The 1996 welfare law enacting the Temporary Assistance for
Needy Families (TANF) block grant is often described as having changed
welfare by adding time limits and work requirements and increasing
state flexibility. While
the law did make changes in each of these areas, the nature of the
1996 changes was more fundamental.
The 1996 law repealed a federal-state entitlement program (Aid
to Families with Dependent Children) and replaced that program with a
federal block grant for states. A
state’s block grant may be used to operate a cash assistance program
(subject to an array of federal requirements) and may also be used for
a broad range of other state activities.
In return for receiving the block grant, each state has
maintenance of effort (MOE) obligation.
The MOE obligation is a requirement to spend a specified amount
of state funds for benefits and services to low-income families, but
the state has broad discretion in deciding how to spend those funds.
Administrators and advocates sometimes speak of “the TANF
block grant” and “the TANF program” as if they are the same
thing, but they are not. Using
its TANF block grant, each state chooses to operate a TANF cash
assistance program for needy families.
TANF cash assistance is only one activity funded with TANF
block grant funds, and a state may spend some or all of its TANF or
MOE funds for services and activities outside of the TANF cash
assistance program.
This chapter begins with a brief description of Aid to Families
with Dependent Children, the program that was repealed when Congress
enacted TANF. The chapter
then describes the legal and fiscal framework for TANF, and the
choices and requirements states face in designing and operating their
TANF cash assistance programs and other TANF- and MOE-funded services
and activities. Before
discussing issues in the operation of the basic cash assistance
program (e.g., time limits, work requirements and services,
sanctions), the text begins with an overview of state choices in
spending TANF and MOE funds. An
appreciation of state flexibility in use of federal and state funds is
important in understanding state flexibility in the design and
operation of TANF cash assistance programs.
This is not a
complete discussion of all aspects of the TANF structure, but is
intended to offer an overview of the key concepts of the TANF
framework.
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Aid to Families with Dependent Children (AFDC) was originally
enacted in the Social Security Act of 1935 and operated until 1996
when it was repealed by the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA).
Until 1996, AFDC was the nation’s principal income support
program for families with little or no other income.
AFDC was a federal-state cooperative program, in which no state
was required to participate, though all states elected to do so.
Federal law established a set of program requirements.
If a state complied with those requirements, the federal
government would pay half or more of the cost for assistance payments
made to eligible families and half of all program administrative
costs. States, in turn,
had a legal responsibility to provide assistance to families who
satisfied federal and state eligibility requirements.
As a condition of receiving federal funds, the state was
required to submit a plan describing key aspects of its program, and
states were required to operate their programs in compliance with
their state plans except, as noted below, when particular state plan
requirements were waived.
Program eligibility rules under AFDC involved a complex mix of
federal requirements and state options.
Federal law set the basic framework: states were required to
provide cash assistance to “needy families” who were “deprived
of parental support or care;” i.e., families below state-determined
income eligibility levels in which a parent was deceased, absent from
the home, incapacitated, or met a federal definition of being “unemployed.” In
some areas, federal law was highly prescriptive, with detailed
definitions of what counted as income or who must be included in the
assistance unit. At the
same time, states had broad discretion to set program cash assistance
levels and this effectively determined who was eligible for
assistance.
In the latter years of the AFDC Program, the federal government
and states became increasingly concerned with encouraging or requiring
workforce participation by families receiving assistance.
Limited authority to impose participation requirements had
existed for many years, but two major developments - enactment of the
Family Support Act in 1988, and the expansion of the federal waiver
process beginning in 1992 - resulted in significant expansions of
program participation requirements and in some instances, the
availability of employment-related services for families receiving
assistance.
The Family Support Act (FSA)[13]
required each state to establish a Job Opportunities and Basic Skills
Training (JOBS) Program.[14]
JOBS resulted in an expansion of both program participation
requirements and of employment-related services for AFDC recipients.
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In AFDC, individuals were exempt or non-exempt from required
participation in work or work-related activities.
To be exempt meant that the state could not require the
individual to participate and could not impose a grant reduction for
failure to participate. An
exempt person could volunteer to participate, but states often placed
little emphasis on encouraging exempt persons to volunteer, and
sometimes denied services to exempt persons on the basis of insufficient
resources. If an individual
was non-exempt, the state could require participation and could impose a
“sanction,” generally reducing the family’s grant if the
non-exempt person failed to participate without good cause.
The FSA increased the numbers of families subject to
participation requirements above that under prior law. But exemptions
remained, however, for certain categories of families, including those
in which the adult was ill, incapacitated, aged 60 or over, or caring
for an ill or incapacitated household member.
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The law required that state JOBS Programs contain a range of
activities (including basic education, job skills training, job
readiness activities, and job placement and development efforts), along
with a set of optional activities (including job search and work
experience) that states could incorporate in their programs.
States were required to conduct assessments of program
participants and develop employability plans “in consultation with the
participant” but individuals did not have a federal right to
participate in any particular activity.
The law required that states provide needed transportation and
other support services for families participating in the JOBS Program
and also required that states guarantee child care for families
participating in JOBS, work or other approved education and training
activities.
Partly due to limited funding and partly due to state choices in
implementation, the JOBS Program in most states never involved most
recipients in JOBS participation. For
example, in fiscal year 1994, only an average of 13% of AFDC adults
participated in JOBS in an average month.
The broadening of the federal waiver process resulted in further
expansions of program requirements and, in some cases, expansion of
services. Section 1115 of
the Social Security Act
grants the Secretary of Health and Human Services broad discretion to
“waive” provisions of Section 402 of the Act
for state demonstration projects. Section
402, in turn, contained the basic AFDC “state plan” provisions,
including those relating to definitions of filing units, income,
resources, etc. Beginning
in 1992, the federal government began to freely grant waivers of AFDC
state plan requirements for state “welfare reform” initiatives.
While there were some differences between the Bush and Clinton
administrations in the conditions under which waivers were granted, both
administrations granted a substantial number of waivers of federal
requirements provided that the waiver package was “cost-neutral” to
the federal government and the state’s initiative was subject to an
evaluation requirement. Waiver
requests involved a wide array of program approaches,[17]
which often involved modifying program income and asset rules and rules
affecting two-parent family eligibility.
The most common waiver packages also often included one or more
of the following program modifications:
1)
Increased Penalties for Violating Program Rules:
Typically, states sought to either increase the length of sanctions for
violation of JOBS-related requirements or to increase the magnitude of
the sanction, e.g. implementing full-family sanctions instead of just
reducing the family’s grant;
2)
Reducing the Circumstances in which Family Members are Exempt from Jobs
or Work-related Participation:
A limited number of states attained waivers to remove exemptions for ill
or incapacitated persons, but more typically, states sought exemptions
to require participation from parents with younger children.
3)
Time Limits and Work Requirements:
Most states sought
approval for some form of time limit, though states took different
approaches to what happened after the time limit.
In some cases, a family would be required to participate in work
or a work-related activity after the time limit; in other cases,
assistance would be terminated for either the parent or the entire
family. States varied in
their approaches as to who was subject to the time limit, who was
exempt, and when a family reaching a time limit could qualify for an
extension. Most time limit
waivers occurred in the last years of the AFDC Program, and few families
actually reached time limits by the time the AFDC Program ended.
In
summary, key elements of the AFDC structure included:
1) a federal requirement to pay half or more of all costs of
assistance to eligible families;
2) a
requirement that participating states submit and comply with state plans
and provide assistance to families who met federal and state eligibility
requirements;
3) a
complex mix of federal mandates and options affecting who actually
received assistance, although there was a basic requirement to assist
single parent families (and in some circumstances, two-parent families
who had no other income);
4) the
principle that some families were non-exempt and other families were
exempt from program requirements, although the share of exempt families
was declining over time;
5) a
mandate that states implement a program of employment-related services,
although the actual likelihood of an individual receiving services and
the extent of individual choice in the services received was, at best,
uneven;
6)
penalties for violation of program rules without good cause, with the
extent of severity of penalties increasing in the last years of the
program; and
7) the early design, but limited experience, of time limits.
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PRWORA repealed the AFDC Program and enacted the Temporary
Assistance for Needy Families (TANF) block grant.[18]
States were permitted to begin implementing TANF as soon as the
PRWORA was enacted, and all states were required to begin implementation
by July 1, 1997.
With their block grants, all states have elected to operate a
TANF cash assistance program,[19] but that is only one part of state use of block
grant funds. Many of the rules affecting work requirements and time limits
apply to the operation of a state’s TANF cash assistance or other “assistance”
programs funded with a TANF block grant.
However, to understand the basic framework of TANF, it is helpful
to begin by looking at the purpose of the law, then the allowable
choices in spending federal TANF funds and state MOE funds, and then the
consequences of receipt of “TANF
assistance.”
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TANF was enacted in Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act.
Most provisions of the law relating to TANF were codified at 42
U.S.C. §601-79(b). On
April 12, 1999, the U.S. Department of Health and Human Services issued
federal regulations addressing many, but not all, aspects of the federal
law.[20]
The purpose language in the TANF statute is particularly
important because (as discussed below) it has direct implications in
affecting what constitutes an allowable expenditure of TANF funds.
42 U.S.C. § 601(a) provides:
The purpose of this part is to increase the flexibility of states
in operating a program designed to–
1)
provide assistance to needy families so that children may be cared for
in their own homes or in the homes of relatives;
2)
end the dependence of needy parents on government benefits by promoting
job preparation, work, and marriage;
3)
prevent and reduce the incidence of out‑of‑wedlock
pregnancies and establish annual numerical goals for preventing and
reducing the incidence of these pregnancies; and
4) encourage the formation and maintenance of two‑parent
families.[21]
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Under TANF, each state qualifies for a “family assistance grant”
each year. Generally, each
state qualifies to receive an amount that reflects federal spending from
a base period (i.e., the most favorable of 1994 federal spending, 1995
spending or the 1992-94 average) under the programs that were repealed
at the time TANF was enacted (i.e., the AFDC Program, the JOBS Program,
and the Emergency Assistance Program).[22]
For most states, TANF grants stay constant from 1997 through
2002. The factors that
could affect TANF funding for a state are:
1)
A minority of states qualify for 2.5% adjustors each year because they
were determined to be states with historically low federal welfare
spending or above-average population growth.[23]
2)
A state could qualify for a bonus or a penalty. There are two bonuses: a high performance bonus (which under
preliminary guidance is based on employment entries, employment
retention, and wage progression for families receiving TANF assistance)
and an out-of-wedlock bonus (for states in which the share of
out-of-wedlock births declines while the pregnancy termination rate also
declines).[24] There
are numerous potential penalties, including penalties for misexpenditure
of TANF funds, failure to submit required reports, failure to meet work
participation rates, and failure to comply with time limit provisions.
This chapter provides additional detail about some, but not all,
potential penalties for states.[25]
3)
A TANF Contingency Fund of $2 billion is available for states to
draw upon federal funds, subject to state matching funds, during a
period of economic downturn if the state’s expenditures in the TANF
program reach a specified historical state spending level.[26]
4) A $1.7 billion federal loan fund is available to states.[27]
In addition, the 1997 Balanced Budget Act created a $3 billion
program of Welfare-to-Work grants that were made available in 1998 and
1999. These funds were
divided into formula grants and competitive grants.
Most (approximately 75%) of these funds were allocated to states
as formula grants. Each
state must, in turn, distribute at least 85% of its formula grant to
local Private Industry Councils unless the state attains federal
approval to provide the funds to other entities.
A state must satisfy maintenance of effort and matching
requirements to qualify for a formula grant. Not all states opted to
receive their formula grants. Twenty-five
percent of the Welfare-to Work funds is being distributed through
competitive grants to Private Industry Councils, political subdivisions
of a state, or private entities; the states themselves are not eligible
for the competitive grants. Both
formula and competitive grants must be spent on “hard-to-employ
individuals” and “individuals with long-term dependence
characteristics” for activities in a defined list, including job
readiness activities, employment activities, job placement services,
post-employment services, job retention services and support services,
and individual development accounts.[28]
At the time Congress was considering enactment of the TANF
statute, many people were concerned about the potential implications of
a funding structure in which federal funding would stay essentially flat
for a six year period. However,
since TANF funding to states was principally based on state AFDC
assistance costs in 1994 or 1995, and since caseloads in most states
have fallen sharply since that time, the fiscal structure has resulted
in many states having significant fiscal resources above the level that
they would have had under the AFDC funding formula. A state is not
required to spend its full block grant each year, and funds not spent in
a year remain available for assistance costs in future years.
In addition, funds not spent on assistance may be used for an
array of other permissible expenditures.
As a result, TANF policy discussions in a number of states have
increasingly focused on alternative choices for spending available TANF
funds.
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In order to receive a TANF block grant, a state must submit a
state plan to the U.S. Department of Health and Human Services (HHS) and
HHS must determine that the plan is “complete,” i.e., contains the
information required by law.[29] This
is the only federal role concerning the state plan; the federal
government does not have the authority to approve or disapprove the
state plan, and the federal government does not have legal authority to
take action against a state solely because the state has acted in
violation of its state plan. The
federal statute expressly states:
LIMITATION ON FEDERAL
AUTHORITY. No officer or
employee of the Federal Government may regulate the conduct of States
under this part or enforce any provision of this part, except to the
extent expressly provided in this part.[30]
Thus, unless a state’s conduct also violates some provision of
the law that HHS is authorized to enforce, the federal government lacks
authority to act simply because the state has violated its state plan.
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Notwithstanding the above restriction on enforcing provisions
of the TANF statute, the federal law also provides that any program or
activity receiving funds under TANF is subject to the Age Discrimination
Act of 1975; Section 504 of the Rehabilitation Act of 1973; the
Americans with Disabilities Act of 1990; and Title VI of the Civil
Rights Act of 1964.[31]
There are three ways in which a state can spend its TANF
funds:
(1)
The state can transfer funds to other block grants. Up to a total of 30% of TANF funds can be transferred to the
Child Care and Development Block Grant and to the Social Services Block
Grant (Title XX), provided that no more than 10% can be transferred to
Title XX, and Title XX transfers must be for services to children and
their families below 200% of poverty.
(Beginning in FY 2001, no more than 4.25% of TANF funds may be
transferred to Title XX.) If
funds are transferred to another block grant, they become subject to the
rules of that other block grant and are no longer subject to TANF rules.[32]
(2)
Unless otherwise prohibited, a state may spend TANF funds in any manner
reasonably calculated to accomplish a purpose of TANF.[33] Thus,
the four purposes of TANF listed above affect whether spending is
allowable.
(3)
Even if spending is not “reasonably calculated” to accomplish a TANF
purpose, the state may, unless otherwise prohibited, spend TANF funds in
any manner that the state authorized to use the funds under a set of
programs (AFDC, JOBS, Emergency Assistance, AFDC Child Care,
Transitional Child Care, At-Risk Child Care) on September 30, 1995, or
at state option, August 21, 1996.[34]
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Who the state can help with TANF funds depends on why the
spending is allowable. Of
the four purposes of TANF, the first and second purposes (providing
assistance to needy families, and ending dependence of needy parents by
promoting job preparation, work, and marriage) relate to needy families
or needy parents, and thus, spending based on the first or second
purposes must be for families or parents determined to be “needy.”
Under HHS rules, the determination of need must be based on
income and may also be based on resources.[35]
The third and fourth purposes of TANF (reducing out of wedlock
pregnancies and promoting the formation and maintenance of two parent
families) are not limited to needy families or persons, and thus
expenditures reasonably calculated to accomplish these purposes are
permissible even if not for low-income persons.
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When a state spends TANF funds for a benefit or service, the
benefit or service may or may not fall within the TANF definition of “assistance.” The
definition is important because many TANF provisions apply to the
receipt of “TANF
assistance.” For
example:
1)
Time Limits: The state may not use federal TANF funds to provide
assistance to a family in which the adult head of household or spouse of
the head of household has received federal TANF assistance for sixty
months (subject to limited exceptions).[36]
2)
Work Participation Requirements: If a family including an adult or minor
parent head of household receives TANF assistance (whether federally
funded or state funded), the family is considered part of the state’s
caseload for purposes of TANF participation rate requirements.[37] The
TANF 24-month work requirement is a requirement that a parent or
caretaker receiving TANF assistance (whether federally funded or state
funded) be engaged in work (as defined by the state) by the time that he
or she has received TANF assistance for 24 months.[38]
3)
Child Support: A family receiving TANF assistance (whether federally
funded or state funded) is required to assign its child support to the
state.[39]
4)
Prohibitions: A set of prohibitions bar the state from providing TANF
assistance (or in some cases, federally-funded TANF assistance) to
certain groups of families and individuals.[40]
5)
Data Collection: A set of data reporting requirements apply to those
receiving TANF assistance (whether federally funded or state funded).[41]
Under final regulations issued April 12, 1999, some of a state’s
TANF benefits and services are likely to be considered “assistance”
and others are likely to be considered “no assistance.” Assistance
is defined to include: “[C]ash, payments, vouchers, and other forms of
benefits designed to meet a family’s ongoing basic needs (i.e., for
food, clothing, shelter, utilities, household goods, personal care
items, and general incidental expenses).”[42]
The definition also includes:
1) needs-based payments to individuals in any work activity whose
purpose is to supplement the money they receive for participating in the
activity;[43]
and
2)
supportive services such as transportation and child care provided to
non-employed families, unless within one of the exclusions from
assistance listed below.[44]
If a benefit falls within the definition of assistance, the
benefit counts as assistance even when receipt of the benefit is
conditioned on participation in work experience, community service or
other work activities.[45]
Under final regulations,
“assistance” does not
include:
1)
Non-recurrent short-term benefits that: are designed to deal with a
specific crisis situation or episode of need; are not intended to meet
recurrent or ongoing needs; and
will not extend beyond four months;
2)
Work subsidies (i.e., payments to employers or third parties to help
cover the costs of employee wages, benefits, supervision, and training);
3)
Support services such as child care and transportation provided to
families who are employed;
4) Refundable earned income tax credits;
5) Contributions to and distributions from Individual Development
Accounts;
6)
Services such as counseling, case management, peer support, child care
information and referral, transitional services, job retention, job
advancement, and other employment-related services that do not provide
basic income support; and
7)
Transportation benefits provided under a Job Access or Reverse Commute
project to an individual who is not otherwise receiving assistance.[46]
Thus, if a state elects to use TANF funds for a benefit like
refundable earned income credits for needy families, such spending is
considered non-assistance, and the families benefiting are not subject
to TANF time limits, work or participation requirements or other
requirements unless they also receive benefits falling within the
definition of TANF assistance.[47]
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A state will receive a TANF penalty if it fails to meet its
maintenance of effort (MOE) obligation.[48]
The MOE obligation is a requirement to spend at least a certain
amount of state money on benefits and services for low-income families
each year. As discussed in
more detail below, a state can choose to satisfy its maintenance of
effort obligation by spending state money in its TANF program, or it can
satisfy the obligation by spending the money in separate state programs
outside of TANF, or through any combination of the two. The state’s maintenance of effort obligation is 80% (or, if
the state meets TANF participation rates, 75%) of the amount that the
state spent in 1994 for a set of federal programs.[49]
There are
detailed requirements concerning when a state expenditure counts toward
MOE.[50]
Generally, MOE expenditures must be for “eligible families”
and must be for an allowable purpose.
The phrase “eligible families” is not limited to families
receiving TANF assistance. Under
final regulations, to be eligible the family must be one that the state
could assist in its TANF program. This means the state is either not
prohibited from using federal funds or could permissibly use state funds
to assist the family.[51]
In addition, the family must be “needy,” defined as meeting
the income standards and the resource standards (if the state elects to
have resource standards) determined by the state and contained in the
state’s TANF plan.[52]
MOE expenditures must be for an allowable purpose.
Generally, the allowable purposes for which expenditures can
count toward MOE requirements are cash assistance, child care
assistance, educational activities designed to increase
self-sufficiency, job training and work, any other use of funds
reasonably calculated to accomplish a TANF purpose, and administrative
costs (not to exceed 15%). Certain
qualifications apply to each of the allowable purposes.[53]
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A state has three choices for how to spend its MOE funds:
1)
Commingled funds: The state may commingle its MOE funds with federal
TANF funds in a single program. For
example, if the state commingles state and federal funding for
assistance for 100 cases, and 60% of the money in the program comes from
federal funding, and 40% comes from state funding, all 100 of those
cases will receive assistance that is partially federally‑funded
and partially state‑funded. If the state elects to commingle state
and federal funds, then all families receiving “assistance” with
commingled funds are subject to the requirements generally applicable to
federal TANF assistance.
2)
Segregated state funds within TANF: Alternatively, a state might spend
state funds in a program that also receives federal TANF funds, but
segregate some or all of such state spending so that the assistance
provided to certain families, together with the administrative costs
relating to those families, is paid for entirely with state funds.
For example, if 60% of the money in a state’s TANF cash
assistance program involves federal funding, 40% involves state funding,
and the state has one hundred cases, the state might structure its TANF
cash assistance program so that sixty of its cases are federally‑funded
and forty are state‑funded.
The distinction is important because federal time limits only
apply to federally funded cases, and some prohibitions on assistance are
only applicable to use of federal funds.
3)
Separate State Programs: Alternatively, a state might use state funds to
create or expand a separate state program that receives no federal TANF
funds. Families in a
separate state program are not subject to the requirements that apply to
families receiving TANF assistance (e.g., time limits and work
requirements). However, a state may, of course, impose its own
requirements.[54]
The differences in funding choices become important because they
mean, for example, that a state may develop its own approach to time
limits, work requirements, and more generally, the mix of services and
requirements for particular populations. The state will often have broad
flexibility in implementing its choices depending on how it chooses to
structure its spending of state funds.
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Technically, a state is not required to use its TANF funds to
operate a TANF cash assistance program, but Congress and others must
have assumed that all states would elect to do so, and many of the
requirements of the federal TANF statute are written to apply to the
operation of the state’s TANF assistance program.
When using federal TANF funds, “assistance” may only be
provided to a family that includes a child residing with a parent or
relative or to a pregnant woman.[55] However,
it is up to the state to determine virtually all of the basic elements
of family eligibility, including:
1)
which persons among those residing with the child will be considered
part of the TANF family assistance unit (among those not prohibited from
receiving assistance);
2)
the income eligibility level at which a family will be considered “needy;”
and what sources of income will be counted in determining eligibility
and benefit levels;
3) whether to apply a resource requirement, and if so, what that
requirement will be;
4) the benefit levels to be provided to eligible families;
5) which benefits an eligible family will qualify to receive.
The TANF statute does not impose any direct limits on how a state
makes its decisions in the above areas but does provide that a state’s
TANF plan must “set forth objective criteria for the delivery of
benefits and the determination of eligibility and for fair and equitable
treatment, including an explanation of how the State will provide
opportunities for recipients who have been adversely affected to be
heard in a State administrative or appeal process.”[56]
Once a state determines the rules concerning eligibility and
assistance, the state is not legally required to provide assistance to
eligible families as a matter of federal law.
The PRWORA provides that “[t]his part shall not be interpreted
to entitle any individual or family to assistance under any State
program funded under this part.”[57] Note
that this does not preclude a state from establishing an entitlement as
a matter of state law. Moreover,
it remains unclear how a court would interpret the “no entitlement”
language of TANF in the context of due process challenges to state
policies and practices.
In contrast to AFDC, there is no requirement of “statewideness”
in TANF; there is no requirement that the same program be implemented in
a uniform way across the state.[58] In
addition, there is no requirement that the program be implemented by a
single state agency, so different agencies could be responsible for
different components of the program.
And, there is no requirement that any component of the program be
administered by the state or local government, so the program or
particular components of the program could be administered by non-profit
or for-profit entities pursuant to contracts or other arrangements with
the state or local government.
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One potential source of flexibility in operating state TANF cash
assistance programs flows from the state option to continue previous
waivers. As noted above,
many states had waivers under Section 1115 of the Social Security Act at
the time TANF was enacted. The
law provides that if a state had an approved waiver, the state may elect
to continue that waiver until the waiver expires, and need not comply
with inconsistent provisions of the TANF statute until expiration of the
waiver.[59]
HHS regulations outline circumstances under which HHS will
consider provisions of the TANF law to be inconsistent with a state’s
approach to work requirements or time limits under the state’s waiver.
A state continuing such a waiver will be able to apply its waiver
policies rather than the inconsistent TANF requirements until expiration
of the waiver.[60]
The federal TANF statute contains certain prohibitions that bar
states from providing assistance to particular categories of persons or
families. In some
instances, the prohibition only bars the provision of federally funded
TANF assistance and, in other instances, the prohibition also bars the
state from providing state-funded TANF assistance.
The TANF time limits (discussed below) are framed as prohibitions
on assistance.
Other principal prohibitions bar provision of assistance for
families without a child, families in which an individual is not
cooperating in establishing paternity or obtaining child support (for
which the state must reduce or terminate assistance), families who have
not assigned certain support rights to the state, teen parents who are
not living in adult-supervised settings or attending school (subject to
limited exceptions), and certain categories of legal immigrants and
undocumented immigrants. In
addition, a State is prohibited from providing TANF assistance to
individuals convicted of certain drug-related felonies, unless the State
opts out of this requirement.[62]
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Under the prior AFDC program, a set of federal regulations
required that states accept applications for assistance, process
applications within a specified period of time, provide written notice
of disposition of a request for assistance, and allow for a fair hearing
when a request for assistance was denied.
A state may make use of similar state-based requirements under
TANF, but the federal TANF statute does not impose such requirements.
Specifically, there is no federal requirement that states accept
or process applications for assistance, provide written notice of
disposition, or allow applicants fair hearing rights.
To find that provisions offer some protections, a court could
require a state plan set forth “objective criteria for the delivery of
benefits and the determination of eligibility and for fair and equitable
treatment.”
One increasingly common state and local procedure under TANF
involves “diversion”—efforts to divert a potential applicant
family from receiving assistance. A wide range of practices fall within
the framework of diversion, including counseling about alternative
community resources, a mandate that an individual complete some number
of job search contacts before an application is approved, provision of
lump sum benefits, or other forms of help to address immediate crises,
and active discouragement seeking to deter individuals from filing
applications. Thus,
diversion may involve efforts to dissuade and discourage applicants by
burdening the process of seeking assistance.
Such latter efforts may violate provisions of other federal laws
(e.g., Food Stamp and Medicaid processing requirements) but are not
prohibited by the TANF statute.
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A state is required to make an initial assessment of the skills,
prior work experience, and employability of each recipient of assistance
who is at least age 18 or who has not completed high school (or
equivalent) and is not attending secondary school.
The state may make any required assessment within 30 days (or 90
days, at state option) of the date an individual becomes eligible for
assistance.[63]
A state may but is not required to develop an Individual
Responsibility Plan based on the assessment.[64]
While the federal legal requirements are limited, a state could
choose to conduct more comprehensive assessments, assess applicants or
recipients at earlier stages, or do assessments of all applicants or
recipients. The state could choose to ensure that program activities are
appropriately determined on the basis of these assessments.
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A state
may elect to certify in its state TANF plan that it has established and
is enforcing procedures to:
1)
screen and identify individuals receiving assistance who have a history
of domestic violence, while maintaining confidentiality;
2) refer such individuals to counseling and supportive services;
and
3)
waive program requirements such as (but not limited to) time limits and
child support cooperation in cases where compliance with the
requirements would make it more difficult for individuals to escape
domestic violence or unfairly penalize individuals who are or have been
victimized by such violence or are at risk of further domestic violence.[65]
While any state can elect to make such a certification, HHS has
also indicated that if a state’s policies and practices meet certain
specified requirements, the state will be considered to have
“federally recognized” good cause domestic violence waivers.
If a state has federally recognized good cause domestic violence
waivers and fails to meet TANF work participation requirements or time
limits because it has granted such waivers, the state will be considered
to have “reasonable cause” for failure to meet the federal
requirements.[66]
To be federally recognized, the good cause domestic violence
waivers must:
1) identify the specific program requirements that are being
waived;
2)
be appropriately granted based on need, as determined by an
individualized assessment by a person trained in domestic violence and
redetermined no less often than every six months;
3)
be accompanied by an appropriate services plan that is developed by a
person trained in domestic violence and reflects the individualized
assessment and any revisions indicated by the redetermination;
4)
be designed to lead to work (consistent with the other provisions
relating to domestic violence).[67]
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Many state TANF cash assistance programs place a strong emphasis
on job search requirements for applicants and recipients of assistance.
Programs are often guided by a “work first” philosophy, in
which there is only limited access to education and training activities,
and programs emphasize the importance of accepting any available job.
There may be few or no exemptions from work-related requirements,
and the circumstances under which “good cause” will be recognized
for failure to comply with program requirements may be limited.
Each of these program orientations is permitted, and in some
respects encouraged by the TANF statute.
However, a state has substantial discretion in determining which
activities are required, when the activities are required, what
employment-related services are offered, and how the program addresses
circumstances of noncompliance or circumstances in which individuals
have significant barriers affecting the ability to obtain employment or
participate in program activities.
In contrast to AFDC, there are no mandated federal exemptions in
TANF; thus a state is free to require participation in activities by any
or all categories of applicants or recipients.
This does not mean that the state is barred from developing its
own exemption categories or ensuring that individuals are in appropriate
activities,
but it does mean that there is no federal “right” to be exempt from
program mandates.
TANF has four work and participation requirements that
potentially affect families receiving TANF assistance (whether
federally-funded or state-funded): community service after two months;
the twenty-four month work requirement; the overall participation rate;
and the two-parent participation rate.
In addition, a state is free to impose its own additional
requirements. There is
often confusion about the TANF work and participation requirements.
It is important to understand the details of each applicable
requirement in order to understand what requirements the state is and is
not mandated to impose.
First, the state plan provisions of the law provide that unless
the state opts out, the state must require a nonexempt parent or
caretaker to participate in community service employment after two
months of receiving assistance, with minimum hours per week and tasks to
be determined by the state.[72]
Most states have elected to opt out of this requirement.
A state that has not opted out has broad discretion in
determining what constitutes community service employment and in setting
minimum hours and tasks. It is probably unclear how a state implementing this
provision determines whether a parent or caretaker is nonexempt; it is
unclear whether Congress intended to allow states discretion to
determine exemptions or whether Congress intended that the provision
apply to any family subject to federal participation rate provisions.
Second, a state’s TANF plan must require a parent or caretaker
receiving assistance under the TANF program to “engage in work” (as
defined by the state) after receiving 24 months of assistance (or
earlier, if the state determines that the adult is ready at an earlier
point).[74] In contrast with the participation rate
provisions,
states have very broad discretion in determining what counts as being
“engaged in work” for purposes of the twenty-four month requirement.
The determination was expressly left to each state, so the state
has flexibility in determining both what counts as work and in
determining how many hours per week or month will be sufficient.
There does not appear to be any limitation, which would, for
example, prevent a state from counting participation in education,
training, or job readiness activities as satisfying this requirement.
In addition, there is no explicit penalty for a state’s failure
to comply with this requirement.[76]
At the day-to-day level, the two work-related provisions that
have the greatest effect on state behavior are likely to be the TANF
overall participation rate and two-parent family participation rate.
Technically, the participation rate provisions do not directly
impose requirements on individuals; rather, each is a requirement under
which the state risks a federal fiscal penalty if it fails to attain a
particular participation rate each year.[77]
The federal law specifies for each participation rate:
1) the maximum required work participation rate for the year;
2)
a methodology for adjusting the maximum rate downward if the state’s
caseload has fallen since 1995 for reasons other than changes in
eligibility rules (generally referred to as the “caseload reduction
credit;”)
3)
the number of hours that an individual must participate in one of a set
of specified activities to count toward the rate;
4)
the specified activities that will count as participation for purposes
of the participation rates.
Detailed rules affect the determination of the applicable rates,
hourly requirements, and countable activities.[78]
The following chart lists the maximum applicable rates and
required hours of participation needed to count towards the required
rates.
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Overall
and Two-Parent Families Maximum Participation Requirements Under
TANF (before
Caseload Reduction Credits)[79]
For
two-parent families receiving federally funded child care
assistance, a special rule generally requiring participation by
both parents applies for purposes of the two-parent rate.
|
|
Fiscal
Year
|
Overall
Participation
Rate
|
Hours
Required to Count Toward Overall Rate
|
Two-Parent
Families Participation Rate
|
Hours
Required to Count Toward Two-Parent
Families Rate
|
|
1997
|
25%
|
20
|
75%
|
35
|
|
1998
|
30%
|
20
|
75%
|
35
|
|
1999
|
35%
|
25
|
90%
|
35
|
|
2000
|
40%
|
30
|
90%
|
35
|
|
2001
|
45%
|
30
|
90%
|
35
|
|
2002
and after
|
50%
|
30
|
90%
|
35
|
A state’s actual required participation rate may be
substantially lower than the maximum participation rate, as a result of
the application of the caseload reduction credit. The caseload reduction
credit provides that each year, a state’s participation rate shall be
adjusted downward based on the number of percentage points by which the
state’s caseload in the prior year was less than its caseload in 1995
for reasons other than federal or state changes in program eligibility
rules. For example, suppose a state has had no changes in eligibility
rules since 1995, and that its 1999 caseload was 35% below its 1995
caseload. In 1999, if the maximum overall participation rate is 40%,
that state’s adjusted participation rate would be reduced by 35
percentage points, i.e., to 5%. Federal
TANF regulations outline the process for a state to apply for a caseload
reduction credit, in which the state must describe the extent of
caseload decline since 1995, list eligibility rule changes since that
time, and estimate the effect of eligibility rule changes on the state’s
caseload.[80]
Once the state’s application participation rate is determined,
a state wishing to avoid fiscal penalties must ensure that a number of
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CHAPTER
1: AN OVERVIEW OF TANF