TANF-ACF-IM-1998-07 (TANF Work Participation Rates and Recipient Characteristics For FY 1997)

TO:

State Agencies Administering the Temporary Assistance for Needy Families Program and-Other Interested Parties

SUBJECT:

TANF Work Participation Rates and Recipient Characteristics For FY 1997

BACKGROUND:

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established mandatory work requirements and minimum annual work participation rate standards for States operating the Temporary Assistance for Needy Families (TANF) program. States are subject to these minimum participation rate requirements beginning July 1997 or six months after the State implementation of the TANF program, which ever is later. The Act establishes separate minimum participation rates each year for all families and two-parent families. The minimum work participation rate standards for fiscal year (FY) 1997 are 25 percent for all families and 75 percent for two-parent families.

PRWORA provides for a reduction in the minimum work participation rates standards if a State's average monthly assistance caseload decreased the previous year in comparison to its average monthly caseload in FY 1995. Each participation rate standard is reduced by the number of percentage points the caseload fell; however, the law specifies that any caseload reductions resulting from changes in State or Federal eligibility are disregarded. Adjustment of FY 1997 minimum participation rate standards, called the 034caseload reduction credit,034 are based on the caseload changes in the State's title IV A program between FY 1995 and FY 1996.

The statute also provides States the option to retain approved welfare reform waiver provisions that are inconsistent with the TANF provisions. Such waiver provisions may affect who is required to participate, the required hours of participation and the countable activities. Thus, the participation rate calculation may apply differently for States retaining inconsistent waiver provisions.

Note that in the absence of final TANF rules, the calculation of the participation rates, the application of the caseload reduction credit and the criteria for determining waiver inconsistencies are based on a reasonable interpretation of PRWORA.

CONTENT:

This memorandum transmits the work participation tables for FY 1997. Thirty-eight States and the District of Columbia were required to report work participation information for some or all of the July - September 1997 quarter.

The FY 1997 national average all family work participation rate is 28. 1 % and the FY 1997 national average two-parent family participation rate is 34.3%. Nearly all the 38 jurisdictions subject to the FY 1997 participation rate standards met the -minimum requirement for all families, and nearly half of the 34 subject to the much higher participation requirement for two- parent families met it. Information is incomplete for one State and will be corrected shortly.

All 38 jurisdictions received reductions in their minimum participation rates for the all-family rate and for the two-parent family rate as result of the application of the caseload reduction credit. The national title IV-A program caseload decline between FY 1995 and FY 1996 for all families was 7.5% and for two-parent families was 13. 1%. The minimum work participation rate adjustment for all families ranged from 4% to 19% and the adjustment for two-parent families ranged from 5% to 69%. In addition, waiver inconsistency participation rules applied in 14 States.

As shown in the attached all family work participation activity table, an average of over one-half million adults per month in the 3 9 jurisdictions participated a sufficient numbers of hours in work activities to count toward meeting the participation rate, even without consideration of activities that qualify through waivers. Over two-thirds of these adults were engaged in unsubsidized employment. Another 16% were engaged in either work experience or community services, and 14% were engaged in job search. (Because some individuals were engaged in multiple activities, the table total is in excess of 100%.)

This memorandum also transmits statistical tables on TANF recipient characteristics and financial circumstances for FY 1997. Thirty-nine jurisdictions were required to report this information via the Emergency TANF Data Report for the July-September 1997 quarter. Most significantly, States reported more than 18 percent of adults on welfare were employed compared to a 14 percent employment rate for the previous period. Earned income for families on welfare also increased by 17 percent, with the monthly average of earned income increasing from just over $500 to nearly $600. We have included a fuller summary and analysis of this information.

States have been individually notified of their participation rates for FY 1997. States that failed to meet their minimum work participation rate for either all families or two-parent families are subject to a penalty as required by section 409(a)(3) of PRWORA. However, States will have an opportunity to file a claim for good cause and/or submit a corrective compliance plan to correct their failure to meet their FY 1997 minimum work participation rate standard(s) before the Secretary will impose a penalty.

ATTACHMENTS:

TANF Work Participation Rate For FY 1997 Table 1
TANF Recipient Characteristics and Financial Circumstances for FY 1997 (July-September 1997)

NOTE: Due to the length and complexity of Tables 2 and 3 to the TANF Work Participation Rates For FY 1997, these attachments are not included here. For a copy of the attachments, contact the Office of Family Assistance at 202-401-9275.

INQUIRIES:

Inquiries should be directed to the appropriate Regional Administrator  

/s/
____________________________
Alvin C. Collins
Director
Office of Family Assistance

/s/
____________________________
Howard Rolston
Director
Office of Planning, Research and Evaluation