States Retool Welfare Under New TANF Rules


While most states are scrambling to meet stiff new federal standards for moving poor people from welfare to work, Georgia, Arkansas and New Hampshire already have revamped their Temporary Assistance for Needy Families (TANF) programs to comply with the new rules.

Three other states — California, Michigan and Washington — are hammering out final details on new laws designed to boost the number of welfare recipients who land and keep jobs.

The new federal rules, issued last month, carry out Congress' orders that states enroll at least 50 percent of poor parents in work-preparation programs. If the standards aren't met, states face hefty penalties starting Oct. 1.

The regulations also tie states' hands in developing their own brands of welfare-to-work programs by strictly defining what types of activities qualify as work preparation. In addition, the new rules extend federal oversight to separate state-funded TANF programs.

The changes take the "block" out of the block grant concept, said Michael Bird of the National Conference of State Legislatures (NCSL), explaining that the hallmark of Congress' 1996 welfare reform was the broad authority it gave states.

In announcing the rule changes, Bush administration officials pointed to Georgia's revamped welfare system as a model other states should follow.

Georgia achieved increased work-participation rates by making the work rules clear to welfare applicants from the beginning, monitoring their compliance on a daily basis and quickly cutting off cash assistance if they failed to attend their assigned work programs or counseling sessions, according to state officials.

Since launching its new plan in 2004, the percentage of Georgia's welfare recipients engaged in work-related programs has risen from 24 percent to 64 percent, in part because people who failed to meet the requirements were dropped from the rolls.

Between 2000 and 2005, Georgia's welfare rolls fell from roughly 30,000 recipients to fewer than 8,000, leading some advocates for the needy to question whether the state was simply pushing people off welfare to meet federal goals.

NCSL's Sheri Steisel says that despite the federal government's promotion of the Georgia plan, states are not likely to follow a "one-size-fits-all" model.

Arkansas' strategy is a case in point.

Instead of moving more people off of its rolls, Arkansas launched a program July 1 allowing parents to stay on welfare even after they land jobs. Statewide research shows that without continued assistance, most welfare recipients lose their jobs and end up back on the rolls within a year.

By counting working parents who stay in the program, Arkansas expects to boost its work-participation rate from 28 percent to nearly 45 percent this year.

New Hampshire's new law combines stricter sanctions for those who fail to comply with state work rules and a program similar to Arkansas' that allows working parents to remain on welfare until they reach a certain income level.

New Hampshire Gov. John Lynch (D) signed the law last month under protest that it did not go far enough to help poor people become self-sufficient. To supplement the law, he issued an executive order committing additional funds for child care, transportation and education "to ensure that TANF clients can truly move from welfare to work permanently," he said.

NCSL's Jack Tweedie says states can take three basic approaches to meeting the new federal requirements:

  • Follow the Georgia model and push more people into job-related activities by imposing tougher sanctions on those who fail to comply with the rules.
  • Follow the Arkansas plan and keep working parents on the rolls to improve their future economic prospects and boost the total number of welfare recipients who are working or in job-preparation programs.
  • Follow models being developed in California and other states that provide non-TANF state programs for needy parents who are the least likely to find and keep jobs, including those with mental or physical handicaps, handicapped children, and drug or alcohol addictions. By removing these needy families from the TANF program, states can improve their overall work-participation rates.

Even using these strategies, some states will be hard-pressed to meet the new work-participation rates, Tweedie said. At least 15 states will have to more than double the percentage of welfare recipients engaged in work programs; 23 more will have to boost their rates by more than half.

Under the 1996 rules, states received a caseload reduction credit each year that welfare rolls were lower than 1995 levels. For example, if rolls were half of the 1995 level, the work participation rate was reduced by half. Because welfare rolls shrank dramatically during the economic boom of the late 1990s, the original 50 percent federal work-participation rate was reduced to 25 percent or lower in every state.

Starting Oct. 1, the base year for calculating caseload reduction credits will be shifted to 2005, giving states little to no credits, since welfare rolls have fallen very little since 2005.

Over the years several states, including Virginia and Massachusetts, boosted their work participation rates by placing the majority of difficult-to-employ parents in state-run TANF programs that were not regulated by the federal government. As of Oct.1, those programs will come under federal purview, causing work participation rates to plummet in those states.

Other TANF changes, including strict definitions of which activities can be counted as work preparation, will hinder states' efforts to bring their programs into compliance.

For example, states no longer are allowed to include degree-oriented college courses as work preparation, and only six weeks of drug rehabilitation per year can be counted toward work rates. The new rules also disqualify many community-service jobs states had counted as work preparation.

Wisconsin, Wyoming and Ohio currently exceed the new requirements because they aggressively enforced work rules starting in 1996. Unlike other states, they did not use caseload reductions credits to ease their transition into the welfare-to-work program.

Prior to 1996, the federal welfare program did not require states to help people find jobs and move off of welfare. To give states time to craft their welfare-to-work programs, the federal government offered caseload reduction credits as a cushion against work-participation standards.

With most legislative sessions over or ending soon, many states are asking the U.S. Department of Health and Human Resources to withhold penalties until they have time to legislate needed changes early next year.


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