Low-Income Families: Comparison of Incomes of AFDC and Working Poor Families

GAO discussed its comparison of incomes and poverty status of Aid to Families with Dependent Children (AFDC) and working-poor female-headed families. GAO noted that: (1) the incomes of AFDC families who also receive other benefits are similar to the incomes of working-poor families who earn close to the minimum wage; (2) AFDC benefits vary widely among the states and generally increase with family size; (3) most AFDC families receive additional noncash benefits to varying degrees; (4) about 6 percent of female heads of AFDC families earn income; (5) some working-poor families receive some noncash benefits, but to a lesser extent than AFDC families; (6) both AFDC families with earned income and working-poor families are eligible for the earned income tax credit (EITC); (7) although working-poor families have higher median incomes than AFDC families, most families in both groups fall below the poverty line; (8) work-related expenses such as child care could significantly impact working-poor families' cash flows; and (9) child care subsidies, EITC, and other work-related supports could help keep low-income women in the workforce and raise their incomes above the poverty level.