TANF-ACF-IM-2011-05 (Work Participation Rates for FY 2009)
State Agencies Administering the Temporary Assistance for Needy Families (TANF) Program and Other Interested Parties
Work Participation Rates for FY 2009
The Social Security Act requires the U.S. Department of Health and Human Services (HHS) to issue annual TANF work participation rates, which measure how well States engage families receiving assistance in certain work activities. A State must meet both an overall (or “all families”) and a two-parent work participation requirement or face a potential financial penalty. The statutory requirements for fiscal year (FY) 2009 are 50 percent for all families and 90 percent for two-parent families, but a State’s individual target rates equal the statutory rates minus a credit for reducing its caseload.
A State’s caseload reduction credit equals the percentage point decline in its average monthly caseload between FY 2005 and a comparison year. Normally the comparison year is the previous year (e.g., FY 2008 for the FY 2009 caseload reduction credit) but the American Recovery and Reinvestment Act of 2009 allows a State to opt to use FY 2007 as the comparison year if it is to the State’s advantage. For a caseload reduction credit toward the two-parent work participation rate, the State has the option of using its overall caseload reduction credit or a separate one calculated using the decline in the two-parent caseload. In calculating the caseload reduction, HHS must exclude any caseload reduction resulting from changes in State or Federal eligibility requirements. In addition, a State that is investing State maintenance-of-effort (MOE) funds in excess of the required 80 percent or 75 percent basic MOE amount need only include the pro rata share of caseloads receiving assistance that is required to meet basic MOE requirements.
The Deficit Reduction Act of 2005 (DRA) and regulations implementing that law made significant changes to work participation requirements by: (1) recalibrating the caseload reduction credit to a base year of 2005 (rather than FY 1995); (2) adding families to the calculation of the work participation rates (e.g., those in separate State programs and certain families in which children receive assistance but parents do not); and defining the activities and hours of participation that could count toward those rates.
This memorandum transmits the FY 2009 work participation rates. All States were required to report work participation information for the months of October 2008 through September 2009. The FY 2009 national average overall work participation rate was 29.4 percent. Five States, the District of Columbia, and two Territories failed to meet their overall work participation rate requirements. The FY 2009 national average two-parent families work participation rate was 28.3 percent. Six States and one Territory failed to meet their two-parent families work participation requirement. (Twenty-four States, the District of Columbia, and two Territories were not subject to the two-parent work participation requirement due to the manner in which they structured their programs.) The attached tables provide detailed State-by-State information regarding work participation rates and standards, caseload reduction credits, the number of work-eligible individuals, and activities in which individuals participated.
We have notified States individually of their work participation rates for FY 2009. States that failed to meet either of their minimum work participation requirements are, by statute, subject to a potential penalty; however, they will have an opportunity to file a request for a reasonable cause exception from that penalty and/or submit a corrective compliance plan to correct the failure before any penalty is imposed.
Please direct any inquiries to the TANF Program Manager in your Region.
Earl S. Johnson
Office of Family Assistance