Earlier this year, Thomas Foy, 60, went to the Richmond, Va., welfare office to apply for benefits. For the first time in his life, he was unable to find a job.

Foy had held a variety of jobs, ranging from insurance salesman to building custodian. Recently, he worked as a driver for a Richmond senior community center. Now, instead of receiving a monthly welfare check, Foy is being paid to work part-time as a security guard in Richmond's Virginia Museum.

Through a federally funded program that trains and finds jobs for older Americans with incomes at or below the poverty level, Foy has escaped the status of being a welfare recipient.

Like many other senior citizen workers across the country, Foy had the good fortune of being referred to one of the project directors of a Title 5 Senior Community Service Employment Program (SCSEP). The Title 5 program is administered through the Department of Labor and is designed specifically to provide training and part-time subsidized employment in community service agencies for persons 55 years and older whose prospects of finding other paid employment are poor. The SCSEP has been operating in its present form since 1968.

As of Oct. 1, however, Foy and 54,200 other Title 5 program participants will find themselves unemployed unless Congress appropriates money to continue the program.

During the 1980-81 program year, 67 percent of those enrolled in the SCSEP were female, 53 percent were 65 years or older and 58 percent had less than a high school education.

Supporters of the SCSEP say that besides the obvious benefit of cutting back the number of older Americans receiving food stamps and welfare payments, the program is important because it is helping eliminate prejudice against older workers.

These sentiments also were expressed by enrollees, who testified in February before a House subcommittee on retirement income and employment. When asked why she did not think she could get a job in the private sector, 72-year-old Ethel Federoff answered with the familiar response: employers think "I'm just too old."

When Federoff retired at age 66, she discovered she could not live on the income she received from Social Security. Rather than apply for Supplemental Security Income or ask her family for help, she accepted a job through the SCSEP with the San Francisco Public Guardian's Office. While assisting others who are incapable of handling their own affairs, she earns the extra funds to survive.

"Without the Title 5 program," Federoff testified, "I would have to cut down on food and things I need for the house. I would barely eat if I were unable to work."

Glen Northup, executive director of the Senior Community Service Employment Program of the National Retired Teachers Association/American Association of Retired Persons (NRTA/AARP), repeated the sentiments expressed at the hearing, noting particularly that the program educates employers in addition to providing training and finding jobs.

"One of the biggest pluses of the program is its ability to educate industry to the viability of the older worker," Northup said. "It's very difficult to eliminate discrimination by legislation and that is only part of the process. The most important thing is education, and Title 5 is doing that," he said.

Within their communities, SCSEP enrollees are placed in positions that will provide a new skill or job experience. In the case of Lucille Jordan, 57, the training in making dental plates resulted in her leaving the welfare roll and finding acceptance in the Medical College of Virginia Dental School. Almost half of the enrollees have the opportunity to work in community services related to the elderly, working in nutrition programs, providing home health care and being involved in outreach programs.

President Reagan is sending out conflicting signals about his commitment to the SCSEP, signing an amendment to the Older Americans Act on Dec. 29, 1981, that reauthorized funding for the program for the next three years, but more recently excluding funding in the proposed 1983 budget.

The budget eliminates Title 5 as a separately funded program. What has been proposed is incorporation of the elderly Title 5 enrollees with other special interest groups into one program, funded as a whole, without specialized administration. In addition to older workers, these groups would include Native Americans, migrant and seasonal farmworkers, persons with limited English language proficiency and handicapped persons.

In addition to reducing outlays for the new program by $492 million, training and subsidized employment would be downplayed and simple job placement emphasized. The combined amount expected to be spent in fiscal 1982 on these individual groups is $692 million, of which $277 million was to be received by the SCSEP.

Proponents of the program claim that the administration's proposal would severely restrict funding to older workers when they are in competition with so many other needy groups. A 1978 study by the Civil Rights Commission on age discriminationreported that older Americans were seriously underserved in employment and training programs.

Valinda Jones, staff director for the House subcommittee on retirement income and employment, noted that the current legislation for the Comprehensive Employment and Training Act (CETA) contains a broad program for older workers, but so far, it has done nothing with the allocated money.

Although she acknowledged that the SCSEP is not the only answer to an older worker program, she said this program is reaching a vulnerable group of people, those who are not only elderly, but also often lack the essential job skills required for employment. Jones said her office has received hundreds of letters from frightened SCSEP enrollees who do not know what they will do if the program is eliminated.

Jones said the Department of Labor has never bothered to measure the effect of the program's elimination on welfare rolls. "In many respects, the government will end up paying these people in one way or another," she said. In a 1978 performance study by the National Retired Teachers Association/American Association of Retired Persons, Thomas C. Borzilleri said, on an average, the Food Stamp and Supplemental Security Income programs save $24 a month whenever SCSEP adds a person to its rolls.

Sandra Sweeney, an administrative officer for the NRTA/AARP Title 5 program, said their calculations show that the federal government will end up paying about $5 million more in food stamps and welfare if the 7,000 persons they enroll lose their jobs.

During his testimony before the Senate subcommittee on aging, Undersecretary of Labor Malcolm R. Lovell told panel members that labor market changes over the next decade will create a greater demand by the private sector for older workers. Because of this, Lovell said, older workers will no longer need to fall back on the training and subsidized employment the SCSEP offers now.

Although it was a difficult choice, Lovell told the subcommittee, the administration's proposed bill has "singled out" the younger worker as being the primary recipient of job training. Rather than job training and subsidized employment, the SESCP should place more emphasis on transition of enrollees into unsubsidized jobs in the private sector, he said, adding that other things will make more sense for the older worker than sending them back to school.

Northup disagrees. "Their error is in not remembering it is not the youth that vote. I don't mean to imply that youth shouldn't be helped, but the older worker should be helped on a proportionate basis," he said. "Youths do not have an age discrimination problem."

Dr. Solomon Jacobson, principal investigator for the 1981 Federal Council on the Aging's performance evaluation of the SCSEP, said elimination of the Title 5 program at this time would be premature.

"This program is pioneering in an area where work previously has not been done," Jacobson said. "They are attempting to break down barriers to the employment of the elderly." The program will pay off in the future, he predicts, as employer prejudice decreases.

Funding for SCSEP is passed through the Department of Labor's Office of National Programs for Older Workers to eight national organizations and 49 state and territorial governments. The eight organizations include: Green Thumb, NRTA/AARP, National Council of Senior Citizens, National Council on the Aging, the U.S.Forest Service, National Urban League, National Center on the Black Aged, and Asociacion Nacional Pro Personas Mayores.

Under regulation from the Department of Labor, these sponsors pay the enrollees no less than minimum wage, provide them with annual physical examinations and offer personal and job-related counseling. Enrollees may work up to 1,300 hours per year, and are placed in host community service agencies with the hope that the enrollee eventually will move into an unsubsidized job in either the public or private sector.

An annual transition rate to private jobs of 15 percent is the goal set by the Department of Labor. While the NRTA/AARP had a transition rate of 34 percent in 1981, the average rate for the other national organizations was 11.2 percent. The fact that organizations such as Green Thumb, the Forest Service and the National Center on the Black Aged operate primarily in rural areas where the opportunity for unsubsidized employment is scarce, accounts, in part, for the low transition rate. The more urbanized the location, the higher the transition success rate.

Like most of the SCSEP participants, Thomas Foy is hoping his present training position will result in a permanent job. But Foy is aware of what the proposed budget impacts would be on his continuation as a SCSEP enrollee. Without the program, he said, he would be where he was before, lacking hope and unemployed.