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CHARACTERISTICS AND FINANCIAL CIRCUMSTANCES OF TANF RECIPIENTS

FISCAL YEAR 1998

Temporary Assistance for Needy Families (TANF) Program

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Office of Planning, Research and Evaluation
Washington, DC 20447

Introduction

Summary

List of Tables

INTRODUCTION

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established a new Temporary Assistance for Needy Families (TANF) program to replace the Aid to Families with Dependent Children (AFDC) program. The new welfare law also established new State reporting and data requirements for the TANF program. In September 1997, HHS issued the Emergency TANF Data Report specification providing States with guidance/instructions for the collection and submission of this important data.

All States, the District of Columbia, Guam, Puerto Rico and Virgin Islands were required to submit TANF data on the demographic characteristics and financial circumstances of families receiving assistance under their TANF program for the 1998 federal fiscal year. Twelve States, which chose to start their TANF program from January 1998, requested to report TANF data for January to September 1998.

All 54 States and Territories transmitted 13,130,661 active cases and 1,146,364 closed cases onto the national TANF database.

Under the new data reporting system, States have the option to submit either sample data or universe data to HHS. Thirty-two States submitted universe data, from which HHS randomly selected approximately 200 active cases and 500 closed cases each month to prepare this report. The remaining 22 States submitted sample data. A total sample of 155,214 active cases was used to compile 30 TANF recipient characteristics tables. Also, a total sample of 175,928 closed cases was used to compile Table 31 regarding reasons for closure. The statistical data in this report are estimates derived from samples and, therefore, are subject to sampling errors as well as non-sampling errors.

The TANF statute allowed for a phase in of the data reporting requirements based on when a State implemented their TANF program. Thirty-nine States were required to report TANF data for the July – September 1997 quarter. For the purpose of data comparison we have chosen to use the AFDC data reported for the October 1996 to June 1997 period because the data collected under the AFDC program was comparable, all States reported the data for this period, and it reduced the possible data distortions associated with a limited data set.

The new TANF data reporting system posed significant initial challenges to State and HHS and delayed the issuance of this report. Despite every effort to ensure the reliability of the data, HHS eliminated some problem/questionable data from this report. In cases where a few States submitted questionable data, the data from those States were eliminated from the tables. In cases where numerous States reported questionable data or unusually large numbers of "unknown" or "other" categories, HHS urges caution in drawing conclusions on the basis of the data.

SUMMARY

The TANF Family

The average monthly number of TANF families was 3,176,000 in fiscal year (FY) 1998. The estimated total number of TANF recipients was 2,631,000 adults and 6,273,000 children. The average monthly number of TANF families decreased in all States and reflects an overall 22 percent decrease from 4,058,000 families in October 1996 - June 1997. During FY 1998, 2,897,000 TANF families had their assistance terminated.

The average number of persons in TANF families was 2.8 persons. The TANF families averaged 2 recipient children, which remained unchanged. Two in five families had only one child. One in 10 families had more than three children.

About seventy percent of families had only one adult recipient, and five percent included two or more adult recipients. For the 49 States that reported child-only cases, 23.4 percent of TANF families had no adult recipients, up about 0.7 percentage points for the comparable States for the October 1996 - June 1997 period. While the percentage of child-only cases on the welfare rolls has risen steadily since 1988, the rate of increase seems to be a slowing trend in the recent 3 years. Even though the overall percentage of child-only cases has continued to increase, the total number of child-only cases has actually declined by about 200,000 since FY 1996.

Of TANF families, 98 percent received cash and cash equivalents assistance with the monthly average amount of $358 under the State TANF program. Of such TANF families, 84 percent received Food Stamp assistance, which is consistent with previous levels. Also, almost every TANF family was eligible to receive medical assistance under the State plan approved under title XIX.

Reasons for which TANF families received a reduction in assistance for the reporting month were: sanction at 3.8 percent, recoupment of a prior overpayment at 8.2 percent and other at 6.4 percent. "Other" could include reasons for a reduction in assistance, such as receiving a lower benefit based on a state policy to pay families that move from another State at a lower level, or the application of a family cap.

The reasons for TANF families no longer receiving assistance were due to employment at 21.7 percent, State’s policy at 15.5 percent and sanction at 6.2 percent. However, understanding the reason for case closure is severely limited by the fact that States reported 56.1 percent of all cases that closed did so due to "other" reasons. For example, while independent studies of the reason for families leaving welfare typically find that somewhat over half leave as a result of employment, States reported only 21.7 percent of cases closing due to employment, clearly an understatement of the true rate. The final rule of TANF data collection requirements, effective October 1999, provides a detailed reason for case closure classification codes. These data specifications should result in more accurate determination of the reason for families leaving TANF.

The TANF Adults

The average age of TANF adult recipients was 30 years. Of TANF adult recipients, 6 percent were teenagers and 19 percent were 40 years of age or older. About 4 percent of TANF adult recipients were teen parents whose child was also a member of the TANF family. Only 16 percent of adult recipients were married and living together.

There was no significant change in the racial composition of TANF families. Three of five TANF adult recipients were members of minority races or ethnic groups. Black adults comprised 37 percent of TANF families. White adults comprised 36 percent of adult recipients and 20 percent were Hispanic. Of adult recipients, 1.6 percent were American Indian or Alaska Native.

Most TANF adult recipients were U.S. citizens. Non-citizens residing legally in this country were 11 percent of TANF adults.

Employment increased dramatically by about 75 percent among TANF adult recipients. Compared to October 1996 - June 1997, when 13 percent of adult recipients were employed, about 23 percent were employed in FY 1998. Furthermore, the average earnings of those employed increased from about $500 per month to $553, an increase of about 11 percent. Seven percent of adult recipients had unearned income averaging about $229 per month. Finally, an additional 45 percent of TANF adult recipients were in the labor force, i.e., seeking work but not employed, and almost one third of adult recipients were not in the labor force.

Work participation was mandatory for almost three of every five adult recipients. Of TANF adult recipients, about 8 percent were exempt from the work participation because they were single custodial parents with child under 12 months. Only three percent were exempt because of a sanction or participation in a Tribal Work Program. Nearly 17 percent were exempt from the work participation status because of a good cause exception, e.g., disabled, in poor health, or other. About 12 percent were teen parents who were required to participate in education.

The TANF Children

TANF recipient children averaged about 7.7 years of age. Seven percent of recipient children were under 2 years of age, while 35 percent were of preschool age under 6. Only 7 percent of the children were 16 years of age or older.

Most recipient children were children of the head of household in TANF families, and only 6 percent were grandchildren of the head of household.

The racial distribution of TANF recipient children was relatively unchanged in recent years. Black children continued to be the largest group of welfare children, comprising about 41 percent of recipient children. About 29 percent of TANF recipient children were white and 24 percent were Hispanic. The percentage of black children on TANF is up about 2 percentage points with corresponding 1 percentage point decline in the percentage of white and Hispanic children between October 1996 – June 1997 and FY 1998.