U.S. Department of
Health and Human Services
Administration for Children & Families
Office of Planning, Research & Evaluation
Washington, D.C. 20447

Memorandum No. TANF-ACF-IM-2000-4 Date: August 22, 2000

TO:

State Agencies Administering the Temporary Assistance for Needy Families (TANF) Program and Other Interested Parties

SUBJECT:

Work Participation Rates For FY 1999

BACKGROUND:

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established mandatory work requirements and minimum annual work participation rate standards for States operating a TANF program. States are subject to these minimum participation rate requirements beginning July 1997 or six months after the State implementation of the TANF program. The Act establishes separate minimum participation rates each year for all families and two-parent families. The minimum work participation rate standards for fiscal year (FY) 1999 are 35 percent for the all families rate and 90 percent for two-parent families rate.

PRWORA provides for a reduction in the minimum work participation rate standards if the State’s average monthly assistance caseload decreased the previous year in comparison to its average monthly caseload in FY 1995. The all families participation rate standard is reduced by the number of percentage points the overall caseload declined. The two-parent participation rate standard is reduced, at State option, by either (1) the number of percentage points the two-parent caseload declined or (2) the number of percentage points the overall caseload declined. However, the law specifies that any caseload reductions resulting from changes in State or Federal eligibility rules are excluded in calculating the credit. Adjustments of FY 1999 minimum participation standards, called the "caseload reduction credit," are based on the caseload changes from FY 1995 (in the State’s title IV-A program under prior law) to FY 1998.

The statute also provides States the option to retain approved welfare reform waiver provisions that are inconsistent with the TANF provisions. Such waiver provisions may affect who is required to participate, the required hours of participation, and the countable activities. Thus, the

Participation rate calculation may apply differently for States retaining inconsistent waiver provisions.

The final TANF rule went into effect for FY 2000 (beginning October 1, 1999). Since these participation rates are for FY 1999, the calculation of the participation rates, the application of the caseload credit and the criteria for determining waiver inconsistencies are based on a reasonable interpretation of PRWORA.

CONTENT:

This memorandum transmits the work participation tables for FY 1999. All States were required to report work participation information for all of the October 1998 – September 1999 fiscal year and are subject to the work participation standards for FY 1999 based on this information.

The FY 1999 national average all families work participation rate is 38.3%, which exceeds the national minimum rate standard by 9% before accounting for any caseload reduction credit. This represents an 8.5 percent increase over the 35.3% rate attained in FY’ 1998. The FY 1999 national average two-parent families participation rate is 54.7%. This represents a 29.0 percent increase over the 42.4% rate attained in FY’ 1998. Of the 54 jurisdictions subject to the FY 1999 participation rate standards, all States, the District of Columbia, and Puerto Rico met or exceeded their minimum all families work participation rate. Fifteen States (Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, New Jersey, North Dakota, Oklahoma, Puerto Rico, South Dakota, Utah, the Virgin Islands and Virginia) did not have any two-parent families in the TANF program and thus were not subject to the two-parent work participation requirements. Vermont claims waiver inconsistencies that exempts all cases from the participation rates. Of the 36 States, the District of Columbia, and Guam that had two-parent families in their TANF program, 28 States met or exceeded their minimum two-parent families work participation rate. All States, except Guam, received a reduction in their minimum participation rates for the all families rate and all States with a two-parent TANF program, except Guam, received reductions in their minimum participation rates for the two-parent families rate as a result of the application of the caseload reduction credit. Twenty-seven States met the all families participation rate standard before application of the caseload reduction credit. Four States (Illinois, Oregon, Rhode Island, and Wyoming) met the two-parent participation rate standard before application of the caseload reduction credit. The caseload decline between FY 1995 and FY 1998 that was applicable to the caseload reduction credit for all families was 35.3% and for two-parent families was 55.6%. The minimum work participation rate

adjustment for all families ranged from 0.0% to 35.0% and for the two-parent families ranged from 5.6% to 90.0%. Twenty-three States had

sufficient caseload reduction credits that their standard for the all families rate dropped to zero. Two States (Missouri and Wyoming) had sufficient caseload reduction credits that their standard for the two-parent rates fell to zero. In addition, waiver inconsistencies applied in calculating participation rates for 15 States (Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, Oregon, South Carolina, Tennessee, Texas, Vermont, and Virginia).

As shown in the attached work activity tables, an average of 885,464 adults participated in work activities for an average of 27.5 hours per week. This represents about 41.9% of all adults receiving TANF assistance. Of these participating adults over 573,000 adults participated for a sufficient number of hours in work activities to include the family in the count toward meeting the participation rate, even without consideration of activities that qualify through waivers. About 66.1% of the participating adults were engaged in unsubsidized employment. Another 14.2% were engaged in job search and 12.3% were engaged in either work experience or community service. (Because some individuals were engaged in multiple activities, the table total is in excess of 100%.)

States have been individually notified of their participation rates for FY 1999. States that failed to meet their minimum work participation rate for either all families or two-parent families are subject to a penalty as required

by section 409(a)(3) of PRWORA. However, States will have an opportunity to file a claim for good cause and/or submit a corrective compliance plan to correct its failure to meet its FY 1999 minimum work participation rate standard(s) before the Secretary will impose a penalty.

This memorandum also transmits statistical tables on TANF recipient characteristics and financial circumstances for FY 1999. We have included a summary and analysis of this information.

ATTACHMENT:

TANF Work Participation Rate Tables For FY 1999 (October 1998-September 1999), TANF Recipient Characteristics and Financial Circumstances for FY 1999

INQUIRIES:

Inquiries should be directed to the appropriate ACF Regional Hub Director/Administrator