Welfare and Medicaid Fiscal Assistance Program Act of 1981

Welfare and Medicaid Fiscal Assistance Program Act of 1981 - Amends title XIX (Medicaid) of the Social Security Act to raise the "Federal medical assistance percentage" to 90 percent by fiscal year 1985 provided a State establish a minimum benefit level for its AFDC program (part A of title IV of the Act, Aid to Families with Dependent Children). Requires the minimum benefits to be at least 75 percent of the official poverty line. Provides for additional payments to a State if the State incurs additional expenditures in meeting the minimum benefit amount. Requires under both Medicaid and AFDC that additional Federal funds be passed through the State to local government.