Work Incentive Amendments of 1986

Work Incentive Amendments of 1986 - Amends part C (Work Incentive Programs) of title IV of the Social Security Act to provide for the allocation of funds to States which establish comprehensive programs of education, training, and job search assistance, enabling recipients of benefits under part A (Aid to Families with Dependent Children) of title IV of the Act to achieve long-term self-sufficiency.

Directs the Secretary of Labor to promulgate program performance standards which: (1) measure a State's success in reducing welfare dependency, while taking into account differing conditions faced by different States; and (2) provide the basis for awarding incentive grants to States which satisfy such standards.

Requires each participating State to develop a State plan which: (1) identifies the State agency responsible for administering education, training, and job search assistance programs within the State; (2) assures that services will be provided in an efficient and coordinated manner, including the coordination of services with existing programs where appropriate; (3) identifies State resources available for the satisfaction of this Act's matching requirements; and (4) assures that necessary support services will be available to program participants. Sets forth the State review and approval procedure to which a State plan must be subject before the Secretary approves or rejects the plan.

Requires services to be organized so that each participant will: (1) have his or her abilities and prior training evaluated during an intake process; (2) be notified of the evaluation's results and the education, training, job, and support services available; and (3) select one or more service(s), service resources being allotted first to those participants who are most difficult to place in unsubsidized employment.

Includes certain temporary employment of those whose participation in a program has not resulted in unsubsidized employment as a service provided under this Act. Deems individuals who are making satisfactory progress in a vocational or undergraduate education or training program at an accredited post-secondary institution (on not less than a half-time basis) to be satisfactorily participating in a work incentive program.

Provides that, before the determination is made that an individual has refused, without good cause, to participate in a work incentive program, such individual must be offered an opportunity to propose other means of satisfying participation requirements.

Authorizes the Secretary of Labor to investigate a State agency alleged, and apply sanctions to an agency found, to be out of compliance with requirements of this Act or the State plan.

Authorizes appropriations.