Florida Project Shows Cost and Complexity Of Welfare 'Caps'

TWO years and you're out.

It seems so definitive and so simple. The best way to break long-term dependency on welfare is to limit the time an individual is eligible to receive benefits. That way, people are forced to find work, or pay the consequences.

The idea is the most radical and controversial of all the welfare-reform initiatives afloat on the Republican tide. It removes the guarantee of a helping hand for families in need.

Yet both Congress and the Clinton administration support the cap in some form, and thus it is likely to pass soon. Little is understood of the impact of time-limited welfare, though. Only a few states have tested it, and none has produced measurable results.

A pilot program in this Gulf city on the western edge of Florida's panhandle, however, suggests that time limits are more complicated and costlier than first thought. The program involves a significant increase in human resources, and success may hinge on community involvement and the strength of local job markets.

''Part of the reality is the need to make an upfront investment,'' says Don Winstead, the state welfare-reform administrator.

In Florida's case, that upfront investment is significant. The state has spent $9 million on pilot programs in just two counties, involving only a portion of recipients. With experiments now beginning in six more counties, that investment is expected to exceed $31 million.

How's the money being spent?

The program here works on a 24-month time limit. That means individuals are eligible to receive cash benefits under the main welfare program, Aid to Families With Dependent Children, for two years out of every five. After that, they have to be working in either public- or private-sector jobs, or see benefits cut off.

In February 1994, Escambia County enrolled a small group of 22 recipients in the new Family Transition Program. A new group is added each month.

The program designs contracts with recipients to help them prepare for and find work based on educational or skill needs. Each case involves a caseworker, career adviser, health nurse, job developers, child-care liaison, and enforcers who track down parents delinquent on child support - one reason single mothers end up on welfare.

State help in finding jobs

In addition, the state allows recipients, who normally have their cash benefits scaled back once they start receiving a paycheck, keep a higher percentage of their aid while employed.

If they marry, the new spouse's income is exempt from earning limits for six months. To help ensure success, the program provides childcare for 24 months after a recipient moves from the program into full-time employment, and extends Medicaid 12 months.

If the range of support seems generous, it reflects a truism about caps that is just beginning to be realized: States will be better off if people are working than if they reach the time limit and fall through the safety net.

Consider the different time limits: the work-trigger and the benefit-termination models.

Vermont, for example, uses the former. Recipients who reach the time cap, 15 months for two-parent families and 30 months for single-parent families, are required to work full- or part-time, depending on the age of the children. The state provides community service jobs for those who don't find work. Limited benefits are still available.

Wisconsin, on the other hand, terminates benefits after recipients are enrolled in the program 24 months in a 48-month period. They are required to work while enrolled, but the state provides no jobs if they are unemployed when the time limit expires.

Either way, a state will feel a financial impact of recipients reaching the cap, says Dan Bloom, a researcher at Manpower Demonstration Research Corporation in New York, who is studying welfare reform.

''Time limits raise the stakes for both sides,'' Mr. Bloom says. Under the work-trigger model, states face the burden of providing jobs to those who can't find them. The benefit-termination approach, however, may leave families with children without any means of income, which could swell state expenditures on child- health services.

It's still too early to measure the impact such programs may have. Iowa has terminated benefits for almost 2,200 cases this year, but people become eligible again after only six months. Vermont's program reached the first 15-month stage this month, but all its participants had already found jobs.

A look under Florida's cap

Florida, which ends cash benefits at the time limit but will provide public- or private-sector work for those who reach the cap, will terminate cases for the first time on Feb. 1. Tracking what happens to individuals who lose their benefits will provide the first real impact study of the cap.

What is known is that time limits address only one of the reasons for long-term welfare dependency: lack of work ethic. Other reasons may keep people on the rolls, such as economic conditions and mental health.

Local job markets and community involvement, experts say, are crucial to the success of time-limited welfare. The Pensacola program has developed a close relationship with the local school district, which provides a number of volunteer and teaching assistant openings. It also suspends the time-limit clock in periods of high unemployment.

Bloom notes, too, that none of the test programs around the country is taking place in large urban areas. And this has critics worried. If Washington imposes a federal time cap on welfare, it will become mandatory. But if success depends on moving people into jobs, what happens in places where the entry-level market is already too competitive?

In Harlem, for example, the ratio of job seekers to entry-level positions is 14 to 1, according to a study by Katherine Newman, a visiting scholar at the Russell Sage Foundation in New York

''It would be wonderful if jobs were waiting and people on welfare just needed a little push,'' she says. ''But that's not the reality.''