Under the new block grant system, states receive federal funds and match this amount with state funds to use as they see fit to meet the objectives of TANF in varying manners. In order to continue receipt of funds, states must demonstrate a Maintenance of Effort (MOE) Requirement, in which each state matches the federal funds provided for services that must fall into one of the four objectives stated above for eligible families. States have large discretion over the distribution of funds and how to implement their programs in order to meet the program objectives.
In response to this block grant system, the past 15 years have provided ample time for states to individualize their programs. This means that as TANF comes up for reauthorization, nationwide analyses of the strengths and weaknesses of the program are limited, due to the complex differences between state implementation of TANF and a lack of authority for the United States Department of Health and Human Services to require states to record TANF caseload data. In this timeframe, a number of states have strived to create a strong assistance program, while others have limited the access to and effectiveness of TANF benefits for eligible families.
Variation in TANF administration between states include such subjects as income eligibility and maximum benefit levels, time limits, work requirements, sanctions, the amount of cash assistance distributed to families and the allocation of overall funds to specific departments, among many others.
Below are descriptions of variations among states in their administration of the TANF program.
Income Eligibility and Maximum Benefits: Each state has allocated a specific income level to be eligible for TANF benefits, which, in 2003, ranged from an income of $269 in Alabama to $1,641 in Hawaii. Such a range in the income threshold accounts for differential costs of living between states, but it also brings to light states within the country that have eligibility requirements that are too low to reach many people in need of TANF benefits. Additionally, the allocation of maximum benefits varies greatly between states. The maximum benefit is very low for a majority of states; in 30 states, the maximum benefit in 2008 was less than 30% of the federal poverty level.
Work Requirements: Almost all states have some form of work requirement that must be completed for recipients to obtain benefits. Over half of the states require 30 hours of work per week, which coincides with the federal requirement. A number of states require a greater quantity of hours, whereas a few others only require 20 to 25 hours. The type and quantity of exemptions from the work requirements differ between states as well. In 2008, 42 states had a diversion program as a means to dissuade people from applying for TANF benefits, such as an employment search or settling for a one-time benefit meant to be utilized for temporary emergencies.
Time Limit: In 2008, 29 states adhered to the federal five-year lifetime limit for recipients to receive benefits. Five states had no time limit, and 17 states had time limits shorter than five years. A number of states provide exemptions or continue to provide benefits to only the children in a family after the five-year limit.
Sanctions: When a family that receives TANF benefits is not in compliance with state TANF policies, they may be sanctioned. Sanctions range from small cuts in benefits to full removal from TANF benefits and sometimes a lifetime ban. Although a number of states, such as Texas, have tightened their sanctions, other regions have developed methods to limit sanctions and encourage participation. Los Angeles County requests home visits for noncompliant recipients who fail to attend scheduled meetings, often with the success of improving participation. Additionally, Suffolk County in New York requires a meeting after a family receives its first sanction in order to determine the issues and barriers to full participation.
Caseload Trends: In the years following the 1996 Welfare Reform, caseloads dropped dramatically. Between 1997 and 2008, overall US caseloads dropped by 47%. Between December 2007 and December 2008—during the most recent recession—TANF caseloads only increased by 3% overall. Specifically, caseloads increased in 30 states and fell in 20 states, which highlights the unresponsive nature of the program to act as a social safety net and meet needs of low-income families during the recession.
Best Practices in Employment: A number of states have designed programs in specific areas—employment support, administration, use of ARRA funds, education and others—that have been successful in providing support to TANF recipients. Below are brief snapshots of regions that have been successful with specific programs in the past decade.
Erie County in New York created the PIVOT (Placing Individuals in Vital Opportunity Training) Program, which is designed to encourage permanent employment. The county pays for the first six months of a TANF recipient’s wages for an employer who contracts to permanently hire the individual after the initial six months. The program works with people they believe are ready for the permanent career track. For those who may need greater skills training, Erie County restructured its work experience program to provide trainings and classes for work-ready individuals close to recipient’s places of residency and provide supervisors to support individuals throughout the duration of the program.
Washington has employed a number of methods to increase vocational skills and employment. Washington’s WorkFirst TANF Program has partnered with the Department of Community, Trade, and Economic Development (CTED) to create Community Jobs, a program that provides subsidized employment programs for recipients, with an emphasis on training opportunities and intensive case management services.
Roughly twenty states have implemented a Worker Supplemental Program, which provides various forms of service for those who are employed and on track to leave the TANF rolls. Arkansas, Washington and Utah have been successful in providing such supplemental support programs.
Best Practices in Administration: New York, Baltimore and Utah have developed data collection projects that monitor TANF programs and seek opportunities to improve services. In New York, the Ring Report monitors participation rates, and in Maryland, the JobStart program evaluates county performance. Montgomery County in Maryland also utilizes a system that provides financial incentives for employers to encourage full participation on the part of the TANF recipients they hire.
Best Practices in use of ARRA Funds: In 2009, Illinois took a more aggressive stance to strengthen TANF than most states. It enacted legislation that utilizes funds under the American Recovery and Reinvestment Act of 2009 (ARRA) to increase the pool of eligible families, encourage employment, and provide more crisis support for victims of domestic violence.
Best Practices in Education: Despite TANF’s strong welfare-to-work emphasis, a number of states have identified the need to provide educational programs for recipients in order to improve their future employment opportunities. Under the current TANF program, only 30 % of TANF recipients that count towards a state’s work participation requirement—needed in order to receive government funds—can pursue educational or vocational studies. Thus, only a small quantity of families has the opportunity to pursue continued education while receiving TANF benefits. Such individuals can only participate in vocational educational training for a maximum of 12 months. Despite these stringent limitations, a number of states have overcome bureaucratic obstacles in creating educational opportunities for recipients.
Washington has designed the Integrated Basic Education and Skills Training Program (I-BEST), which supports students in earning for-credit occupational certificates that will place graduates in higher wage jobs. Similarly, the Wisconsin RISE career Pathways has employed Washington’s model, providing occupational credentials for small postsecondary programs. Additionally, the California Community College (CCC) CalWORKs initiative is designed to provide education and skills training for students in preparation for high-demand career fields.
Other states have designed specific vocational programs as well. The Arkansas Career Pathways Initiative (CPI) has also been successful in creating specific academic paths for low-income students, focused on short-term occupational programs. In Kentucky’s Ready to Work (RTW) initiative, the state’s TANF agency partners with the community and technical college system to create a wide range of postsecondary education opportunities. Outcomes of this program have been high entering employment rates, continued employment after four quarters, and the highest average annual wage of TANF recipients in the state.
In 2008, Mississippi, Tennessee, Arkansas and Alabama had the lowest benefit levels in the country, providing benefits that meet less than 20% of the federal poverty level.
Between 1997 and 2008, all states except Oregon saw a decline in TANF caseloads, with declines as great as 89 to 90% in Illinois and Wyoming. During the recent recession, states had an average increase in caseloads by 10%. However, the TANF program acted differently across the country; between 2007 and 2008, some states saw an increase in caseloads, others remained consistent, and yet others continued to see caseload declines. Indiana saw an increase of 32%, while New Hampshire and New Mexico’s caseloads rose by 23 and 24%. On the other hand, Vermont’s caseload decreased by 29% and Minnesota’s decreased by 21%.
Michigan, the state with the highest unemployment rate in January 2010 at 14.3%, saw no increase in TANF caseloads. Rhode Island, with the third highest unemployment rate at 12.7%, saw caseloads fall by 25%, instead of rising to meet the increase in need. In 2008, the program restricted the lifetime limit from 60 to 48 months, and families can only utilize benefits for 24 months of any 60 month period. These changes may have significantly contributed to the decline in caseloads.