TANF-ACF-PI-2005-06 (Using Federal TANF and State MOE Funds for Families Affected By Hurricane Katrina)

To:

State Agencies Administering the Temporary Assistance for Needy Families (TANF) Program and Other Interested Parties.

Subject:

Using Federal TANF and State MOE Funds for Families Affected By Hurricane Katrina Purpose:

This will summarize policy and provide guidance with respect to the current TANF program on the use of TANF funds to enable States to serve families affected by Hurricane Katrina.  These principles apply to the directly affected Gulf Coast States of Alabama, Florida, Louisiana and Mississippi, as well as to any State receiving families displaced by or evacuated as a result of this tragic disaster.  We want to encourage States to take necessary action to address the immediate needs of the dislocated families affected by the hurricane.  Our goal is to help them integrate as quickly as possible into local communities, preferably with family, relatives or friends.  We want to assure you that we will take all steps within our authority to ensure that there are no negative consequences associated with a State’s compassionate response to this unfortunate situation.

Guidance:

This Program Instruction presents items to consider with respect to the current TANF program as you address the needs of families affected by Hurricane Katrina.  A separate Program Instruction will address the key features of the TANF Emergency Response and Recovery Act of 2005 (Public Law 109-68), enacted on September 21, 2005.

General Information

States may use both Federal TANF funds and State maintenance-of-effort (MOE) funds in “any manner that is reasonably calculated” to accomplish one or more of the TANF purposes:

1.  To provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
2.  To end the dependence of needy parents on government benefits by promoting job preparation, work and marriage;
3.  To prevent and reduce out-of-wedlock pregnancies; and
4.  To encourage the formation and maintenance of two-parent families.

Our funding guide Helping Families Achieve Self-Sufficiency provides additional guidance: “Activities, benefits, or services that are reasonably calculated to accomplish a TANF purpose are those that directly lead to (or can be expected to lead to) achievement of a TANF purpose.  This includes activities whose relationship to a purpose may not be obvious, but for which there is evidence that it achieves a purpose.”

States have broad discretion to decide what services and benefits to offer and to set different eligibility standards for various types of benefits.  States may also fund their TANF programs with a combination of Federal and State funds. While both are very flexible, the two sources of funds have somewhat different rules and restrictions.  Under TANF purposes 3 and 4, States may use segregated Federal TANF funds (but not MOE funds) to help clients who are not financially needy with different benefits and services, as long as the activity does not constitute “assistance” as described in 45 CFR 260.31(a).

But, clients must be financially needy to receive (a) federally funded assistance, regardless of TANF purpose; (b) federally funded benefits or services under purposes 1 or 2; and (c) MOE-funded benefits, services, or assistance.

Federally funded assistance and MOE-funded benefits, services or assistance may only be provided to a financially needy family that consists of, at a minimum, a child living with a relative, or consists of a pregnant woman.  The family must meet the quantified income and applicable resource criteria established by the State for that particular benefit.

Eligibility and Payment Determinations:

We have no authority under current law to waive any of the TANF statutory requirements.  It is important to recognize that families affected by Hurricane Katrina may have left behind or lost important and vital documents.  Therefore, we encourage States to consider streamlining the application process to expedite eligibility and payment determinations.  This streamlined process would be in lieu of the normal course of evidence-gathering to substantiate that a family meets all applicable eligibility and payment factors.  States may simply settle for a signed declaration of facts on a streamlined application form.  Or, States may still choose to retain their standard application processes and verification procedures for determining eligibility for and payment of benefits.

For example, we have defined "needy" to mean "financially deprived" and, therefore, "financially eligible" according to the State's quantified income and resource (if applicable) standards to receive a particular benefit or group of benefits.  For families affected by Hurricane Katrina, States may deem the affected families “needy” — i.e., to have met the established financial eligibility criteria established to receive the particular benefit.

Income and Eligibility Verification System (IEVS) Requirement:[1]

The IEVS requirement under section 1137 of the Social Security Act (Act) applies to any applicant or recipient receiving assistance or non-assistance benefits under the TANF program where income or citizenship and alienage are a condition of eligibility.  Sections 1137(a) and (b) of the Act require States to have in effect a computer matching system that uses an applicant or recipient’s Social Security number (SSN) to screen for income and assets toward verifying eligibility or benefit amounts.  States conduct the requisite data exchanges with the Internal Revenue Service, State Wage Information Collection Agencies, Social Security Administration and the U.S. Citizenship and Immigration Services (USCIS) within the Department of Homeland Security.  When a “hit” occurs which shows information that differs from the case record information, then the State must independently verify or follow-up on the information.  We are not holding States to the time-frame specified in 45 CFR 205.56(a)(1) for follow-up action on information received from a data match — i.e., generally within 45 days.  In the meantime, section 1137(c) prohibits States from denying, terminating, suspending or reducing any benefits of an individual until the agency has independently verified the information.  Also, States may not delay, deny, or discontinue any benefits if the evacuee does not know, does not have, or cannot remember his/her SSN.  The individual may need to obtain a replacement SSN card from the Social Security Administration.

As far as verifying citizenship and alienage pursuant to section 1137(d) of the Act, States have some statutory flexibility.  States must verify that a non-citizen is in satisfactory immigration status — i.e., is a qualified alien. Section 1137(d)(2)(B) of the Act allows States to accept “such other documents as the State determines constitutes reasonable evidence indicating a satisfactory immigration status.”  States could, for example, determine that the declaration required by section 1137(d)(1)(A) of the Act that an individual is a citizen or national of the U.S. or that the individual is in satisfactory immigration status is reasonable evidence under the current emergency circumstances created by Katrina.  States may include the declaration on the application form.  Alternatively, under section 1137(d)(4)(A)(i) a State could provide an extended period of time to a non-citizen applicant to produce the requisite immigration documentation on the grounds that the person will need to seek replacement documentation from the USCIS.  In the meantime, the State may not delay, deny, reduce, or terminate the individual’s TANF benefit per section 1137(d)(4)(A) of the Act.  States may also accept a claim on the declaration that the individual is a citizen or national of the U.S. without further verification.

Therefore, the IEVS requirement should not prevent States from adopting a streamlined application process to expedite eligibility and payment determinations.

Payments from FEMA and/or the American Red Cross:

The Federal Emergency Management Agency (FEMA) under the authority of section 408 of the Robert T. Stafford Disaster Relief and Emergency Act (42 USC 5174) and Title 44 of the Code of Federal Regulations may provide financial assistance and, if necessary, direct services to eligible individuals and households under the Individuals and Household Program (IHP) when disasters take place.  FEMA has already distributed $2,000 per household as expedited assistance and may distribute more to provide help with Hurricane Katrina disaster needs such as transportation, clothing, rental housing, other housing accommodations, and food.  It is included in the calculation of total benefits for which individuals and households may be eligible.  According to the FEMA statute at 42 USC 5155(d) and implementing regulations at 44 CFR 206.110 (f), the money received from IHP “is not to be counted as income or a resource in determining eligibility for welfare, income assistance, or income-tested benefit programs that the Federal government funds.”  Therefore, States MUST disregard all of the money received by Katrina victims under FEMA’s IHP program in determining eligibility for and payment of a federally funded TANF benefit.  We also recommend disregarding this money in determining eligibility for and payment of a MOE-funded benefit.

The American Red Cross (ARC) also provides financial assistance to evacuees dispersed across the nation.  Assistance is provided in a variety of ways, including client assistance debit cards, vouchers, checks and cash.  The ARC also administers the Special Transient Accommodations Program, with funds provided by FEMA.  FEMA provides funds to the ARC to pay for the hotel stays of individuals who apply and are eligible for FEMA assistance.  ARC donor funds pay the associated administrative costs of operating the Special Transient Accommodations Program. Essentially, this program allows hotels providing lodging to evacuees who are unable to pay the cost of lodging to bill the ARC.  The ARC will pay for up to 14 days of hotel lodging with an extension of up to another 30 days for guests who are in the hotel at the end of their first 14 day period.[2] The statutory and regulatory disregard cited above does not apply to benefits received under the Special Transient Accommodations Program.

While there is no express statutory disregard that mandates exclusion of any of the possible benefits an individual could receive from the ARC, we recommend that States disregard all cash payments, as well as any in-kind or noncash benefits provided by the ARC in determining eligibility for and payment of a federally funded TANF benefit or MOE-funded benefit.

Residency Requirement:

The “residency” requirement is a State option. States may have a temporary residency policy. States may also relax or waive their residency requirement for families affected by Hurricane Katrina.  Title IV-A of the Act does not preclude a State from providing assistance or other benefits to eligible families or eligible individuals who have arrived from another State, even on a temporary basis. If the family has received assistance in another State, then the new State should contact the old State to learn the facts -- e.g., for purposes of deciding onset of assistance or for purposes of the 5-year time limit for receipt of federally funded assistance.

We also wish to remind States of the U.S. Supreme Court decision in Saenz v. Roe (526 U.S. 489 (1999)), which overturned California’s durational residency policy limiting new residents for the first year they lived in California to the benefits they would have received in the State of prior residence. The Court ruled that such differential treatment was unconstitutional.

Refer below for additional discussion regarding application of the temporary absence provision in section 408(a)(10) of the Act.

Short-Term Non-Recurring Benefits:

We suggest that States first consider providing “non-recurrent, short term” benefits outlined in 45 CFR 260.31(a)(3)(b)(1) which excludes from the definition of “assistance” benefits designed to deal with a specific crisis situation or episode of need, not intended to meet recurrent or ongoing needs, and will not extend beyond four months.   Because such benefits are not “assistance,” they are not subject to a variety of TANF requirements such as work participation, time limits, child support assignment, and detailed data reporting.

Other "Non-Assistance" Benefits and Services:

Because the needs of many evacuees are comprehensive, States may consider offering a wider range of services or benefits than those currently offered in the State plan. (For example, a critical item that many families have been requesting is cell phones to communicate with family and friends.   Also, families and individuals may need counseling to help with the stress of displacement, separation from family members and other loved ones, and acclimation to their new location.)   If a State decides to offer new benefits or services that are not covered by the State plan, it should feel free to implement those changes immediately to address the current crisis.  A State may also change the eligibility criteria for any current services or benefits.  We will accept the State plan amendment reflecting such changes, when the State has the opportunity to submit it to us. TANF-Funded Assistance:

All applicable programmatic requirements apply to a family that is provided TANF-funded assistance (Federal TANF funds, commingled Federal/MOE funds, State TANF MOE funds).  We have no authority to waive any of the provisions in the Act.  Nevertheless, certain programmatic requirements allow some flexibility.

1.  Section 407(e) of the Act and the implementing regulations at 45 CFR 261.14 require a State to reduce the family’s assistance payment pro rata or to terminate such assistance if an individual in the family receiving assistance has refused to engage in work activities — unless good cause or another exception as determined by the State applies.  For families affected by Hurricane Katrina, the State may consider such families to have good cause for not participating in work activities.  Alternatively, the State may adopt a policy to except families affected by Hurricane Katrina from participating in work activities for a particular period of time.  However as a general rule, we cannot exempt such families with an adult from the work participation rates.  The statute and implementing regulations require us to include in the denominator of the calculation all of the families receiving TANF-funded assistance during the month that include an adult or a minor head of household.  Nevertheless, most States have historically had large enough caseload reduction credits to enable a significant reduction in the State’s overall target work participation rate, so that we do not anticipate an adverse effect on States.

2.  Section 408(a)(10)(A) of the Act allows States to continue federally funded TANF assistance (includes commingled funds) for a child who is temporarily absent from the home in which s/he resides with his/her caretaker relative.[3]  States determine the period of temporary absence.   This period may range from 30 days to not more than 180 consecutive days. During the temporary period, the child is considered to be residing with the parent or other caretaker relative.  Once the temporary absence period has expired, the child’s absence from the home is considered significant.  Section 408(a)(10)(A) of the Act prohibits States from using Federal TANF funds (including commingled funds) to provide assistance to minor children who are absent from the home for a significant period.  However, section 408(a)(10)(C) of the Act allows States to establish such good cause exceptions for exceeding the temporary absence period established by the State, if such exceptions are provided for in the State’s TANF plan.

Some children affected by Hurricane Katrina have been inadvertently separated from or missing from their parent or other caretaker relative.  The evacuee residing in the State may only be the parent(s) or other caretaker relative. In these situations, States may choose to provide assistance based on the presumption that the family will be reunited in the very near future.  Hence, States may consider the child temporarily absent from the caretaker relative’s home as long as the absence does not exceed the period established by the State.  The State may choose to provide assistance to the caretaker relative and the absent child (if the State so elects).  Thereafter, if the child has not been reunited with his/her family, then the State may elect to extend the period of temporary absence for good cause — e.g., due to Hurricane Katrina.

States establish their own reasonable time frames to define temporary absence when using segregated State TANF MOE funds or separate State MOE funds to provide assistance, benefits, and services to or on behalf of eligible families.  We have recommended that States use the provisions in section 408(a)(10) as their guide.

Section 408(a)(10) of the Act only applies to a child who leaves the home, not to the caretaker relative.  For example, the children are staying with a relative in State A so that they can attend school.  The relative applied for and receives assistance on behalf of the children only.  The children’s mother has remained in State B affected by Hurricane Katrina, to salvage the home and assist other relatives affected by the hurricane. The statute neither prohibits nor requires State A to continue to provide assistance for the absent caretaker relative.  The State is free to develop its own policy -- e.g., (a) consider the parent temporarily absent from the home and “continue” his/her assistance; or, (b) consider the parent to be temporarily absent from the home, but not meeting his/her needs until s/he actually returns to the home of the relative where her children now live.

Penalties:

While we do not have general authority to waive TANF requirements or penalties, the Secretary may not impose a penalty on a State that has “reasonable cause” for failing to meet several TANF requirements:

1. Use Federal funds in accordance with Federal law (section 409(a)(1) of the Act and 45 CFR 262.1(a)(1) and (2));
2. Submit required reports (section 409(a)(2) of the Act and 45 CFR 262.1(a)(3));
3. Satisfy minimum participation rates (section 409(a)(3) of the Act and 45 CFR 262.1(a)(4));
4. Participate in the Income and Eligibility Verification System (IEVS) (section 409(a)(4) of the Act and 45 CFR 262.1(a)(5));
5. Comply with various paternity establishment and child support enforcement requirements (section 409(a)(5) of the Act and 45 CFR 262.1(a)(6));
6. Comply with the 5-year time limit on receipt of federally funded assistance (section 409(a)(9) of the Act and 45 CFR 262.1(a)(9));
7. Maintain assistance to an adult single custodial parent who cannot obtain child care for a child under the age of six (section 409(a)(11) of the Act and 45 CFR 262.1(a)(11); and
8. Reduce assistance to recipients refusing without good cause to work (section 409(a)(14) of the Act and 45 CFR 262.1(a)(14)).

The regulations at 45 CFR 262.5(a)(1) provide that we will not impose a penalty against a State if we determine that the State has reasonable cause for the failure.  One of the factors for which we would grant reasonable cause is “Natural disasters and other calamities (e.g., hurricanes, earthquakes, fire) whose disruptive impact was so significant as to cause the State’s failure.”

MOE Requirement:

In Policy Announcement TANF-ACF-PA-2004-01 dated December 1, 2004, we clarified that States may count toward their MOE requirement in-kind or cash expenditures by non-Federal sources in the State other than the State or local government.  This includes expenditures for allowable costs by other non-Federal third parties (e.g., a non-profit organization, corporation, or other private party), cash donations by non-Federal third parties that are expended for benefits and services to or on behalf of eligible family members, as well as the value of third party in-kind contributions.  States should follow the guidance in TANF-ACF-PA-2004-01, which explains this matter in further detail.  In this PA, we also advised that the third party must be aware of and agree with the State’s intentions to claim the expenditure for MOE purposes.  Accordingly, State records must include an agreement between the State and the third party permitting the State to count the expenditure toward its MOE requirement.

Inquiries:

Please direct any inquiries to the appropriate Administration for Children and Families Regional Administrator.

/s/

Sidonie Squier
Director
Office of Family Assistance