Welfare reform in 1996 abolished most federal eligibility and payment rules, giving states much greater flexibility to design their own programs. The reforms eliminated welfare's "entitlement" status so that no one would have an automatic right to benefits. States could choose which families to help.
Under the old AFDC system, many welfare recipients seemed trapped in almost permanent dependency on government aid. To combat this, welfare reform established time limits to prevent welfare from becoming a way of life. PRWORA set a federal limit of five years, but allowed states to set shorter time limits if they wished.
The 1996 welfare reform imposed widespread work requirements on recipients. States are required to have at least 50 percent of eligible welfare recipients from single parent families participating in work activities. For two-parent families, the participation requirement is 90 percent. As of 2006, every state except Indiana had technically met the mandate for all families.
After all the credits, waivers, and exemptions are taken into account, only 32 percent of welfare recipients were working in 2009.
20 While this is low, it does represent a substantial improvement over pre-reform welfare. Under the old AFDC program, only about 10 percent of recipients were working.
21