CHANGES IN EARNED INCOME DISREGARDS.

SEC. 402. CHANGES IN EARNED INCOME DISREGARDS. (a) Limit on Disregard of Child Care Costs Increased; Child Care Disregard To Be Applied Last.— Section 402(a)(8)(A)(iii) of the Social Security Act is amended— (1) by inserting “after applying the other clauses of this subparagraph,” before “shall disregard”; (2) by striking “$160” and inserting in lieu thereof “$175”; and (3) by inserting before the semicolon “, or, in the case such child is under age 2, $200”. (b) Standard Disregard Increased.— Section 402(a)(8)(A)(ii) of such Act is amended by striking “$75” and inserting in lieu thereof “$90”. (c) Disregard of Advance Payments or Refund of Earned Income Tax Credit.— (1) Section 402(a)(8)(A) of such Act is amended— (A) by striking “and” at the end of clause (vi); and (B) by adding at the end the following new clause: “(viii) shall disregard any refund of Federal income taxes made to a family receiving aid to families with dependent children by reason of section 32 of the Internal Revenue Code of 1986 (relating to earned income tax credit) and any payment made to such a family by an employer under section 3507 of such Code (relating to advance payment of earned income credit); and”. (2) (A) Section 402(d) of such Act is repealed. (B) Section 402(a)(30) of such Act is amended by striking “subsection (d)” and inserting in lieu thereof “subsection (e)”. (d) Effective Date .— The amendments made by this section shall become effective on October 1, 1989.