Implementation of the Welfare-to-Work Grants Program. A. WtW Objectives and Funding


The two-fold objective of the WtW grants program was to serve the hardest-to-employ and help them obtain employment that could ultimately result in long-term economic independence. Federal regulations specified that the objectives of the WtW grants program were to:

  • "Target hard-to-employ welfare recipients, noncustodial parents, and other low-income parents;" and
  • "Facilitate the placement of eligible individuals into employment opportunities that will help them transition into lasting unsubsidized employment."

Congress recognized that certain populations and certain high-poverty areas might require higher investments of resources over a longer period of time than the regular welfare caseload. Long-term services to achieve economic self-sufficiency were encouraged--beginning a job, either subsidized or unsubsidized, was assumed to be just the first step. WtW funds were also to target individuals in need of intensive services: long-term welfare recipients, high school dropouts, substance abusers, and persons approaching their TANF time limits. In addition, WtW programs could serve noncustodial parents with severe employment problems, regardless of their legal child support status.

To address the employment and service needs of such a diverse target population, WtW grants could fund a broad range of employment services. The types of program activities WtW funds were intended to support included: (1) job creation through short-term public or private sector wage subsidies; (2) on-the-job training; (3) job readiness programs; (4) job placement services; (5) pre-employment vocational educational or job training; (6) post-employment education or training; (7) vouchers for job readiness, job placement or post-placement services; (8) community service or work experience; (9) job retention services; and (10) supportive services such as transportation or child care services, substance abuse treatment, and housing assistance (if such services were not otherwise available to the individual participants receiving WtW services). The emphasis of WtW, though, was on employment rather than training or education.

Congress authorized $3 billion for the WtW grants program--$1.5 billion in FY 1998 and $1.5 billion in FY 1999--to help move welfare recipients into jobs, and included specific provisions about how the WtW funds were to be distributed. About 5 percent of the funds were set aside at the national level for Indian and Native American programs, for evaluation activities, and for federal-level program administration. The rest was distributed through competitive and formula-based grants. One-quarter of the grant funds was distributed competitively based on applications submitted to DOL (these are referred to as competitive grants). The other three-quarters of the federal WtW grant funds were allocated to states according to a formula based on each state's share of the poverty population and number of adults on welfare.

A total of $2.5 billion dollars in WtW grant funds was distributed by DOL in fiscal years 1998 and 1999: $2 billion was allocated by formula to states (formula grants), $472 million was allocated competitively to grantees that submitted applications (competitive grants), and $12.8 million was distributed to 93 tribal program grantees. The rest of the funds appropriated by Congress were devoted to national activities including evaluation and reporting. Governors designated which state agency received and administered the formula funds. The state WtW agency (usually the state workforce development or employment/training department) then distributed 85 percent of the grant to local Job Training and Partnership Act (JTPA) service delivery areas (SDAs)/Private Industry Councils (PICs) (or to the newly established Workforce Investment Boards established under the new Workforce Investment Act, which replaced JTPA), according to the same formula used for allocation of funds to the states. Locally, competitive grantees and SDAs (primarily as formula subgrantees) were responsible for program design, administration, and service delivery.

While TANF is administered at the national level by the U.S. Department of Health and Human Services (HHS), the WtW program is administered by the U.S. Department of Labor (DOL)--but still had to be implemented within the broader context of welfare reform. To receive WtW formula funds, a state had to submit an amendment to its TANF plan to HHS and DOL, explaining generally how the new funds would be used. The grant-funded programs were expected to complement TANF services and programs as they existed in their local communities. Achieving the primary objectives of the WtW grants programs--targetting targeting welfare recipients with the most serious difficulties and providing them with services intended to help them succeed in the job market--required that programs understand the welfare policies and programs in effect in their communities and establish reasonable arrangements for interacting with those programs.

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