New Welfare Law: Comparison of the New Block Grant Program with Aid to Families with Dependent Children

New Welfare Law: Comparison of the New Block Grant Program with Aid to Families with Dependent Children

96-720 EPW
CRS Report for Congress
Received through the CRS Web
New Welfare Law: Comparison of
the New Block Grant Program with Aid to Families
with Dependent Children
Updated October 6, 1997
Vee Burke
Specialist in Income Maintenance
Education and Public Welfare Division
Congressional Research Service ˜ The Library of Congress

New Welfare Law: Comparison of the New Block Grant
Program with Aid to Families with Dependent Children
SUMMARY
This report compares the block grant program of Temporary Assistance for
Needy Families (TANF), enacted on August 22, 1996 (P.L. 104-193) and amended
on August 5, 1997 (P.L. 105-33), with the former program of Aid to Families with
Dependent Children (AFDC). The 1996 law replaced the 61-year-old AFDC
program and its education, work, and training program, called JOBS, with capped
block grants to states. It imposes a general 5-year time limit on duration of TANF
benefits and requires work in order to receive benefits after 2 years. To receive full
grants, states must achieve certain work participation rates: 30% of all TANF
families in FY 1998 (25% in FY1997, transition year) and 75% of two-parent TANF
families in both years. These minimums (to be reduced when caseloads fall below
the FY1995 level) increase to 50% of all families by FY2002 and 90% of two-parent
families by FY1999. In contrast, JOBS required participation by about 9% of all
cases in FY1995. Unlike JOBS, TANF sharply limits educational activities that may
count toward a state’s work participation rate.
AFDC entitled states to unlimited federal reimbursement at varying “matching”
rates for state-set benefits and administration, Emergency Assistance, and child care
for AFDC recipients and ex-recipients, and to capped matching funds for JOBS and
“at-risk” child care (for low-income families not on welfare). Federal spending for
these commitments totaled about $17.4 billion in FY1995. In contrast, TANF
provides a fixed block grant based on recent federal funding for AFDC, JOBS, and
EA ($16.5 billion yearly through FY2002) plus an average of $2.3 billion annually
in a new child care block grant (for about half of the child care funds, States must
provide matching funds). The Act also provides five kinds of extra TANF funds:
supplemental grants for above-average population growth and below-average federal
welfare spending per poor person; contingency funds — matching grants for periods
of high and rising unemployment or increasing food stamp caseloads; a bonus for
reducing the number of out-of-wedlock births and the abortion rate; a performance
bonus, based on goals of TANF; and, added by P.L. 105-33, for two years only,
welfare-to-work grant funds.
Ineligible for TANF: Unwed mothers under 18 unless they live with an adult
relative or in another adult-supervised arrangement; unwed mothers under 18 without
a high school diploma whose youngest child is 12 weeks old unless they attend
school; persons convicted of a drug-related felony occurring after August 22, 1996.
Under TANF, decide what categories of children to aid. AFDC required states to
aid all families with children in a class eligible under federal rules unless their
income was above state-set limits. TANF disallows any claim of entitlement to cash
aid. To receive a full grant, a state must spend yearly on behalf of TANF-eligible
families a sum of its own funds equal to a specified percentage of what it spent in
FY1994 on the replaced programs, its “historic” level. The required spending level
is 75%, but 80% if a state fails work participation minimums. At the 75% level,
required state funding would total about $10.4 billion annually; for this calculation,
states may count spending on families no longer eligible for TANF because of the
time limit. The Act took effect July 1, 1997, at latest, but states may continue
waivers approved before enactment.

CONTENTS
General Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligible Categories of Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Conditions for Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Ineligible Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Family Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Grandparent Caregivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Form of Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Cash/Noncash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Electronic Benefit Transfer (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Benefit Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Entitlement Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Income Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Resource Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Treatment of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Time Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Out-of-Wedlock Pregnancies/ Births . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Client Contracts/ Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Non-Work Conduct Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Health Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Drug/Alcohol Abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Residence of Unwed Minor Mothers . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Deterrence of New Birth (Family Cap) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Child Care for Welfare Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Job Opportunities and Basic Skills Training Program (JOBS) . . . . . . . . . . . . . . 12
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Non-Displacement Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Work Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Weekly Hour Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Percent of Caseload Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Calculation of Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Penalties Against States for Failing Work Participation Rate . . . . . . . . . . 17
Sanctions Against Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Federal Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Regulatory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Reduction in Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Quality Control/Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Penalties Against States (Other Than for Failing Work Requirements . . . . . . . 19
Corrective Compliance/Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
50 States and the District of Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3 Outlying Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
All 54 Jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Indian Tribes and Alaska Native Organizations . . . . . . . . . . . . . . . . . . . . 24
Loan Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Supplemental Grants for Population Increase
(and Low Federal Spending Per Poor Person) . . . . . . . . . . . . . . . . . . . 25
Out-of-Wedlock Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Contingency Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Performance Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Welfare to Work Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Transfer of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Cost-Sharing (Maintenance of Effort) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
State Plan Procedural and Policy Requirements . . . . . . . . . . . . . . . . . . . . . . . . 31
Child Support Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Evaluation, Research, and Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Services from Charitable, Religious, or Private Organization . . . . . . . . . . . . . . 40
Interaction with Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Interaction with Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Interaction with Housing Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Interaction with Foster Care/Adoption Assistance . . . . . . . . . . . . . . . . . . . . . . 43
Interaction with Earned Income Tax Credit (EITC) . . . . . . . . . . . . . . . . . . . . . 43
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Cost/Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

New Welfare Law: Comparison of
the New Block Grant Program with Aid to Families with Dependent Children
Note: Provisions marked with an asterisk reflect changes to TANF made by the Balanced Budget Act of 1997 (P.L. 105-33)
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
General
AFDC law (Title IV-A of the Social Security Act)
The Personal Responsibility and Work Opportunity
provides unlimited federal matching funds for Aid to
Reconciliation Act of 1996 (Public Law 104-193) repeals
Description
Families with Dependent Children (AFDC), child
AFDC, JOBS, AFDC-related child care, and EA. Through
care needed by recipients to work or study,
fiscal year 2002, it replaces them with fixed block grants to
transitional child care for those who moved from
states for Temporary Assistance for Needy Families (TANF)
welfare into the workforce, and Emergency
and with new child care block grants in a revised Title IV-A of
Assistance (EA). Title IV-F offers capped matching
the Social Security Act. It sets time limits on duration of aid to
funds to states for an education, work, and training
individual families and requires states to supplement federal
program for AFDC parents called Job Opportunities
TANF funds with their own. To receive full funding states must
and Basic Skills Training (JOBS) for AFDC parents.
achieve specified rates of participation by recipient families in
To receive “enhanced” reimbursement for JOBS
work activities.
outlays, states must achieve specified participation
rates and spend a certain percentage of funds on target
groups.

CRS-2
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Purpose
Encourage care of needy children in own homes or
Increase state flexibility in operating programs designed to: (1)
those of relatives (original 1935 purpose), strengthen
aid needy families so that children may be cared for in their
family life, and promote family self-support (1956).
homes or those of relatives; (2) end dependence of needy
parents upon Government benefits by promoting job
preparation, work, and marriage; (3) prevent and reduce out-of-
wedlock pregnancies and establish goals for preventing and
reducing their incidence; and (4) encourage formation and
maintenance of 2-parent families. (Sec. 401 of Social Security
Act, as amended by P.L. 104-193) See footnote, end of table.
Eligible
Entitled to state-set AFDC benefits are children under
State may give cash TANF benefits to a family it finds needy if
18 (19, at state option, if still in school) found needy
it includes a minor child (under 18 or under age 19 if a full-time
Categories of
under state standards who live with one parent
student in a secondary school or the equivalent level of
Families
because of death or continued absence of the second
vocational or technical training) who lives with his/her parent
parent; who live with two parents, one of whom is
or other caretaker relative or if it includes a pregnant person.
incapacitated or (if the primary earner)
(Sec. 408(a)(1) and Sec. 419((2))
“unemployed,” and who live with one parent and a
stepparent. Also eligible are the needy parent(s) or
other caretaker relatives of these children.
Regulations allow benefits to continue for children
TANF funds may be used to aid a child who has been (or is
who are “temporarily absent” from the home.
expected to be) absent from home for no more than 45
consecutive days (or, at state option, for no more than 30-180
(State options):
days). (Sec. 408(a)(10))
—a pregnant woman in the last trimester of
pregnancy
—a person whose needs it deems “essential” to the
child’s well-being.

CRS-3
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Conditions for
Cooperate in establishing paternity of a child,
Cooperate in establishing paternity and in establishing,
Eligibility
obtaining child support payments, and in identifying
modifying, or enforcing a child support order (under penalty of
third party who may be liable to pay for medical
reduced or zero benefit) (Sec. 408(a)(2); assign child support
services for the child. Assign child support and
rights to state (Sec. 408(a)(3)); engage in work, as defined by
spousal support rights to state. Participate in JOBS
state, after 24 months of TANF benefits (sooner, if found ready
unless exempt.
to work) (Sec. 402(a)(1)(A)(ii)) Participate in community
service, after 2 months of benefits, unless state notifies the
Secretary of Health and Human Services (DHHS) that it will
not impose this rule. (Sec. 402(a)(1)(B)(iv))

CRS-4
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Ineligible
-Children who live with two able-bodied parents,
-Unwed mothers under 18 (and their children) unless they live
unless the principal earner works fewer than 100
in home of adult relative or in another adult-supervised
Persons
hours monthly.
arrangement (such as “second-chance” home). (Sec. 408(a)(5))

-Illegal aliens.
-Unwed mothers under l8 without high school diploma unless
they attend school once their youngest child is 12 weeks old..
-Strikers.
(Sec.408(a(4))
-Recipients of Supplemental Security Income (SSI).
-(State option) noncitizens, including legal aliens already here.
Aliens who enter U.S. after enactment are barred from TANF
-Children for whom foster care payments are made.
for 5 years. Thereafter, TANF eligibility is State option. (Sec.
402(b)) of P.L. 104-193)
-(State option) the child of an unmarried parent under
age 18 (and that parent) unless they are in an adult-
-Child who has been (or is expected to be) absent from home
supervised supportive living arrangement. State also
for 45 consecutive days, or, at state option, for 30-180 days.
has option to treat minor mothers as “adult
States may make “good cause” exceptions to this rule. (Sec.
caretakers” of own children and permit them to had
408(a)(10))
their own AFDC household.
-Persons convicted of drug-related felony for conduct occurring
after enactment* (unless state opts out by state law). (Sec. 115
of P.L. 104-193)

-(For 10 years) persons who fraudulently misrepresented
residence to obtain Food Stamps, TANF, SSI, or Medicaid in
two or more states. (Sec. 408(a)(8))
-Fugitive felons and violators of probation/parole. (Sec.
408(a)(9))
Note: See also time limit.

CRS-5
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Family Unit
Eligibility and benefits must be based on income and
No family unit definition. To receive TANF, family must
needs of the child, any parent of the child, and
include (a) a minor child living with a parent or other adult
dependent siblings living in the home (excepting
caretaker relative, or (b) a pregnant woman. (Sec. 408(a)(1)(B))
family members who receive SSI or foster care or
adoption assistance maintenance payments). Thus,
family members other than SSI recipients and foster
care recipients must share income.
Grandparent
Grandmothers and grandfathers are among the
Requires the Census Bureau, in decennial census and mid-
relatives with whom AFDC children may live. If
decade census, to collect data about households in which a
Caregivers
needy, the grandparent may receive AFDC benefits as
grandparent is a child’s primary caregiver. (Sec. 105 of P.L.
the child’s caregiver. Some states permit
104-193)
grandparents to receive foster care payments, which
usually are higher than AFDC amounts per child, on
behalf of their child(ren).
Form of Aid
Cash/Noncash
AFDC is defined as money payments, but under
Bans use of TANF for medical services (except for
certain circumstances may be given as vendor
prepregnancy family planning services). (Sec. 408(a)(6))
payments for specific goods or services. Cash
Permits up to 30% of TANF funds to be used for services (by
payments normally go to the child’s mother or other
transfer to the Child Care and Development and Block Grant
caretaker relative, but if that person is judged
(CCDBG) and to Title XX social services). See Transfers
incapable or has violated program work rules,
below, under Funding.
payments may go to another person interested in the
child’s welfare (a protective payee).

CRS-6
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Electronic
Under the JOBS program, part of a family’s AFDC
Permits use of TANF funds in any manner allowed under
Benefit Transfer
grant may be used to subsidize a job (work
AFDC or JOBS, and in any manner reasonably calculated to
(EBT)
supplementation).
accomplish TANF goals. (Sec. 404 (a)) Explicitly permits use
of TANF for payments to job placement agencies or to provide
job placement vouchers. (Sec. 404(f))
Unlimited federal reimbursement is provided for 50%
In general, limits administrative spending to 15% of TANF
of state costs of administering AFDC.
grant. (Sec. 404(b))
Regulations permit states to receive federal
Permits states to use TANF funds to implement an EBT system
reimbursement funds (50% administrative cost-
for the program. Exempts any EBT system distributing need-
sharing rate) for operation of electronic benefit
based benefits established or administered by a state (such as
systems. For this, states must obtain advance
TANF) from Federal Reserve Board rules known collectively as
approval from DHHS and comply with automatic
“Regulation E.” The most important Regulation E provision
data processing rules.
requires that lost/stolen benefits be restored; individuals with
accounts are responsible only for the first $50 of any loss, when
reported in a timely fashion. (Sec. 891 of P.L. 104-193)
Permits states to use TANF funds to carry out a program to
fund individual development accounts established by recipients.
See Resource Limits.

CRS-7
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Benefit Levels
States set benefit levels. For a family of three with no
Gives states full authority to set TANF benefit levels.
income, they range from $120 monthly in Mississippi
However, restricts changes in superseded AFDC income
to $923 in Alaska. Two Medicaid provisions limit
standards, to be used for Medicaid eligibility. See Interaction
reductions in AFDC benefits: if a state reduces
with Medicaid.
AFDC payment levels below those in effect on May
1, 1988, the Secretary of DHHS shall not approve the
For the first 12 months of their residence, permits states to pay
state’s Medicaid plan; if a state reduces payment
incoming families the lesser benefit of their previous state.
levels below those of July 1, 1987, DHHS is to
States could apply to new families the TANF rules of their
disallow Medicaid matching funds for required
former state for 1 year. (Sec. 404(c))
services to certain pregnant women and children,
those not enrolled in AFDC but eligible for Medicaid
on income grounds alone. With these exceptions,
states have full authority to set benefit levels.
Entitlement
State entitlement — The law directs DHHS to pay
State entitlement — Entitles each state to a share of a fixed
states specified shares of their AFDC expenditures,
national total of TANF funds.
Status
without limit.
Individual entitlement — None. States that
Individual entitlement — Supreme Court rulings
TANF entitles no person to its benefits. (Sec. 401(b)
require states to give AFDC to all persons whose
income and resources are below state-set limits if they
are in a class eligible under federal rules.
Income Limits
Gross income limit (federal): 185% of state standard
No provision.
of need. Actual limit usually is far lower, as payment
standards of most states are below need standards.

CRS-8
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Resource
Counted resource limit (federal): $1,000 per family.
Permits states to use TANF to fund individual development
Not counted: home and some of the equity value of an
accounts (IDAs) for persons eligible for TANF, with no dollar
Limits
auto, some of the value of funeral arrangements,
limit. Accounts would contain deposits from the recipient’s
burial plots, real property that the family is attempting
earnings, matched by contributions from a not-for-profit
to sell, and — for 2 months — refunds of the Earned
organization, or a state or local government agency in
Income Tax Credit, EITC).
cooperation with the non-profit organization. Withdrawals
allowed only for postsecondary educational expenses, first
home purchase, and business capitalization. Requires all
means-tested programs to disregard funds (including accruing
interest) in these IDAs. (Sec. 404(h))
Treatment of
States must disregard these earnings of a recipient
No provision.
family per month:
Earnings
—First 4 months of a job. $120, one-third of
remaining earnings, and actual dependent care costs
up to $175 (up to $200 for child under age 2), less for
part-time work.
—Months 5 through 12: $120 plus dependent care
costs.
—After 12 months: $90 plus dependent care costs.
Note: Special rules apply to applicants and child
students.

CRS-9
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Time Limits
Recipients remain eligible for benefits as long as they
Work trigger. Requires parents to engage in “work” (as defined
meet program rules.
by states) after 24 months of cash benefits (sooner, if deemed
ready for work). Also, not later than 1 year after enactment,
JOBS imposes no time limit on general participation,
unless it opts out by notice to the Secretary, states must require
but does limit the time a person may be required to
a parent who has received TANF for 2 months to participate in
participate in a work supplementation program, a
community service, with hours and tasks set by the state. (Secs.
community work experience program, or job search.
402(a)(1)(A)(ii) and 402(a)(1)(B)(iv))
Aid cutoff. Forbids use of TANF for aid to family that includes
an adult who has received 60 months of TANF benefits. In
counting months, states must disregard those when adult lived
in Indian country* or on an Indian reservation or in Alaska
Native village with 50% of adults unemployed. Allows
exceptions (for hardship or family’s inclusion of a battered
woman) for up to 20% of caseload. (Sec. 408(a)(7))
Note: State funds used to aid persons ineligible for TANF
because of the 5-year time limit or new alien rules may be
counted toward the maintenance-of-effort requirement. (Sec.
409(a)(7)(B)(i)(III)) Also, states may use TANF funds
transferred to Title XX social services for aid to the ex-TANF
family (Sec. 2002(f)) See Cost-sharing and Transfers below.

CRS-10
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Out-of-
States are required to provide family planning
TANF plans must outline how the state intends to establish
services (to prevent/reduce the incidence of births out
goals and act to prevent and reduce the incidence of out-of-
Wedlock
of wedlock) to any AFDC recipient who requests the
wedlock pregnancies, with special emphasis on teenage
Pregnancies/
services. The law requires a reduction of 1% in
pregnancies; and how it intends to establish numerical goals for
Births
AFDC matching funds if a state fails to offer and
reducing the proportion of births outside marriage. (Sec.
provide family planning.
402(a)(1)(v))
Offers bonus funds to 5 states that rank highest in decreasing
out-of-wedlock births while decreasing abortions (see Funding
below).
As noted above (Ineligible Persons), TANF cash cannot be
given to unwed mothers under 18 (and their children) unless
they live in home of adult relative or in another adult-
supervised arrangement (such as “second-chance” home).
Appropriates $50 million for each of fiscal years 1998-2002 for
grants to states for abstinence education programs, with a focus
on groups likely to bear children out-of-wedlock. (Sec. 912 of
P.L. 104-193)
Client
After assessing the needs and skills of recipients and
States must assess the skills, work experience, and
developing an employability plan, states may require
employability of each adult recipient (at least age 18) who has
Contracts/
JOBS participants to negotiate and enter into an
not completed high school and is not attending school. In
Agreements
agreement that specifies their obligations.
consultation with the recipient and on the basis of the
assessment, they may develop an individual responsibility plan
that sets forth obligations of the recipient and describes services
to be provided by the state. The plan may require the recipient
to undergo appropriate treatment for substance abuse. (Sec.
408(b))

CRS-11
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Non-Work
Conduct Rules
Education
For full family benefits, parents under age 20 without
Unmarried parents under 18 without a high school diploma and
a high school diploma or equivalent must participate
whose children are at least 12 weeks old are ineligible unless
in an educational activity, provided state resources
they participate in an educational activity. (Sec. 408(a)(4))
permit. Some states have received permission
(waivers from federal law) to require AFDC children
to attend school; some, to require AFDC parents to
attend parenting classes.
Health Practices
Under waivers, some states require specific health
No provision.
practices, such as immunization of preschool children
and annual health checkups.
Drug/Alcohol
Under waivers, some states require drug testing for
States shall not be prohibited by the federal government from
Abuse
specified AFDC recipients and/or treatment for
testing welfare recipients for use of controlled substances nor
substance abuse.
from sanctioning those who test positive. (Sec. 902 of P.L. 104-
193) States must ask TANF applicants whether a family
member has been convicted of a drug-related felony. (Sec. 115
of P.L. 104-193)
Residence of
As noted above (ineligible persons), states may deny
States may not give TANF cash aid to unmarried parents under
Unwed Minor
AFDC to unmarried parents under age 18 (and their
18 (and their children) unless they live in an adult-supervised
Mothers
children) unless they live in an adult-supervised
supportive arrangement. (Sec. 408(a)(5))
supportive arrangement.

CRS-12
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Deterrence of
Some states have waivers to deny AFDC benefits for
No provision.
New Birth
a new baby in a family already receiving aid.

(Family Cap)
Child Care for
States must “guarantee” child care (by direct
Repeals the child care guarantee for recipients of cash aid who
provision, reimbursement, vouchers, etc.) for JOBS
need it to work or study and ends existing AFDC-related child
Welfare
participants who need it, and for other AFDC parents
care programs. Entitles states to an average of $2.32 billion
Families
already in school, training, or work. Regulations
annually for child care under Title IV-A for 6 years (FY1997-
require states to guarantee care for children under age
FY2002 total: $13.9 billion). (Sec. 418) This consists of $1.2
13 (older if incapable of self-care) that is needed to
billion per year in 100% federal grants and an average of about
permit the parent to work, train or attend school.
$1.1 billion yearly in matching grants. Entitles individual states
States must continue child care benefits for 1 year to
to what they received for AFDC work-related child care,
ex-AFDC working families (transitional care), but
transitional child care, and at-risk child care in a recent year.
must charge them an income-related fee. Unlimited
States that maintain the higher of their 1994 or 1995 spending
federal matching funds are offered for AFDC/JOBS
on these programs would be entitled also to extra funds at the
and transitional child care (the Congressional Budget
fiscal year 1995 medicaid matching rate. Earmarks 70% of
Office (CBO) estimates federal outlays at $1.015
entitlement child care funds for recipients or ex-recipients of
billion for FY1996). In addition, capped entitlement
TANF or persons at risk of TANF eligibility. States that a
matching funds of $300 million yearly are offered for
substantial portion of the remaining entitlement funds should be
care of children “at risk” of becoming eligible for
used for low-income working families not on welfare.
AFDC.
For the Child Care and Development Block Grant
Transfers welfare-related child care funds to the lead agency
(CCDBG), $935 million was appropriated in
under the CCDBG and makes them subject to rules of CCDBG.
discretionary funds for FY1996.

For CCDBG, authorizes $1 billion annually in discretionary
funds for 7 years, FY1996-FY2002.

CRS-13
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Job
States must establish a JOBS program and, to the
Repeals JOBS (Sec. 108(e) of P.L. 104-193)
extent that it is available and resources otherwise
Opportunities
permit, must require participation by all nonexempt
and Basic
adult AFDC recipients to whom the state guarantees
Skills Training
child care. Law entitles states to a share of limited
federal matching funds ($1.3 billion in FY1995, $1
Program
billion annually thereafter).
(JOBS)
The stated purpose of JOBS is to assure that needy
One of the stated purposes of TANF is to increase state
Purpose
families with children obtain the education, training,
flexibility in operating programs designed to “. . . end
and employment that will help them avoid long-term
dependence of needy parents upon Government by promoting
welfare dependence.
job preparation, work, and marriage. . .” (Sec. 401)
Non-
A JOBS work assignment may not displace a
A TANF recipient may fill a vacant employment position.
Displacement
currently employed worker or position (including
However, no adult in a work activity that is funded in whole or
Rule
partial displacement) or cause the infringement of
in part by federal funds shall be employed or assigned when
promotional opportunities of a current worker. A
another person is on layoff from the same or any substantially
JOBS participant may not fill a position when another
equivalent job; or if the employer has ended the employment of
person is on layoff from the same or an equivalent
any regular employee or otherwise caused an involuntary
job or if the employer has reduced the workforce with
reduction of its workforce in order to fill the vacancy so created
the effect of creating vacancy for a subsidized JOBS
with a TANF recipient. These provisions shall not preempt or
participant. A JOBS participant cannot be assigned
supersede any provision of state or local law that provides
under work supplementation or community work
greater protection against displacement. (Sec. 407(f))
experience to fill an established unfilled position
vacancy.
Note: Additional restrictions apply to activities funded with
welfare-to-work grants established by P.L. 105-33.

CRS-14
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Work
Requirements
General
Required to participate in JOBS are able-bodied
After maximum of 2 years of TANF benefits, requires parents
custodial parents without a child under 3 years old (a
to engage in “work,” as defined by the state. Not later than 1
state may require participation by a parent with a
year after enactment, unless it opts out by notice to the
child as young as 1).
Secretary, state must require a parent who has received TANF
for 2 months to participate in community service employment,
with hours and tasks set by state (not applicable to a single
parent of a child under 6 who is unable to obtain needed child
care for a specified reason). (Sec.402(a)(1)(A)(ii) and
402(a)(1(B)(iv))
Exemptions
Major exemptions: persons who are ill, incapacitated
No exemptions, but permits state to exempt single parent caring
or needed at home because of another’s illness or
for a child under age 1. Sec. 407(b)(5))
incapacity; parents of a child under 3 (under 6, unless
the state guarantees child care and requires no more
than 20 hours weekly of JOBS activity).

CRS-15
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Activities
JOBS must include high school or equivalent,
Defines “work activities” that count toward a state’s
basic/remedial education, and education for those
participation rate as: unsubsidized employment, subsidized
with limited English proficiency); job skills training,
private or public sector employment, work experience, on-the-
job readiness activities, and job development and
job training, job search and job readiness assistance (6 weeks
placement. States also must offer at least two of these
maximum of job search [12 weeks if state unemployment rate is
four: group and individual job search; on-the-job
50% above average or, for the most recent 3 months, equals at
training; work supplementation, community work
least 6.5% and is 10% above its level for the same months in
experience program (CWEP) (or another approved
either or both of the two previous years*], but only 4
work experience program). State also may offer
consecutive weeks), community service programs, vocational
postsecondary education in “appropriate” cases.
educational training (12 months maximum), job skills training
directly related to employment, education directly related to
employment (recipient without high school diploma or
equivalent), satisfactory attendance at secondary school (high
school dropout), and provision of child care services to a TANF
recipient who is participating in a community service program.
The share of persons credited with work activity by reason of
vocational educational training cannot exceed 30%.* For
FY1998 and 1999 only, an unlimited number of teen household
heads who lack high school diplomas may be credited with
work by reason of satisfactory secondary school attendance or
by spending an average of 20 hours weekly in education
directly related to employment.* (Sec. 407(d))

CRS-16
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Weekly Hour
Federal regulations measure JOBS participation by a
To be counted as a work participant, a person must be engaged
Requirement
20-hour-per-week standard. Counted as participants:
in a work activity for at least these minimum average number of
the largest number of persons whose combined and
hours per week: 20 hours until FY1999, 25 hours in FY1999,
averaged hours in education, work, and training
30 hours in FY2000 and thereafter (for a recipient who is the
during the month equal 20 per week. The law sets a
only parent or caretaker relative* of a child under 6, weekly
special rule for two-parent families (AFDC for
hours remain at 20.) Of required hours, at least 20 generally
Unemployed Parents). At least one parent in each
must be spent in these specified “priority” activities:
AFDC-UP family must participate at least 16 hours
employment, work experience, on-the-job training, job search
weekly in a work activity (see below).
and job readiness, community service, vocational educational
training, or provision of child care to a participant in
community service. (A teen household head without diploma is
deemed to be engaged in work if she maintains satisfactory
secondary school attendance or, for at least an average of 20
hours weekly,* engages in education directly related to work.)
A special work rule applies to 2-parent families (unless one
parent is disabled, in which the family must be treated as a
single-parent family*): 2-parent families must work at least 35
hours weekly from the start, with at least 30 hours in priority
activities specified above, and they may share the hours
requirement.* If the 2-parent family receives federally-funded
child care aid and an adult is not disabled or caring for a
severely disabled child, the two parents must engage in a total
of 55 hours of work activity per week, with 50 hours in priority
activities specified above.* (Sec. 407(c))

CRS-17
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Percent of
The general JOBS participation rate expired on
Overall required participation rates (percent of all cases except,
Caseload
September 30, 1995. It was 20% of the nonexempt
at state option, those with child under 1):
Requirement
caseload (roughly equal to about 9% of all cases) in

FY1995.
FY1997 25% FY2000 40%
FY1998 30% FY2001 45%
A special higher rate, ending on September 30, 1998,
FY1999 35% FY2002 + 50%
applies to AFDC-UP families. Required to
participate at least 16 hours weekly in on-the job
For 2-parent families, the rates are 75% in FY1997 and 1998,
training, work supplementation, community work
90% in FY1999 and thereafter. (Sec. 407(a))
experience or other work experience program, or a
state-designed work program: 60% of AFDC-UP
Note: The Secretary is to issue regulations for reducing the
families in FY1996 and 75% in FYs1997-1998.
overall participation rates by the number of percentage points
(The 16 hour weekly minimum is reduced for
by which a state’s caseload is smaller than in FY1995 unless
participants in community work experience if it
she finds that the decrease was required by federal law or
would yield an hourly payment below the minimum
results from changes in state eligibility criteria, a relationship to
wage rate.)
be proved by the Secretary. (Sec. 407(b)(3))
Calculation of
A state’s participation rate, expressed as a percentage,
Monthly participation rates, expressed as a percentage, equal (a)
Rates
equals the number of JOBS participants divided by
the number of all recipient families in which an individual is
the number of AFDC recipients required to
engaged in work activities for the month, divided by (b) the
participate (non-exempt from JOBS). For 2-parent
number of recipient families with an adult recipient (but
families, the participation rate equals the number of
excluding families subject that month to a penalty for refusal to
parents who participate, divided by the number of
work, provided they have not been penalized for more than 3
principal earners in AFDC-UP families (but
months, whether or not consecutive, in preceding 12; and
excluding those who received aid for no more than 2
excluding families with children under 1, if state exempts them
months, if one parent then was engaged in intensive
from work). (The same method is used to calculate
job search).
participation rates of 2-parent families.) (Sec. 407(b))

CRS-18
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Penalties Against
If a state fails to achieve required participation rates,
If a state falls short of the required participation rate, its TANF
States for Failing
the federal matching rate for JOBS spending (which
block grant is to be reduced by 5%* for the first year. In
Work
generally ranges from 60% to 78% among states) is to
subsequent years, annual penalties would rise by 2 percentage
be reduced to 50%. (However, the Secretary may
points (thus, 7% in second year, 9% in third, etc.) with a
Participation
waive the penalty if the state submits a proposal likely
maximum cumulative penalty of 21%. (Secretary may reduce
Rate
to achieve the required rate for the current year.)
penalty if State unemployment is 6.5% and 10% above
comparable level of either of past 2 years or if failure is due to
extraordinary circumstances*.) Sec.409(a)(3) Before
assessing this penalty, the Secretary must notify the state of the
violation and allow it to enter into a corrective compliance plan.
(Sec. 409(c)
Note: In the case of all penalties, states must replace federal
funds with their own.
Sanctions
For failure to meet JOBS requirements without good
If an adult recipient refuses to engage in required work, the state
Against
cause, AFDC benefits are to be denied to the
shall reduce aid to the family pro rata (or more, at state option)
Individuals
offending parent and payment for the children made
with respect to the period of work refusal, or shall discontinue
to a third party.
aid, subject to good cause and other exceptions that the state
may establish. Exception: A state may not penalize a single
parent caring for a child under age 6 for refusal to work if the
parent has a demonstrated inability to obtain needed child care
for a specified reason. (Sec. 407(e))

CRS-19
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Federal
Administration
Regulatory
At the Federal level AFDC and JOBS, along with
TANF and child support enforcement shall be administered by
Authority
numerous other programs (see below), are
an Assistant Secretary for Family Support within DHHS. (Sec.
administered by an Assistant Secretary,
416) No officer or employee of the federal government may
Administration for Families and Children of the
regulate the conduct of states under Title IV-A or enforce any of
Department of Health and Human Services. The
its provisions, except to the extent expressly provided in Part A
DHHS Secretary is authorized to make and publish
of Title IV. (Sec. 417)
rules and regulations, not inconsistent with the Social
Security Act, that are needed for efficient
administration.
Reduction in
DHHS has reported (1995 data) that 118 employees
The Secretary must reduce the federal workforce within the
Workforce
in the Office of Family Assistance (OFA) work on
department by 245 equivalent full-time (FTE) positions “related
AFDC and 209 (full-time equivalent positions) in
to” the conversion of AFDC, Emergency Assistance, and JOBS
regional offices of the Administration on Children
into TANF and by 60 FTE managerial positions. (Sec. 416)
and Families. The OFA employees include 30 who
spend some time interpreting AFDC/JOBs policy and
helping states develop plans. Programs administered
by ACF include AFDC, JOBS, emergency assistance
(to be replaced by TANF), child support enforcement,
foster care, adoption assistance, independent living,
family preservation and support, Head Start, Title
XX social services block grant, child care and
development block grant program, low-income home
energy assistance, refugee resettlement, child welfare
services, and child abuse prevention (not replaced by
the new law).

CRS-20
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Quality
The DHHS Secretary must operate a quality control
If an audit conducted under the Single Audit Act finds that a
Control/Audits
system to determine the amount of federal
state has used TANF funds in violation of the law, its block
reimbursement funds to be disallowed, if any, because
grant for the next fiscal year quarter shall be reduced by that
of erroneous payments made by states. AFDC
amount. Unless the state proves that the violation was not
payments to states are subject to audits conducted
intentional, the Secretary shall further reduce the amount by 5%
under the Single Audit Act (Ch. 75, Title 31, U.S.
of the TANF grant. (Sec. 409(a)(1)) Before the penalty is
Code).
imposed, the state must have an opportunity to enter into a
corrective compliance plan. (For list of specific
actions/inactions subject to penalties, see Penalties below.)
Penalties
Note: States must replace federal penalty funds with their own
funds. Except for failure to repay a loan, replace penalty funds,
Against States
maintain required state spending, or comply substantially with
(Other Than
child support requirements,* the Secretary must allow the state
for Failing
to enter into a corrective action plan. Penalties for any quarter
shall not exceed 25% of the basic grant; unrecovered penalties
Work
are to be carried forward.
Requirements,
Shown Above)
Failure to comply with provisions of IV-A or state
See Quality control/audits for penalty for misuse of funds.
plan. The Secretary is to withhold all payments from
the state, or limit payments to categories affected by
noncompliance.
Failure to submit required report. No specific
Failure to submit required report. Secretary shall reduce the
penalty, but general compliance penalty could apply.
TANF grant for the next year by 4% but rescind penalty if state
submits the report before the end of the next fiscal quarter.
(Sec. 409(a)(2))

CRS-21
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Failure to participate in the income and eligibility
Failure to participate in the income and eligibility verification
verification system. No specific penalty.
system. Secretary shall reduce TANF grant for the next fiscal
year by up to 2%. (Sec. 409(a)(4))
Failure to comply with requirement that AFDC
Failure to enforce penalties required by the child support agency
eligibility be conditioned on cooperation of
against TANF recipients who fail to cooperate in establishing
applicant/recipient in establishing paternity of a child
paternity or in establishing, modifying, or enforcing child
born out of wedlock and in obtaining support
support order (good cause exceptions allowed). Secretary shall
payments (unless person is found to have good cause
cut TANF grant for next fiscal year by up to 5%. (Sec.
for noncooperation). No specific penalty.
409(a)(5))
Failure to comply substantially with child support
Failure to comply substantially with child support enforcement
enforcement requirements (Title IV-D). The
requirements (Title IV-D). The Secretary is to reduce TANF
Secretary is to reduce AFDC matching funds: by 1-
grant for each quarter of non-compliance thus: first finding of
2% for first finding of noncompliance, by 2-3% for
non-compliance, by 1-2%; second consecutive finding, 2-3%;
second consecutive finding, and by 3-5% for third or
and third and later findings, 5%. (Sec. 409(a)(8)) Penalty
subsequent finding.
cannot be waived for reasonable cause.
Not relevant (states are entitled to unlimited matching
Failure to timely repay a loan from the federal loan fund for
funds, and there is no loan fund).
state welfare programs. The Secretary shall reduce the TANF
grant for the next fiscal year quarter by the outstanding loan
amount, plus the interest owed. Penalty cannot be waived for
reasonable cause.* (Sec. 409(a)(6))

CRS-22
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Not relevant. (States must share in every dollar of
Failure to maintain certain level of historic state spending
outlays.)
(generally, sum equal to 75% of spending from own funds on
replaced programs — including AFDC-related child care — in
FY1994). Secretary shall reduce the following year’s TANF
grant by the shortfall. (Sec. 409(a)(7)) Penalty cannot be
waived for reasonable cause.
Not relevant (no time limit).
Failure to comply with the 5-year limit for TANF eligibility.
The Secretary shall reduce the TANF grant for the next fiscal
year by 5%. (Sec. 409(a)(9))
Not relevant (no contingency fund, since unlimited
Failure to maintain 100% of historic state spending during a
federal matching funds are offered).
year in which state received contingency funds. The Secretary
shall reduce the next year’s TANF grant by the total amount of
contingency funds paid to the state. (Sec. 409(a)(10)) Penalty
cannot be waived for reasonable cause.*
No provision. State must guarantee care for a child
Failure to maintain aid for a single parent who cannot obtain
under 13 if AFDC parent needs child care to work or
care (for specified reasons) for a child under 6. The Secretary
study.
shall reduce the grant for the next fiscal year by up to 5%. (Sec.
409(a)(11))

CRS-23
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Corrective
The penalty against a state for substantial
Before assessing a penalty, the Secretary must notify the state of
Compliance/
noncompliance with child support rules (loss of
the violation. Except for failure to repay a loan, replace penalty
Appeals
AFDC matching funds) must be suspended if a state
funds, maintain required state spending (including that for
submits and implements a corrective action plan.
contingency funds) or comply substantially with child support
States are entitled to reconsideration of disallowed
requirements,* the Secretary must allow the state to enter into a
reimbursement claims, and the law provides for
corrective compliance plan. (Sec. 409(c)) If the Secretary
administrative and judicial review of DHHS decisions
accepts the plan and if the state corrects the violation, no
about approval of state plans.
penalty will be assessed. Provides for appeals of adverse
decisions (administrative and judicial review). (Sec. 410)

CRS-24
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Funding
50 States and the
The law permanently authorizes unlimited federal
Repeals funding for AFDC, EA, JOBS, and AFDC-related child
District of
matching funds for AFDC benefits and for child care
care. For each of FYs1996-2002 entitles each state (and
Columbia
for AFDC recipients and ex-recipients (1 year of
territory) to a share of a fixed national TANF grant equal to the
transitional benefits) in the 50 states and the District
largest of 3 amounts: amount required to be paid by federal
of Columbia at the regular Medicaid matching rate,
government to state for AFDC benefits and administration, EA,
which ranges among states from 50% to 78%.
and JOBS for (a) FY1994, plus 85% of the amount by which
Authorizes unlimited matching funds for EA and for
EA payments for FY1995 exceeded those for FY1994 if the
AFDC administrative costs, at a uniform 50% rate.
state amended its EA plan in FY1994; (b) FY1992-1994, on
Authorizes capped matching funds, at the Medicaid
average, or (c) FY1995. (Sec. 403(a)) CRS calculations
matching rate, for “at-risk” child care, for persons
indicate that the national yearly sum will be $16.5 billion
needing it to avert AFDC eligibility.
yearly. Entitles States in FY1998 and FY1999 to a total of $3
billion in welfare-to-work grants.* Also entitles states to
separate child care funding. See Child Care. Requires States to
supplement TANF funds with their own. See Cost-sharing.
3 Outlying Areas
Ceilings apply to matching funds, at a 75% rate, for
Replaces federal funding for AFDC, EA, JOBS, and AFDC-
AFDC, EA, AFDC-related child care, at-risk child
related child care with TANF grant, based on recent federal
care, foster care and adoption assistance, and cash
payments to the territory. Retains but increases aggregate
welfare for needy adults in Guam, Puerto Rico, and
funding ceilings. Entitles territories to matching grants (at 75%
the Virgin Islands. Caps: Guam, $3.8 million; Puerto
federal rate) for TANF or foster care and adoption assistance
Rico, $82 million; Virgin Islands, $2.8 million.
outlays above their basic block grant level but below the new
Authorized for American Samoa is $1 million for
ceilings, provided they maintain their own fiscal year 1995
AFDC, EA, foster care, and adoption assistance, but it
spending level for children. New funding caps: Guam: $4.7
has not implemented these programs.
million; Puerto Rico, $107.3 million; and Virgin Islands, $3.6
million. (Sec. 1108)

CRS-25
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
All 54
The law entitles each jurisdiction to a share of JOBS
No earmarked funding for work programs.
Jurisdictions
matching funds equal to its share of adult AFDC
recipients. Authorized is $1 billion yearly. The
federal matching rate for JOBS activities and full-
time personnel costs ranges from 60% to 78%, but is
50% for other administrative expenses other than full-
time personnel.
Indian Tribes
Indian tribes and Alaska native organizations receive
For each of 6 years (FY1997-FY2002) earmarks some TANF
and Alaska
no special treatment regarding AFDC, and they do not
funds for direct administration by applicant Indian tribes and
Native
administer AFDC. Indian and Alaska families with
Alaska native organizations. The amount equals federal AFDC
children receive AFDC benefits on the same terms as
payments to the state for FY1994 attributable to Indian families.
Organizations
other families in their states from state or local AFDC
These funds are to be subtracted from the TANF grant of the
agencies.
state(s) containing the tribes’ service areas. (Sec. 412(a)(1)),
the Secretary, with participation of tribes, is to establish work
participation rules, time limits for benefits, and penalties for
tribal family assistance programs. Tribes are to prepare 3-year
family assistance plans. In general, tribal programs in Alaska
must be comparable to those operated by the state of Alaska.
(Sec. 412(b))
However, more than 80 tribes and native
For 6 years (FYs1996-2001) Secretary must pay to Indian tribes
organizations in 24 states are JOBS grantees. Their
and Alaska native organizations that have been JOBS grantees
allocation of JOBS funds is subtracted from that of
an annual grant equal to their FY1994 JOBS allotment ($7.6
their state. JOBS programs operated by Indians and
million). The bill appropriates this sum, which is in addition to
Alaska natives are fully federally funded. Further,
the national TANF grant. (Sec. 412(a)(2))
their programs need not meet participation rules of
the regular JOBS program.

CRS-26
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Loan Fund
No provision.
Establishes a $1.7 billion revolving federal loan fund for state
welfare programs. The Secretary shall make loans, for no more
than 3 years, to eligible states, at an interest rate comparable to
the average market yield on outstanding federal obligations with
comparable periods to maturity. Ineligible are states that have
been penalized for using TANF funds in violation of IV-A. The
cumulative total of loans made to a state during FYs1997-2002
shall not exceed 10% of a state’s basic block grant. (Sec. 406)
Supplemental
Current law provides unlimited AFDC matching
For each of FYs1998-2001, some of the 50 states (and the
Grants for
funds. When enrollment climbs, federal funding
District of Columbia) may receive a supplemental grant
Population
automatically rises. Federal share of AFDC spending
generally equal to 2.5% of federal payments to them for fiscal
is a function of benefits set by states and federal
year 1994 for programs replaced by TANF (AFDC benefits and
Increase (and
matching rates, which are inversely related to state
administration, EA, JOBS, and AFDC-related child care). To
Low Federal
per capita income (with a floor of 50%).
qualify, a state’s rate of population growth must be above
Spending Per
average and its [federal] welfare spending per poor person
Poor Person)
below average. States must qualify during fiscal year 1998 in
order to qualify later. If it continued to qualify after fiscal year
1998, a state would receive an increase in the extra grant (the
2.5% increase would be calculated on a new higher base,
containing the previous year’s supplement). Deemed to qualify
in all 4 years: a state with a population gain above 10% from
April 1990 to July 1994 or with FY1994 welfare spending per
poor person 35% below the FY1994 average (11 states meet at
least one of these standards). For these grants, $800 million is
appropriated over 4 years (if funds are insufficient, pro rata
reductions are to be made). (Sec. 403(a)(3))

CRS-27
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Out-of-Wedlock
No provision.
Offers a bonus for each of 5 years (FYs1999-2003) to the 5
Bonus
states with the largest percentage decline in the out-of-wedlock
birth ratio* (for the most recent 2-year period with data). To be
eligible, a state also must reduce its abortion rate below that of
FY1995. In awarding bonuses, the Secretary shall disregard
changes in births outside marriage and in abortion rates that are
attributable to changed methods of reporting data. The bonus
amount is $20 million per state, ($25 million if fewer than 5
states qualify). If Guam, the Virgin Islands, or American Samoa
should qualify for a bonus, the bonus amount would be reduced
(to 25% of the area’s funding ceiling).* (Sec. 403(a)(2))

CRS-28
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Contingency
No provision. Law offers unlimited federal matching
Establishes a contingency fund for state welfare programs and
Fund
funds.
appropriates for it up to $2 billion for a total of 5 years (FYs
1997-2001). The fund would provide matching grants at the
FY1995 Medicaid matching rate to “needy” states that expected
during the fiscal year to spend under the TANF program from
their own funds 100% of their “historic” level of welfare
expenditures (their FY1994 spending for AFDC, EA, JOBS,
and AFDC-related child care). A state would qualify as needy
if for the most recent 3-month period: (a) its total
unemployment rate (seasonally adjusted) was at least 6.5% and
up 10% from the corresponding rate in at least 1 of the 2
preceding years or (b) its food stamp average monthly caseload
was up 10%, compared to what enrollment would have been in
the corresponding period of FY1994 or FY1995, as determined
by the Secretary of Agriculture, if changes made in the new law
to food stamp rules and alien eligibility had been in effect
throughout FY1994. The Secretary is to make contingency
payments upon request, in the order of their receipt. A monthly
payment shall not exceed 1/12 of 20% of the state’s basic
TANF grant (monthly maximum, 1.67% of annual grant). At
the end of each fiscal year, a reconciliation accounting
procedure is prescribed to assure that states pay their matching
share of contingency funds. (Sec. 403(a)(b))
As noted under Penalties, if a state fails to maintain 100% of
historic state expenditures under its TANF program during a
year in which it receives contingency funds, the Secretary must
reduce its next year’s grant by the amount of contingency funds.

CRS-29
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Performance
No provision.
For each of 5 years (FYs1999-2003) a bonus shall be paid to a
Bonus
“high performing” state, defined as one whose performance
score for the previous year at least equals a threshold set for that
year by the Secretary. State performance is to be measured by a
formula developed by the Secretary in consultation with the
National Governors’ Association and the American Public
Welfare Association. The formula is to measure success in
achieving “the goals” of TANF. A total of $1 billion is
appropriated for these bonuses, which are to average $200
million yearly. (Sec. 403(a)(4))

CRS-30
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Welfare to Work
AFDC law provided a capped entitlement to States
The Balanced Budget Act of 1997 (P.L. 105-33) established a
Grants*
($1 billion in FY1996) for federal reimbursement, at
two-year $3 billion program of welfare-to-work grants to fund
an average rate of about 59%, of costs of education,
the following activities in FY1998 and FY1999 for TANF
work, and training activities for AFDC adults under
recipients: community service or work experience programs,
JOBS.
job creation through wage subsidies, on-the-job training,
contracts with providers of readiness, placement, and post-
employment services, job vouchers, and job retention or
support services. After setasides totaling $154 million, 75% of
funds are to be used for matching formula grants (66.7%
federal matching rate) and 25% for competitive grants. States
must distribute 85% of formula grants among Job Training
Partnership Act (JTPA) service delivery areas, and JPTA
private industry councils (PICS), or alternate agencies
designated by governors under a waiver process, are to
administer them, coordinating spending of WTW and TANF
funds. Seventy percent of WTW funds must be used to benefit
persons with specified barriers to work who also are long-term
recipient (30 months of AFDC/TANF benefits) or area about to
exceed the TANF 5-year time limit (and for non-custodial
parents of children in the care of such recipients). Eligible to
apply for competitive grant funds are PICs, political
subdivisions of states, and private entities applying in
conjunction with a PIC or political subdivision. WTW work
activities may not violate an existing contract for services or a
collective bargaining agreement; a WTW worker cannot fill a
vacancy that results from reducing hours of a job to less than
full-time. The Labor Department rather than DHHS is to
administer WTW, but DHHS is to evaluate the grant program.
grants).* (Sec. 403 (a)(5)

CRS-31
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Transfer of funds
No provision.
Allows states to transfer up to 30% of TANF funds to the Child
Care and Development Block Grant (CCDBG) and Title XX
social services. Specifies that a maximum of 10% of total
transfers may go to the latter.* Amounts transferred to Title XX
shall be used only for programs and services to children or their
families whose income is below 200% of the poverty income
guideline. Sec. 404(d)) Provides that Title XX funds may be
used to provide vouchers, for services directed at the goals of
Title XX, to families who have become ineligible for TANF by
reason of a durational limit or to children denied TANF because
of state imposition of a family cap. (Sec. 2003(d))
Cost-Sharing
States must share in every dollar of program costs.
Cost-sharing is required during FYs1997-2002 for basic TANF
(Maintenance of
For administrative costs, the rate is a uniform 50%.
funds payable in FYs1998-2003. For full grant, state spending
Effort)
For other costs it varies among states (and, within
under all state programs in previous year on behalf of TANF-
limits, is inversely related to the square of state per
eligible families (defined to include those ineligible because of
capita income, compared to the square of national per
5-year time limit or federal ban on benefits to new immigrants)
capita income). AFDC benefits and AFDC-related
must equal at least 75% of the state’s “historic” level, the sum
child care use the Medicaid federal matching rate,
used in FY1994 on AFDC, JOBS, EA, and AFDC-related child
which ranges in FY1996 among states from a floor of
care (80% if state fails to meet work participation
50% to 78%. For JOBS activities, the law provides
requirements). State expenditures that qualify for this test of
an “enhanced” rate, ranging from 60% to 78%. For
historic spending are cash aid, child care, educational activities
Emergency Assistance the rate is a uniform 50%.
designed to increase self-sufficiency, job training, and work
(but not generally available to non-TANF families),
administrative costs (15% limit), and any other use of funds
reasonably calculated to accomplish TANF purposes. (Sec.
409((a)(7)) Cost-sharing also is required for contingency funds
(above), for some child care funds, and for most welfare-to-
work funds* (above).

CRS-32
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Waivers
Sec. 1115 of the Social Security Act authorizes the
Provides that AFDC waivers in effect on the date of enactment
DHHS Secretary to waive specified requirements of
will continue until their scheduled expiration, unless the state
state AFDC plans in order to enable a state to carry
chooses to end them early. Provisions of TANF law, if
out any experimental, pilot, or demonstration project
inconsistent with terms of existing waivers, will not affect
that the Secretary judges likely to assist in promoting
waiver projects. However, TANF work requirements shall
the program’s objective. The Clinton Administration
apply to any waivers granted after enactment (in response to
gave AFDC waivers to 42 states and the District of
requests submitted before enactment). Beginning with FY1997
Columbia before enactment August 22, 1996 of the
a state operating under a waiver shall receive the TANF grant in
new law.
lieu of any other payment. The Secretary is directed to
encourage continuation of current waivers and their evaluation,
but a state will be held harmless for accrued cost neutrality
liabilities incurred under a waiver if it submits a written request
to end the waiver not later than 90 days after adjournment of the
first regular legislative session that begins after enactment of
TANF. (Sec. 415))
State Plan
Secretary must approve state plans. Plan must
Secretary must certify that plans contain required elements.
include these provisions:
State 2-year plan (Sec. 402) must outline how it intends:
Procedural
and Policy
Requirements
AFDC and JOBS must be available statewide
— to conduct a program, designed to serve all political
subdivisions (not necessarily in a uniform manner), that
provides cash assistance to needy families with (or expecting
children) and that provides parents with work and support
services;

CRS-33
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
States must operate a JOBS program and require
—to require a parent or caretaker recipient to engage in work as
AFDC parents not exempt from JOBS to participate
defined by the state after 24 months of aid, or sooner if then
in education, work, and training (but minimum
judged ready for work;
participation rates now apply only to 2-parent
families).
See entry immediately above.
—ensure that parents and caretaker recipients engage in work
activities in accordance with Sec. 407 (Mandatory work
requirements);
States must restrict use or disclosure of information
—take steps deemed necessary by state to restrict and
about applicants/recipients to purposes directly
disclosure of information about recipients of TANF. If it does
connected to administration of welfare programs.
adopt privacy safeguards, they shall not prevent the agency
Information identifying a recipient may be disclosed
from providing the address of a recipient to a law enforcement
only to a governmental entity “with respect to” an
officer who furnishes the recipient’s name and notifies the
authorized audit or similar activity. These privacy
agency that the recipient is a fugitive felon or parole/probation
safeguards shall not prevent the agency from giving a
violator or has information needed by him in his official duties
recipient’s address to a law enforcement officer who
and that his location or apprehension is within his official
furnishes the recipient’s name and social security
duties;
number and demonstrates that the recipient is a
fugitive felon and that the felon’s location or
apprehension is within his official duties.
States must develop a program for AFDC recipients
—establish goals and take action to prevent and reduce the
to prevent or reduce the incidence of births outside
incidence of out-of-wedlock pregnancies, with special emphasis
marriage; they must offer, and promptly provide,
on teenage pregnancies, and establish numerical goals for
family planning services in all appropriate cases who
calendar years 1996 through 2005 for reducing the incidence of
voluntarily request them.
births outside marriage;

CRS-34
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
No provision.
—conduct a program providing education and training on the
problem of statutory rape, designed to reach law enforcement
officials, the education system, and relevant counseling
services, so that teenage pregnancy prevention programs may
be expanded to include men.
Further, the document must:
The U.S. Supreme Court held in 1969 (Shapiro v.
—indicate whether the state intends to treat families moving
Thompson) that some state residence rules for AFDC
into the state differently from others and, if so, how it intends to
violated the Constitution (equal protection clause, due
treat incoming families;
process clause, and the constitutionally secured right
to travel). The Court let stand a section of federal law
that forbids approval of state plan that would deny
eligibility to a person who resided in the state for 1
year. It said the section did not approve imposition of
a 1-year waiting period, but that if it did, it would
violate the Constitution.
No provision. Legal aliens are eligible for AFDC.
—indicate whether the state intends to provide aid to
noncitizens and, if so, must provide an overview of the aid;
Regulations require that states determine need and
—set forth objective criteria for the delivery of benefits and
amount of aid on an objective and equitable basis and
determination of eligibility and for fair and equitable treatment,
that all types of income be considered in the same
including an explanation of how it will provide opportunities
way except where otherwise specifically authorized
for an administrative hearing or appeal to recipients adversely
by federal statute. State plans must provide a fair
affected;
hearing opportunity to a person whose claim is denied
or not acted upon promptly.

CRS-35
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
No provision. (Under JOBS, required hours of
—provide that, unless the governor opts out by notice to the
participation in community work experience
Secretary, the state will, not later than 1 year after enactment,
programs are limited, with the effect of assuring a
require a parent who has received TANF for 2 months and is
minimum wage return.)
not exempt from work requirements to participate in
community service employment, with minimum hours and tasks
set by the state.
Certifications required in the state plan:
Governor must certify that state will operate a child
—that it will operate a child support enforcement program
support enforcement program during the fiscal year.
(under Title IV-D),
State must have in effect an approved plan for foster
—that it will operate a foster care and adoption assistance
care and adoption assistance.
program (under Title IV-E) and ensure that the children are
eligible for Medicaid;
No provision.
—that it will provide equitable access to TANF for Indians
who are not eligible for aid under a tribal family assistance
plan;
State must have measures to detect fraudulent
—that the state has established and is enforcing standards and
applications for AFDC before establishment of
procedures against program fraud and abuse, including
eligibility. It must provide methods of administration
procedures against nepotism, conflicts of interest, kickbacks,
found necessary by the Secretary for proper and
and use of political patronage;
efficient operation; these include establishing and
maintaining personnel standards on a merit basis.

CRS-36
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Program must be in all political subdivisions of state
—certification specifying which state agency or agencies will
and, if administered by them, be mandatory upon
administer and supervise the program; this shall include
them.
assurances that local governments and private sector
organizations have been consulted about the plan and have had
at least 45 days to submit comments.
In addition, at state option, the Governor may certify that the
state has established and is enforcing standards and procedures
to screen and identify recipients with a history of domestic
violence, to refer them to counseling and supportive services;
and to waive some program requirements, such as time limits,
for victims of domestic violence in certain cases.
Regulations require that state program manuals and
The State must make available to the public a summary of its
other policy issuances, which reflect the state plan, be
TANF plan.
maintained in the state office and in each local and
district office for examination of regular workdays.
States must share in every dollar of program costs, at
For the basic TANF grant, for contingency funds, for some
rates that vary with state per capita income..
child care funds, and for Welfare to Work formula grants,*
states must share in program costs through maintenance-of-
effort requirements.
State must furnish aid to eligible persons with
Explicitly states that TANF entitles no individual to aid. (Sec.
“reasonable promptness” (cited by U.S. Supreme
401(b)) No provision requiring prompt help for those state
Court [King v. Smith, 1968] as entitling eligible
makes eligible.
persons to AFDC) and must give opportunity to make
application to all wishing it.

CRS-37
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
State must round the benefit down to the next lower
No provision.
dollar and may not pay a monthly benefit smaller than
$10.
State must promptly correct over- and
No provision.
underpayments.
State must make reports, as required by the DHHS
Requires states to collect monthly and report quarterly on 15
Secretary, from time to time. The law requires states
items of specified data about TANF families/activities (using
to report data (including numbers aided, types of
disaggregated case record information, with estimates allowed
families, how long aided, payments made) for
if obtained through approved sampling methods); and, from a
families who receive AFDC-related child care or
sample of closed cases, to report reasons for closure. Quarterly
transitional aid (child care or Medicaid) after leaving
reports also must show: federal sums used for administrative
AFDC for work.
costs, total sums spent for needy families, number of
noncustodial parents who worked, amount used to provide
transitional services for ex-TANF families. (Sec. 411)
State must have in effect an Income and Eligibility
Sets a penalty for failure to participate in the Income and
Verification System covering AFDC, Medicaid,
Eligibility Verification System: a decrease of not more than 2%
unemployment compensation, the Food Stamp
in the TANF block grant (to be replaced by state funds).
program, and adult cash aid in the outlying areas
(section 1137 of Social Security Act).
Child Support
Applicants and recipients, as a condition of AFDC
No TANF funds may be used for a family that includes a person
eligibility, must assign rights to child or spousal
who has not assigned support rights to the state. (Sec.
Requirements
support to the state.
408(a)(3))

CRS-38
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
AFDC applicants and recipients must cooperate in
If the child support agency determines that a TANF recipient is
establishing the paternity of a child and in obtaining
not cooperating with the state in establishing paternity or in
child support payments unless they are found to have
establishing, modifying, or enforcing a support order for her
good cause for refusing to cooperate.
child (and the person does not qualify for a good cause
exemption), the state must reduce the family’s TANF benefit by
at least 25% and may remove it from the program. (Sec.
408(a)(2))
If a state does not enforce penalties requested by the child
support enforcement agency against TANF recipients who fail
to cooperate in establishing paternity, the Secretary shall reduce
the TANF grant by not more than 5% (and the state shall
replace these funds with its own.) (Sec. 409(a)(5))
States must disregard the first $50 monthly in child
In repealing AFDC, repeals required disregard of first $50
support payments collected by the state and passed
monthly in child support collections passed through to IV-A
through to the AFDC family.
family.
Penalty for failure to comply substantially with state
Retains current law penalty for failure to comply substantially
child support plan: reduction of 1-5% in AFDC
with child support plan, applying it to TANF funds. Penalty
matching funds (penalty rises for successive findings
suspended if state submits an approved corrective action plan.
of noncompliance). Penalty suspended if state
submits an approved corrective action plan.

CRS-39
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1

The law authorizes and appropriates such sums as
Requires DHHS Secretary to conduct research on the effects,
may be determined by Congress for cooperative
costs, and benefits of state TANF programs. Provides that
research or demonstration projects. Examples include
Secretary may help states develop innovative approaches to
studies relating to the prevention and reduction of
employing TANF recipients and shall evaluate them, using
dependency. (Section 1110 of the Social Security Act)
random assignment to experimental and control groups when
feasible. Directs Secretary to develop innovative methods to
disseminate findings. For 6 years, appropriates $15 million
yearly, half for TANF research and novel approaches cited
above and half for state-initiated TANF studies and completing
waiver projects. (State must pay 10% of costs of state-initiated
TANF evaluations.) (Sec. 413) Note: Congress later (P.L.
104-208) rescinded the $15 million appropriated for FY 1997.
Directs the Secretary to rank states in order of success in (a)
moving recipients into long-term private jobs and (b) reducing
the proportion of out-of-wedlock births and in both cases to
review programs of the 3 states with highest and lowest ratings.
(Sec. 413(d) and (e)) Requires Secretary to report to four
Committees of Congress annually (beginning 3 years after
enactment) on specified matters about three groups: children
whose families lost TANF eligibility because of a time limit,
children born after enactment to teen parents, persons who
became teen parents after enactment. Reports are to include:
percentage of each group that dropped out of school, is
employed, was convicted of a crime, became married, has
health insurance, participates in TANF-funded programs, and
their average family income. Sec. 413(g))

CRS-40
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Requires each Governor, not later than 90 days after enactment
and yearly thereafter, to report the state’s child poverty rate. If
poverty rate has risen by 5% or more as a result of the new
welfare law, the state shall submit a corrective action plan to
reduce child poverty rate. (Sec. 413(i))
Evaluation,
No provision.
Directs Census Bureau to expand Survey of Income and
Program Participation (SIPP) to obtain data with which to
Research, and
evaluate TANF’s impact on random national sample of
Studies
recipients. Authorizes appropriation of $10 million annually
for 7 years. (Sec. 414)
The Family Support Act required the Secretary to
Requires Secretary to study measures of program outcomes as
make recommendations for JOBS performance
alternative to minimum participation rates and to report by Sept.
standards regarding measures of outcomes. The
30, 1998 to Congress. Report is to include whether alternate
report was submitted in 1994 (after deadline).
measures should be applied nationwide or state-by-state. (Sec.
107 of P.L. 104-193)
No provision (State child support plans may provide
Requires the Secretary to report to Congress within 6 months of
for establishment of a statewide automated data
enactment on the status of automatic data processing systems in
processing and information retrieval system.)
the states and what would be required to track participants over
time and to determine if persons were enrolled in programs in
more than one state. (Sec. 106 of P.L. 104-193)

CRS-41
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
The Family Support Act of 1988 (Sec. 505) directed
Requires the Secretary to enter into agreements with nonprofit
the Secretary to enter into agreements with between 5
organizations to conduct projects that create job opportunities
and 10 nonprofit organizations to conduct
for TANF recipients and other persons with income below the
demonstrations to create job opportunities for AFDC
poverty guideline. (Expands and converts previous
recipients and other low-income parsons—Job
demonstration projects to grant status.) Authorizes $25 million
Opportunities for Low-Income Persons (JOLI). For
annually for the projects. (Sec. 112 of P.L. 104-193)
these projects, $6.5 million was authorized to be
appropriated for each fiscal year, 1990-1992, and, by
1994 law, for each fiscal year, 1993-1996.
Services from
The Child Care and Development Block Grant Act
Authorizes states to administer and provide TANF services (and
prohibits use of financial assistance for any sectarian
those under Supplemental Security Income) through contracts
Charitable,
purpose or activity. In general, it requires religious
with charitable, religious, or private organizations. Authorizes
Religious, or
nondiscrimination, but it does allow a sectarian
states to pay recipients by means of certificates, vouchers, or
Private
organization to require employees to adhere to its
other disbursement forms redeemable with these organizations.
religious tenets and teachings.
Stipulates that any religious organization with a contract to
Organization
provide welfare services shall retain independence from all
units of government. Requires states to provide an alternative
provider for a beneficiary who objects to the religious character
of the designated organization. (Sec. 104 of P.L. 104-193)

CRS-42
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Interaction
AFDC recipients automatically are eligible for
Although the new law ends AFDC, it retains AFDC eligibility
Medicaid. States also must provide Medicaid to some
limits for Medicaid use. Requires states to provide Medicaid
with Medicaid
AFDC-related groups who do not receive cash aid.
coverage and benefits to children and family members who
Examples: persons who do not receive a monthly
would be eligible for AFDC cash aid (under terms of July 16,
payment because the amount would be below $10
1996) if that program still existed. For this purpose, states may
(federal law prohibits payments this small) and
lower AFDC income and resource standards to those in effect
persons whose payments are reduced to zero in order
on May 1, 1988 and may increase them by the percentage rise
to recover previous overpayments. States must
since July 16, 1996 in the consumer price index for all urban
continue Medicaid for specified periods for certain
consumers (CPI-U). States also may adopt more liberal methods
families whose lose AFDC benefits. If the family
of determining income and resources (example, more generous
loses AFDC eligibility because of increased earnings
disregard of earnings). Permits states to end Medicaid for
or hours of work, Medicaid must be extended for 12
adults who refuse TANF work requirements, but requires
months. (During the second 6 months, a premium
continued Medicaid for their children. . (Sec. 114 of P.L.104-
may be charged, the scope of benefits may be
193) Requires state plans to ensure Medicaid for children
limited, or alternate delivery systems may be used.)
receiving foster care or adoption assistance. (Sec.
They must provide Medicaid to two-parent families
402(a)(1)(B)(3))
whose principal earner is unemployed and who would
receive AFDC-UP if the state had not used its option
Requires 12 months of medical assistance to those who lose
to limit cash aid to 6 out of 12 months. (Medicaid
eligibility for cash aid (TANF) because of increased earnings
law requires states to cover all pregnant women and
and 4 months of extended medical benefits to those who lose
children below age 6 with family income not above
eligibility because of child or spousal support. (Sec. 408(a)(11))
133% of the poverty guideline and all children born
since September 30, 1983 — now almost 13 years old
— whose family income is below poverty.)

CRS-43
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Interaction
Food Stamps. AFDC families (recipients of title
TANF recipients not living with others automatically are
IV-A aid), unless they are part of a larger household,
eligible for food stamps, but states can opt to operate a
with Food Aid
automatically are eligible for Food Stamps. Food
“simplified food stamp program” under which they may apply
Stamp rules are set by Congress; states administer
many of their TANF rules to determination of food stamp
federally-paid benefits and pay half the costs of
benefits for TANF families, so long as the program does not
administration. Persons disqualified from AFDC for
increase federal costs. TANF recipients disqualified for
non-compliance may, in limited cases, be disqualified
noncompliance with TANF rules may be disqualified also for
also from food stamps. Persons whose AFDC benefits
food stamps; persons whose TANF benefits are lowered for
are reduced as a sanction usually receive an increase
noncompliance will not receive an increase in food stamps.
in food stamps (30 cents per lost AFDC dollar). State
Food stamps can be merged with cash benefits in work
payments to AFDC families that are designated as
supplementation programs (jobs subsidized with welfare
energy assistance must be disregarded as income by
benefits) for TANF families. Energy assistance provided by
the food stamp program.
states or localities as part of public assistance is counted as
income for food stamp purposes. (Title VIII of P.L. 104-193)
If a family’s TANF benefits are reduced as a penalty for an act
of fraud under TANF, the food stamp program may not increase
its benefits in response to the income decline. (Sec. 911 of P.L.
104-193)
Child Nutrition. AFDC families automatically
TANF children automatically are eligible for free school meals
are eligible for free school meals and other child
and other child nutrition programs.
nutrition programs.
WIC. Women, infants, and children
Women, infants, and children enrolled in TANF automatically
categorically are income-eligible for the Special
are income-eligible for WIC.
Supplemental Nutrition Program for Women, Infants,
and Children (WIC) if they receive AFDC.

CRS-44
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Interaction
About 20% of AFDC families live in public housing
If a TANF family living in public or assisted housing is
or receive a rental subsidy from the U.S. Department
penalized with a cash benefit reduction for an act of fraud under
with Housing
of Housing and Urban Development (HUD). In
TANF, its rent may not be decreased in response to the loss of
Aid
general, their rent increases if their cash income rises
income. (Sec. 911 of P.L. 104-193)
and decreases if it falls (by about 30 cents per dollar).
Interaction
Federal funds for foster care are available only for
Although the new law ends AFDC, it retains AFDC eligibility
children who meet AFDC eligibility rules. Federal
limits for foster care and adoption assistance. Makes foster
with Foster
funds for adoption assistance are available only for
care and adoption assistance matching funds available for
Care/Adoption
children eligible for AFDC or SSI.
children who would be eligible for AFDC cash aid (under terms
Assistance
of June 1, 1995) if that program still were in effect.
Interaction
AFDC law forbids counting EITC payments as
No provision. States will set policy about treatment of EITC
income (or, for 2 months, as a resource) in
payments by TANF.
with Earned
determining AFDC eligibility and benefits.
Income Tax
Credit (EITC)
Effective Date
Not relevant.
July 1, 1997. Permits states to begin TANF sooner. Penalties
generally apply only to conduct occurring on or after July 1,
1997, or, if later, 6 months after a state submits its TANF plan.
(Sec. 116 of P.L. 104-193) A state may continue one or more
individual waiver projects until their scheduled expiration. (See
Waivers.)

CRS-45
Item
Aid to Families with Dependent Children
Block Grants for Temporary Assistance for Needy Families1
Cost/Savings
The Congressional Budget Office (CBO) on August
CBO estimated (August 1, 1996) that federal outlays for
1, 1996 estimated that the existing AFDC, JOBS, and
“family support payments” under P.L. 104-193 would total
child support enforcement programs, including
$125.5 billion over FYs1997-2002, an increase of $3.7 billion
AFDC-related child care, would have a net cost of
(3.1%) over corresponding outlays projected under
$121.8 billion in direct federal spending over 6 years
AFDC/JOBS law. The increase reflects larger child care
(FYs1997-2002). CBO uses the term “family support
outlays. Outlays under the child care block grant were
payments” to describe expenditures of these
estimated at $12.8 billion, up $3.4 billion from those expected
programs.
with no change in law. Overall, CBO estimated that P.L.104-
193 would reduce direct (mandatory) federal spending by a net
total of $54.1 billion over 6 years. Restrictions on benefits for
noncitizens accounted for 44% of this total, and food stamp
revisions for 43%. Net dollar decreases and percentage cuts for
welfare programs other than family support: Food stamps,
$23.3 billion, 12.2%; SSI, $22.7, billion, 11.2%; Medicaid,
$4.1 billion, 0.5%; child nutrition, $2.9 billion, 4.6%; social
services block grant, $2.5 billion, 14% (in later appropriations
act, FY1997 funds were increased by $0.12 billion); and earned
income tax credit (EITC), $2.9 billion, 2.1%. Further, EITC
changes were expected to increase tax revenues by $.4 billion.
Outlays for foster care and related programs and for maternal
and child health were expected to rise by a total of $0.5 billion.
The Balanced Budget Act of 1997 rescinded and modified some
of the 1996 budget cuts. CBO’s preliminary estimate was that
this law would increase direct federal spending on cash welfare
and food stamps by $13.7 billion through FY2002: restoring
SSI to some legal aliens, $9.5 billion, establishing welfare-to-
work grants, $2.7 billion; moderating the impact of the food
stamp program’s new work rule, $1.5 billion.
1. References to sections of the law are to the Social Security Act, as amended by P.L. 104-193 and P.L. 105-33.