Family Economic Security Act of 1985

Family Economic Security Act of 1985 - Amends part A (Aid to Families with Dependent Children) of title IV of the Social Security Act to require each State to have in operation at any time and to carry out either a work incentive program under part C (Work Incentive Program) of title IV or an employment program demonstration project under part A (General Provisions) of title XI of such Act. Repeals time restriction limitations on demonstration projects.

Directs the Secretary of Health and Human Services to make annual grants to each State to carry out special programs, projects, and experiments designed to reduce the dependency of AFDC individuals and families, including: (1) supported work programs for long-term adult AFDC recipients; (2) work experiments aimed at easing the transition to jobs in the private sector; and (3) other programs, projects, and experiments designed to reduce AFDC dependency. Provides that grants shall be made only on the basis of a plan submitted to the Secretary by a State and approved by the Secretary. Provides that a grant shall be in an amount ranging from two to seven percent of a State's Federal share under part A of title IV or title XI. Requires reports concerning such grants from a State to the Secretary. Permits a State to transfer up to ten percent of its grant for use in carrying out programs to prevent teenage pregnancies and to assist pregnant individuals and mothers of young children in achieving self-sufficiency.

Requires a State to make monthly payments to each family with dependent children in an amount determined by subtracting, after the application of resource and disregard provisions, the family's monthly income from its monthly cash needs standard (equal to one-twelfth of the annual cash needs standard) or from its monthly payment standard (equal to one-twelfth of the annual payment standard). Requires a State to establish for any family with dependent children: (1) an annual cash needs standard; and (2) an annual payment standard specifying the amount of AFDC that the family would receive monthly under AFDC if it had no other income. Requires that, in the case of a family with no income other than AFDC (and reducing such income only by the applicable standard deduction specified by the Food Stamp Act of 1977), each of such standards when added to the total monthly allotments of food stamp coupons equal an amount that places the family at no less than a specified percentage of the poverty level. Provides that such percentage shall be 55 percent for 1986 and rise to 70 percent by 1991. Directs the Secretary of Health and Human Services to determine the poverty level for each State.

Provides for increases in the Federal AFDC contribution to States increasing AFDC benefits.

Revises provisions relating to dependent children of unemployed parents. Requires a State to make AFDC payments with respect to dependent children in two-parent families not otherwise eligible. Authorizes a State, with respect to making such payments, to establish appropriate work requirements and related registration and training requirements. Requires State plans to provide that at least one such parent: (1) register for manpower services, training, and employment, if either parent is required to register; and (2) participate in some State job search, training, or work program. Sets forth requirements relating to the provision day care and the payment of the minimum wage. Provides that the Federal AFDC matching rate shall be 75 percent with respect to families that include one or more dependent children.

Directs the Secretary to make grants to assist States and localities to establish and carry out programs to: (1) reduce the rate of teenage pregnancies in AFDC families; and (2) help pregnant individuals and mothers of young children in such families, who might otherwise become long-term AFDC recipients, to achieve self sufficiency. Requires applications to be submitted for such grants. Sets forth program objectives and requirements. Provides that a grant shall be in an amount equal to two percent of a State's Federal share under part A of title IV or title XI. Requires reports concerning such grants from a State to the Secretary. Permits a State to transfer up to ten percent of its grant for use in encouraging programs to reduce welfare dependency. Authorizes appropriations.

Redefines the term "aid to families with dependent children" so as to include a pregnant woman in any case where the child would be eligible for AFDC in the month of payment if such child had been born and was living with the mother in that month.

Disregards the first $100 of unearned income, including payment of benefits under title II (Old Age, Survivors and Disability Insurance) of such Act, unemployment benefits, and child support payments.

Requires a State to periodically reevaluate its AFDC needs standards.

Requires a State to provide Medicaid eligibility for one year to an AFDC family following the family's removal from the State's AFDC plan. Permits a State to provide an additional year of Medicaid eligibility.

Increases the amount of assets which a family may possess and still receive AFDC. Directs the Secretary to prescribe the type and allowable amounts of resources a family may own while eligible for AFDC. Prohibits including as such resources a home, burial plots, certain real property, and certain licensed vehicles.

Revises AFDC earned income disregards. Excludes the first $100 and one-fourth of other earnings. Limits the monthly child care disregard to $320 for a family.

Directs the Secretary to: (1) notify all recipients of and applicants for benefits under title II of the Act of the availability of the supplemental security income program (title XVI of the Social Security Act); (2) notify all recipients of and applicants for SSI or AFDC of the availability of food stamps; (3) notify unemployment compensation benefit recipients of the availability of AFDC; and (4) notify food stamp recipients of the availability of AFDC.

Increases the SSI benefit.

Prohibits the reduction in OASDI widow's and widower's benefits which may occur after a beneficiary attains age 80.

Provides for a Federal matching rate of 30 percent for SSI State supplementary payment increases made after May 22, 1985.

Amends the Internal Revenue Code to: (1) provide for an increase in the earned income credit; (2) provide for the disregard of any needs-based governmental benefit in determining support and maintenance of a household; (3) provide for the disregard of any refund of Federal income taxes made because of the earned income credit for purposes of determining eligibility for or the amount of benefits under any Federal or State program which receives Federal funds; (4) provide for cost-of-living adjustments in the earned income credit; (5) extend and increase the targeted jobs credit; (6) include food stamp recipients as members of targeted groups; and (7) provide for an increase in the zero bracket amount for heads of households for taxable years beginning after 1985.

Requires a State's Medicaid plan to cover SSI recipents.