II. PARTICIPATION RATES

PRWORA provided for a transition period for states to implement their new TANF programs. Although all states were required to implement TANF by July 1, 1997, the participation rate and data reporting requirements under TANF are based on the effective date of a state's implementation of TANF. States that implemented TANF by January 1, 1997 became subject to the participation rate standards and were required to begin reporting information on the TANF program with the July-September, 1997 quarter. All other states became subject to participation rates and were required to begin reporting TANF information six months after implementation of TANF. Under section 116 of PRWORA, all states were required to continue to meet the reporting requirements under part A and F of title IV of the Social Security Act until July 1, 1997 or until the TANF reporting requirements were effective as provided for under the Balanced Budget Reconciliation Act of 1997.

The TANF program is not like the JOBS program under which states reported participation rate information in an aggregate format. TANF requires that states report individual level data, on either a population or sample basis. Based upon these data, HHS calculates participation rates. Thirty nine states were required to report data for one or more months of the July-September, 1997 quarterly report. States were required to report this information by December 31, 1997. While we have been working closely with states to assist them in implementing this new reporting system, significant data transmission, data format and data quality problems have occurred which prevent us from having complete and reliable TANF participation rate data for inclusion in this report. We will provide this information as soon as reliable data is available.

As indicated above, states were required to continue to report AFDC and JOBS program data through June 1997 irrespective of whether they had implemented TANF. The JOBS data potentially provides important participation rate information on state TANF programs. However, only 27 states reported the JOBS data for the first three quarters of FY 1997. See table 2:1 AFDC/TANF: Total Families and Unemployed Parent Families, percent change from 1995 - 1996. Table 2:2 provides FY 1996 JOBS data, as well as the FY 1997 JOBS data that are available from the 27 states reporting. This report does not provide a substantial discussion on JOBS participation rates due to issues with the data which make data comparability difficult. Please see footnotes in Table 2:2 for a more complete explanation.

Caution should be used in drawing conclusions about whether a state might meet the work participation requirements under TANF from the JOBS participation data. There are three factors that make such a comparison difficult. The first is what constitutes a countable activity under the participation rate. For example, under the TANF program there is a 30% limitation of individuals who can be placed in vocational education, while in JOBS program there was no such limit. (JOBS and TANF activities are described in Chart 2:1) The second difference which should be noted is that JOBS mandatory population was a subset of the AFDC caseload, while the entire TANF caseload (with few exceptions) is included in the participation rates. The third factor relates to the difference in the required participation rates. Target rates under TANF have increased for the respective populations. Under TANF, the required participation rates for FY 1997 are 25% for all families and 75% for two-parent families. The two-parent rate includes many families not previously included in the AFDC Unemployed Parent program. However, the TANF statute provides for a reduction in these targets if a state achieved a caseload reduction between the FY 1995 base year and subsequent years. The caseload reduction percentage is subtracted from the target participation rate and this then becomes the new target participation rate. Caseload reductions attributed to Federal requirements or state changes in eligibility rules are not counted.

Appendices:

Chart 2:1 TANF/JOBS Activities

Table 2:1 AFDC/TANF: Total Families and Unemployed Parent Families, Percent Change from FY 1996 to FY 1997

Table 2:2 JOBS Participation Rates, FY 1996 - 1997