The Temporary Assistance for Needy Families (TANF) block grants created by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 give states increased responsibility for welfare programs, along with vast new flexibility and some new constraints. Appendix A provides a detailed summary of work-related provisions in the law. In general, the legislation presents both opportunities and challenges for work first programs:
- States no longer need to obtain federal waiver approval to implement many of the ideas discussed in this guide, as they did under the Aid to Families with Dependent Children (AFDC) program. However, there are some restrictions on the use of TANF funds, and states risk losing some funding if they do not comply with certain requirements.
- In the first years of TANF, many states will have additional funds (due to recent caseload declines) that they can use to make investments in a work first program. While work first approaches have been shown to return more to governments and taxpayers than they cost, there are up-front costs for hiring staff, developing or modifying management information systems, and implementing activities and services.
- The high participation rates required under TANF put pressure on work first programs to work with a broad segment of the welfare caseload. States are required to have 25 percent of all families participating in certain work activities in fiscal year 1997; this rate will increase to 50 percent in 2002 (these rates are reduced if caseloads decline). Participants must be active for at least 20 hours per week (or more, depending on which year it is, family composition, and age of youngest child) in order to count toward the required participation rates. States risk reductions in block grant funding if they do not meet these rates.
- Not all activities count toward the federal participation requirements. For example, job search counts for only up to six weeks per individual (or 12 weeks if the state's unemployment rate is 50 percent greater than the national average) and not for more than four consecutive weeks. Secondary school or a course of study leading to a certificate of general equivalence (except for teen parents) counts only for those hours required in excess of 20 per week. (The first 20 hours of required participation must be in specified work activities; see Appendix A for a complete list.) Program planners should understand these requirements and take them into account when designing their work first program. Some may choose, however, to incorporate activities that do not count toward federal participation requirements if those activities make sense in terms of the state's goals.
- The legislation imposes a five-year time limit on a family's receipt of federally funded assistance (though states can exempt 20 percent of their caseload from the federal time limit due to hardship or risk of domestic violence). Time limits increase the pressure on work first programs to serve all recipients who are subject to the time limit and to help them find employment before they reach the end of their time limit. Time limits also increase the importance of helping recipients keep the jobs they find so that they do not cycle back onto welfare. (See section 40 for more on time limits.)