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The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) made unprecedented changes to the welfare system in the United States, eliminating the 60-year-old Aid to Families with Dependent Children (AFDC) program and replacing it with a block grant to states to create the Temporary Assistance for Needy Families (TANF) program. A system that once focused on the accurate delivery of cash benefits now focuses on encouraging families to make the transition from welfare to work. Part of this shift translates into a dramatic increase in the range of circumstances in which families' welfare benefits can be reduced or canceled. In particular, sanctions--financial penalties for noncompliance with program requirements — have become central features of most states' efforts to promote self-sufficiency through their TANF programs. A primary goal of work-oriented sanctions is to encourage TANF recipients who might not be inclined to participate in work activities to do so. A secondary goal is to encourage greater reporting of earnings, especially among families who work in jobs where earnings are not reported through official channels. The logic behind sanctions is that adverse consequences can be used to influence the decisions clients make. Sanctions have long been used to enforce program requirements. However, with the emergence of "full-family" sanctions that eliminate all of a family's cash grant, the imposition of work requirements on a greater share of the TANF caseload and greater emphasis on encouraging TANF recipients to become self-sufficient, they have taken on much greater significance.
While consensus holds that sanctions have been an important policy change implemented through state welfare reform efforts, they are among the least studied. Additional information on the role sanctions have played in welfare reform can help inform policy discussions regarding whether all states should be required to impose more stringent sanctions and help program administrators identify strategies for using sanctions to promote greater compliance with program requirements. This report presents findings from a study of the use of sanctions in two local welfare offices in each of three states — Illinois, New Jersey, and South Carolina. In this chapter, we provide a brief context for the study, outline the study design, and describe the study states. Chapter II presents our findings on how the study sites implemented sanctions. Chapter IIIdescribes our findings on how often sanctions are used, how the characteristics of sanctioned and nonsanctioned families compare, and how sanctioned families fare over time. Finally, Chapter IV summarizes our findings and identifies important unanswered research questions.
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Before the passage of PRWORA, welfare offices reduced the AFDC payment for families with a household head who failed to participate in the work activities mandated under the Job Opportunities and Basic Skills (JOBS) training program. Believing that the penalty was not sufficiently severe to influence household heads' participation decisions, beginning in the early 1990s, many states applied for and received waivers to impose more stringent sanctions for program noncompliance. The majority of states then used TANF's flexibility to implement more stringent sanctions, though some chose to retain the structure that was in place before the advent of TANF. Under TANF, states are required to impose at least a "pro-rata" grant reduction for noncompliance but can impose a greater penalty if they choose to do so. It is also important to note that while state sanction policies are most often compared on the amount and structure of the benefit reduction, they often differ along other important dimensions such as the minimum duration, cure requirements, and approaches to repeated noncompliance (Pavetti et al. 2003).
Currently, state approaches to sanctioning follow one of four models: (1) partial, (2) gradual full-family, (3) immediate full-family, and (4) pay for performance. Fourteen states and the District of Columbia have implemented a partial sanction, which, as the name implies, reduces a family's cash assistance grant though the family continues to receive some portion of its benefits. In most cases, a partial sanction eliminates the noncompliant adult(s) from the grant, which all states did before the implementation of welfare reform. Some states that impose a partial sanction have deviated from this structure and instead reduce the family's grant by a specified percentage.
Seventeen states have implemented an immediate full-family sanction. When such a policy is in place, a family loses all of its cash assistance soon after it is identified as noncompliant. In some states, such cases become "zero-grant" cases and are counted as part of the TANF caseload for some specified period (usually three months). In most states, the case is closed with a sanction closure code that distinguishes families exiting TANF because of a sanction from those that have left for other reasons.
Nineteen states have implemented either gradual full-family or pay-for-performance approaches to sanctions, which include elements of both partial and full-family sanctions. Under a gradual full-family sanction policy, failure to comply with work requirements leads to an initial grant reduction for a period ranging from one to six months, depending on the state. If a family comes into compliance before the end of the period, it reverts to full-grant status, but if it remains noncompliant at the end of the period, it loses the entire grant. The philosophy behind such sanctions is that full-family sanctions should be imposed only when lesser penalties have failed to promote compliance. Pay for performance, implemented only in Wisconsin, can resemble either a partial or full-family sanction, depending on whether a family is fully or partially noncompliant. Under this model, a family receives assistance only for the hours it participates in required work activities. If it does not participate at all, it does not receive any assistance; thus, the policy operates in the same manner as an immediate full-family sanction. However, if the family participates to some degree, it receives payment for the hours of participation such that the policy functions like a partial sanction.
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The implementation of more stringent sanctions has been accompanied by keen interest in how sanctions are used and their associated outcomes. In a review of earlier studies on the use and effectiveness of TANF sanctions (Pavetti, Derr, and Hesketh, 2003), we found the following:
The research questions examined in this study are similar to those addressed in previous studies. However, two features make the present study unique: (1) we use comparable methodologies and data from multiple states, which provides much greater contextual information for understanding how and how often sanctions are used, and (2) we combine analysis of case study, administrative, and survey data to provide a comprehensive analysis of the use of TANF sanctions. These features permit us to add to both the depth and breadth of our knowledge of how TANF sanctions are being used to encourage participation in work activities and movement toward self-sufficiency.
Our examination focuses on four important research questions:
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We selected the three study states based on the availability of data collected for other research studies, which could be used to examine the use of TANF sanctions.(1) In each state, we supplemented the existing data with additional data collected specifically for the present study.
Administrative Data. In each of the study states, we use administrative data on single- parent families (excluding child-only cases) to examine how often TANF sanctions are imposed and how the rate of return to the welfare system compares between sanctioned and nonsanctioned families. Our analysis examines the use of TANF work sanctions among a cohort of recipients on the TANF caseload whom we follow over time. In all three states, the administrative data include information on basic demographic characteristics as well as welfare receipt and sanctioning status over time. The time at which the administrative data sample was selected for the study varies across the states, but in all cases it occurred several years after major reforms were implemented and after substantial caseload declines had already occurred.
In New Jersey, the data come from administrative records on all 51,539 single-parent families that received TANF benefits at any time between July 2000 and June 2001. In Illinois, the data come from administrative records for the 33,495 single-parent cases that were authorized to receive a TANF grant in November 2001. Also included in Illinois are a small number of "zero-benefit cases," which include some fully sanctioned families whose TANF grants had not yet been closed. In South Carolina, the data come from administrative records for the 10,852 single-parent cases that received a TANF grant in June 2002.
Survey Data. Survey data are available for a randomly selected subsample of recipients in all three states, and comparable data are available in South Carolina and Illinois. South Carolina and Illinois both fielded a telephone survey of a subsample of recipients to examine the assets and liabilities of the "current" TANF caseload. While each survey included some state-specific questions, most questions were identical, ensuring comparability across the states. In Illinois, a sample of 416 single parents was interviewed between November 2001 and March 2002. In South Carolina, a sample of 1,128 families was interviewed between August and November 2002. In New Jersey, a follow-up survey of 1,219 families conducted between April and August 2002 as part of the Work First New Jersey evaluation gathered detailed information on a wide variety of topics, including timelines of employment and earnings. In this study, we analyze information for a subset of 126 single parent cases from the Work First New Jersey survey who received a full family sanction during the follow-up period and had a year of follow-up data after receiving a sanction.(2)
Case Studies. For purposes of the present study, we conducted case studies of the implementation of TANF work sanctions in two local offices in each of the three states. The states selected the local sites, although we asked the states to select at least one local site that illustrates innovative approaches to implementing sanctions and demonstrates success in overcoming implementation challenges. We asked for the second site to be located near the first and, if possible, for that site to have followed a different approach to implementing sanctions. We conducted site visits to each study site in winter and spring 2003. A two-person team, made up of a researcher from Mathematica Policy Research, Inc. (MPR) and a research analyst from our subcontractor, AFYA, Inc., conducted the visits, which lasted about three days per state. During the visits, we interviewed TANF administrators, case managers, eligibility workers, and employment service providers. We also reviewed a small number of cases with workers and obtained written reports and copies of sanction notices and other relevant materials.
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This study was designed to increase our understanding of how and how often work-oriented sanctions are used. As is true of many studies of its kind, this study suffers from several important limitations. First, the study uses data that was collected for other purposes. While some comparable administrative data is available for all the states, some data of interest is available for only one or two states. More importantly, because the study states were selected based on the availability of data they do not represent the full range of state experiences in using TANF work-oriented sanctions. Because information on the use of sanctions is scant, we have no way of knowing how well their experiences represent the experiences of other states. Second, because we do not have data that compares the experiences of recipients who have and have not been subject to a sanction or have been subjected to different sanction policies, we cannot answer important questions about the effectiveness of sanctions in general or the relative effectiveness of different types of sanctions. Finally, because our site visits were conducted to only two local sites and we conducted interviews with a limited number of program staff, we cannot be certain that we captured all important aspects of how sanctions have been implemented at the local level.
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Sanction and Related Policies. The three study states all implemented some variant of a full-family sanction (see Table I.1). Illinois and New Jersey both implemented a gradual full-family sanction while South Carolina implemented an immediate full-family sanction. When Illinois sanctions a family for the first time, it reduces the grant by 50 percent for up to three months and then eliminates the grant entirely. New Jersey eliminates the adult portion of the grant for three months and then closes the case. Illinois and New Jersey both require a sanction to be in place for a minimum of one month before lifting it. South Carolina lifts the sanction immediately after the recipient comes into compliance with program requirements; however, recipients are required to participate for 30 days before they are considered to be in compliance, making the minimum sanction period comparable to that in New Jersey and Illinois. In New Jersey, recipients must participate in program activities for 10 consecutive days before their sanction is lifted. In Illinois, the compliance period and requirements are left to the discretion of the case manager.
In Illinois and New Jersey, sanctions are more stringent if the client is noncompliant for a second or third time. In both states, the minimum sanction period increases to three months for the second period of noncompliance; in New Jersey, the case closes in the second month if the family is not complying with program requirements. In both Illinois and New Jersey, a third incident of noncompliance results in immediate case closure.
| Dimension | All States | Illinois | New Jersey | South Carolina | |
|---|---|---|---|---|---|
| # of States | |||||
| Type of sanction | Partial Gradual full-family Immediate full-family Pay for performance |
15 18 17 1 |
Gradual full-family | Gradual full-family | Immediate full-family |
| Minimum duration | No minimum, until compliance 1 month 2-3 months |
28 15 8 |
1 month | 1 month | No minimum |
| Cure requirements | Willingness to comply Period of compliance Unknown |
9 26 16 |
Willingness to comply | Compliance for 10 consecutive days | Compliance for 30 consecutive days |
| Approach to repeated noncompliance | More stringent sanction Longer minimum duration Stricter cure requirements Reapplication for benefits Life-time ban on assistance |
10 32 24 24 7 |
3-month minimum duration; immediate full-family for third sanction |
3-month minimum duration; immediate full-family for third sanction |
Same as for first instance |
| Source: Welfare Rules Database, Urban Institute 2000; State Policy Documentation Project. | |||||
The role sanctions play in welfare reform may be a function not only of the structure of sanctions but also of the context in which they are applied. Of particular importance is whether a state or local welfare office imposes any preapproval work-related requirements that might effectively serve as a sanction. Among the study states, Illinois is the only state to impose such a requirement. All families applying for TANF in Illinois are assessed and must complete a Responsibility and Service Plan (RSP) that contains goals and activities in which the client must participate while their application is pending. Many applicants are expected to participate in a 30-day up-front job search program, however, some might be asked to obtain services such as mental health or substance abuse treatment. If a family fails to follow their RSP, their application for TANF benefits can be denied. In practice, this requirement functions much like an immediate full-family sanction; the only difference is that, in the case of the up-front requirement, the TANF case is never opened. We would expect such a policy to reduce the number of families sanctioned, because some families that might have been sanctioned once on the rolls never actually become a TANF case.
The "Cost" of a Work-Oriented Sanction. The cost of a work-oriented sanction depends on the initial grant amount and the influence of the sanction on other benefits (see Table I.2). The financial cost of the initial grant reduction for a family of three in Illinois and New Jersey is $198 and $141, respectively; for a full-family sanction, the cost is $396 in Illinois and $424 in New Jersey. The cost of a full-family sanction in South Carolina is $201. South Carolina adds to the cost of the sanction by eliminating Medicaid benefits for the noncompliant adult. In all three states, families are not eligible to receive child care and other work supports until they begin participating in work activities.
| Illinois | New Jersey | South Carolina | |
|---|---|---|---|
| TANF grant | Initial partial sanction: Half grant: $198 Full-family: $396 |
Initial partial sanction: Adult portion: $141 Full-family: $424 |
Full-family: $201 |
| Medicaid | No change due to sanction | No change due to sanction | Loss of eligibility for nonpregnant adults |
| Work supports (e.g., child care, transportation) | Eligible only if participating in work activities | Eligible only if participating in work activities | Eligible only if participating in work activities |
| Source: Welfare Rules Database, Urban Institute 2000; State Policy Documentation Project. | |||
Client Characteristics. The characteristics of the single-parent caseloads in the three study states are similar in many respects but also show some important differences (see Table I.3). The age distribution is almost identical in Illinois and New Jersey, but the caseload in South Carolina is considerably younger; 43 percent of the caseload in South Carolina is age 24 or younger compared with 35 and 33 percent in Illinois and New Jersey, respectively. African Americans account for the largest share of each caseload, but for a smaller share of the caseload in New Jersey — the only study state that includes a substantial number of Hispanic families. South Carolina's single-parent population is somewhat more educated, with almost two-thirds having completed high school. The caseload in New Jersey has the largest representation of families with just one child and the fewest number of families with a child under the age of three. Finally, the states show different durations of the current TANF spell. With 39 percent of its caseload in the midst of a TANF spell that has lasted 25 or more months, Illinois claims the greatest representation of long-term cases on its caseload. In New Jersey, 27 percent of cases have received TANF continuously for 25 or more months while, in South Carolina which has a two-year time limit, only 6 percent of the caseload has received assistance for this long. (Illinois and New Jersey both have a 60-month time limit and Illinois "stops the clock" for families who are working 30 or more hours per week.)
| Characteristics | Illinois | New Jersey | South Carolina |
|---|---|---|---|
| Female | 98 | 95 | 98 |
| Age (years) | |||
| Younger than 20 | 8 | 9 | 11 |
| 20-24 | 27 | 24 | 32 |
| 25-29 | 21 | 19 | 20 |
| 30-39 | 30 | 31 | 25 |
| 40 or older | 13 | 17 | 12 |
| Race/Ethnicity | |||
| AfricanAmerican,Non-Hispanic | 82 | 57 | 73 |
| White,Non-Hispanic | 12 | 14 | 26 |
| Hispanic/other | 7 | 29 | 1 |
| Marital Status | |||
| Never married | 84 | 78 | 71 |
| Ever married | 17 | 22 | 29 |
| Education | |||
| Lessthanhighschooldiploma/GED | 49 | 46 | 36 |
| High school diploma/GED | 40 | 41 | 50 |
| More than high school diploma/GED | 11 | 10 | 14 |
| Number of Children on TANF Case | |||
| 0 | 2 | 4 | 1 |
| 1 | 29 | 54 | 37 |
| 2 | 28 | 25 | 34 |
| 3 | 20 | 11 | 18 |
| 4 or more | 21 | 6 | 10 |
| Age of Youngest Child on Case(years) | |||
| Younger than 1 | 27 | 15 | 11 |
| 1-3 | 26 | 18 | 37 |
| 3-5 | 17 | 20 | 22 |
| 6 or older | 30 | 47 | 31 |
| Duration of Current TANF Spell (months) | |||
| Fewer than 6 | 22 | 51 | 52 |
| 6-11 | 18 | 10 | 28 |
| 12-24 | 21 | 12 | 15 |
| 25ormore | 39 | 27 | 6 |
| Number of TANF Cases | 33,478 | 51,539 | 10,852 |
| Source: Analysis of state administrative data
by Mathematica Policy Research, Inc. Note: Some distributions do not add to 100 due to missing data or rounding. |
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TANF Administrative Structure. The implementation of welfare reform required local welfare offices to expand their capacity to provide employment services and monitor their use. Many expanded their reliance on contracted service providers and restructured staff responsibilities. As shown in Table I.4, the study sites use a variety of administrative arrangements to provide employment services to TANF recipients and to track program participation.
In each of the study sites, in-house welfare agency staff provide case management. Welfare case managers have primary responsibility for conducting assessments, developing employment plans, monitoring and tracking participation, and imposing and lifting sanctions. In some offices, they may also provide job readiness services to TANF recipients on their caseload, assisting with such tasks as completing a resume or filling out a master application. In addition to its regular case managers, one local welfare office in New Jersey uses intensive case managers with reduced caseloads to work with hard-to-employ clients and those nearing the welfare time limit. When contracted employment service providers are used, TANF clients referred to these providers receive additional case management from staff at the providers. However, primary responsibility for developing and monitoring an employment services plan rests with the case managers in the TANF agency.
In all the local sites, employment and training service providers (some contracted and some in-house) play an important role in implementing TANF sanctions. Their responsibilities include: (1) providing information to recipients on work requirements and consequences for noncompliance; (2) providing work-related activities in which TANF recipients can participate; (3) monitoring daily participation in work activities; and (4) participating in case staffings, conciliation reviews, and case conferences for TANF recipients who are experiencing participation problems or are at risk of sanction. In four of the six sites, one or more contractors deliver these services. In the two sites in South Carolina, specialized employment units staffed by workers employed by the TANF agency deliver the needed services.
Several of the welfare offices created specialized positions or units to streamline the process for implementing TANF sanctions. In one local office in Illinois, an employment and training liaison handles monitoring and tracking of all 900 TANF recipients participating in employment and training services. Both local offices in New Jersey created separate units to implement eligibility changes for sanctioned TANF recipients. The units handle all transactions involved in executing a sanction and monitoring its progression over time. Finally, one local office in New Jersey hired a specialized social worker to help clients reverse their sanction. She conducts a weekly sanction compliance meeting and assists clients with meeting the work requirements so that their sanction can be lifted.
| Illinois Office A |
Illinois Office B |
New Jersey Office A |
New Jersey Office B |
South Carolina Office A |
South Carolina Office B |
|
|---|---|---|---|---|---|---|
| TANF caseload: Total Work mandatory |
1,400 500 |
1,500 900 |
4,200 2,000 |
2,400 1,400 |
1,513 690 |
833 350 |
| Approach to case management | Combined eligibility and case management | Combined eligibility and case management | Separate eligibility worker and case manager | Separate eligibility worker and case manager | Separate eligibility worker and case manager | Combined eligibility and case management |
| Caseload size per case manager | 115 TANF cases | 150-160 TANF cases | 150-200 TANF cases | 100-125 TANF casesa |
150-170 TANF cases | 200 benefit cases (50 TANF) |
| Employment services provided in-house | Case management | Case management | Case management | Case management | Case management Home visits Job search and job readiness (specialized unit) |
Case management Job search and job readiness (specialized unit) |
| Contracted employment service providers | 10 service providers | 6 service providers | 1 provider | 5 service providers | None | None |
| Types of responsibilities contracted out | Employment and training services |
Employment and training services Mental health/substance abuse |
Employment and training services | Employment and training services |
n/a | n/a |
| Employment service provider's involvement with the implementation of TANF sanctions | Monitoring and tracking Participation in conciliation reviews |
Monitoring and tracking Participation in conciliation reviews |
Monitoring and tracking |
Monitoring and tracking | Monitoring and tracking | Monitoring and tracking |
| Frequency and types of reporting on program participation | Monthly reports | Monthly reports | Weekly reports | Weekly reports | Immediately after non-participation | Immediately after non-participation |
| Specialized units or staff for implementing or lifting sanctions | None | Employment and training liaisonb | Sanctions unit (manages eligibility changes) | Sanctions unit (manages eligibility changes) Specialized social worker |
None | None |
| a Case managers in the EFFORTS program
for hard-to-employ recipients carry caseloads of 40-50 cases. Social workers
for those nearing the time limit carry caseloads of 50-75 cases. b The employment and training liaison monitors and tracks 900 TANF recipients served in office B. She imposes and lifts all TANF sanctions. |
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(1) In New Jersey, data were collected for a comprehensive evaluation of Work First New Jersey, a multiyear study conducted by Mathematica Policy Research, Inc., for the state of New Jersey. In Illinois, data were collected for a study of the characteristics and service needs of Illinois' current TANF caseload. The study was conducted by Mathematica Policy Research, Inc. with funding from ASPE and the Annie E. Casey Foundation. In South Carolina, data were collected as a part of an ASPE-funded multistate project to understand the characteristics and needs of families receiving TANF cash assistance.
(2) All three of the surveys had a response rate of at least 75 percent.
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