Description and Assessment of State Approaches to Diversion Programs and Activities Under Welfare Reform. B. Twenty States Currently Operate Lump Sum Payment Diversion Programs

08/01/1998

As shown by Table II-1, twenty states are currently operating lump sum payment programs formally designed to divert TANF applicants from receiving ongoing assistance. An additional three states have developed program designs and plan to begin their programs before the end of 1998. Alaska and Nevada will implement their programs on July 1, 1998 and October 1, 1998 respectively and Rhode Island will establish a pilot program in selected areas of the state by the end of 1998. Four states not shown in Table II-1, Connecticut, the District of Columbia, New Jersey and Vermont, are in the very early stages of developing lump sum diversion programs. Arizona state law allows the development of such a program but it has not been implemented because of concerns about guaranteeing transitional Medicaid benefits to persons who receive a lump sum payment. In addition to the 20 states that have already implemented lump sum diversion programs, the remainder of this discussion will include the programs in Alaska, Nevada, and Rhode Island because, even though these state have not yet implemented their lump sum diversion programs, they have developed specific designs for their programs.

TABLE II-1. CHARACTERISTICS OF LUMP SUM PAYMENT PROGRAMS (n=23)1
State Date in effect How often can apply for lump sum Maximum Amount for 3-person family Maximum payment formula10 Duration of ineligibility for TANF Repayment terms if applying during period of ineligibility14 Count towards lifetime limit 
Alaska1 7/98 Once-a-year $860 2 months 3 months entire amount must be repaid and method of repayment is prorated  
Arkansas 7/97 no stated limit $612 3 months 100 days cannot reapply//entire amount must be repaid and method of repayment prorated16  
California2 1/98       equivalent to TANF aid months11 entire amount must be repaid; repayment is prorated or counted against the limit ü17
Colorado2 7/97     3 months      
Florida 11/97 one time only $606 2 months 3 months entire amount must be repaid upfront  
Idaho 7/97 one time only $828 3 months 2 for 112 cannot apply for TANF during period of ineligibility  ü18
Iowa2 10/976       equivalent to twice TANF aid months12 no repayment  
Kentucky3 2/97, 8/97 once a year $15007   12 months no repayment but can reapply  
Maine4 8/97 one time only not stated not stated 3 months entire amount must be repaid and method of repayment is prorated  
Maryland 10/97 no stated limit $11648 3 months8 equivalent to TANF aid months11 cannot apply for TANF during period of ineligibility  
Minnesota 1/98 once every three years $30529 4 months equivalent to TANF aid months11 cannot apply for TANF during period of ineligibility  
Montana 2/96 one time only $1350 3 months equivalent to twice TANF aid months12 cannot apply for TANF during period of ineligibility  
Nevada1 10/98 no stated limit $10008 3 months equivalent to TANF aid months11 cannot apply for TANF during period of ineligibility ü18
North Carolina 3/97 once a year $816 3 months none specified13 entire amount must be repaid and method of repayment is prorated13  
Ohio20  10/97            
Rhode Island1   one time only $1662 3 months equivalent to twice TANF aid months12 cannot apply for TANF during period of ineligibility  
South Dakota 9/97 no stated limit $860 2 months  3 months entire amount must be repaid and method of repayment is prorated  
Texas5 11/966 one time only $1000 flat amount 12 months cannot apply for TANF during period of ineligibility with exceptions for children15  
Utah 1/93 every 4 months  $1278 3 months  3 months entire amount must be repaid and method of repayment is prorated ü18
Virginia 7/95 one time only $1416 4 months equivalent to 1.33 TANF aid months11 cannot apply for TANF during period of ineligibility  
Washington 11/97 once a year  $1638 3 months 12 months amount of repayment is prorated and method of repayment is prorated  
West Virginia 1/97-1/98 one time only $759 3 months 3 months cannot apply for TANF during period of ineligibility ü18
Wisconsin19 9/97 no stated limit $1600 depends on need not applicable entire amount must be repaid19  

Few states have had extended experience with lump sum diversion programs. As illustrated by Table II-l, most states implemented their programs within the last three to fourteen months or since late 1996. Montana, Utah and Virginia are the exceptions to this with Utah implementing the first state lump sum payment diversion program in January 1993, Virginia implementing the second such program in July 1995, and Montana implementing the third in February 1996.

In 18 of the 20 states that have lump sum programs already in operation, the programs are available on a statewide basis. Of the remaining two states, Iowa currently operates its lump sum program in three counties with no immediate plans for expansion; and Texas currently operates its lump sum payment program in one county but plans to expand the program to 15 counties in April 1998 and go statewide in August 1998.