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1. Increase employment

Approach for the Strategic Objective: Increase employment and economic independence by reducing reliance on public welfare programs, providing job training and encouraging job creation. Focus on the abilities and skills of individuals, enabling them to be more self-sufficient and to pursue jobs in their communities.

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1.1 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Program Description, Context, Legislative Intent and Broad Program Goals

In 1996, "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996," (PRWORA) was enacted--a comprehensive, bipartisan welfare reform plan that dramatically changed the nation's welfare system into one that requires work in exchange for time-limited assistance. The Temporary Assistance for Needy Families (TANF) program replaced the former Aid to Families with Dependent Children (AFDC) and Job Opportunities and Basic Skills Training (JOBS) programs, ending the Federal entitlement to assistance. In TANF, States and Territories operate programs, and Tribes have the option to run their own programs. States, territories, and Tribes each receive a block grant allocation with a requirement to maintain a historical level of State spending known as maintenance of effort. The block grant covers benefits, administrative expenses, and services. States, Territories, and Tribes determine eligibility and benefit levels and services provided to needy families.

ACF provides leadership to help State and Tribal governments as they design and implement their programs and move clients from welfare to work, while protecting the well-being of children through child care and other services. PRWORA gives States great flexibility to design their TANF programs in ways that promote work, responsibility, and self-sufficiency and strengthen families. Except as expressly provided under the statute, the Federal government may not regulate the conduct of States. States may use TANF funding in any manner "reasonably calculated to accomplish the purposes of TANF." These purposes are: to provide assistance to needy families so that children can be cared for in their own homes; to reduce dependency by promoting job preparation, work and marriage; to prevent out-of-wedlock pregnancies; and to encourage the formation and maintenance of two-parent families.

Changing welfare as we know it has not only meant changing the welfare rules, it has also meant changing the way ACF and State welfare agencies plan and do business. Just as the welfare objective has shifted from income maintenance to work and self-sufficiency, so the way we plan for the welfare program has shifted from oversight of States’ check-producing operations to establishing measures and targets for assessing ACF and our partners' success in achieving our strategic goals. The nation has an enormous stake in this new approach to public assistance. ACF is committed to working with States to promote work, personal responsibility, and self-sufficiency in ways that will strengthen families.

There are four steps that must be completed before we can claim success in reforming the welfare system. These are:

• Reaching all families. ACF must reach the families that are still on the welfare caseloads, who may have considerable barriers -- substance abuse, domestic violence, disability of a child or of a parent, mental disorders, living in isolated rural or inner city areas without access to transportation, very low skills or education, and language barriers among others.
• Moving families into work and promoting success at work. For parents to succeed at work and provide for their children, we must ensure that they have sufficient family income and basic work supports. Sustained economic growth, reduction in unemployment, increasing employment opportunities and policy changes including expansion of the Earned Income Tax Credit, and increases in the minimum wage have contributed to increases in family income. Equally important is the provision of basic supports that all working families need, such as affordable quality child care, transportation, access to health care, opportunity to move to better jobs, and help overcoming barriers to work.
• Transforming the welfare office. The transformation of the welfare system must be accompanied by a transformation of the typical welfare office. States are reorganizing their operations to focus on assisting recipients in finding and retaining employment, rather than on distributing benefit checks.
• Maintaining investment. To accomplish the first three steps, States need to sustain the involvement of all parties in the process of helping people move from welfare to work. States have TANF and Maintenance of Effort (MOE) dollars, not needed for cash assistance because caseloads have declined, that can be reinvested in other critical needs for families.

Program Activities, Strategies and Resources

A primary goal of the TANF legislation is to move recipients from welfare to work and self-sufficiency. In addition to providing States with flexibility in program design and funding, Congress established work participation performance standards and created a High Performance Bonus (HPB) incentive system to facilitate the achievement of this goal. PRWORA provides both financial rewards for high performance and significant improvement and also penalties for not meeting the work participation targets. The HPB legislation authorized awards for five years (FY 1999-FY 2003). ACF issued award specifications for FY 1999, FY 2000, and FY 2001 through guidance. The first three years focused only on work measures, i.e., rates of newly-employed recipients, retention rates and earnings gain rates of employed recipients and former recipients. Final rules were published in August 2000 to cover awards for FY 2002 and FY 2003. In addition to the work measures, new measures have been included that promote work and provide assistance to needy families, i.e., participation by low-income working families in the Food Stamp Program, participation in the Medicaid and the State Children’s Health Insurance program after leaving TANF, receipt of child care subsidies, as well as a family formation and stability measure. Although participation in HPB is voluntary, most States are participating. Forty-six States participated in the FY 1999 HPB and $200 million in awards were issued to 27 States. Forty-eight States and the District of Columbia competed for the FY 2000 HPB and $200 million in awards were issued to 28 States in December 2000.

Under PRWORA, $100 million in annual bonuses are to be awarded to as many as five States with the largest reduction in the proportion of out-of-wedlock births to total births. These bonuses are an incentive to advance parental responsibility and encourage the formation of two-parent families. ACF compiled the statistics reported by States and compared the proportion for the most recent two-year period to that for the preceding two-year period. For FY 1999, rankings were based on birth statistics from 1995 and 1996 compared to 1997 and 1998. In order to receive the bonuses, the five States must also show a decrease in their abortion rate between the most recent year and 1995. Awards of $20 million each were given to Alabama, Arizona, the District of Columbia, Illinois and Michigan in September 2000.

ACF selected outcomes that measure State investment and policy choices directed at providing support for individuals to work and succeed at work. Strategic activities were developed to meet these targets including issuing bonuses to reward States for high performance; an aggressive technical assistance approach using contracts and grants; aggressive outreach and collaboration with key Federal and non-Federal partners; review and analysis of State programs and fiscal data to identify emerging trends; promoting and disseminating research results; and publishing regulations. Attention is being given to removing barriers to work for welfare recipients who are victims of domestic violence or have developmental disabilities or serious personal or family problems, such as substance abuse or mental health problems that interfere with their ability to work.

ACF implements a wide range of projects to help States produce the desired outcomes. These projects include:

• Convening State leaders to educate them about the specifics of the law and offering them the opportunity to engage other legislators in their State or region in designing their respective programs;
• Providing technical assistance through contracts and grants including a Peer Technical Assistance Network that provides support to States and localities to share expertise and proven experiences;
• Supporting initiatives to increase the availability of jobs for TANF recipients both in the private and public sectors, including Federal entry-level jobs;
• Developing a catalog and other sources of innovative practices, and convening workshops and conferences to provide targeted technical assistance;
• Sponsoring research and convening conferences to discuss welfare reform research; and
• Conducting and encouraging training on the need for welfare agencies to draw on the broader resources of other government agencies, the private sector, and community-based organizations.

To accomplish these strategies, ACF is striving to improve its own performance by training our employees in marketing, negotiating, and consulting; using and improving automated technology, databases, and electronic communication; and by implementing team-based work procedures.

Program Coordination, Partnerships and Crosscutting Issues

Extensive coordination is underway throughout DHHS on initiatives concerning welfare and employment. ACF and the Office of the Assistant Secretary for Planning and Evaluation are co-lead agencies. Participating agencies include the Health Care Financing Administration, the Health Resources and Services Administration, the Administration on Aging, the Office of Public Health and Science, the Substance Abuse and Mental Health Administration, the Agency for Health Care Research and Quality, the Centers for Disease Control and Prevention, the National Institutes of Health, the Office for Civil Rights, the Office of the Assistant Secretary for Management and Budget, the Office of the Assistant Secretary for Public Affairs, the Office of Intergovernmental Affairs, and the Office of the Assistant Secretary for Legislation.

In addition to coordinating with DHHS initiatives, ACF will continue to coordinate its efforts with other complementary Federal and national efforts. For example, under the Welfare-to-Work program, jointly administered by DHHS and the Department of Labor (DOL), DOL awarded grants totaling $3 billion to State and local entities in 1998 and 1999. The program requires that at least 70 percent of the Welfare to Work funds be targeted to current and former long-term TANF recipients and their non-custodial equivalents. Up to 30 percent of the funds may be spent on persons at high risk for long-term dependency and may be used for job creation, wage subsidies, on-the-job training, and employment support and follow-up. Under the Consolidated Appropriations Act for FY 2000, the Department of Labor has sole responsibility for financial and participant reporting. The Welfare-to-Work Partnership is a non-partisan non-profit effort created to lead the business community's efforts to help move those on public assistance into jobs in the private sector. DHHS will coordinate these various initiatives in order to ensure the most effective use of resources for those in transition from welfare.

Program-wide Performance

With the primary responsibility for welfare reform lodged in the States, and in a number of cases in counties and cities, ACF’s ability to affect goal achievement is limited. ACF works in partnership with State and local governments toward achieving the goal of increased employment for TANF recipients.

While the overall health of the economy could have a major effect on achieving this goal, traditional business cycles have varying effects across geographic areas and sectors of the economy. Historically, some groups in the labor force (e.g., women who head families, minorities, and women without high school diplomas) are much more vulnerable to unemployment than the population as a whole. Unemployment rates among these groups remain two to three times the overall rate, even during periods of economic recovery.

Employment measures

ACF does not have any FY 2000 performance data to report at this time because States are given up to 11 months to provide data for some measures each quarter. Past performance is not comparable because the performance measures used to track progress in the AFDC program, which was replaced by the TANF program, are substantially different from those ACF established for the TANF program. For example, the JOBS "work participation" measures/standards only applied to about one-half of the AFDC caseload, the activities that counted toward participation were different and the performance standards were less rigorous. In FY 1995, almost all States met the 20 percent all family JOBS participation rate standard. States were less successful with the Unemployed Parent (UP) participation standards under JOBS. The UP participation standards were 50 percent in FY 1995 and 60 percent in FY 1996. Only 24 States met the standard in FY 1995 and 25 States met the UP standard in FY 1996. Since Congress allowed the States to phase in the implementation of the TANF program beginning in FY 1997, ACF does not have AFDC/JOBS performance data for all States for FY 1997.

Congress established the TANF work participation performance targets for FY 1999 through FY 2002. All States met the all-families work participation targets for FY 1998 achieving a national rate of 35 percent (the 1998 target was 30%) and in FY 1999, 38 percent (the 1999 target was 35%). ACF believes that States can continue to meet the higher all-families’ targets in the subsequent years. However, only 29 of 44 States with two-parent family programs met the FY 1998 two-parent target rate of 75 percent and only 28 States of the 36 States, District of Columbia and Guam with two-parent family programs met the FY 1999 two-parent target rate of 90 percent. States have the option to move their two-parent cases into a separate State program thus avoiding the two-parent work participation requirements. Several States exercised this option so there are fewer States with two-parent TANF programs in FY 1999. The statutory two-parent participation target of 90 percent remains a rigorous standard.

The TANF performance measures for job entry, employment retention and employment earnings gain rate were not measures collected under the AFDC program. The AFDC program did collect information on families with earnings. These data indicate an increasing percentage of AFDC/TANF families with earned income. The percentage of TANF families with earnings increased from 9 percent of the caseload in FY 1994 to 28 percent in FY 1999. In FY 1999, there was a 4.2 percentage point increase in the percent of adult TANF recipients who became newly employed (job entry); a decrease of 3.2 percentage points in the percent of adult TANF recipients employed in one quarter who continued to be employed in the subsequent quarter (employment retention) and a decrease of 2 percentage points in the percent rate of earnings gained between the base quarter and the second subsequent quarter (employment earnings gain rate).

We believe that the decline in the job retention and earnings gain rates is, in part, the result of the changing composition of the remaining TANF caseload. The caseload continued to decline between FY 1998 and FY 1999 and there is concern that the remaining TANF recipients are likely to have less job skills and more barriers to employment resulting in less employment stability. We project modest increases in employment targets for FY 2002 discussed in the section Performance Measures for FY 2002 and Final Measures for FY 2001.

One of ACF’s initiatives was to increase self-sufficiency for low-income families by moving one million welfare recipients into new employment by 2000. For FY 1998, 46 States reported 1.3 million job entries, substantially exceeding the goal in only one year. This HPB job entry data exceeded the new employment goal by almost 30 percent. In FY 1999, 49 States reported 1.2 million job entries. Some of these jobs entries may have been filled by individuals who had previously been employed in FY 1998, lost their job and acquired a new job in FY 1999.

Data Issues

There are three data sources for reporting on the proposed performance targets. The first is TANF administrative data. The statute directs the Secretary to collect aggregated data (caseload summaries) and disaggregated data (by individual and family) on the TANF program quarterly. ACF has developed an automated TANF data reporting system to collect this information. This system was modified to collect data under the TANF final rule effective October 1, 1999. The TANF work participation data is also collected through this system. The consistency and validity of this State-reported data is assessed through system edits and consistency checks, special data computation runs, and data trend analysis. Within limited resources, ACF will be assessing the source data for the information supplied by States.

With respect to the employment measures, States have been given the option for the first three years of the HPB to collect this information through their administrative records or State Unemployment Insurance agency wage records (UI) or both. All States are using UI information with some supplementation of administrative record data. ACF conducted a study using data from ten States to assess the viability of using UI wage data for the HPB performance measures. ACF concluded that this database has a high degree of consistency and reliability across States, the costs are reasonable, and there is sufficient technical support to facilitate the data matches.

Under the HPB final rules governing the FY 2002 and FY 2003 bonus awards, we have specified the National Directory of New Hires (NDNH) as the sole data source for the HPB work measures. The NDNH contains UI wage data for all States and Federal employment wage data. States will provide recipient identifying information that will be matched against the NDNH database to obtain employment measurement data.

Summary Table

Performance Measures		Targets		Actual Performance	Reference (page # in printed document)
1.1a. All States meet the TANF all-families work participation rates: FY 2002 All families rate=50% work participation FY 2001 All families rate=45% work participation		FY 02: 100% FY 01: 100% FY 00: 100% FY 99: 100%		FY 02: FY 01: FY 00: 8/01 FY 99: 100%Ö FY 98: 100%	Px M-33
1.1b. All States meet the TANF two parent families work participation rates: Two parent families rate=90% work participation		FY 02: 100% FY 01: 100% FY 00: 100% FY 99: 100%		FY 02: FY 01: FY 00: 8/01 FY 99: 74%Ö FY 98: 66%	Px M-33
1.1c. Maintain the increase (from the baseline year) in the percentage of adult TANF recipients who become newly employed.		FY 02: 43% FY 01: 43% FY 00: 42% FY 99: NA		FY 02: FY 01: FY 00: 12/01 FY 99: 42.9%Ö FY 98: 38.7%	Px M-33
1.1d. Maintain the increase (from the baseline year) in the percentage of adult TANF recipients/former recipients employed in one quarter of the year who continue to be employed in the next two consecutive quarters.**		FY 02: 84% FY 01: 84% FY 00: 83% FY 99: NA		FY 02: FY 01: FY 00: 12/01 FY 99: 76.8%Ö FY 98: 80%	Px M-34
1.1e. Maintain the increase (from the baseline year) in the percentage rate of earnings gained by employed adult TANF recipients/former recipients between a base quarter and the second subsequent quarter.		FY 02: 28% FY 01: 28% FY 00: 27% FY 99: NA		FY 02: FY 01: FY 00: 12/01 FY 99: 22%Ö FY 98: 24%*	Px M-34
Ö FY 1999 data that was not available when the FY 1999 report was submitted with the FY 2001 CJ. *For FY 1998, preliminary data indicated 23.1% earnings gained for measure 1.1e. **Measure 1.1d revised to agree with rule change for HPB. Availability of FY 2000 Data: Final performance level data for FY 2000 measures 1.1a-b will be available in August 2001; data for measures 1.1c-e will be available approximately 15 months after the end of the FY (December 2001). States are being given up to 11 months to provide data for each quarter. Time will be needed for validation and verification of the data.
Total Funding (dollars in millions) See detailed Budget Linkage Table in Appendix 6 for line items included in funding totals.	FY 02: $16697.8 FY 01: $16753.6 FY 00: $16818.4 FY 99: $17186.2		Bx: budget just. section J Px: page # performance plan

 

Performance Measures for FY 2002 and Final Measures for FY 2001

ACF has consulted extensively with States and other customers/partners to develop regulations on work participation standards, the HPB, and the TANF data collection system. As noted in the section Program Activities, Strategies and Resources on page 28, a final rule, covering TANF work participation standards and data reporting requirements, was published on April 12, 1999. Final rules governing the FY 2002 and 2003 HPB awards were published August 30, 2000.

A primary goal of the TANF statute is to move recipients from welfare to work and self-sufficiency. These five measures taken together measure State success at achieving that goal. Full success requires not only getting recipients into jobs, but also keeping them in those jobs and increasing their earnings in order to reduce dependency and enable families to support themselves. The TANF data collection provisions limit our ability to require States to collect the longitudinal outcome data reflected in measures 1.1c-e. However, these measures reflect critical performance information necessary for States to effectively manage their programs. Many States were already collecting this kind of information before it was incorporated into the High Performance Bonus (HPB) system. The HPB provides an additional incentive for States to collect and report this information.

ACF views the work participation rates (measures 1.1a-b) as process measures and the other work measures as interim outcome measures. While we have performance data for FY 1998 and FY 1999, the projected performance targets remain somewhat speculative given the changing nature of the TANF population.

Achieving economic independence for many TANF families begins with either direct job search or eliminating barriers to employment, e.g., lack of basic skills, and progresses to acquiring job experiences, a private sector job, increased wages, and eventually self-sufficiency. ACF believes that there are three key elements in this process: getting a job, retaining the job, and increased earnings. Therefore, ACF selected the following measures and performance targets:

1.1a. FY 2001: All States meet the TANF all families work participation rates for FY 2001:

--All families rate: 45%

FY 2002: All States meet the TANF all families work participation rates for FY 2002.

-- All families rate: 50%

1.1b FY 2001: All States meet the TANF two-parent families work participation rate of 90%.

FY 2002: All States meet the TANF two-parent families work participation rates of 90%.

The work participation rates, measures 1.1a-b, were established by Congress. The statute directs the Secretary to collect aggregated data (caseload summaries) and disaggregated data (by individual and family) on the TANF program quarterly.

1.1c. FY 2001: Increase (from the baseline year) to 43% the adult TANF recipients who become newly employed.

FY 2002: Maintain the increase (from the baseline year) in the percentage of adult TANF recipients who become newly employed.

1.1d. FY 2001: Increase (from the baseline year) to 84% the adult TANF recipients/former recipients employed in one quarter of the year who continue to be employed in the next two consecutive quarters.

FY 2002: Maintain the increase (from the baseline year) in the percentage of adult TANF recipients/former recipients employed in one quarter of the year who continue to be employed in the next two consecutive quarters.

1.1e. FY 2001: Increase (from the baseline year) to 28% the rate of earnings gained by employed adult TANF recipients/former recipients between a base quarter and the second subsequent quarter.

FY 2002: Maintain the increase (from the baseline year) in the percentage rate of earnings gained by employed adult TANF recipients/former recipients between a base quarter and the second subsequent quarter.

Data Sources: see discussion under "Data Issues"

Note: For this rate/measure we look at the earnings of those who are employed in each of the four quarters of the measurement year and determine if they are also employed in the second subsequent quarter. If they are employed in both quarters, we determine the gain in earnings (if any) between the initial quarter and the second subsequent quarter. The sum of these gains in earnings across the four quarters is the numerator. The denominator is the sum of the earnings in each of the four quarters in the measurement year.

The work performance measures 1.1c-e were developed after extensive consultation with the American Public Human Services Association, the National Governors Association, and States as specified in the HPB statute. In FY 1999, ACF modified the work performance goal specifications to reflect percentage increase in performance rather than numeric changes and established modest increases in target levels for FY 1999 through FY 2001 with the FY 2002 target remaining unchanged from the FY 2001 target. These actions were taken for the following reasons. The performance achieved by States in FY 1998 and FY 1999 under the job entry, retention, and earnings gain rate measures (measures 1.1c-e) reflect a major accomplishment. One factor that may explain the increase in job entry rates (measure 1.1c) over the FY 1998 levels is States may have had access to more complete data in the second year of operating TANF. In addition, because there is concern that the remaining TANF population has more barriers to employment, it is not clear that the projected modest increases in performance will be achievable.

 

 

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