TANF-ACF-IM-2017-02 (State Work Participation Rates for FY 2016)

TO:

State agencies administering the Temporary Assistance for Needy Families (TANF) Program and other interested parties.

SUBJECT:

State Work Participation Rates for FY 2016

REFERENCES:

Sections 407 & 409 of the Social Security Act; 45 C.F.R. Parts 261 & 262

BACKGROUND:

The U.S. Department of Health and Human Services (HHS) issues TANF state work participation rates, which measures 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) 2016 are 50 percent for all families and 90 percent for two-parent families, but a state’s individual target rates 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.”

The Deficit Reduction Act of 2005 (DRA) and regulations implementing that law made significant changes to work participation requirements by: (1) recalibrating the caseload reduction credit to a base year of 2005 (rather than FY 1995); (2) adding families to the calculation of the work participation rates (e.g., those in separate state programs and certain families in which children receive assistance but parents do not); and (3) defining the activities and hours of participation that could count toward those rates.

CONTENT:

This memorandum transmits the FY 2016 state work participation rates. All states were required to report work participation information for the months of October 2015 through September 2016. Eleven states failed one or both required work participation rates. The FY 2016 national average overall work participation rate was 51.9 percent. Four states failed to meet their overall work participation rate requirements. The FY 2016 national average two-parent work participation rate was 70.8 percent. Eleven 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 2016 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 2016. 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.

ATTACHMENTS:

TANF State Work Participation Rate Tables for FY 2016

INQUIRIES:

Please direct inquiries to the TANF Program Manager in your region.

        /s/

Clarence H. Carter
Director
Office of Family Assistance