Welfare Reform:

With TANF Flexibility, States Vary in How They Implement Work Requirements and Time Limits

GAO-02-770: Published: Jul 5, 2002. Publicly Released: Jul 5, 2002.

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Congress created the Temporary Assistance for Needy Families (TANF) block grant to replace the previous welfare program and help welfare recipients transition into employment. To this end, states are required to enforce work requirements, and face financial penalties if a minimum percentage of adults receiving cash assistance do not participate in work or work-related activities each year. This federal participation rate requirement has increased each year, reaching 50 percent for all families in fiscal year 2002, but it can be adjusted if caseload declines. In addition to work requirements, TANF places a 60 month lifetime limit on the amount of time families with adults can receive cash assistance. To receive TANF block grants, each state must also spend a specified amount of its own funds, referred to as state maintenance-of-effort (MOE) funds. The law allows states considerable flexibility to exclude families from work requirements and time limits. In addition, states may provide cash assistance to families and exempt them from work requirements and time limits by using state MOE in specified ways. States provided cash assistance funded by federal TANF or state MOE dollars to 2.1 million families in 2001. For 736,000 of these families, only the children in the family received assistance. When only children receive the benefits, it is typically because they are cared for by someone who is not their parent or because their parents are noncitizens. The percentage of adults in work or work-related activities varied greatly among the states because of the flexibility allowed. Most states met or exceeded their adjusted required rate in fiscal year 2000. However, the fiscal year 2000 federal participation rates varied, ranging from 6 percent to more than 70 percent. States excluded 154,000 families from federal or state time limits, or 11 percent of the 1.4 million families with an adult receiving cash assistance.

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