PRWORA ended the entitlement to individual families and gave states the flexibility to design their own programs, although attached conditions to the TANF block grant. Some of the more important conditions include:
- Time limits. States must impose a five-year time limit on TANF-funded benefits, although they can exempt up to 20 percent of their caseloads. States can establish shorter time limits, without being penalized, or use state funds to provide assistance to welfare recipients after five years.
- Work requirements. States must achieve minimum work participation rates. In 1997, states were required to have 25 percent of all families meeting the work participation requirement, increasing by 5 percentage points each year until reaching 50 percent in 2002. States can lower the work participation requirements by reducing their TANF caseload; the required work participation rate is reduced by the number of percentage points by which the states caseload is lower than its fiscal year 1995 caseload.
- Sanctions. States are also required to sanction welfare recipients who refuse to meet work participation requirements. It is up to the states to determine the penalty. About 25 percent of states apply full-family sanctions; the remainder sanction adults only or reduce overall grant levels.