WELFARE

On August 22, 1996, "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996," a comprehensive bipartisan welfare reform plan that dramatically changed the nation's welfare system into one that requires work in exchange for time-limited assistance was signed into law. The Temporary Assistance for Needy Families (TANF) program replaces the former Aid to Families with Dependent Children (AFDC) and Job Opportunities and Basic Skills Training (JOBS) programs, ending the federal entitlement to assistance. In TANF, states and territories operate programs, and tribes have the option to run their own programs. States, territories, and tribes each receive a block grant allocation with a requirement on states to maintain a historical level of state spending known as maintenance of effort. The total federal block grant is $16.8 billion each year until fiscal year (FY) 2002. The block grant covers benefits, administrative expenses, and services. States, territories, and tribes determine eligibility and benefit levels and services provided to needy families.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) gives states enormous flexibility to design their TANF programs in ways that promote work, responsibility, and self-sufficiency, and strengthen families. Except as expressly provided under the statute, the federal government may not regulate the conduct of states.

States may use TANF funding in any manner "reasonably calculated to accomplish the purposes of TANF." (see "A Guide on Funding Services for Children and Families through the TANF Program") These purposes are: to provide assistance to needy families so that children can be cared for in their own homes; to reduce dependency by promoting job preparation, work and marriage; to prevent out-of-wedlock pregnancies; and to encourage the formation and maintenance of two-parent families.

HIGHLIGHTS OF TANF

Work requirements. With few exceptions, recipients must work after two years on assistance. Twenty-five percent of all families in each state must be engaged in work activities or have left the rolls in fiscal year FY 1997, rising to 50 percent in FY 2002. Single parents must participate for at least 20 hours per week the first year, increasing to at least 30 hours per week by FY 2000. Two-parent families must work 35 hours per week by July 1, 1997. Unless a state opts out, non-exempt adult recipients who are not working must participate in community service two months after they start receiving benefits. Single parents with a child under 6 who cannot find child care cannot be penalized for failure to meet the work requirements. States can exempt from the work requirement single parents with children under age one and disregard these individuals in the calculation of participation rates for up to 12 months. Failure to participate in work requirements can result in either a reduction or termination of benefits to the family.

Work Activities. To count toward state work requirements, recipients will be required to participate in unsubsidized or subsidized employment, on-the-job training, work experience, community service, 12 months of vocational training, or they must provide child care services to individuals who are participating in community service. Up to 6 weeks of job search (no more than 4 consecutive weeks) would count toward the work requirement. However, no more than 25 percent of those meeting the participation rates of each state's caseload may count toward the work requirement solely by participating in vocational training or by being a teen parent in secondary school. The teen parent limitation is phased in over several years.

A five-year time limit. Families who have received assistance for five cumulative years (or less at state option) will be ineligible for cash aid under the new welfare law. States will be permitted to exempt up to 20 percent of their caseload from the time limit, and states will have the option to provide non-cash assistance and vouchers to families that reach the time limit using Social Services Block Grant or state funds.

State maintenance of effort requirements. States must maintain their own spending on welfare at 80 percent or more of FY 1994 levels. States must also maintain spending at 100 percent of FY 1994 levels to access a $2 billion contingency fund designed to assist states affected by high population growth or economic downturn. In addition, states must maintain 100 percent of FY 1994 or FY 1995 spending on child care (whichever is greater) to access additional child care funds beyond their initial allotment. To receive their full allocation, states must demonstrate they are spending on activities related to TANF 80% of the amount of non-federal funds they spent in FY 1994 on AFDC and related programs. If they meet minimum work requirements, their mandatory state effort is reduced to 75%.