Although PRWORA is known as the legislation that reshaped the nation’s cash assistance landscape, it may also have a significant impact on kinship care. Under PRWORA, Congress required States to “consider giving preference to an adult relative over a non-related caregiver when determining a placement for a child, provided that the relative caregiver meets all relevant State child protection standards.” As noted above, most States were already giving preference to kin. Beyond this stated preference, though, PRWORA could have a major impact on kinship families because it replaced AFDC, one of the major economic supports for both public and private kinship families, with TANF and made a variety of other statutory and regulatory changes.
Figure 5. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996
Under PRWORA, States enjoy increased flexibility in spending and augmenting Federal financial assistance dollars. The new law outlines a number of minimum requirements and restrictions on how Temporary Assistance for Needy Families (TANF) funds may be spent. Specifically, the law requires that, barring certain exemptions, adults must satisfy work requirements in order to continue receiving federally subsidized financial assistance. Likewise, States must meet overall work participation rates to continue to draw down their full Federal TANF grant. Barring certain exemptions, reliance on federally funded temporary assistance is now limited to a lifetime maximum of five years in cases that include adults.
First, kinship caregivers are no longer entitled to federally subsidized income assistance in the form of family or child-only grants. Second, PRWORA outlines work requirements for all adult recipients of assistance. A State can choose whether or not to exempt kinship care providers from individual work requirements, but it must include such persons in its overall work participation rate. However, only families that include an adult or minor head of household must be included in calculating a State’s work participation rate, so States are not required to include kin who receive child-only payments. Finally, the new welfare law restricts the length of time an individual can receive federal benefits to 60 months in a lifetime. Specifically, the law states that “States may not use Federal funds to provide assistance to a family that includes an adult who has received assistance for more than five years.” Child-only payments are exempt from this requirement.
In November, 1997, HHS issued a Notice of Proposed Rulemaking (NPRM) for implementation of the TANF program. In the preamble, HHS stated that it was concerned that States might be able to avoid the work participation rates and time limits by excluding adults (particularly parents) from the eligible cases. Given the flexibility available to States under the statute and regulations, it appears possible that States could protect themselves from the requirement and associated penalty risk by converting regular welfare cases into child-only cases (HHS, 1997).
The agency noted that it would prohibit States from converting welfare cases to child-only cases for the purposes of avoiding penalties and would require States to report annually on their number of child-only cases and why the adults in these households were excluded. In the Final Rule, published on April 12, 1999, HHS acknowledged that it had received numerous comments on this section of the NPRM. Some commentors challenged HHS’s legal authority to regulate in this area, while others questioned how HHS would be able to determine States’ intent in classifying cases as child-only. In summarizing these comments, HHS noted “of particular concern was the effect of our proposal on State efforts to keep children in the homes of relatives, in lieu of foster care placements.”
In response to these comments, HHS decided “the most appropriate response at this point is to give states leeway to define families in ways that they think are most appropriate while gathering better information on how child-only policies might be affecting the achievement of TANF goals.” Under the Final Rule, HHS neither prohibits States from converting cases into child-only, nor threatens to add such cases back into the work participation rate and time-limit calculations. Instead, in the separate annual reporting on child-only cases, HHS has added a data element to the TANF Data Report that will identify the specific cases in the desegregated sample that have become child-only cases.