To amend title IV of the Social Security Act to eliminate disincentives in the program of aid to families with dependent children that prevent recipients of such aid from working toward…

Amends part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Social Security Act (SSA) to: (1) provide for continuation of Medicaid (SSA title XIX) benefits for 36 months for families who become ineligible for AFDC due to excessive income; (2) increase the limit on resources used in determining a family's eligibility for AFDC; (3) require that the State ensure that caseworkers are able to properly advise AFDC recipients of the use of microenterprises to attain self-sufficiency and encourage interested recipients to participate in a program designed to assist them in starting one; (4) provide for the inclusion of microenterprise training and activities in the JOBS program; (5) require that performance standards be adjusted to reflect the time required to establish microenterprises; (6) revise provisions concerning the earned income of children disregarded in determining the family's need for AFDC; (7) provide for suspension of AFDC where a child of a family on AFDC is not regularly attending required school; (8) reduce AFDC in cases where the family member claiming it is a high school dropout; (9) require States to guarantee child care to parents who are high school drop-outs during the period they are completing high school or the equivalent; and (10) make AFDC available to certain families with dependent children whose parents attend school or participate in the JOBS program.

Requires the Secretary of Health and Human Services to identify administrative barriers to microenterprise development by AFDC recipients.

Amends the Internal Revenue Code to provide for the collection of overdue child support through a levy on the wages of the individual owing it.