TANF 5th Annual Report to Congress

XII. Specific Provisions of State Programs

Each State must submit a plan to the Secretary that outlines how it intends to conduct a program in all political subdivisions of the State (not necessarily in a uniform manner) that provides cash aid to needy families with (or expecting) children and provides parents with job preparation, work, and support services. States may determine what benefit levels to set and what categories of families are eligible. States have the flexibility to design and operate a program that best matches their residents’ needs and helps families gain and maintain self-sufficiency.

The information in the tables in this chapter was based on State Temporary Assistance for Needy Families (TANF) plans and amendments, and has been reviewed by each State. The information reflects each State’s program as of June 2002.

In this chapter HHS has organized the multitude of policy choices into some common themes: (1) requiring work and making work pay; (2) encouraging personal responsibility; (3) time limiting assistance; and (4) other key policies.

I. Requiring Work and Making Work Pay

The chart below (Table 12:1) outlines how each State has designed its TANF program.

Benefit Levels

TANF Provision: States are free to set the benefit levels that apply under their TANF programs. The majority of States have not raised benefit levels since July 1995, and in a few States benefit levels have declined. (See Table 12:2).

Time Frame for Work

TANF Provision: Under TANF, parents or caretakers must engage in work (as defined by the State) when determined ready, or no later than 24 months, whichever is earlier. (See Table 12:3).

TANF Provision: States have the option to exempt single parents with children up to one year of age from work requirements, and to disregard them from the calculation of the work participation rates for a cumulative lifetime total of 12 months. States have the flexibility to provide exemptions to other families. However, all other families with an adult or minor head of household are included in the State's participation rate calculations. States that received waivers prior to enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) may continue exemption policies approved under those waivers for the duration of the waiver period. Such States are indicated with an asterisk in Table 12:3. Map 12:1 displays State’s choices.

States Claiming Continuing Waiver Inconsistencies with Respect To Work Requirements

A State may have received a waiver to modify its work requirements under the former Aid to Families with Dependent Children program (AFDC) program. To the extent that the Federal TANF work requirements are inconsistent with the State's waiver work requirements, the State may be allowed to follow its approved waiver policy rather than the Federal TANF policy, until expiration of the waiver. The TANF final rules required States to file a certification with HHS by October 1, 1999, if they intended to follow inconsistent waiver policies. (See Table 12:4).

Treatment of Earnings

TANF Provision: PRWORA does not specify how States should treat earnings in determining families’ eligibility for TANF assistance. Thus, States have the flexibility to establish the income eligibility rules that best meet their residents' needs. However, as a means to help families transition from welfare to work and to help make work pay, all States disregard a portion of a family's earned income when determining benefit levels, and most States also disregard a portion of earned income in determining eligibility. (See Table 12:5).

Resource Limits

TANF Provision: PRWORA does not specify the total resource level that States are to use to determine eligibility for families. States have the flexibility to set the resource level to determine eligibility that best meets the needs of their residents. (See Table 12:6).

TANF Provision: PRWORA does not specify the vehicle asset level that States are to use under TANF. States have the flexibility to set the vehicle asset limit at the level that best meets their residents' needs. (See Table 12:6).

II. Encouraging Personal Responsibility

Individual Development Accounts

TANF Provision: The TANF statute specifically authorizes States to fund Individual Development Accounts (IDAs) established by TANF-eligible individuals. IDAs are restricted savings accounts that allow individuals to accumulate savings that can be used for postsecondary educational expenses, first home purchase, or business capitalization. The IDA program in the TANF statute allows individuals to contribute to an IDA such amounts as are derived only from earned income (while other IDAs might allow contributions to come from any source of income). Funds in a TANF IDA (including earned interest) are disregarded in determining eligibility and benefits in any program that uses financial considerations in such determinations.

Because of the funding flexibility under TANF, States can also use Federal TANF or State MOE funds to fund IDAs established under another authority. The following data are not limited to IDAs authorized under the specific provision in the TANF statute. (See Table 12:7).

Initial Sanctions for Not Complying with Work Requirements

TANF Provision: If an individual in a family receiving assistance refuses to engage in required work, a State has the option to either reduce or terminate the amount of assistance payable to the family, subject to good cause. (See Table 12:8).

Applicant Cash Diversion Programs

TANF Provision: PRWORA contains no specific diversion provisions. Because the law is silent on diversion, it allows States to provide diversion assistance. As such, the majority of States now offer applicant diversion assistance to families as an alternative to ongoing TANF assistance. Generally, this assistance comes in the form of benefit payments designed to provide short-term financial assistance to meet critical needs in order to secure or retain employment.

Typically, States provide several months of benefits in one lump sum. A few States provide a flat amount. By accepting the diversion payment, the family generally agrees not to re-apply for cash assistance for a specified period of time, e.g., receipt of a diversion payment equal to three months of benefits results in family agreeing to not re-apply for benefits for three months. A number of diversion programs provide applicant job search, other services, and/or referral to alternative assistance programs. (Table 12:9 highlights what cash assistance programs the States are providing).

III. Time Limiting Assistance

General Provisions: States generally may not use Federal funds to provide assistance to a family that includes an adult head of household or a spouse of the head of household who has received assistance for 60 months (whether or not consecutive). However, States may extend federally funded assistance beyond 60 months to up to 20 percent of the caseload, without penalty, based on hardship or domestic violence. States also have the option to set lower time limits on the receipt of TANF benefits.

State policies related to time limiting assistance to a family vary greatly. In a few cases, States had received waivers under section 1115 of the Act to implement time limits before PRWORA. These States have the authority to continue their waiver policies for the duration of their waivers. Furthermore, the flexibility available in the use of State funds allows each State to structure its time limit policies in a variety of ways. For example, a State may use segregated or separate State-only funds to provide assistance to families that it wishes to exempt from the time limit or to families that have reached the 60-month Federal time limit, in excess of the 20 percent cap. (See Table 12:10 and Map 12:2).

Waiver Inconsistencies Related to Work Participation and/or Time Limit Assistance Requirements of TANF

Ten States are claiming waiver inconsistencies for waivers that were approved to extend beyond FY 2002. The waivers for six of these States (KS, NE, OH, OR, SC, and VA) expire in FY 2003. Waivers for two States (MT and HI) expire in FY 2004, Massachusetts' waivers expire 9/30/2005, and Tennessee's waivers expire 6/30/2007.

Nine States have lost or will lose their waiver authority by the end of FY 2002 and will not be claiming waiver inconsistencies on FY 2003 or beyond. In addition, two States have expired waiver authority, but continue to claim waiver inconsistencies. Washington and Texas delayed the implementation of time limits because of a waiver inconsistency. Their waiver projects have ended, but the earlier waivers continue to affect families who were on assistance while the waiver was in effect. Table 12:11 summarizes the waiver inconsistency claims by States.

IV. Other Key Policies

Child Support Enforcement

TANF Provision: Title III of PRWORA establishes stricter child support enforcement policies. States must operate a child support enforcement program meeting general requirements in order to be eligible for TANF. Recipients must assign rights to child support and cooperate with paternity establishment efforts. States have the option to either deny cash assistance or reduce assistance by at least 25 percent to those individuals who fail to cooperate with paternity establishment or with obtaining child support. (See Map 12:3).

Adoption of Family Violence Option

TANF Provision: Each State has the option to certify in its State plan that it has established and is enforcing standards and procedures to: (1) screen and identify individuals with a history of domestic violence (while maintaining their confidentiality); (2) refer such individuals for counseling and supportive services; and (3) waive program requirements, as appropriate, based on safety and fairness concerns. This provision is commonly referred to as the Family Violence Option. (See Table 12:12)

Family Cap

TANF Provision: PRWORA did not include a specific family cap provision. However, States have the flexibility under TANF not to increase cash assistance after the birth of an additional child to a family already receiving TANF benefits. (See Table 12:13 and Map 12.4).

Fifth Annual Report to Congress (February 2003)

XII. Specific Provisions of State Programs