TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
(TANF)

Sixth Annual Report to Congress

V. High Performance Bonus

Link to Appendices

TANF's High Performance Bonus (HPB) program provides TANF cash awards to States (in addition to their basic TANF block grant) for high relative achievement on certain measures related to the goals and purposes of the TANF program.  States are not required to participate and may compete in one or multiple measures; however, those that do so must provide required data necessary to measure performance on HPB indicators.  Annual bonuses are awarded to the top ranking States for performance measured over a year, called the “performance year” (FY 2001 was the performance year for FY 2002 awards), and also to States with the largest positive change in performance over the previous year.  Formulas for each of the measures used for the FY 2002 awards are provided in Table 5:1 in the Appendix.

The amount an individual State can receive from the award each year is limited to five percent of its TANF grant.  The total amounts awarded for FY 2002 to each State are listed in Table 5:2 in the Appendix.

Awards for FY 1999, 2000, and 2001 (the first three award years) were given to the top 10 States with the highest rates in four work measures related to moving adult recipients to work and sustaining their success in the work force.  These measures included a job entry rate, a success-in-the-workforce rate (measured by combining a job retention rate and an earnings gain rate), and the change in each of these rates over the prior year.

Several important changes were made to the HPB measures in regulations that were finalized in 2000, and these changes apply to award years 2002 and 2003.  First, four new non-work indicators were added:  participation of low-income working families in the Food Stamp program; participation of former TANF recipients in the Medicaid program and in the State Children's Health Insurance Program (SCHIP); a child care subsidy measure; and a family formation and stability measure.

Second, a major change was made in the source of the employment data used to calculate performance under the work measures this year.  In prior years, States competing on work measures were required to collect, compile, and submit quarterly reports on basic data.  Beginning with award year 2002, competing States were required to submit monthly lists of adult TANF recipients, identified only by their Social Security Number (SSN).  These data were then matched against the National Directory of New Hires (NDNH) maintained by the Department of Health and Human Services (HHS).  Individual data and identifiers are kept strictly confidential and these matches are used only to compute aggregate performance information.

The following technical changes were also made in the computation of the work measures:

• Success-in-the-workforce sub-measures (job retention and earnings gain) are equally weighted.  In prior years, the weight for job retention was twice the weight of earnings gain.
• Differences between the performance year and comparison year rates are measured by percentage point changes rather than percentage changes.
• At least one sub-measure rate in the percentage point change between the success-in-the-workforce rate for the performance year and the success-in-the-workforce rate for the prior year must be positive.  This is a new requirement.

Finally, because of the addition of new categories, both the number of States eligible for bonuses and the allocation of the total $200 million annual bonus among measures have been changed.  The number of eligible States and the amount allocated to each measure are listed in Table A.

In performance year FY 2001, 49 States and the District of Columbia competed for awards related to at least one of the 80 award measures; 42 of these States received awards.  Table B lists the winning States and the number of measures awarded.

A summary of average national performance on the work measures is given in Table C, and State-by-State data on all performance measures are provided in the Appendix to this chapter.  Note:  Non-work measures were first included in the High Performance Bonus award system beginning with performance year 2001, thus trend data are not available on the non-work measures.