Description and Assessment of State Approaches to Diversion Programs and Activities Under Welfare Reform. C. Who Is Eligible for Lump Sum Payments


In general, the eligibility criteria for lump sum payments require that the TANF applicant have a short-term need that can be resolved by the lump sum payment and that, as a result of receiving the lump sum payment, the applicant will have no immediate or future need for TANF assistance.

There is some variability among the states with respect to who can be considered for lump sum payments. Eleven states - Alaska, Arkansas, Iowa, Maine, Montana, Nevada, North Carolina, Rhode Island, South Dakota, West Virginia and Wisconsin - specifically require that TANF applicants considered for lump sum payments have an employment-related need that when solved will allow the applicant to obtain or maintain employment. For example, in South Dakota, only applicants with current employment or the potential for immediate employment and a strong work history are considered for the lump sum payment. In Arkansas, lump sum payments are considered only for applicants who are currently employed but have a problem jeopardizing that employment or for applicants who are promised a job but need assistance securing the job. In Wisconsin, an applicant can be considered for a "Job Access Loan" for any need that is job-related - including payment of rent if an applicant is likely to be evicted and lose their employment as a result of having nowhere to live.

The remaining states do not use the employment-related eligibility criteria and all TANF applicants can be considered for lump sum payments. An exception is Utah where only those applicants who are single parents or who come from a two parent family where one parent is incapacitated can be considered for lump sum payments.

There also appears to be some variability among the states with respect to how much discretion is afforded to caseworkers in determining who is eligible for lump sum payments. In six states - Alaska, California, Idaho, Maryland, Rhode Island and Wisconsin- caseworkers are explicitly given discretion within broad eligibility criteria to determine which TANF applicants are appropriate for lump sum payments. Five other states - Florida, Nevada, Utah, Virginia, and West Virginia - emphasize a collaborative approach between the caseworker and the TANF applicant to determining the appropriateness of participating in the lump sum payment program.

In all states, appropriate candidates for lump sum payments must also be determined as eligible, or likely to be eligible, for TANF assistance. Given this, it is also important to note that participation in lump sum payment diversion is described as voluntary in all states. TANF applicants who are determined eligible for lump sum payments can choose not to accept these payments in lieu of TANF assistance. There are reportedly no negative consequences for exercising such a choice.