TANF-ACF-IM-2018-02 (State Work Participation Rates for FY 2017)
State agencies administering the Temporary Assistance for Needy Families (TANF) Program and other interested parties
Sections 407 & 409 of the Social Security Act; 45 C.F.R. Parts 261 & 262
The U.S. Department of Health and Human Services (HHS) issues TANF state work participation rates, which measure how well states engage families receiving assistance in certain work activities during a fiscal year. For work participation rate purposes, states include the 50 states, the District of Columbia, and the US territories of Guam, Puerto Rico and the Virgin Islands. A state must meet 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) 2017 are 50 percent for all families and 90 percent for two-parent families, but a state’s individual targets 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 the previous year and a base year, FY 2005. (For a caseload reduction credit toward the two-parent work participation rates, 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. In other words, it may exclude from its comparison-year caseload the share of cases funded with “excess MOE.”
In accordance with the Deficit Reduction Act of 2005 (DRA), the base year of the caseload reduction credit is FY 2005, and included in the work participation rate calculation are those families in separate state programs and certain families in which children receive assistance but parents do not.
This memorandum transmits the FY 2017 state work participation rates. All states were required to report work participation information for the months of October 2016 through September 2017. Nine states failed one or both required work participation rates. The FY 2017 national average overall work participation rate was 53.0 percent. Two states failed to meet their overall work participation rate requirements. The FY 2017 national average two-parent work participation rate was 69.5 percent. Nine states failed to meet their two-parent work participation requirements. (Twenty-six states were not subject to the two-parent work participation requirement due to the manner in which they structured their programs.) While the FY 2017 national average exceeds the 50-percent requirement for all families and both rates represent historic high levels, this does not necessarily reflect increased state effort to engage recipients in work activities. Many states have adopted strategies that make it easier to meet the rate such as such as providing token payments to low-income working families not otherwise receiving assistance, or serving families in a solely state-funded program to remove them from the calculation entirely.
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 2017. A state that fails its minimum work participation requirement (by failing either work participation rate), is subject by statute to a potential penalty; however, a state has an opportunity to dispute a penalty, seek a discretionary reduction due to needy state status or extraordinary circumstances, 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 inquiries to the TANF Program Manager in your region.
Clarence H. Carter
Office of Family Assistance