Description and Assessment of State Approaches to Diversion Programs and Activities Under Welfare Reform. D. What is Required for the Application Process


The process of diverting TANF applicants from going on the TANF rolls by assessing their potential eligibility for lump sum payments can also affect the TANF application process. There is substantial variability among the states with respect to what is required for the application process.

Nine states - Colorado, Idaho, Maine, Maryland, Montana, Rhode Island, Texas, Virginia, and Washington, require that individuals fully complete the TANF application and eligibility verification process before the lump sum payment will be authorized. The remaining states use a range of approaches to processing the authorization for lump sum payments and most require that applicants provide just enough information for the caseworker to presume the likelihood of eligibility for TANF assistance. Seven of these states - Alaska, California, Florida, Minnesota, Nevada, South Dakota, and Utah - do not explicitly require income verification Even where income verification is not required and limited information is acceptable, states may require that the TANF application be completed - this is clearly the case in Minnesota. For most of the states requiring limited information, however, the TANF application is not likely to be completed or the completed application may be withdrawn when lump sum payments are authorized.

This variability in the application process may be greater in states where counties are primarily responsible for administering the lump sum payment programs. Six states - California, Colorado, Iowa, Maryland, North Carolina and Wisconsin - have provided for county administration of these diversion programs. Counties in these states have been given substantial discretion in determining how they implement and administer the lump sum payment programs. This discretion will no doubt affect how the application process is handled.

There are reasons to be concerned about the variability in the application process, particularly with respect to whether or not a TANF application may be completed or withdrawn. Given that all states reported using a joint application for TANF and for other benefits such as Medicaid and Food Stamps, a withdrawn or incomplete application raises the issue of whether the application for these other services is processed when an applicant is diverted with lump sum payments. Although most states asserted that a TANF applicant's application for Medicaid and Food Stamps is processed immediately and thoroughly notwithstanding their status as a diverted recipient, there could be an increased likelihood of diverted applicants' eligibility for Medicaid "falling through the cracks" in states where a diverted applicants' TANF application is not completed or withdrawn. Interviews with states that only collect limited applicant information suggest that some lump sum recipients may not be offered additional services for which they may otherwise qualify.

South Dakota provides an example of an unusual approach to administering the lump sum payment program that could create the potential for lump sum recipients not to receive the additional services for which they may be eligible. In South Dakota, only applicants who are not exempt from work requirements may be considered for lump sum payments. These applicants must be processed by the Department of Labor (DOL) where they are also screened for lump sum payment eligibility. If the applicants accept diversion payments, then the DOL must ensure that the applicants either go or return to the Department of Social Services (DSS) office to complete the full application for Medicaid and Food Stamps. Applicants who receive diversion payments do not complete the TANF application and are recorded in the state's information system as either an incomplete or denied application due to receipt of diversion.