A bill to amend title IV of the Social Security Act to make necessary changes in the amount of earned income to be disregarded under the State plan for aid and services to needy families with children.

Amends the program of Aid to Families with Dependent Children of Title IV of the Social Security Act to change the formula for determining the amount of earned income of a dependent child, who does not qualify as a full or part time student, of a relative, or an individual living in the household of the recipient, which a State must disregard in assessing need under such Title.

Allows a deduction from a recipient's earned income for 80 percent of the reasonable child care expenses for dependent children up to 15 years of age and requires that such dedication be made before computing the earned income of such recipient.

Terminates the application of the formula to the income of a recipient who has received such income for over four consecutive months.

Prohibits the receipt of aid by any family whose total income, without regard to exclusions, exceeds 150 percent of its need as established by the State agency administering the program.