Indicators of Welfare Dependence: Annual Report to Congress, 1997. Administrative Data Issues

10/01/1997

Although the abundance of program options presents a challenge to any data collection system, it is clear that the collection and reporting of state data on the nature and amount of assistance provided to eligible families under TANF will be much more valuable and descriptive of welfare receipt than national survey data alone2. The administrative data that is required to be reported on federal TANF assistance is substantial and will be extremely useful in providing information on families who receive TANF assistance. However, it will not be a complete representation of the multi-faceted TANF program that can be meaningfully compared to the AFDC program it replaced.

One of the biggest causes of uncertainty about the viability of data collection efforts to capture TANF program information is the change that took place in the nature of the program. While the AFDC program had always allowed states the flexibility to set eligibility rules, passage of the PRWORA dramatically increased states' ability to create assistance programs designed to meet each state's unique needs. Under TANF, federal block grants are provided to states for use "in any manner reasonably calculated to accomplish the purpose" of the law. Federal TANF funds cannot be used for assistance to families without minor children, to individuals who fail to cooperate in establishing paternity and collecting child support, to families who do not assign child support rights to the state, to teenage parents who do not attend high school or training and live in adult-supervised settings, or for assistance to adults for more than five years. Federal TANF funds can be used for virtually any other purpose that would accomplish the objectives of the block grant.

Under TANF, states are required to maintain a certain level of historic state expenditures, but they are not bound by the same requirements as federal TANF funds as long as the federal and state funds are not co-mingled. Some states may utilize the flexibility provided within TANF to separate the federal TANF dollars from the state maintenance-of-effort (MOE) funds, and operate separate programs with each funding stream. In order to accurately measure dependence, it is critical that future indicators include data that describes both federally-funded TANF assistance and assistance provided with state MOE funds.3

Also, the flexibility provided by TANF will almost certainly increase the variation in the type of assistance received. Assistance to needy families can be provided in cash or through in-kind services such as wage supplements to employers, child care, one-time heating or cooling assistance, individual development accounts, and assistance for qualified aliens. Moreover, as time goes on TANF assistance will likely become more and more associated with performance of some kind of work activity, from work required to obtain benefits to training to subsidized employment and may be provided by the welfare office or an employer. The Advisory Board's proposed definition of dependence discussed in Chapter 1 calls for future reports to distinguish between assistance provided in relation to work and assistance provided unrelated to work. As states more fully develop their TANF programs it will become increasingly important to understand what types of assistance are provided and by whom.

Finally, TANF program parameters and operating rules vary across states, and sometimes within states. These variations are likely to increase as states have an opportunity to further utilize the flexibility provided under TANF. The development of data sources that can illustrate these indicators at the state level will become even more important as the "national" data provided by national surveys further mask the differences across states and present an incomplete picture of welfare receipt in the United States.

It is generally desirable to capture a sufficient level of detailed data about the TANF program and its recipients and benefits to permit the development of AFDC/TANF time series data for tracking several of the indicators and risk factors associated with welfare receipt. In addition to the general desirability, however, the quality and level of detail of TANF data takes on even greater importance in the context of this report's proposed primary indicator of welfare dependence. For purposes of discussion, this report proposes the following definition of the primary indicator of dependence:

A family is dependent on welfare if more than 50 percent of its total income in a one-year period comes from AFDC/TANF, Food Stamps and/or SSI, and this welfare income is not associated with work activities. Welfare dependency is the proportion of all families who are dependent on welfare.

Public debate on any number of fine points of the merits of this definition of welfare dependence will be influenced by the availability of TANF data. Several questions about the proposed definition come immediately to mind:

  • What should be considered "income?" Cash or near cash (like food stamps) benefits only? Should the value of services provided to employed recipients and in-kind benefits be counted? Should one-time emergency assistance provided in lieu of a determination of on-going TANF eligibility be counted?
  • What work-related activities should be considered? Should working to obtain benefits count as work? Should job skills training be counted? What about education directly related to employment? Should state-funded payments to employers for the purpose of supplementing the wages of employed recipients be counted, or only federally-funded payments?

Regardless of the choices made for this report or whether this proposed definition is ultimately determined to be a useful indicator of welfare dependence, the quality of the public debate will be influenced by the quantity and quality of the available data. Questions about TANF receipt and the proposed dependence definition abound. For instance, who will be considered TANF "recipients?" Will they include families who receive cash benefits only, or will families who receive some cash and some services also be counted? What about families who receive only services? Will "recipients" include only those families who receive federal TANF-funded benefits? If the definition includes families who receive benefits under state-funded programs that count toward the state's TANF MOE requirement, will data on those families also be collected and reported by states? Will TANF data be available to extend the time series on the proposed definition? Will the TANF data distinguish between cash and in-kind benefits? Will the data identify whether work was required to obtain cash benefits? Will the data on participation in work-related activities differentiate between work and training?

These data reporting questions and others like them are being debated for many reasons unrelated to this report. Certainly, the federal government's role in requiring states to collect and report such data in the context of block grants is a major consideration. However, the Welfare Indicators Act was not repealed by the PRWORA, and while it is neither the purpose nor intent of the annual Indicators reports to evaluate the outcomes of welfare reform, these reports continue to be potentially useful tools in tracking the impacts of the PRWORA on AFDC/TANF, Food Stamps, and SSI recipients, and in tracking trends in predictors or risk factors associated with welfare receipt.


2 Most national surveys are not currently designed to provide reliable estimates of state-level data. Those that are representative at the state level can currently only provide reliable estimates for the largest states.

3 Some examples of assistance states are considering providing to eligible families with state funds that qualify as TANF MOE expenditures include: benefits to families after time limits expire, benefits to individuals who are enrolled in 2- or 4-year college education programs, and state-funded food stamp benefits to legal immigrants who are ineligible to participate in the Food Stamp Program as a result of PRWORA.