PRWORA allows states to exempt up to 20 percent of its caseload from the federal time limit due to hardship.
In addition to the option of funding services and benefits with state funds, PRWORA also gives states the flexibility to continue to fund services with federal TANF funds beyond 60 months for up to 20 percent of its caseload due to "hardship." PRWORA further gives states the flexibility to define what constitutes a hardship. In other words, 20 percent of TANF families who reach the five-year federal time limit and qualify under state-defined "hardship" criteria may continue to receive federally funded TANF benefits and services.
This provides states the opportunity to determine what disabilities or barriers to employment may exist among the remaining TANF caseload, and define hardship such that these individuals receive a time limit exemption. However, many states have little systematic information about the barriers faced by TANF recipients and must consider which barriers to deem worthy of a hardship exemption, while subjecting other clients to benefit termination. States with 60-month time limits will not have clients who reach this limit until August 2002, and, as a result, it is not surprising that many states are in the early stages of thinking about who should be covered by the federal 20 percent hardship exemption rule.