Although there was no new job training money in the 1996 welfare reform law, the Balanced Budget Act of 1997 provided substantial new funding for the employment of long-term welfare recipients, as discussed later. For example, Florida allows 24 months of receipt within a 60-month period. Most states have expanded the amount of earned income that recipients can keep. Past AFDC policy effectively imposed a 100 percent marginal tax rate after four months of work. As we will see, more generous earnings disregards, when combined with a work requirement and a generous EITC, have made welfare less attractive and work more attractive.
Most states have rules intended to foster responsible parental behavior.
The Balanced Budget Act of 1997 authorized grants to states and local communities to create new job opportunities for the hardest to employ welfare recipients. As we will see, the combination of subsidies to employers can approach 100 percent of wages for up to two years. Moreover, the proportion of mothers with child support awards and those receiving some or all of the amount awarded remained relatively stable over this time. In a continuing effort to increase collections, the 1996 welfare reform law requires state child support enforcement agencies to create centralized automated disbursement systems. States are also required to collect information on all new hires to better track those who avoid wage withholding through frequent job changes.