Welfare Improvement and Cost Reduction Act

Welfare Improvement and Cost Reduction Act - Title I: Child Support - Amends Title IV, part D (Child Support and Establishment of Paternity) of the Social Security Act to prohibit payment to any State for child support unless such State submits to the Secretary of Health, Education, and Welfare within a prescribed time period a complete report on the amount of child support collected and disbursed by such State.

Requires the Secretary to reduce payments to the States by the amount which the States are required to reimburse the Federal Government from child support collections.

Extends indefinitely the period in which States may receive payments for child support collection and paternity determination services.

Authorizes compensation to court personnel who perform services directly related to the Child Support and Establishment of Paternity program.

Authorizes payment to States for the planning, design, development, or installation of an automatic data processing and information retrieval system to assist in the administration of the Child Support and Establishment of Paternity program.

Title II: Program Administration Improvements - Authorizes payment to States for the planning, design, development, installation, and operation of statewide mechanized claims processing and information systems to assist in the administration of the program of Aid to Families with Dependent Children of Title IV of the Social Security Act. Sets forth requirements for the operation of such information systems.

Requires the Secretary to provide States with technical assistance in developing and operating such information systems.

Permits States to obtain access, with appropriate safeguards, to wage information contained in social security records for purposes of determining eligibility for benefits under the Aid to Families with Dependent Children program and for enforcing the child support obligations of absent parents under the Child Support and Establishment of Paternity program.

Authorizes the States to require AFDC recipients, as a condition of eligibility, to obtain a detailed identification card specifying the programs for which they are eligible.

Authorizes the Secretary to pay directly to States up to 75 percent of the costs of investigating and prosecuting complaints of fraud under the AFDC program.

Requires States to pay to their political subdivisions an amount equal to 75 percent of the costs incurred by such subdivisions in administering the AFDC program.

Directs the Inspector General of the Department of Health, Education, and Welfare to compile data concerning cases of fraud under the AFDC program and the Supplementary Security Income Program of Title XVI of the Social Security Act.

Reduces payments made under the AFDC program in the case of a dependent child who lives in a home in which a relative who is either not legally responsible for the support of such child or is no longer eligible for aid under such program is also residing.

Establishes a monthly retrospective accounting period whereby the income and other elements of a household's circumstances for the preceding 30 days are reviewed for purposes of determining eligibility under the AFDC program and Medicaid.

Designates an alien who receives assistance under certain titles of the Social Security Act as a public charge for purposes of the Immigration and Nationality Act.

Expands the definition of "dependent child" to include a child who has been deprived of parental care due to desertion, abandonment, divorce, legal separation, institutionalization, or incarceration for more than 30 days.

Requires States to establish a quality control system to monitor payments made under the AFDC program and sets forth requirements which such a system must meet for approval by the Secretary. Requires the Secretary to utilize the services of the Inspector General in reviewing the operation of such quality control systems. Directs the Secretary to review cases erroneously excluded from a State's quality control investigation and to provide technical assistance to the States in developing quality control systems.

Title III: Child Care Improvements - Increases the limit on Federal funding for social services under Title XX (Grants to States for Services) of the Social Security Act. Extends the termination date of provisions providing for funding of child day care services.

Title IV: Work Related Provisions - Revises the formula for determining the amount of earned income of a dependent child, who does not qualify as a full or part-time student, or a relative, or an individual living in the household of the recipient, which a State must disregard in assessing need under the AFDC program.

Requires recipients of aid under the AFDC program to register for manpower services, training, employment, and other employment related activities with the Secretary.

Authorizes States to establish work demonstration projects and community work and training programs under the AFDC program.

Title V: Fiscal Relief for State and Local Welfare Costs - Increases payments to States for services under the AFDC program according to a specified formula.