwise indicated—in
dollars) dollars) thousands)
FY20002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
72. TANF work activitiesb $2,121 $1,937 $1,613 $607 $662 $540 n.a. n.a. n.a.
73. Job Corpsc 1,454 1,509 1,536 — — — 68 68 68
74. Youth activitiesd 1,353 1,039 995 — — — 408 369 396
75. Adult activities 945 895 893 — — — 467 444 410
76. Senior community service employmente 445.1 442.3 438.7 49.5f 49.1f 48.7f 100g 100g 100g
iki/CRS-RL3334077. Welfare-to-work grants 342 312h 181h 71.4 104i 60i n.a. n.a. n.a.
g/w78. Food stamp employment and trainingj 316 303 267 138 162 166 n.a. n.a. n.a.
s.or
leak79. Foster grandparents 106.7 110.7 110 40.5k 40.7k 36.5k 30.9 32.5 31.7
80. Senior companions 44.4 46.3 46.0 27.4k 27.3k 24.7k 13.2 16.5 16.5
://wiki
http81. Targeted assistance for refugees, asylees, and other humanitarian casesb 44.5 44.2 44.1 — — — n.a. n.a. n.a.
82. Native employment works program 7.6 7.6 7.6 n.a. n.a. n.a.
Jobs and Training Total 7,179 6,646 6,131 934 1,045 876 l l l
Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
available upon request.
Except for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
a. Data are appropriations unless otherwise marked.
b. Expenditures.
c. Numbers for this program were incorrectly reported in the previous edition of this report (RL3223). The correct numbers are as follows: FY2000, $1,358 million;
FY2001, $1,399 million; and FY2002, $1,454 million.




d. Numbers for this program were incorrectly reported in the previous edition of this report (RL32233). The correct numbers are as follows: FY2000, $1,251 million;
FY2001, $1,378 million; FY2002, $1,353 million.
e. The law permits no more than 13.5% of federal funds to be used for administrative costs (but authorizes the Secretary of Labor to increase this to 15% under certain
conditions.).
f. Estimate based on general requirement that nondfederal funds equal at least one-ninth of federal funds (10% of total). State-local spending represents cash and in-kind
amounts and may include some private sums.
g. Estimate of persons served each program year (July 1-June 30).
h. Federal budget outlays.
i. Estimated, based on historical ratio of federal to state expenditures.
j. Obligations for administering and operating employment and training activities for food stamp recipients and for support costs like child care and transportation.
k. Table shows non-federal funding (cash and in-kind amounts from state-local governments and some private sources), as reported by the Corporation for National and
Community Service. These amounts exceed the required minimum non-federal “matching” share (10% of the total, one-ninth of the federal amount).
l. Recipients are not totaled because of missing data and possible duplication.
Table 21. Need-Based Benefits: Energy Aid—Expenditures and Enrollment Data, by Program, FY2002-FY2004
iki/CRS-RL33340(federal expenditures, state-local expenditures, and number of recipients)
g/w
s.orENERGY AID
leak
Recipients
://wikiFederal expenditures State-local expenditures (number of households aided
http(millions of current dollars) (millions of current dollars) during the year—in thousands)
FY2002 FY2003 FY2004 FY2002 FY2003 FY2004 FY2002 FY2003 FY2004
83. Low-income home energy assistance program (LIHEAP)a $1,773 $2,030 $1,891 n.a. n.a. n.a. 4,424 4,805 4,827b
84. Weatherization assistancec 230 224 227 122 122 141 105d 94d 94d
Energy aid total $2,003 $2,254 $2,118 $122 $122 $141 e e e
Notes: Data in this table are based on program reports and budget documents, including departmental justifications of appropriations estimates. Details of sources are
available upon request.
Except for sums below $100 million, figures shown are rounded to the nearest million. Totals reflect rounding of sums below $100 million to the nearest million. N.A.=
means “not available.” N.P.= means no program. To conserve space, names of some programs have been shortened in the table.
a. Recipient numbers are households served during the year with heating and winter crisis aid. Outlay data include weatherization aid. Expenditures are from regular
LIHEAP appropriations plus contingency funds.
b. Unofficial estimate provided by the National Energy Assistance Directors’ Association (NEADO), based on a survey of the states.




c. By law, no more than 10% of federal funds may be used for administration.
d. Recipient counts indicate numbers of homes weatherized in a given year.
e. Total may include some duplication, as some households may receive aid from both programs.


iki/CRS-RL33340
g/w
s.or
leak
://wiki
http



Karen Spar, Coordinator
Specialist in Social Policy
kspar@crs.loc.gov, 7-7319
This report is the most recent in a series that was conceived and compiled by former Specialist
Vee Burke until her retirement from the Congressional Research Service (CRS) in 2004. Ms.
Burke began the series in 1976 (CRS Report 76-5 ED) and prepared an updated version either
annually or every other year through 2003 (CRS Report RL32233, Cash and Noncash Benefits
for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY2000-
FY2002). The following alphabetical list of programs provides the names of CRS staff members
who contributed program data and rules to the current edition of the report. Each is a member of
the Knowledge Services Group (KSG) or the Domestic Social Policy Division (DSP) of CRS.
Thomas Gabe of DSP produced Figure 3 and the accompanying text. All other figures and tables
were produced by Jason Kuznicki of DSP, who, along with Bryan Sinquefield of the Electronic
Research Products Office (ERPO) of CRS, provided production and editorial assistance for the
entire report. The report was coordinated by Karen Spar of DSP.
Adoption Assistance Marjorie H. Washington
Adult Activities Bonnie F. Mangan
Cash Assistance to Refugees, Asylees, Entrants, Others Karma Ester
Child and Adult Care Food Program Marjorie H. Washington
Child Care and Development Block Grant Marjorie H. Washington
Child Tax Credit Paul H. Janov/
Christine Scott
Close-up Fellowships Bonnie F. Mangan
College Assistance Migrant Program (CAMP) Laura Monagle
Commodity Supplemental Food Program Marjorie Washington
Community Services Block Grant Program LaVonne M. Mangan
Consolidated Health Centers Sharon Kearney Coleman
D.C. School Choice Incentive Program Bonnie F. Mangan
Dependency and Indemnity Compensation for Parents of Veterans (DIC) Janice Cheryl Beaver
Earned Income Tax Credit (EITC) Paul H. Janov/
Christine Scott
Emergency Food and Shelter Program Libby Perl
Farm Labor Housing Loans (514) and Grants (516) Meredith Peterson
Farmers Market Nutrition Programs Marjorie Washington





Federal Pell Grants Laura L. Monagle
Federal Work-Study Program Laura L. Monagle
Fellowships for Graduate and Professional Study Bonnie F. Mangan
Food Distribution Program for Indian Reservations Marjorie H. Washington
Food Stamp Employment and Training Program Marjorie H. Washington
Food Stamps Marjorie H. Washington
Foster Care Marjorie H. Washington
Foster Grandparents Bonnie F. Mangan
General Assistance to Indians Roger Walke
Head Start Meredith Peterson
Health Professions Student Loans and Scholarships Sharon Kearney Coleman
Home Investment Partnerships (HOME) Meredith Peterson
Homeless Assistance Grants Libby Perl
Homeownership and Opportunity for People Everywhere (HOPE) Meredith Peterson
Housing for Special Populations (Elderly/Disabled) Libby Perl
Housing Opportunities for People With AIDS (HOPWA) Libby Perl
Indian Health Services Marjorie H. Washington
Indian Housing Improvement Grants Meredith Peterson
Job Corps Bonnie F. Mangan
Legal Services LaVonne M. Mangan
Leveraging Educational Assistance Partnerships (LEAP) Laura L. Monagle
Low-Income Home Energy Assistance Program (LIHEAP) Libby Perl
Low-Rent Public Housing Meredith Peterson
Maternal and Child Health Services Block Grant Sharon Kearney Coleman
Medicaid Angela Napili
Medical Assistance to Refugees, Asylees, and Others Karma Ester
Medical Care for Veterans Without Service Connected Disability Janice Cheryl Beaver
Migrant High School Equivalency Program (HEP) Laura L. Monagle
Native Employment Works Program Marjorie H. Washington
Nutrition Program for the Elderly Angela Napili
Pensions for Needy Veterans, Dependents, and Survivors Janice Cheryl Beaver
Perkins Loans Laura L. Monagle
Rural Housing Loans (502) Meredith Peterson
Rural Housing Preservation (533) Meredith Peterson
Rural Housing Repair Loans and Grants (504) Meredith Peterson
Rural Housing Self-Help Technical Assistance (523) Meredith Peterson
Rural Rental Assistance (521) Meredith Peterson
Rural Rental Housing Loans (515) Meredith Peterson





School Breakfast Program Marjorie H. Washington
School Lunch Program Marjorie H. Washington
Section 101 Rent Supplements Meredith Peterson
Section 8 Low-Income Housing Assistance Meredith Peterson
Section 235 Homeownership Assistance Meredith Peterson
Section 236 Interest Reduction Payments Meredith Peterson
Senior Community Service Employment Angela Napili
Senior Companions Bonnie F. Mangan
Supplemental Educational Opportunity Grants (SEOGs) Laura L. Monagle
Social Services for Refugees, Asylees, and Others Karma Ester
Special Milk Marjorie H. Washington
Special Supplemental Food Program for Women, Infants, and Children (WIC) Marjorie H. Washington
Social Services Block Grant Meredith Peterson
State Child Health Insurance Program Angela Napili
Subsidized Federal Stafford and Stafford/Ford Loans Laura L. Monagle
Summer Food Marjorie H. Washington
Supplemental Security Income Gary Sidor
Targeted Assistance to Refugees, Asylees, Others Karma Ester
Temporary Assistance for Needy Families (TANF) Marjorie H. Washington
TANF Child Care Marjorie H. Washington
TANF Services Marjorie H. Washington
TANF Work Marjorie H. Washington
The Emergency Food Assistance Program (TEFAP) Marjorie H. Washington
Title (Chapter) I Migrant Education Laura L. Monagle
Title X Family Planning Services Sharon Kearney Coleman
TRIO Programs Laura L. Monagle
Weatherization Assistance Karen Spar
Welfare to Work Marjorie H. Washington
Youth Activities Bonnie F. Mangan