SENATE, No. 402

STATE OF NEW JERSEY

INTRODUCED JANUARY 18, 1996

By Senator BRYANT

An Act promoting financial savings on the part of recipients of aid to families with dependent children benefits and supplementing chapter 10 of Title 44 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. The Legislature finds and declares that the State has developed services and supports under the Family Development Initiative pursuant to the "Family Development Act," P.L.1991, c.523 (C.44:10-19 et seq.) to help families to escape the bonds of welfare dependency and become economically self-sufficient, and that the State needs to take further action to build upon the provisions of that law by establishing incentives for families to save for their future and become responsible and productive citizens.

    2. a. The Commissioner of Human Services shall adopt rules and regulations governing eligibility for benefits under the program of aid to families with dependent children, or AFDC, established pursuant to P.L.1959, c.86 (C.44:10-1 et seq.) to provide that when considering the total value of all countable resources of an applicant for, or recipient of benefits under, the AFDC program, the commissioner shall disregard the following:

    (1) up to $5,000 in savings or assets if those assets are designated by the applicant or recipient, on a form and in a manner to be determined by the commissioner, to be used solely for the purchase of a primary residence, educational expenses for the applicant or recipient or the applicant's or recipient's dependent child, or work-related transportation costs, or a combination thereof; and

    (2) the ownership of one or more motor vehicles, the equity value of which does not exceed $15,000.

    The commissioner shall revise the amount of the motor vehicle equity value disregard annually, as necessary, to adjust for inflation.

    b. The commissioner shall adopt such procedures as necessary to ensure that the savings or assets designated by the applicant or recipient pursuant to paragraph (1) of subsection a. of this section are expended for the purpose so designated.

    c. A recipient who expends the savings or assets designated pursuant to paragraph (1) of subsection a. of this section for a purpose other than that so designated is liable for a termination of AFDC benefits for a period of at least 90 days.

    3. The Commissioner of Human Services, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the purposes of this act.

     4. This act shall take effect immediately.

STATEMENT

    This bill is intended to encourage recipients of aid to families with dependent children (AFDC) benefits to save for the purchase of a home, to meet education costs for themselves and their dependent children, or to cover the expenses of traveling to and from work. By providing incentives for saving, the bill seeks to augment the means to achieve economic self-sufficiency for AFDC-recipient families established under the Family Development Initiative pursuant to the "Family Development Act," P.L.1991, c.523 (C.44:10-19 et seq.).

    The bill would permit an AFDC applicant or recipient to accumulate a maximum of $5,000 in savings or assets if designated by the applicant or recipient, on a form and in a manner to be determined by the Commissioner of Human Services, to be used solely for the purchase of a primary residence, educational expenses for the applicant or recipient or the applicant's or recipient's dependent children, or work-related transportation costs, or a combination thereof; and one or more motor vehicles, the equity value of which does not exceed $15,000. The commissioner shall revise the allowable motor vehicle equity value amount annually, as necessary, to adjust for inflation.

    The bill further provides that the commissioner shall adopt such procedures as are necessary to ensure that the savings or assets designated by the applicant or recipient to be used for the purchase of a home, or education or transportation expenses are used for that purpose.

    Finally, the bill stipulates that an AFDC recipient who expends these savings or assets for a purpose other than that so designated is liable for a termination of AFDC benefits for a period of at least 90 days.

    This bill is part of a legislative package that is designed to build upon the AFDC reform initiatives enacted into law during the 1990-91 legislative session, in order to effect further significant reforms in that program that will strengthen families, restore the dignity and hope of AFDC recipients, encourage them to exercise personal responsibility, and facilitate the efforts of these persons to escape the bonds of welfare dependency and achieve economic independence.

Permits AFDC recipients to keep up to $5,000 in savings or assets to buy a home, save for educational expenses, or meet work-related transportation costs.