Wage subsidy program for aid recipients proposed

The Health and Human Services Committee heard testimony Feb. 15 on a bill that would create a wage subsidy program using untapped funds from the Temporary Assistance to Needy Families (TANF) program. The program is known in Nebraska as Aid to Dependent Children (ADC).

LB1136, sponsored by Omaha Sen. Heath Mello, would require the state Department of Health and Human Services (DHHS) to establish a wage subsidy program to aid employers in developing work placements for ADC recipients.

The bill would be funded by an appropriation of $1 million in fiscal year 2012-13 and $1 million in FY2013-14 from the state’s TANF “rainy day” fund. Mello said the fund currently has a balance of approximately $16 million.

He said 39 other states have established similar programs, which are authorized by the federal government to develop partnerships between nonprofit employment agencies and employers to hire public assistance recipients.

“ADC recipients would obtain job skills and gain access to meaningful employment,” he said.

Mello said the program would provide valuable job experience for approximately 250 low-income Nebraskans by subsidizing a portion of their initial wages based on the following scale:
• 100 percent in the first two months;
• 75 percent in month three;
• 50 percent in months four and five; and
• 25 percent in month six.

The program would terminate on July 1, 2014.

Laura Baker, an ADC recipient, testified in support of the bill, saying the program would help motivate recipients to pursue employment opportunities and become self-sufficient.

“I am goal oriented and ready to do for myself,” she said.

Kate Bolz of Nebraska Appleseed also supported the bill. She said 65 percent of ADC recipients are under age 30 and have uneven work histories, which can make it difficult to find employment.

Scot Adams, DHHS director of the division of children and family services, opposed the bill. In written testimony provided to the committee, Adams stated that authorizing a wage subsidy program that may not have funds available in the future would create a false expectation among ADC recipients.

The committee took no immediate action on the bill.