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Since welfare reform was enacted in 1996, the number of dependent families has been cut in half, and more families than ever are working. Yet evidence suggests that almost 1 million of the 1.6 million adults presently on TANF are not engaged in any activity leading toward self-sufficiency. These families cannot be left behind. The heart of welfare reform is encouraging work and requiring all welfare recipients to do everything they can to end their dependency on welfare and gain a secure foothold in the workforce.
The Administration proposal strengthens work rules to ensure that all welfare families are fully engaged in work and other meaningful activities that will lead to self-sufficiency. Along with new requirements for individuals, states are expected to closely monitor the participation and progress of all TANF families. All parents are to be fully and constructively engaged. States will be required to make certain that, over time, the percentage of TANF recipients engaged in work and additional productive activities continues to grow.
At the same time, the Administration proposal gives states greater flexibility to define activities that will lead toward self-sufficiency and that are consistent with the purposes of TANF. Beyond the hours that parents must be engaged directly in work, states have the flexibility to implement education and training programs to help workers advance in their jobs. Furthermore, states will be able to count individuals who are in treatment for substance abuse or undergoing rehabilitation related to work abilities, toward their participation requirement for a limited period of time.
Summary of Proposals
Require Welfare Agencies to Engage All Families. The Administration proposes the creation of a new universal engagement requirement. States must engage all families in work and other constructive activities leading to self-sufficiency. TANF agencies will be required to ensure that:
States will have full discretion to define and design appropriate activities, subject to the work requirement outlined below, as well as to develop methods for monitoring and review. The provision in current law related to individual responsibility plans will be eliminated, as will the state-plan requirement that families must begin work no later than two years after coming on assistance.
Increase Minimum Participation Rate Requirements. The Administration proposes that in FY 2003, 50 percent of TANF families with one or more adults must be participating in a combination of work and other activities that lead to self-sufficiency as quickly as possible. The percentage will increase annually by 5 percentage points until it reaches 70 percent in 2007. States will be allowed to count families that have left welfare due to employment as part of their participation rate for up to three months. In contrast, under TANF, the required percentage of families engaged in work-related activities began at 25 percent (in 1997) and rose over time to 50 percent in 2002.
Require Families to Participate 40 Hours a Week. This proposal requires that families be involved in constructive activities averaging 40 hours per week in order to count toward the required participation rate. States will have discretion to define approved activities, which must help achieve a TANF purpose. Similar to current law, states will be able, at their option, to exclude parents with children under 12 months of age from the participation rate calculation. However, states must still require such parents to participate at some level.
TANF requires single and two-parent families to be engaged in work-related activities for 30 and 35 hours a week, respectively. The Administration believes that these families should be engaged in a full workweek of activities. States will continue to have flexibility in establishing sanctioning policies, except that states must, as in current law, continue assistance for single, custodial parents who have a child under age 6 but who cannot obtain childcare.
Increase Work Requirements. This proposal requires that families counted toward participation must also average at least 24 hours per week in work, including:
This 24-hour work requirement is part of the 40-hour full participation requirement. TANF payments to families participating in supervised work experience or supervised community service are not considered compensation for work performed. Thus, these payments do not entitle an individual to a salary or to benefits provided under any other provision of law.
Give Work Credit to Families Engaged in Short-Term Substance Abuse Treatment, Rehabilitation, and Work-Related Training. This proposal allows states to count certain activities as meeting the work requirement for limited periods of time. Individuals participating in substance abuse treatment, rehabilitative services designed to maximize self sufficiency through work, and work-related training enabling the recipient to work, can be deemed to have met the three days a week work requirement. This exception would be available for no more than three consecutive months within any 24 month period.
Improve Calculation of Participation. States will be allowed to count only families that meet both the 24-hour work requirement and the 40-hour full participation requirement toward their participation rate. States will be able to obtain pro-rata credit for families engaged in appropriate activities less than full time as long as they meet their 24-hour direct work requirement. States will have the option of not counting cases for the purpose of determining participation rates for the first month after a case is opened.
Eliminate Separate Two-Parent Family Participation Rates. The Administrations proposal will end the separate participation rate for two-parent families; the same participation rate will apply to both single- and two-parent families. This policy removes a disincentive to equitable treatment of two-parent families. Under current law, two-parent families have a far more rigorous work participation rate requirement than do single-parent families (90 percent compared to 50 percent).
Phase Out the Caseload Reduction Credit. The Administrations proposal will phase out the current credit for caseload reduction because it reduces states minimum required work participation rates. Currently, states receive credit toward meeting participation rates for caseload declines since 1995. With national caseloads declining by more than half, many states effectively have no work participation standards. In FY 2003 the full caseload reduction credit will apply as under current law; in FY 2004 the credit will be halved; beginning in FY 2005, the credit will be eliminated. During this phase-out period the credit will be based on reductions since 1995, as in current law.
Conform Requirements for Teenage Parents. The Administration proposal will conform current law provisions regarding teenage parents who are heads of household. Teen parents who maintain satisfactory school attendance will satisfy both the 24 hours of direct work and the 40 hours of full participation requirements. Teen parents who are not satisfactorily attending school will have to meet the work and full participation standards in order to be counted toward a states participation rate.
Provide Technical Assistance for Tribes. The Administration proposes to provide technical assistance to Indian tribes to identify and disseminate promising program models and other research information. This approach will help tribes design and implement more effective TANF programs and family formation activities in tribal lands.
Discontinue Outdated State Program Waivers. The Administration proposes to discontinue the few remaining state welfare reform waivers granted prior to the 1996 welfare reform legislation. Flexibility under current law allows states to accomplish all the purposes of TANF without waivers. Furthermore, the requirements of TANF no longer represent an experiment. Abolishing the remaining waivers will put all states on an equal footing. Broad new state waiver authority for integrating programs is proposed in a separate section of this document.
Conform State Penalty Provision to New Requirement. The penalty structure under current law for states failing to meet work participation rates will now apply when a state fails to meet either or both the universal engagement or full participation rate requirements. Penalties will still be limited to a combined maximum of five percent of a states TANF grant for a fiscal year.
Retain Five-Year Time Limits and Continue Allowing 20 Percent to be Exempted. The Administrations proposal will retain current law provisions with respect to time limits. These provisions restrict families to 60 cumulative months of Federally-funded assistance (or less at state option). States may exempt up to 20 percent of their caseload from the time limit without penalty. These provisions make it clear that TANF assistance is temporary. At the same time, the policy recognizes that certain hardship cases require more time to achieve self-sufficiency.