PAYMENTS TO OR ON BEHALF OF RECIPIENTS

Mr. THOMAS. This table has a lot of information in it. It sets out your programs. We will also put pages 11 through 14 in the record.

(The pages referred to follow:)

New legislation

PAYMENTS TO OR ON BEHALF OF RECIPIENTS

Extension of 1961 temporary amendments.-Under these temporary amendments the Federal share of assistance payments in the programs of old-age assistance, aid to the blind, and aid to the permanently and totally disabled was raised to four-fifths of the first $31 (from $30) and the maximum average payment was raised to $66 (from $65), effective October 1, 1961 through June 30, 1962. The Congress made this temporary increase permanent.

In the program of aid to dependent children the 1961 amendments made it possible for the States to expand their programs to include children of unemployed parents; this provision which expired on June 30, 1962, was continued for 5 years. The 1961 temporary provision for Federal participation in the cost of foster family care for a dependent child who is removed by court order from an unsuitable home was made permanent. In addition, for 2 years, starting October 1, 1962, Federal sharing is allowed in assistance paid for such a child if he is placed in a private child care institution.

Amounts for these items were included in the regular appropriation request for 1963 but were deleted by the Congress, pending congressional action on extension of the temporary amendments. As a result of the action taken all of the amendments will be in effect for the entire year, and the Federal share of assistance payments is estimated to increase by $92.2 million, including $20.4 million for an increase in the Federal share of old-age assistance ($16.8 million), aid to the blind ($0.7 million) and aid to the permanently and totally disabled ($2.9 million); and $71.8 million for aid to children of unemployed parents and for children removed from their own homes into foster home care.

Increase in Federal matching formula for the aged, blind, and disabled.-To improve assistance payments to the aged, blind, and disabled the Congress not only made permanent the increase in the amount in which there is Federal participation, described above, but provided a further increase of approximately $4 per month per recipient.

Under the new formula, which becomes effective on October 1, 1962, the Federal share is twenty-nine thirty-fifths of the first $35 of the average monthly payment per recipient, and the maximum average payment on which the Federal share is based is $70. The amendment does not change the provision for additional matching for vendor medical payments in the old-age assistance program. the first quarter of the year (as provided for under the extension of the 1961 amendments), the Federal share is four-fifths of the first $31 of the average monthly payment per recipient, and the maximum average payment on which the Federal share is based is $66.

For

Past experience with similar increases in the Federal share of assistance payments shows that at the end of the first 3 months, the States increased expenditures from Federal funds to about 60 percent of the maximum increase in the Federal share made possible by the amendments; and that it takes more than 12 months for expenditures from Federal funds to reach the maximum amount of the Federal increase made possible by the amendments. The estimate of the additional Federal funds required for the fiscal year 1963 assumes that by December 1962, State expenditures from Federal funds will represent 60 percent of the maximum increase; that by June 1963, this percentage will be about 88 percent; and that by December 1963, all of the Federal increase will be reflected in State expenditures. The increase for the fiscal year 1963 as a result of the formula change, estimated on the basis described above, is $81.1 million.

Inclusion of second parent in certain families with children. In the program of aid and services to needy families with children, a second parent, if incapacitated or unemployed, may be included in the payment with Federal participation, under the new legislation. Previously, the payment in which the Federal Government shared counted only the children and one responsible relative, usually the mother.

This change becomes effective on October 1, 1962 and is estimated to cost $34 million for three-quarters of the year. The estimate assumes that there will be an additional parent in all families with an unemployed parent and in about twothirds of the families in which a parent is disabled. For the latter group, it was

assumed that disabled parents in the remainder of such families would be receiving assistance under the program of aid to the permanently and totally disabled.

Increase in ceilings for Puerto Rico and the Virgin Islands.-The Public Welfare Amendments of 1962 raise the appropriation ceiling for Puerto Rico by $300,000 and for the Virgin Islands by $10,000 above the 1962 ceilings. It is estimated that Puerto Rico will use all the additional funds but that the Virgin Islands will not need any of the additional amount for the fiscal year 1963.

Adult categories: Single plan.-The Public Welfare Amendments of 1962 permit States to simplify administration by having a combined single plan for the adult assistance program-old-age assistance, aid to the blind, aid to the permanently and totally disabled, and medical assistance for the aged-instead of four separate categories. Under the single plan States also will be able to claim additional Federal funds based on vendor medical payments for recipients of aid to the blind and aid to the permanently and totally disabled on the same basis as for recipients of old-age assistance. Thus up to $15 of vendor medical payments per recipient per month will be subject to additional Federal participation. The amount shown in the table-$11.1 million-is only the additional Federal amount that will be required as a result of the combination. All but a few States could benefit financially by electing to operate under a single plan. Action by many State legislatures will be required in order to combine the categories. The estimate of the increase in Federal funds is based on the assumption that the single plan will be in effect for an average of 6 months in about half the States.

Exemption of income earned by recipients of old-age assistance.-In order to encourage old-age assistance recipients to contribute to their own support the 1962 amendments permit the States, in determining the need of a recipient of old-age assistance, to exempt income earned by the recipient up to a maximum of $30 (the first $10 and one-half of additional earnings up to $50). This amendment is effective on January 1, 1963.

Under the provision assistance payments to current recipients who have earnings will be raised, and aged persons who previously were ineligible will be added to the rolls. Most of the additional cost will be incurred for people added to the rolls. In most States, the average assistance payment for those added to the rolls will be less than the average Federal share per recipient because these added recipients will tend to need less assistance than other old-age assistance recipients. As a result, because of the averaging principle in the formula, most States will find it financially advantageous to permit the income exemption, provided they can do so under State law. Since some States will undoubtedly require a change in State law to permit exemption of earned income, the estimate assumes that in the fiscal year 1963, one-third of the States will have the provision in effect for half the year. The number of recipients to be added to the rolls is estimated at 58,600, and the estimated Federal share of assistance payments for half a year is estimated at $12.5 million, including $12.2 million for those to be newly added and $300,000 for those already on the rolls.

Administrative actions

Persons on conditional release from mental institutions. Under revised policy effective March 5, 1962, Federal financial participation is permitted in assistance to or in behalf of persons on conditional release from institutions for mental diseases without regard to the kind of control still exercised by the institution. Federal sharing is also available now with respect to persons on convalescent leave who enter medical institutions, including nursing homes, other than specialized institutions for care of the mentally ill. The purpose of these changes is to afford State public assistance agencies a greater opportunity to work jointly with mental institutions in the rehabilitation of such persons.

The total number of persons on conditional release from mental institutions was reported as 115,000 at the end of 1959 and is estimated to increase to 135,000 by 1963. Of those in their own homes (90,000 estimated) one-sixth were assumed to be eligible for assistance; this rate is somewhat higher than the December 1961 rate of 13.4 percent for all old-age assistance recipients. Of those living elsewhere (45,000), one-third were assumed to be eligible; the higher rate for this group assumes that they will have greater need and fewer resources than those who will live in their own homes. Thus a total of 30,000 is estimated to be eligible for public assistance. It was further assumed that 20,000 would be on the rolls at the beginning of the fiscal year and that the number would increase throughout the year. The estimated average monthly number for 1963 is 28,400, distributed by program as follows: old-age assistance, 13,900; medical assistance for the aged, 5,000; and aid to the permanently and totally disabled, 9,500.

It was assumed that since these would be relatively expensive cases, the average monthly payment would be $125 in old-age assistance, $200 in medical assistance

for the aged, and $100 in aid to the permanently and totally disabled, similar to costs for individuals in nursing homes. The estimates in the regular appropriation request for 1963 submitted to the Congress did not include an amount for this group of recipients. The Federal share of assistance payments for 1963 is estimated to be $23,600,000, distributed among programs as follows: Old-age assistance, $10,800,000; medical assistance for the aged, $6,500,000; and aid to the permanently and totally disabled, $6,300,000.

Exemption of children's earnings.-In order to promote self-reliance and selfimprovement new policy material was issued that permits the States to disregard a child's income in determining need when such income is used for future educational needs, for special training, and for a period between his attaining his 18th birthday and developing capacity for full self-support. In estimating the increase in the Federal share of aid to families with dependent children, it was assumed that 15 States with limited amounts of State funds for assistance payments would not adopt the suggested policy. Of the remaining 39 jurisdictions, 33 have average payments above the maximum average of $30 on which the Federal share is computed; hence all of the additional costs of this provision in these States would be met from State funds. It was assumed that half of the 39 jurisdictions would adopt the policy and that the Federal share of assistance payments in 1963 would be $500,000.

OLD-AGE ASSISTANCE

Mr. THOMAS. This is all good reading matter, but what I want to get to is this table over here. We will put pages 21 and 22 in the record.

(The pages referred to follow:)

Estimates of Federal, State, and local expenditures for assistance payments and for administration, services, and training, and the Federal share thereof, fiscal year

Persons conditionally released from mental institutions__

Amount needed to give effect to current program trends_-_

Total increase_.

Costs for administration, services, and training:

Additional recipients due to earned income exemption..........
Preventive and rehabilitative services_.

Staff training

Persons conditionally released from mental institutions__.
Amount needed to give effect to current program trends___

Total increase.......

10, 842, 000

3, 700, 000

Mr. THOMAS. The table on page 21 is old
Miss GOODWIN. Yes, sir.

age

assistance?

Mr. THOMAS. Is that your first table that breaks down your first program?

Miss GOODWIN. Page 20 gives that, and also page 19 gives the estimates for all the categories.

Mr. THOMAS. I do not have page 19.

Miss GOODWIN. Our pages were originally stamped 22 and have been changed.

Mr. THOMAS. Page 20 shows old age assistance, medical care, aid to families, dependent children, aid to the blind, aid to the permanently and totally disabled, and your denonstration projects. You have your revised figure, your presently available figure, and your increase over in the last column.

Let us break it down. "Old age assistance," this is your first breakdown of your five big headings.

How much is that costing? How much is your increase in that program?

Miss GOODWIN. The increase is $119,400,000 in assistance.
Mr. THOMAS. Out of your round figure of $400 million?
Miss GOODWIN. Yes, sir.

INCREASE IN MONTHLY PAYMENT FOR OLD-AGE ASSISTANCE

Mr. THOMAS. How much of an increase is that per person over your existing rates? Is it any?

Mrs. WEST. We have it on the average.

Mr. THOMAS. You cannot go on an average because most of the States get a different amount.

Miss GOODWIN. Look at the page just before that-I think it is 20. It has the average monthly payment shown and increase in average monthly payment. It is on the bottom line.

Mr. THOMAS. $5.90?

Miss GOODWIN. Yes.

Mr. THOMAS. That does not mean anything when you say average. What is it for Texas, North Carolina, Alabama? We might include Iowa and Ohio. Do you have your tables showing that information by States?

Miss GOODWIN. We do not have it by States. It is an increasenationally-from $69.40 to $75.30. Every State has an opportunity to raise the old-age-assistance payments by $4 just from Federal funds without putting up anything additional.

Mr. THOMAS. Did they all take advantage of that opportunity? Miss GOODWIN. They have not had time yet. It is not effective until October.

Mr. BALL. Both committees in the House and the Senate and the conference committee and the President in his final statement urged the States strongly to pass this amount on to the recipients. Mr. THOMAS. We hope they do it.