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Chapter 2
What Are the States’ Time-Limit Policies?
As outlined in Chapter 1, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 provides states with a number of options to consider in designing their time-limit policies. While it mandates that states cannot use federal Temporary Assistance for Needy Families (TANF) funds to provide more than five years of assistance to families except under certain circumstances, it allows states to establish shorter time limits. It also allows states to provide assistance using federal funds to families beyond five years for up to 20 percent of the TANF caseload as well as allows states to use state-only maintenance-of-effort (MOE) dollars to provide assistance to more families. In addition to variations in the length of their time limits, states have made different decisions regarding the exemption and extension criteria, the financial structure for providing assistance, the process that takes place when families approach the time limit, and the consequences for families when they reach the time limit.
This chapter reflects the policies that were in place in early 2002, when the survey was administered. At that time, welfare recipients had reached time limits in about 35 states but had not yet reached a time limit in 15 states and the District of Columbia. Some states in which few, if any, individuals had reached their limits had not fully developed their time-limit policies at the time the survey was administered. In addition, as states gain more experience, they may confront unforeseen challenges with their present policies. Although this chapter provides useful information on the types of policies being implemented now, the policies in many states are subject to change in the coming year as substantial numbers of individuals reach time limits.
Key Findings
The survey revealed several key findings:
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Responding to the broad flexibility allowed under the federal welfare law, states have developed widely varying approaches to time limits. A large proportion of the TANF caseload is subject to less stringent time-limit policies because such policies are in place in several very large states.
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All states provide exemptions or extensions from their time limits for certain groups of families, but the policies differ dramatically from state to state.
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More than half the states have chosen to pay benefits to certain groups of families using only state funds, but only about 7 percent of cases nationwide are funded in this manner. Also, though these cases are not subject to the federal time limit, many of them are subject to state time limits.
Features of Time-Limit Policies
This section discusses two features of each state’s time-limit policy: the length of the time limit and the consequences for families who reach the time limit and are not offered an extension.
Figure 2.1 presents the proportions of all TANF cases that are in states with a 60-month time limit, a shorter time limit, or no time limit — divided further by whether the state policy is to terminate cases at the time limit or to continue providing assistance either to all family members or to the children. As this figure shows, only about 30 percent of families receiving assistance live in states that have what some might consider to be the “purest” form of the federal time limit: a 60-month time limit that results in benefit termination. Another 25 percent of TANF families live in states with shorter time limits that result in termination.
About 38 percent of the families live in states that impose a 60-month time limit but provide at least some assistance after families have reached that limit. Large portions of these families live in New York (which allows those who reach the time limit to transition to a state and locally funded safety net program) and in California (which will remove the adult from the assistance unit but continues to provide assistance for the children’s needs). About 4 percent of the families live in states that have shorter reduction time limits that do not result in case closure. Finally, 4 percent of all TANF families live in the two states — Michigan and Vermont — that have no time limit on benefits.
Table 2.1 lists the states according to the categories shown in the figure. Given the many variations of time-limit policies, a state’s category may not be readily apparent. For example, Texas is listed as a 60-month termination time limit state, even though the state also has shorter reduction time limits. The state is included in this category because it represents the more severe consequence and because a small portion of the caseload faces just the 60-month time limit.1 While Hawaii provides an employment subsidy to families who have reached the limit and are working 20 hours per week, it is not included in the reduction or replacement category because there are restrictions on who is eligible. On the other hand, New York provides safety net assistance to families who apply and are financially eligible. This state is included in the reduction or replacement category because the vast majority of families who were eligible for the TANF program are eligible for the safety net program, which provides the same level of benefits, but only partly in cash.
Welfare Time Limits
Figure 2.1
Proportions of TANF Assistance Cases, by Type of Time Limit
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| NOTE: A state is categorized according to its shortest termination time limit. If it had no termination limit, it is categorized by its shortest reduction time limit. |
Whereas Figure 2.1 shows that 30 percent of all families live in states with a 60-month termination time limit, Table 2.1 shows that almost half the states have adopted this policy. The difference can be explained by the fact that this category excludes the two states with the largest TANF caseloads (California and New York), which together comprise 32 percent of the caseload.
| Type of Time Limit | States |
|---|---|
| 60-month termination time limit (23 states) | Alabama, Alaska, Colorado, Hawaii, Illinois, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Pennsylvania, South Dakota, Texas, West Virginia, Wisconsin, Wyoming |
| Shorter termination time limit (17 states) | Arkansas, Connecticut, Delaware, Florida, Georgia, Idaho, Louisiana, Massachusetts, Nebraska, Nevada, North Carolina, Ohio, Oregon,a South Carolina, Tennessee, Utah, Virginia |
| 60-month reduction or replacement time limit (7 states) | California, District of Columbia, Maine, Maryland, New York, Rhode Island, Washington |
| Shorter reduction time limit (2 states) | Arizona,b Indiana |
| No time limit (2 states) | Michigan, Vermont |
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NOTES:a In Oregon, families accrue few months toward its 24-month time limit because of the state’s time-limit policy, which does not count toward the time limit any month in which the client cooperates with work requirements. After four months of noncooperation, the case closes due to a full-family sanction. Thus, families who cycle between cooperation and noncooperation might eventually reach the time limit and be terminated, but would have received more than 24 months of assistance.(back) bIn Arizona, the adult is ineligible for TANF after 24 months, although he or she becomes eligible again after three years of ineligibility.(back) |
Exemption and Extension Criteria
For families meeting established criteria, states may decide not to count a month of assistance toward the state time limit. This is sometimes referred to as “stopping the clock.” And once families have reached the time limit, states may choose to extend benefits for those meeting other criteria. Whether the state chooses to immediately exempt a family in a particular circumstance or prefers that they instead “run out the clock” before receiving an extension reflects, in part, the state’s philosophy regarding state obligations and the responsibilities of welfare recipients. It is important to note that every state offers at least some type of exemption or extension.
Exemption Policies
As mentioned in Chapter 1, PRWORA outlines several groups of families who are exempted from the federal time limit. These include families in which the adult is not in the assistance unit (child-only cases), families living on an Indian reservation or in an Alaska native village experiencing high unemployment, families excluded under a state waiver policy, and families assisted exclusively by state MOE funds.
In addition to these exemption criteria for the federal time limit, most states exempt other groups of families from their state time limits. For these families, unless their assistance is paid for with state MOE funds exclusively, the federal clock continues to run. Under such disparate policies, families in some states are operating under separate federal and state clocks with different accumulations of months toward their limits. Thirty-four states exempt at least some families with adults from their state time limit. Figure 2.2 shows how many states offer exemptions to families who meet the most common criteria. (Appendix Table A.3 lists the exemption criteria for each state.)
The most common state exemption policy is to exempt families in which the parent is disabled (shown in combination with “caring for disabled family member”). About half the states stop the state clock for this reason, although some have placed conditions on the exemption. For example, a state may exempt adults with mental health problems but require that they enroll in a treatment program. Of the states that have this exemption, most also exempt families in which the adult is caring for a disabled family member.
Victims of domestic violence are exempted from time limits in 15 states. It is important to distinguish this state exemption policy, which stops the clock, from the federal extension policy, which allows states to provide federal TANF assistance to victims of domestic violence after they have reached the 60-month federal time limit. In these 15 states, victims of domestic violence will not accumulate months toward their state time limit — although they will continue to accumulate months toward the federal time limit during the exemption period.
Sixteen states exempt families in which the head of the household is elderly. Most states have defined this category to include caretakers who are at least 60 years old, with one state limiting the age to those who are at least 62. This is one of the few exemption criteria that is a permanent condition (because the caretaker will not get any younger). Twelve states exempt families with very young children. The child’s maximum age ranges from about 3 months (in Ar-kansas, Delaware, Ohio, Oregon, and Wisconsin) to 2 years (in Massachusetts; however, Mas-sachusetts limits the age of the child to 3 months if the family cap applied — that is, if the child was born after the family began receiving assistance and no additional cash benefits were provided for the child). When a child “ages out” of this category, the clock will restart.
Welfare Time Limits
Figure 2.2
Common State Exemption Criteria and Number of States Applying Them
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Seven states stop the clock when the adult is employed, although they generally place limitations on this exemption. For example, in Illinois and Rhode Island, recipients must work 30 hours per week (in Illinois, two-parent households must work 35 hours per week); and Lou-isiana exempts recipients only for the first six months they are employed.
Other state exemption criteria cover particular circumstances, such as pregnancy (often limited to the third trimester, when expectant mothers are less likely to find employment); when the head of the household is under age 18 or 19; and when child care is unavailable in the area. Some states exempt individuals who participate in special programs. For example, Hawaii exempts individuals who are AmeriCorps or Vista volunteers, while Maine exempts individuals who participate in the Parents as Scholars program, which allows welfare recipients to participate in postsecondary education.
Extension Policies
Forty-seven states extend benefits to certain families after they have exhausted all months on their state time-limit clock. Such extensions are generally offered for circumstances that are not expected to continue indefinitely, and states may put a time limit on the extensions or, at least, review them periodically to determine whether the circumstances still exist. States offer extensions for a wide range of circumstances. The most common state extension criteria are shown in Figure 2.3. (Appendix Table A.4 lists individual state extension policies.)
As noted earlier, many states exempt families if the caretaker is disabled or caring for a disabled family member. Some of these states also offer extensions for disabilities. Other states offer extensions but not exemptions. In particular, 20 states offer extensions for having a disability, but not exemptions; 16 states (including the District of Columbia) offer exemptions only; and 10 states offer both extensions and exemptions. Five states use the extension period as an opportunity to help clients obtain disability benefits, such as Supplemental Security Income (SSI).
The state policy to extend benefits to domestic violence victims generally parallels the federal exemption, which is based on the family’s need for continued assistance when they are reaching the time limit, rather than on prior circumstances. Twenty-nine states list this criterion as a reason for extending benefits. In New York, a family needs to provide medical documentation that the adult is unable to work for up to six months because of the abuse; however, they are not required to provide documentation that the abuse occurred. In Maine, clients must provide “reasonable and verifiable evidence” of domestic abuse.
Twenty-seven states provide extensions to welfare recipients who have made a “good-faith effort” but were still unable to find employment and leave welfare. This criterion is more subjective than others, often requiring that the caseworker make a judgment regarding whether the client was compliant. Some states offer guidelines to determine compliance, generally linking it with the number of times that a client was in sanction status or whether the client is participating in a work activity in the final month of assistance (see Chapter 4).
Welfare Time Limits
Figure 2.3
Common State Exemption Criteria and Number of States Applying Them
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Thirteen states provide extensions when conditions in the local labor market make it difficult for recipients to find employment, which is generally determined by the local unemployment rate. Twelve states provide extensions to clients who are unable to secure child care or other support services, and eleven states provide extensions for other barriers to employment (often including individuals receiving substance abuse treatment, or, in Missouri and Rhode Island, clients with low literacy levels). Nine states offer extensions to clients who are completing an education or training program, and seven do so if a child is at risk of foster care placement.
Structuring the State’s System of Funding Assistance
The final TANF regulations2 gave states considerable flexibility in terms of how they can structure their TANF programs to meet state goals as well as the requirements established in PRWORA. This section describes what the TANF regulations allow and how states are using this flexibility.
Strategies for Using MOE Funds
The requirements imposed in PRWORA focus on work participation, child support assignments, data collection, and MOE obligations.3 However, the requirements that apply depend on two factors: the funding source and the type of benefits or services that are provided.
The final TANF regulations outline three ways that states can allocate state MOE dollars. States can (1) commingle all or some of their state MOE funds with federal funds, (2) segregate all or some of their state MOE funds from federal funds, and (3) create a separate state program funded solely with state MOE dollars. As discussed below, different requirements are imposed in each case.
It is also important to consider the type of benefits or services being provided with the funds, because different program requirements apply. Commingled and segregated funds can be used to provide TANF assistance and TANF nonassistance. TANF assistance includes cash payments, vouchers, or other forms of benefits designed to meet the family’s ongoing needs. TANF nonassistance includes services and benefits that do not provide ongoing basic income support. The most common types of TANF nonassistance are support services such as child care provided to families who are employed, but it also includes work subsidies, nonrecurrent short-term benefits lasting no more than four months, refundable Earned Income Credits (EICs), and other employment-related services and benefits. When assistance is provided from a separate state program, this is referred to as non-TANF assistance, and it can include basic income support.
Figure 2.4 outlines the program requirements that apply to each type of assistance within each of the three funding sources. As this exhibit shows, the 60-month federal time limit applies only when federal or commingled funds are used to provide TANF assistance. The work participation, child support assignment, and data collection requirements apply when federal, commingled, and segregated funds provide TANF assistance. None of these requirements applies to TANF nonassistance or to non-TANF assistance; however, all state dollars expended count toward the state MOE requirements.
Thus, a state that wants the federal time limit to apply to all assistance provided to its welfare caseload may opt to commingle all of its state MOE funds with federal funds. Another state may choose to provide segregated funding to some families to stop the federal clock. And a third state may be concerned about meeting its work participation requirements and thus might create a separate state program to take families who meet certain criteria out of the calculation. That state might apply its own time limit to these months, even though the federal clock will not run.
Approaches Taken by States
The survey revealed that over half the states (30) are taking advantage of the flexibility offered to them and are implementing a segregated state program, a separate state program, or both. Overall, 12 states have segregated their state TANF funding from federal funding, and 27 states have created separate state programs to provide assistance to some families. Among all states, about 3 percent of all cases are funded with segregated funds and 4 percent are funded under a separate state program.4
These states are structuring their TANF programs in a variety of ways, and several of their strategies are worth noting. Figure 2.5 shows the types of families who are being targeted by these segregated and separate funding streams. (Appendix Table A.5 describes individual state programs.)
Welfare Time Limits
Figure 2.4
Types of Funding, Assistance, and TANF Requirements
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Welfare Time Limits
Figure 2.5
Number of States Funding Families with Segregated and Separate State Funds
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The following groups have been targeted by some of these programs:
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Two-parent families. About 19 states have decided to fund two-parent cases under separate state programs. The high two-parent participation requirement — 90 percent of all two-parent families must be participating in a work-related activity — has been difficult for some states to reach.5 To avoid a penalty, states can move all two-parent families to a separate state program. Of the states with separate state programs for two-parent families, all continued to apply a state time limit on the assistance provided. Thus, these two-parent families will reach the state time limit but not the federal time limit.
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Noncitizens. Most people who are not citizens of the United States cannot receive assistance with federal TANF funds. Sixteen states have chosen to provide assistance to families with noncitizens, either through segregated funds or separate state programs. Most states have opted to transfer these cases to a separate state program, and most apply a state time limit on these benefits. One challenge for states that continue to provide assistance to non-citizens is dealing with mixed families (sometimes referred to as “blended cases”) in which some members are eligible for federal TANF assistance because they are U.S. citizens while other family members are not eligible for TANF, based on their alien status. Some states have opted to use segregated or separate state funds for all families in which any member is a noncitizen, while other states have created subfamily groups in which some individuals are supported with state MOE funds only.
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Employed cases. Six states have provided state-funded assistance to individuals with earnings. By funding these families with segregated funds, the state can stop the federal time limit clock but still include them in its work participation calculation. Essentially, this is an incentive to families who are working. In addition, the benefit levels may be relatively low as a result of the family’s earned income, and states may not want clients to lose months on the clock for low benefit amounts. Arizona, for example, stops the clock when benefits fall below $100 in any month.6
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Participants in postsecondary education programs. Four states transfer cases to a separate state program when the head of household is participating in a postsecondary education program. Such participation stops both the federal and the state clocks. These states have created separate programs because the federal TANF regulations do not encourage the use of postsecond-ary education to satisfy the requirements for work-related activity.
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Exempt cases. Seven states have used the tactic of transferring all cases that are exempt to either a segregated or a separate state program, allowing them to stop both the state and the federal clocks. This might simplify the management of individuals’ time limits, since the state and federal clocks coincide.
Approaching the Time Limit
This section describes state policies that target welfare recipients who are approaching the time limit. Chapter 4 provides an in-depth examination of policies and practices in eight states. As welfare recipients accumulate months toward their time limit, welfare agencies use a variety of methods to inform them of the potential cancellation of assistance. The vast majority of states send a letter to clients who are approaching the limit. The letter typically reports how many months of benefits have been exhausted and how many months remain. Some states request that clients contact their case manager to discuss how they might become self-supporting, but they provide little additional information. Other states outline the criteria required to obtain an extension and even prompt clients to begin the application process.
In most states, the case manager conducts an assessment in the last year of assistance, evaluating the family’s needs, any barriers to employment, and progress toward completion of a self-sufficiency plan (see Appendix Table A.6). Some activities that stem from this assessment — such as providing job search assistance — are also typically provided to clients on an ongoing basis from the time of application.
In several states, welfare agencies conduct a “staffing,” in which a case is presented and reviewed by all staff involved with the client. The following are examples of how a staffing might be conducted:
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In Washington State, a staffing occurs in month 48. The process is led by the case manager and, in addition to the client, may involve the social worker, a supervisor or lead worker, other state agency staff, contractors who have worked with the client, any medical or mental health providers, and translators, as needed. The group reviews the client’s current sanction status and history of employment barriers, services, and participation.
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In the District of Columbia, all families approaching the time limit are supposed to receive a home visit to assess their needs before they reach the time limit. Community-based organizations provide this service under contract with the District.
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In Kentucky, all cases are reviewed at month 58 by a “Pro team” comprising staff from Family Support, Protection and Permanency (the Child Welfare division), Employment Services, and Vocational Rehabilitation; occasionally, community members are also included. The team discusses clients’ needs and determines options for addressing them.
The Process for Determining the Outcome of Cases Reaching the Time Limit
What happens after a client is assessed varies by state. In 24 states, clients must request an extension and, in some cases, file an application (see Appendix Table A.7). In some states, the case automatically closes at the time limit if the client fails to contact the welfare agency to request continued assistance. For example, Montana sends a notification to clients who are two months shy of reaching the limit, outlining the criteria for receiving an extension and asking those who qualify to request an application. Only the cases of families who formally apply for an extension are reviewed.
Other welfare agencies evaluate every case that has accumulated the maximum number of months, and they make an independent assessment of each client’s eligibility for additional assistance based on the information they have collected during the client’s time on welfare.
Appendix Table A.7 describes how states decide about extensions. In some states, the decision-making process is quite elaborate and involves multiple staff. For example, Mississippi employs a three-step process: First the caseworker makes a recommendation; then the county director agrees or disagrees with that recommendation; and finally the regional director approves or denies the extension. Similarly, in Florida, contracted case managers make the recommendation for a hardship extension; then supervisors must approve the recommendation; and ultimately the Regional Workforce Board or its designee approves or denies the extension.
Other states rely primarily on case managers to determine who will get an extension. Four states indicated that they determine extensions this way. In another three states, case managers are sometimes responsible for making extension decisions, but this depends on the circumstances of the case or on the county’s decision. In Arizona and Washington, the consequence of reaching the time limit and not receiving an extension is a reduction in the benefit level rather than a termination. This is not so different from a sanction, the imposition of which is regularly the responsibility of caseworkers. Other states may believe that their established criteria provide few opportunities to deviate in deciding extensions. The District of Columbia, for example, consults its automated case management information system, which is used by contractors to record clients’ participation and compliance in work activities. According to the District, caseworkers have little discretion in assessing whether a client is eligible for an extension; instead, their decisions rely on the information in the automated system.
In several states (including Montana and South Dakota), only a handful of individuals have reached the time limit, and so the state office reviews each case independently and makes an extension decision. This policy may change when more clients begin to reach the time limit and states have developed clear guidelines for granting extensions.
Almost all states provide some opportunity to appeal an extension decision. In most states, the process is similar to appealing an eligibility determination: The client can request a fair hearing. Sometimes that hearing takes place after the client’s clock has run out, and benefits are terminated until a decision is reached. In other instances, the hearing takes place prior to termination, and benefits may continue while the case is being reviewed.
1The state estimated that about 105 counties (out of 254) have no access to the employment and training program administered by the Local Workforce Development Board. Recipients in these counties are not subject to the shorter time limit, but they are subject to the 60-month termination time limit. These counties are located in rural areas and together account for less than 10 percent of the TANF caseload.(back)
264 Federal Register 17719-17931 (April 12, 1999).(back)
3The MOE obligation requires states to spend at least 80 percent of the amount they spent in fiscal year 1994, or incur a penalty. States that meet the work participation requirements need spend only 75 percent of the amount spent in 1994.(back)
4Among just those states that use segregated programs, about 8 percent of all cases are funded with segregated funds. Among states that have separate state programs, about 7 percent of all cases are funded from these separate state programs.(back)
5Eighteen states did not meet the two-parent participation requirement in 1997; seven of these states have since transferred their two-parent cases to a separate state program.(back)
6Louisiana exempts families with earned income, but continues to use federal funds.(back)
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