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Omnibus Budget Reconciliation Act of 1981

Resource type
Omnibus Budget Reconciliation Act of 1981
PL 97-35, 95 Stat. 357-933
Aug. 13, 1981
  • Gross income eligibility standard set at 130 percent of poverty line for all households excepting those containing elderly or disabled members which continue to use net income.
  • Standard and dependent care/excess shelter deduction frozen at January 1981 level until July 1, 1983. At that time deduction updated based on changes in the CPI for the 15 months ending March 31, 1983. Deduction updated again in October 1984 and annually thereafter. Homeownership component of CPI no longer used in updates.
  • Earned income deduction for working households lowered from 20 to 18 percent.
  • Repealed two increases in deductions that were enacted into law by PL 96-249 and were scheduled to become effective Oct. 1, 1982. One provision would have created a separate dependent care deduction of up to $90 per month for working adults. The other would have liberalized the medical deduction for the elderly and disabled by: allowing elderly or disabled people to deduct medical costs exceeding $25 rather than $35; and by including in the deduction the medical expenses of spouses who were not elderly or disabled.
  • Adjusted TFP in April 1982, July 1983, and October 1984 based on changes in the CPI during the preceding 15 months. In October 1985 and each October thereafter, the adjustment to be based on a 12-month cost change.
  • Prohibited strikers from participating unless household eligible prior to strike. Household cannot receive an increase in benefits as a result of strike.
  • Boarders prohibited from applying as a separate household.
  • Required parents under 60 and children who live together to be considered as one household.
  • Pro-rated allotment for initial month of participation if household does not participate for a full month.
  • Expanded the base for disqualification to include any action that violates a state statute related to abuse of the FSP.
  • Provided for disqualification of the household member for 6 months for the first offense, 1 year for the second, and permanently for the third.
  • Prohibited any increase in benefits to a household with a disqualified member, if the increase is a result of the disqualification.
  • Required that information on disqualified individuals be forwarded to the Secretary for establishment of a tracking system.
  • Permitted states to collect over-issued benefits in non-fraud cases by recouping allotments. Such collections were limited to 10% of the household's monthly allotment or $10 per month, whichever results in faster collection.
  • States permitted to retain 25 percent of collected claims for all over-issuances, excepting agency error, in addition to 50 percent of claims collected where over-issuances are determined by court action or administrative hearings.
  • Secretary authorized to collect claims due to the federal government (for example, monies owed because of loss or error) by reducing states' administrative funds. The Secretary can also waive such claims.
  • Required states to implement periodic reporting and retrospective accounting by October 1983. Migrants and households consisting entirely of elderly or disabled people exempted from monthly reporting requirement. If use of retrospective accounting causes a serious hardship on newly applying households, a supplemental allotment may be issued. Migrant households excluded from retrospective accounting.
  • Eliminated outreach requirement that states must inform low-income households about the FSP. Prohibited states from using federal funds for this activity. Retained requirements concerning bilingual personnel and materials.
  • Provided that effective July 1, 1982, Puerto Rico to receive a block grant not to exceed $825 million yearly to finance 100 percent of the food assistance expenditures for needy persons and 50 percent of the related administrative costs. Commonwealth must submit an annual plan to be approved by the Secretary to qualify for this financial assistance.
  • SSI cash-out states to remain as such. To retain SSI cash-out status, a state's supplemental payments in December 1980 must have included the bonus value of food stamps. In addition, the state must have incorporated this bonus value into the payment continuously since December 1980.
Page updated: February 26, 2020