Financial Impact of W-2 and Related Welfare Reform Initiatives on Milwaukee County AFDC Cases Identification of AFDC cases (including employed families) likely to leave AFDC prior to the implementation of W-2

Many of Wisconsin’s current and proposed welfare policy changes impacting AFDC are based on a simple caseload reduction model which combined a very strict work requirement with AFDC benefit reductions with the goals of reducing AFDC costs, caseloads, and new applications for assistance and slowing in-migration to Wisconsin. This paper attempts to assess the impact of these policies on families in Milwaukee County who are currently receiving AFDC and to estimate the residual population who will likely be subject to the “W-2” Wisconsin welfare regulations. The December 1995 Milwaukee County caseload data are used to examine the characteristics of the population and to assess the financial impact of regulatory and policy changes over time. State officials are requiring Milwaukee County to significantly reduce this year\u27s AFDC caseloads by 20 percent as of September 1, 1996. Only if the county achieves these cuts will it be allowed to be the presumptive deliverer of services under “W-2.” Children of disabled parents will be removed from AFDC and W-2 and have their benefits cut by 60 percent, saving $10 million annually. Relative foster care families will be removed from AFDC and W-2 and most cases will experience benefit reductions which will save $1 million annually. Imposing stricter financial sanctions for refusal to participate in work or child support programs will likely reduce the county caseloads by at least 5,000 to 6,000 cases in the next year. The cap on assistance payments regardless of family size will effectively reduce benefits by as much as half to the largest families