TANF Issues Paper: Work Requirements

The current Temporary Assistance to Needy Families (TANF) legislation requires that there be an adult meeting a work requirement for at least 30 hours a week in 50% of the households receiving TANF benefits in each state. This percentage is known as the "participation rate". If a state fails to meet this mandate, its TANF block grant is subject to being cut.

When states reduce their caseloads significantly from what they were in 1996 when the legislation was passed, they are permitted to reduce their participation rates by a corresponding percentage. This is called the "caseload reduction credit."

Because the economy was so strong in the period between the TANF law’s enactment in 1996 and 2001, those recipients who had marketable skills and were employable found jobs and left welfare. Consequently, caseloads dropped by over 50%, and the participation rates were greatly reduced in many states.

When President Bush unveiled his TANF reauthorization plan in February 2002, he proposed a number of changes intended to make the work requirements more rigorous. These include:

· Increasing the participation rate from 50% to 70% by 2007;

· Raising the work requirement from 30 to 40 hours a week;

· Redefining the activities that count as work by eliminating vocational training;

· Limiting the period for which full-time participation in drug and alcohol rehabilitation can be counted as a work activity to three months; and

· Eliminating the caseload reduction credit.

Under current law, the 30-hour work requirement allows people to combine actual employment, mandated at 20 hours per week, with activities that will help them become employable such as vocational training, literacy and English proficiency classes, drug and alcohol rehabilitation, job training and readiness, and job search. For a limited number of participants, vocational education can count as work for up to 12 months.

President Bush’s proposal would require that TANF recipients spend at least 24 hours in an actual employment activity such as an unsubsidized job, subsidized private or public sector employment, on-the-job-training, supervised work experience, and supervised community experience ("workfare"). The remaining 16 hours could be used for work-related or family-supportive "constructive activities" outside the home, such as scouting programs, or assisting at a child’s school. The President would eliminate vocational training and job search from the activities that count as complying with the work requirement.

Opposition to increasing the mandated work participation rate to 70% and the work week to 40 hours has come from many sources for a variety of reasons, among them the following:

· This is an unrealistic demand that cannot be met by states. The TANF caseload had already begun to decline before TANF was passed, because the economy had improved and jobs were plentiful. It continued to drop after the legislation passed, not because welfare recipients were required to work but because they were able to find jobs. TANF has not been tested in a weak economy until the past year, and caseloads are now rising again as unemployment hovers near 6%. Some states are having difficulty meeting current TANF requirements because of the softening of the economy.

· Those who remain on TANF now are people who did not find jobs even in a robust economy. Many of them are prevented from working by multiple barriers such as: mental or physical health problems; drug or alcohol dependency; lack of literacy, English language proficiency, or marketable skills; learning disabilities; lack of transportation or child care; limited employment opportunities in their communities; domestic violence; and care-giving responsibilities for small children or elderly or handicapped relatives. Many of these people cannot or should not work.

· The Bush proposal makes no new resources available to help people work more hours. In particular, it provides no additional child care funding but requires parents to be away from home ten additional hours each week. There is a serious shortage of affordable, safe child care for low-income families now, without increasing work hours.

· Despite continued pledges of support for state flexibility in the operation of TANF, the proposal to increase and stiffen work requirements, if implemented, would actually decrease the flexibility of states to manage their programs in the ways they deem most appropriate for their circumstances. By requiring more work while reducing the activities that count as work, the Administration would, in effect, force the states into a "one size fits all" approach to employment, rather than leaving them with the flexibility they now have to tailor programs to meet local needs.

· A 40-hour work week exceeds the normal work week in many states which count 35 or 37.5 hours as full-time employment. Thus, the requirement would be discriminatory against employed TANF recipients.

· Many TANF recipients are in work/study programs to learn job skills. These programs normally require that participants be in training or education activities for 20 hours a week and in a job for 20 hours. Changing the hours required for work to 24 would make participation in the study part of the program difficult or impossible.

The provisions of the current TANF program already impose a difficult mandate on the states. Making the requirements stricter and more broadly applicable without providing additional resources to make them achievable is unlikely to produce more employment but will increase the likelihood of more sanctions (and thus the loss of income) against both states and families.

May 2002