The Temporary Assistance for July 16, 2020 Needy Families (TANF) Block Grant: Gene Falk Responses to Frequently Asked Questions Specialist in Social Policy The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of Patrick A. Landers benefits and services for low-income families with children. TANF was created in the Personal Analyst in Social Policy Responsibility and Work Opportunity Act of 1996 (P.L. 104-193). ). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer For a copy of the ful report, on TANF Financing and Federal Requirements, by Gene Falk).

please cal 7-5700 or visit www.crs.gov. TANF Funding and Expenditures. TANF provides fixed funding for the 50 states, the District of Columbia, the territories, and American Indian tribes. The basic block grant totals $16.5 billion per year. States are also als o required in total to contribute, from their own funds, at least $10.3 billion annually under a maintenance -of-effort (MOE) requirement.

The basic block grant is not adjusted for changes in circumstances (e.g., inflation, population) over time. In FY2019, the TANF basic block grant was 37% below what its value (adjusting for inflation) was in FY1997. Though TANF is best known for funding assistance payments for needy families with children, the block grant and MOE funds are used for a wide variety of benefits and activities. In FY2018, expenditures on assistance totaled $6.7 billion—21% of total federal TANF and MOE dollars. Assistance is often—but not exclusively—paid as cash. In addition to funding basic assistance, TANF also contributes funds for child care, employment services (for both assistance recipients and others), state refundable tax credits for low income families, pre-Kindergarten and Head Start programs, and services for children who have been, or are at risk of being, abused and neglected. Some states also count expenditures in prekindergarten programs toward the MOE requirement.

The TANF Assistance Caseload. A total of 1.21 million families, composed of 3.12.9 million recipients, received TANF- or MOE-funded assistance in September 2018.2019 (as of June 2020, the latest data available) The bulk of the "recipients"“recipients” were children—2.31 million in that month. The assistance caseload is heterogeneous. The type of family once thought of as the "typical" “typical” assistance family—one with an unemployed adult recipient—accounted for 3132% of all families on the rolls in FY2017. FY2018. Additionally, 3127% of cash assistance families had an employed adult, while 3841% of all TANF families were "“child-only"only” and had no adult recipient. Child-only families include those with disabled adults receiving Supplemental Security Income (SSI), adults who are nonparents (e.g., grandparents, aunts, uncles) caring for children, and families consisting of citizen children and ineligible noncitizen parents.

Assistance Benefits. TANF assistance benefit amounts are set by states. In July 2018, the maximum monthly benefit for a family of three ranged from $1,039 in New Hampshire to $170 in Mississippi. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF assistance amount for this sized family in excess of 50% of poverty-level income.

Work Requirements. TANF'’s main federal work requirement is actually a performance measure that applies to the states. States determine the work rules that apply to individual recipients. TANF law requires states to engage 50% of all families and 90% of two-parent families with work-eligible individuals in work activities, though these standards can be reduced by " “credits."” Therefore, the effective standards states face are often less than the 50% or 90% targets, and vary by state. In FY2018, states achieved, on average, an all-family participation rate of 48.1% and a two-parent rate of 57.9%. In FY2018, only Montana did not meet the all-family participation standard. This is a reduction from FY2012, when 16 states did not meet that standard. In FY2018, seven jurisdictions did not meet the two-parent standard. States that do not meet work standards are at risk of being penalized by a reduction in their block grant.

Congressional Research Service link to page 5 link to page 5 link to page 5 link to page 5 link to page 5 link to page 6 link to page 7 link to page 8 link to page 8 link to page 8 link to page 8 link to page 9 link to page 10 link to page 11 link to page 12 link to page 12 link to page 13 link to page 13 link to page 13 link to page 14 link to page 16 link to page 7 link to page 9 link to page 11 link to page 12 link to page 12 link to page 14 link to page 14 link to page 15 link to page 15 link to page 17 link to page 17 link to page 6 link to page 8 link to page 18 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Contents Introduction ................................................................................................................... 1 Funding and Expenditures ................................................................................................ 1 What Is TANF’s Funding Status? ................................................................................. 1 How Are State TANF Programs Funded? ...................................................................... 1 How Much Has the Value of the TANF Basic Block Grant Changed Over Time?................. 1 How Have States Used TANF Funds? ........................................................................... 2 How Much of the TANF Grant Has Gone Unspent? ........................................................ 3 The Caseload.................................................................................................................. 4 How Many Families Receive TANF- or MOE-Funded Benefits and Services? .................... 4 How Many Families and People Currently Receive TANF- or MOE-Funded Assistance? ............................................................................................................ 4 How Does the Current Assistance Caseload Level Compare with Historical Levels? ............ 5 What Are the Characteristics of Families Receiving TANF Assistance?.............................. 6 TANF Cash Benefits: How Much Does a Family Receive in TANF Cash Per Month?................ 7 TANF Work Participation Standards .................................................................................. 8 What Is the TANF Work Participation Standard States Must Meet? ................................... 8 Have There Been Changes in the Work Participation Rules Enacted Since the 1996 Welfare Reform Law?.............................................................................................. 9 What Work Participation Rates Have the States Achieved?............................................... 9 How Many Jurisdictions Did Not Meet the All-Families Standard? ................................. 10 Have Jurisdictions Met the Two-Parent Work Participation Standard? .............................. 12 Figures Figure 1. Uses of TANF Funds by Spending Category, FY2018.............................................. 3 Figure 2. Number of Families Receiving Cash Assistance, July 1959-September 2019 ............... 5 Figure 3. Characteristics of Assistance Families, Selected Years FY1988 to FY2018 ................. 7 Figure 4. TANF Cash Assistance Maximum Monthly Benefit Amounts for a Single- Parent Family with Two Children, 50 States and the District of Columbia, July 2018 .............. 8 Figure 5. National Average TANF Work Participation Rate for Al Families, FY2002-FY2018 ........................................................................................................ 10 Figure 6. Jurisdictions That Met or Did Not Meet the TANF Al -Families Work Participation Standard: FY2006-FY2018 ....................................................................... 11 Figure 7.Two-Parent TANF Work Participation Standard, Status by State: FY2006- FY2018 .................................................................................................................... 13 Tables Table 1. TANF Basic Block Grant Funding in Nominal and Constant Dollars ........................... 2 Table 2. TANF Assistance Caseload: September 2019 ........................................................... 4 Table A-1. Trends in the Cash Assistance Caseload: 1961-2018 ............................................ 14 Congressional Research Service link to page 20 link to page 20 link to page 21 link to page 24 link to page 24 link to page 27 link to page 28 link to page 28 link to page 30 link to page 30 link to page 32 link to page 32 link to page 18 link to page 21 link to page 34 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Table A-2. Families Receiving AFDC/TANF Assistance by Family Category, Selected Years, FY1988-FY2018............................................................................................... 16 Table B-1. Use of FY2018 TANF and MOE Funds by Category ........................................... 17 Table B-2. Uses of FY2018 TANF and MOE Funds by Category as a Percentage of Total Federal TANF and State MOE Spending ........................................................................ 20 Table B-3. Unspent TANF Funds at the End of FY2018 ...................................................... 23 Table B-4. Number of Families, Recipients, Children, and Adults Receiving TANF Assistance by Jurisdiction, September 2019.................................................................... 24 Table B-5. Number of Needy Families with Children Receiving Assistance by Jurisdiction, September of Selected Years .................................................................. 26 Table B-6. TANF Assistance Families by Number of Parents by Jurisdiction: September 2019 ......................................................................................................... 28 Appendixes Appendix A. Supplementary Tables ................................................................................. 14 Appendix B. State Tables ............................................................................................... 17 Contacts Author Information ....................................................................................................... 30 Congressional Research Service link to page 18 link to page 21 link to page 6 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Introduction This report provides responses to frequently asked questions about the Temporary Assistance for Needy Families (TANF) block grant. It is intended to serve as a quick reference to provide easy access to information and data. Appendix A provides additional data on families receiving TANF assistance over time. Appendix B presents a series of tables with state-level data. on TANF expenditures and families receiving assistance. This report does not provide information on TANF program rules (for a discussion of TANF rules, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk).

Funding and Expenditures

What Is TANF'’s Funding Status? The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136) funds TANF through November 30, 2020. s Funding Status?

P.L. 116-94, the Further Consolidated Appropriations Act, 2020, extends TANF funding through May 22, 2020.¹

How Are State TANF Programs Funded?

TANF programs are funded through a combination of federal and state funds. In FY2018, TANF has two federal grants to states. The bulk of the TANF funding is in a basic block grant to the states, totaling $16.5 billion bil ion for the 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, and American Indian tribes. There is also a contingency fund available that provides extra federal funds to states that meet certain conditions.

Additionally, Additional y, states are required to expend a minimum amount of their own funds for TANF and TANF-related activities under what is known as the maintenance of effort (MOE) requirement. States are required to spend at least 75% of what they spent in FY1994 on TANF'’s predecessor programs. The minimum MOE amount, in total, is $10.3 billion bil ion per year for the 50 states, the District of Columbia, and the territories.

How Much Has the Value of the TANF Basic Block Grant Changed Over Time?

TANF was created in the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193). A TANF basic block grant amount—both nationallynational y and for each state—was established in the 1996 welfare reform law. The amount established in that law for the 50 states, District of Columbia, territories, and tribes was $16.6 billion bil ion in total. From FY1997 through FY2016, that amount remained the same. It was not adjusted for changes that occur over time, such as inflation, the size of the TANF assistance caseload, or changes in the poverty population. During this period, the real (inflation-adjusted) value of the block grant declined by one-third (33.1%). Beginning with FY2017, the state family assistance grant was reduced by 0.33% from its historical levels to finance TANF-related research and technical assistance. The reduced block grant amount is $16.5 billion.

bil ion. Table 1 shows the state family assistance grant, in both nominal (actual) and real (inflation-adjusted) dollars for each year, FY1997 through FY2018FY2019. In real (inflation-adjusted) terms, the FY2018 FY2019 block grant was 3637% below its value in FY1997. Congressional Research Service 1 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Table 1. TANF Basic Block Grant Funding in Nominal and Constant Dollars (In bil ions of $) Cumulative Change in State Family Assistance State Family Assistance the Purchasing Power of Grant (50 states, DC, Grant in FY1997 the State Family Fiscal Year territories, and tribes) Dollars Assistance Grant 1997 $16.567 $16.567 1998 16.567 16.300 -1.6% 1999 16.567 15.993 -3.5 2000 16.567 15.501 -6.4 2001 16.567 15.017 -9.4 2002 16.567 14.796 -10.7 2003 16.567 14.456 -12.7 2004 16.567 14.128 -14.7 2005 16.567 13.679 -17.4 2006 16.567 13.193 -20.4 2007 16.567 12.891 -22.2 2008 16.567 12.342 -25.5 2009 16.567 12.382 -25.3 2010 16.567 12.177 -26.5 2011 16.567 11.862 -28.4 2012 16.567 11.583 -30.1 2013 16.567 11.397 -31.2 2014 16.567 11.215 -32.3 2015 16.567 11.181 -32.5 2016 16.567 11.078 -33.1 2017 16.512 10.819 -34.7 2018 16.512 10.563 -36.2 2019 16.512 10.371 -37.4 Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services % below its value in FY1997.

How Have States Used TANF Funds?

In FY2018, a total of $31.3 billion bil ion of both federal TANF and state MOE expenditures were either expended or transferred to other block grant programs. Assistance—ongoing benefits to families to meet basic needs—represented 21% ($6.7 billionbil ion) of total FY2018 TANF and MOE dollars.

TANF is a major contributor of child care funding. In FY2018, $5.3 billionbil ion (17% of all al TANF and MOE funds) were either expended on child care or transferred to the child care block grant (the Congressional Research Service 2 link to page 7 link to page 21 link to page 24 link to page 27 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Child Care and Development Fund, or CCDF). TANF work-related activities (including education and training) were the third-largest TANF and MOE spending category at $3.3 billionbil ion, or 11% of total TANF and MOE funds. TANF also helps low-wage parents by helping to finance state refundable tax credits, such as state add-ons to the Earned Income Tax Credit (EITC). TANF and MOE expenditures on refundable tax credits in FY2018 totaled $2.8 billionbil ion, or 9% of total TANF and MOE spending.

TANF and MOE funds also help fund state prekindergarten (pre-K) programs, with total FY2018 expenditures for that category at $2.6 bil ion. TANF is also a major contributor to the child welfare system, which provides foster care, adoption assistance, and services to families with children who either have experienced or are at risk of experiencing child abuse or neglect, spending about $2.4 billion bil ion on such activities. TANF and MOE funds also help fund state prekindergarten (pre-K) programs, with total FY2018 expenditures for that category at $2.6 billion. TANF and MOE funds are also used for short-term and emergency benefits and a wide range of other social services. Figure 1 shows the uses of federal TANF grants to states and state MOE funds in FY2018.

Figure 1. Uses of TANF Funds by Spending Category, FY2018 (Dollars in billions)

(Dol ars in bil ions) Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services Services (HHS). (HHS). Note: Detail may not add to totals because of rounding. Excludes TANF funds used in the territories and in tribal TANF programs.

For state-specific information on the use of TANF funds, seesee Table B-1 andand Table B-2.

How Much of the TANF Grant Has Gone Unspent?

TANF law permits states to "reserve"“reserve” unused funds without time limit. This permits flexibility in timing of the use of TANF funds, including the ability to "save" to “save” funds for unexpected occurrences that might increase costs (such as recessions or natural disasters).

At the end of FY2018 (September 30, 2018, the most recent data currently available), a total of $5.1 bil ion $5.1 billion of federal TANF funding remained neither transferred nor spent. However, some of these unspent funds represent monies that states had already committed to spend later. At the end of FY2018, states had made such commitments to spend—that is, had obligated—a total of $1.4 billionbil ion. At the end of FY2018, states had $3.7 billion of "bil ion of “unobligated balances."” These funds are available available to states to make new spending commitments. Table B-3 shows unspent TANF funds by state.

by state. Congressional Research Service 3 link to page 8 link to page 28 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs The Caseload The Caseload

How Many Families Receive TANF- or MOE-Funded Benefits and Services?

This number is not known. Federal TANF reporting requirements focus on families receiving only ongoing assistanceassistance. There is no complete reporting on families receiving other TANF benefits and services.

Assistance “Assistance” is defined as benefits provided to families to meet ongoing, basic needs.²1 It is most often paid in cash. However, some states use TANF or MOE funds to provide an "“earnings supplement"supplement” to working parents added to monthly Supplemental Nutrition Assistance Program (SNAP) allotmentsal otments. These "earnings supplements" are paid separately from the regular TANF cash assistance program. AdditionallyAdditional y, TANF MOE dollars are used to fund food assistance for immigrants barred from regular SNAP benefits in certain states. These forms of nutrition aid meet an ongoing need, and thus are considered TANF assistance.

As discussed in a previous section of this report, TANF basic assistance accounts for about 24% of all 21% of al TANF expenditures. Therefore, the federal reporting requirements that pertain to families receiving "assistance"assistance are likely to undercount the number of families receiving any TANF-funded benefit or service.

How Many Families and People Currently Receive TANF- or MOE-Funded Assistance? Funded "Assistance"?

Table 2 provides assistance caseload information. A total of 1.2 million1 mil ion families, composed of 3.1 million 2.9 mil ion recipients, received TANF- or MOE-funded assistance in September 20182019 (as of June 2020, the latest data available). The bulk of the "recipients"“recipients” were children—2.3 million1 mil ion in that month. For state-by-state assistance caseloads, seesee Table B-4.

1 T he definition of T ANF assistance is not in statute. However, because the statutory language has most T ANF requirements triggered by a family receiving “assistance,” the Department of Health and Human Services (HHS) regulations define assistance at 45 C.F.R. §260.31. Congressional Research Service 4 link to page 9 link to page 18 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs How Does the Current Assistance Caseload Level Compare with Historical Levels?

Figure 2 provides a long-term historical perspective on the number of families receiving assistance from TANF or its predecessor program, from July 1959 to September 20172019. The shaded areas of the figure represent months when the national economy was in recession. Though the health of the national economy has affected the trend in the cash assistance caseload, the long- term trend in receipt of cash assistance does not follow a classic countercyclical pattern. Such a pattern would have the caseload rise during economic slumps, and then fall fal again during periods of economic growth. Factors other than the health of the economy (demographic trends, policy changes) also have influenced the caseload trend.

The figure shows two periods of sustained caseload increases: the period from the mid-1960s to the mid-1970s and a second period from 1988 to 1994. The number of families receiving assistance peaked in March 1994 at 5.1 millionmil ion families. The assistance caseload fell fel rapidly in the late 1990s (after the 1996 welfare reform law) before leveling off in 2001. In 2004, the caseload began another decline, albeit at a slower pace than in the late 1990s. During the recent 2007-2009 recession and its aftermath, the caseload began to rise from 1.7 millionmil ion families in August 2008, peaking in December 2010 at close to 2.0 millionmil ion families. By September 20182019, the assistance caseload had declined to 1.2 million families.

1 mil ion families. As of June 2020, TANF assistance caseload data are unavailable for the early part of 2020, including months of the economic recession associated with the COVID-19 pandemic. Figure 2. Number of Families Receiving Cash Assistance, July 1959-September 2018

Source: Congressional 2019 Source: Congressional Research Service (CRS), with data from the U.S. Department of Health and Human Services Services (HHS). (HHS). Notes: Shaded areas denote months when the national economy was in recession. Information represents families families receiving cash assistance from Aid to Dependent Children (ADC), Aid to Families with Dependent Children (AFDC), and TANF. For October 1999 through September 2018201 9, includes families receiving assistance from Separate State Programs (SSPs) with expenditures countable toward the TANF maintenance of effort requirement. See See Table A-1 for average annual data on families, recipients, adult recipients, and child recipients of ADC, AFDC, and TANF cash assistance for 1961 to 2017.

2019. Congressional Research Service 5 link to page 30 link to page 11 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Table B-5 shows recent trends in the number of cash assistance families by state.

What Are the Characteristics of Families Receiving TANF Assistance?

Before PRWORA, the "typical"“typical” family receiving assistance hashad been headed by a single parent (usually (usual y the mother) with one or two children. That single parent has also typicallyhad also typical y been unemployed. However, over the past 20 years the assistance caseload decline has occurred together with a major shift in the composition of the rolls. Figure 3 shows the change in the size and composition of the assistance caseload under both AFDC (1988 and 1994) and TANF. In FY1988, an estimated 84% of AFDC families were headed by an unemployed adult recipient. In FY2016 FY2018, families with an unemployed adult recipient represented 32% of all al cash assistance families. This decline occurred, in large part, as the number of families headed by unemployed adult recipients declined more rapidly than other components of the assistance caseload. In FY1994, a monthly average of 3.8 million mil ion families per month who received AFDC cash assistance had adult recipients who were not working. In FY2016FY2018, a monthly average of 485394,000 families per month had adult recipients or work-eligible individuals, with no adult recipient or work-eligible individual working.

With the decline in families headed by unemployed adults, the share of the caseload represented by families with employed adults and "child only" families has increased. In FY2017, families with all adult recipients unemployed and families with employed adult recipients each represented 31% of all assistance families. The latter“child-only” families has increased. The first category includes families in "“earnings supplement"” programs separate from the regular TANF cash assistance program. "Child-only"In FY2018, families with an employed adult comprised 27% of al TANF families. Child-only TANF families are those where no adult recipient receives benefits in their own right; the family receives benefits on behalf of its children. The share of the caseload that was child-only in FY2017FY2018 was 3841%. In FY2017FY2018, families with a nonrecipientnon-recipient, nonparent relative (grandparents, aunts, uncles) represented 1416% of all al assistance families. Families with ineligible, noncitizen adults or adults who have not reported their citizenship status made up 910% of the assistance caseload in that year. Families where the parent received Supplemental Security Income (SSI) and the children received TANF also made up 910% of all al assistance families in FY2017.

FY2018. Congressional Research Service 6 link to page 12 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Figure 3. Characteristics of Assistance Families, Selected Years FY1988 to FY2017

FY2018 Source: Congressional Research Service (CRS) tabulations of the TANF national data files. Notes: TANF cash assistance caseload includes families receiving receiving assistance in state-funded programs counted toward the TANF maintenance of effort (MOE) requirement.

TANF Cash Benefits: How Much Does a Family Receive in TANF Cash Per Month?

There are no federal rules that help determine the amount of TANF cash benefits paid to a family. (There are also no federal rules that require states to use TANF to pay cash benefits, though all al states do so.) Benefit amounts are determined solely by the states.

Most states base TANF cash benefit amounts on family size, paying larger cash benefits to larger families on the presumption that they have greater financial needs. The maximum monthly cash benefit is usuallyusual y paid to a family that receives no other income (e.g., no earned or unearned income) and complies with program rules. Families with income other than TANF often are paid a reduced benefit. Moreover, some families are financiallyfinancial y sanctioned for not meeting a program requirement (e.g., a work requirement), and are also paid a lower benefit.

Figure 4 shows the maximum monthly TANF cash benefit by state for a single motherparent caring for two children (family of three) in July 2018.³2 The benefit amounts shown are those for a single- parent family with two children.⁴3 For a family of three, the maximum TANF benefit paid in July 2018 varied from $170 per month in Mississippi to $1,039 per month in New Hampshire. The map shows a regional pattern to the maximum monthly benefit paid, with lower benefit amounts 2 States are not required to report to the federal government their cash assistance benefit amounts in either the T ANF state plan (under Section 402 of the Social Security Act) or in annual program reports (unde r Section 411 of the Social Security Act). T he benefit amounts shown are from the “Welfare Rules Database,” maintained by the Urban Institute and funded by the Department of Health and Human Services (HHS). 3 Some states vary their benefit amounts for other family types such as two-parent families or “child-only” cases. States also vary their benefits by other factors such as housing costs and substate geography. Congressional Research Service 7 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs in the South than in other regions. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF cash assistance amount for this sized family in excess of 50% of poverty-level income.⁵

4 Figure 4. TANF Cash Assistance Maximum Monthly Benefit Amounts for a Single - Parent Family with Two Children, 50 States and the District of Columbia, July 2018

Source: Congressional Research Service (CRS), based on data from the Urban Institute's ’s Welfare Rules Database. The welfare rules database has information for the 50 states and District of Columbia. It does not have information on TANF assistance programs in Puerto Rico, Guam, and the Virgin Islands or tribal TANF programs. programs.

TANF Work Participation Standards

TANF'’s main federal work requirement is actuallyactual y a performance measure that applies to the states, rather than individual recipients. States determine the work rules that apply to individual recipients.

recipients. What Is the TANF Work Participation Standard States Must Meet?

The TANF statute requires states to have 50% of their caseload meet standards of participationpartic ipation in work or activities—that is, a family member must be in specified activities for a minimum number of hours.⁶5 There is a separate participation standard that applies to the two-parent portion 4 In 2018, the HHS poverty guidelines for the contiguous 48 states and the District of Columbia for a family of three was $1,732 per month. Higher poverty lines applied in Alaska ($2,165 per month for a family of three) and Hawaii ($1,992 per month for a family of three). 5 Families without a work-eligible individual are excluded from the participat ion rate calculation. It excludes families where the parent is a nonrecipient (for example, disabled receiving Supplemental Security Income or an ineligible noncitizen) or the children in the family are being cared for by a nonparent relative (e.g., grandp arent, aunt, uncle) who does not receive assistance on his or her behalf. Congressional Research Service 8 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs of a state’ There is a separate participation standard that applies to the two-parent portion of a state's caseload, requiring 90% of the state'’s two-parent caseload to meet participation standards.

standards. However, the statutory work participation standards are reduced by a "“caseload reduction credit." ” The caseload reduction credit reduces the participation standard one percentage point for each percentage point decline in a state'’s caseload. Additionally, Additional y, under a regulatory provision, a state may get "extra"“extra” credit for caseload reduction if it spends more than required under the TANF MOE. Therefore, the effective standards states face are often less than the 50% and 90% targets, and vary by state and by year.

States that do not meet the TANF work participation standard are at risk of being penalized through a reduction in their block grant. However, penalties can be forgiven if a state claims, and the Secretary of HHS finds, that it had "“reasonable cause"” for not meeting the standard. Penalties can also be forgiven for states that enter into "“corrective compliance plans,"” and subsequently meet the work standard.

Have There Been Changes in the Work Participation Rules Enacted Since the 1996 Welfare Reform Law?

The 50% and 90% target standards that states face, as well wel as the caseload reduction credit, date back to the 1996 welfare reform law. However, the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) made several changes to the work participation rules effective in FY2007

• .  The caseload reduction credit was changed to measure caseload reduction from FY2005, rather than the original law'’s FY1995.
•  The work participation standards were broadened to include families receiving cash aid in "“separate state programs."” Separate state programs are programs run with state funds, distinct from a state's "’s “TANF program,"” but with expenditures countable toward the TANF MOE.
•  HHS was instructed to provide definition to the allowableal owable TANF work activities listed in law. HHS was also required to define what is meant by a "“work-eligible" ” individual, expanding the number of families that are included in the work participation calculation.
•  States were required to develop plans and procedures to verify work activities.

The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5), a law enacted in response to the sharp economic downturn of 2007-2009, held states "harmless"“harmless” for caseload increases affecting the work participation standards for FY2009 through FY2011. It did so by allowingal owing states to "freeze"“freeze” caseload reduction credits at pre-recession levels through the FY2011 standards.

standards. What Work Participation Rates Have the States Achieved?

HHS computes two work participation rates for each state that are then compared with the effective (after-credit) standard to determine if it has met the TANF work standard. An "all-families"“al -families” work participation rate is computed and compared with the allal -families effective standard (50% minus the state'’s caseload reduction credit). HHS also computes a two-parent work participation rate that is compared with the two-parent effective standard (90% minus the state' state’s caseload reduction credit).

Congressional Research Service 9 link to page 14 link to page 15 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Figure 5 shows the national average allal -families work participation rate for FY2002 through FY2018. For the period FY2002 through FY2011, states achieved an average allal -families work participation rate hovering around 30%. The work participation rate increased since then. In FY2016, it exceeded 50% for the first time since TANF was established. However, it is important to note that the increase in the work participation rate has not come from an increase in the number of recipients in regular TANF assistance programs who are either working or in job preparation activities. This increase stems mostly from states creating new "“earnings supplement" ” programs that use TANF funds to aid working parents in the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) or who have left the regular TANF assistance programs for work.6 for work.⁷

Figure 5. National Average TANF Work Participation Rate for All Families, FY2002-FY2018

FY2002-FY2018 Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services Services (HHS). (HHS).

How Many Jurisdictions Did Not Meet the All-Families Standard?

Figure 6 shows which states and territories did not meet the TANF allal -families work participation standards from FY2006 through FY2018. Before FY2007, the first year that DRA was effective, only a few jurisdictions did not meet TANF allal -families work participation standards. However, in FY2007, 15 jurisdictions did not meet the allal -families standard. This number declined to 9 in FY2008 and 8 in FY2009.

In FY2012, despite the uptick in the national average work participation rate, 16 states or territories did not meet the allal -family standard, the largest number of statesjurisdictions that did not meet their participation standards in any one year since the enactment of TANF. FY2012 was the year that ARRA's "freeze"’s “freeze” of the caseload reduction credit expired, and states were generallyjurisdictions were general y required to meet higher standards than in previous years.

The number of jurisdictions that did not meet the all-familiesal -families participation standard declined over the FY2012 to FY2017FY2018 period. In FY2018, Montana was the only jurisdiction that did not meet the all-family participation standard.

Figure 6.States this standard. 6 See CRS In Focus IF10856, Temporary Assistance for Needy Families: Work Requirements. Congressional Research Service 10 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Figure 6. Jurisdictions That Met or Did Not Meet the TANF All-Families Work Participation Standard: FY2006-FY2018 (Changes to TANF work participation standard rules under the Deficit Reduction Act of 2005 [DRA], effective in FY2007)

ef ective in FY2007) Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services Services (HHS). Congressional Research Service 11 link to page 17 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Have Jurisdictions(HHS).

Have States Met the Two-Parent Work Participation Standard?

In addition to meeting a work standard for all al families, TANF also imposes a second standard—90%—for the two-parent portion of its cash assistance caseload. This standard can also be lowered by caseload reduction.

Figure 7 shows whether each state or territory met its two-parent work participation standard for FY2006 through FY2018. However, the display on the table is more complex than that for reporting whether a statejurisdiction met or did not meet its "all family"“al family” rate.

A substantial number of states and territories have reported no two-parent families subject to the work participation standard. These statesjurisdictions are denoted on the table with an "“NA,"” indicating that the two-parent standard was not applicable to the statejurisdiction in that year. Before the changes made by the DRA were effective, a number of statesjurisdictions had their two-parent families in separate state programs that were not included in the work participation calculation. When DRA brought families receiving assistance in separate state programs into the work participation rate calculations, a number of statesjurisdictions moved these families into solely state-funded programs. These are state-funded programs with expenditures not countable toward the TANF maintenance of effort requirement, and hence are outside of TANF'’s rules.

For states For jurisdictions with two-parent families in their caseloads, the table reports "Yes"“Yes” for states that met the two-parent standard, and "No"“No” for states that did not meet the two-parent standard. Of the 29 jurisdictions that had two-parent families in their FY2018 TANF work participation calculation, 22 met the standard and 7 did not.

Congressional Research Service 12 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Figure 7.Two-Parent TANF Work Participation Standard, Status by State: FY2006-FY2018 ("Yes" FY2018 (“Yes” indicates a state met the standard; "No"“No” indicates the state did not meet the standard; and "NA" “NA” means the standard was not applicable to the state in that year [no two-parent families in its caseload].)

Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services (HHS). Services (HHS). Note: A "“qual."” state is one that qualifies because it has two-parent families within its TANF or SSP caseload.

Appendix A. Congressional Research Service 13 The Temporary Assistance for Needy Families (TANF) Block Grant: FAQs Appendix A. Supplementary Tables Supplementary Tables

Appendix B. “child -only” families. Congressional Research Service 16 Appendix B. State Tables State Tables