This report presents preliminary recommendations for indicators and predictors of dependence on income from means-tested assistance programs, such as Aid to Families with Dependent Children, Food Stamps, and Supplemental Security Income. It includes an assessment of the ability of existing data collection efforts to provide the data needed to report annually on the recommended indicators. Dependence is considered along a continuum from complete long-term dependence to total self-sufficiency, and the depth of dependence is explored through indicators of the duration of welfare receipt, the ratio of earnings to total income received from welfare, and the degree of participation in the labor force and training programs. As measures of well-being, indicators include health, education, poverty and income, and housing conditions. At the writing of this report, states were just beginning to implement the Personal Responsibility and Work Opportunity Reconciliation Act (August 1996). For this reason, suggestions about the data needed for annual reports on indicators and predictors are only suggestions. The report recommends two types of indicators of dependence, those for self-sufficiency and family conditions, and others for child achievement, health, and well-being. To assure a complete and reliable assessment of dependence and well-being, it is recommended that indicators: (1) assess a broad array of outcomes, behaviors, and processes; (2) vary by age; (3) have the same meaning over time; (4) assess dispersion, duration, and risk; (5) include disaggregated data for subgroups; and (6) measure positive and negative aspects of well-being. Five appendixes provide supplemental information on families and state trends and discuss survey methodology. (Contains 24 tables, 23 appendix tables, 59 figures, and 147 references.) (SLD)