New Act Gives States Option to Redirect Social Security Funds to Job Training, Starting in 2026

The “Reduce Duplication and Improve Access to Work Act” is one of those pieces of legislation that sounds great on paper—who doesn't want less duplication and better access to work?—but the real action is buried in the administrative fine print. Essentially, this bill hands state governments a new option: the ability to shift federal funds they receive under a specific part of the Social Security Act (Section 404(d)) directly into workforce development programs under Title I of the Workforce Innovation and Opportunity Act (WIOA).

The Great Fund Shuffle: What’s Moving and Why

Think of this as giving states a bigger bucket to fund job training. Currently, federal funds are often earmarked for specific programs. This bill, however, allows states to take money that was going toward one area—defined by Section 404(d) of the Social Security Act—and redirect it to WIOA programs, which focus on job training, career services, and employment support. The idea is to reduce the headache of managing two separate funding streams for similar goals. If a state sees a massive need for welders or coders, they can now potentially channel more existing federal dollars into those training programs. This change is not immediate; it officially kicks off on October 1, 2026.

The Fine Print and the Potential Trade-Offs

While this flexibility sounds like an administrative win, it comes with a few constraints and a big potential trade-off. First, if a state chooses to make this transfer, they can’t use more than 15 percent of that transferred money for general statewide workforce planning. This is the bill’s way of ensuring the money actually reaches local training centers rather than getting stuck in bureaucracy. Second, states must submit a combined State plan to both the Department of Health and Human Services (HHS) and the Department of Labor (DOL), applying complex WIOA planning rules to the now-combined funds. This requirement aims for better coordination but could also mean more bureaucratic complexity for state agencies.

The biggest question for everyday people is: What was that Section 404(d) money paying for before? The bill doesn't specify, but if a state decides to heavily fund WIOA by defunding existing programs under the Social Security Act, those who rely on the original services could lose out. For example, if that funding stream supported essential support services for job seekers that aren't strictly “training,” those services might disappear, shifting the burden onto local or community resources. While the goal is better access to work, the cost could be less support for those who need it most to even get to the training.

Who Benefits from the Change

State governments are the clear winners here, gaining much-desired flexibility in how they allocate federal dollars to meet local workforce demands. Workforce development boards and training providers under WIOA could also see a funding boost, potentially leading to more training slots for people looking to upskill or change careers. For the busy professional looking to move up, or the construction worker needing a specialized certification, this could mean more available, better-funded programs in their area. But the success of this act hinges entirely on how responsibly each state manages the newly merged funding pot.