Screening and Assessment in TANF\Welfare-to-Work: Ten Important Questions TANF Agencies and Their Partners Should Consider. What is the work participation rate?

03/01/2001

Federal law establishes the work participation rates that states must meet or face penalties44 (shown in Table 1). The participation rate calculations are quite complicated, but worth discussing here because they have figured prominently in the specific program and policy choices made by states. The calculation of a state's annual participation rate is based on the average of the state's monthly participation rates in that year and is calculated as the number of families receiving TANF "assistance" that include a working adult or an adult engaged in countable work activities (discussed below) for the required number of hours per week as a percentage of the number of families receiving TANF "assistance" subject to penalty for refusing to work in that month.45

Table 1: Annual Work Participation Requirements Under the TANF Block Grant

Fiscal Year All Families a Two-Parent Families
2000 40 percent 90 percent
2001 45 percent 90 percent
2002 50 percent 90 percent

Source: Greenberg, Mark and Steve Savner 1996.

a  Note the all families rate is only for families in which there is an adult.

 

The required participation rate for each state is reduced by one percentage point for each percentage point the state's average monthly TANF caseload in the prior year is below its FY1995 average monthly AFDC caseload (commonly referred to as the caseload reduction credit).46 Caseload reduction credits have been an important factor in states' early abilities to meet the required participation rates. Because of significant caseload declines, some rates are substantially lower than those established by PRWORA giving states even greater flexibility to assign clients to a broad range of work and self-sufficiency services. However, some states anticipate that meeting participation rates will become more difficult as the participation rates increase over time and as residual caseloads are likely to contain a higher proportion of clients with disabilities and barriers to work.

The work participation requirements for all families allows flexibility in several ways. In FY2000, states must have 40 percent of all families with an adult in countable work activities for 30 hours per week (assuming no caseload reduction credit). However, states can allow alternative activities for all hours for the 60 percent not needed to meet the FY2000 work participation requirements. Additionally, states should consider that some alternative activities or treatment will be short-term, and, as a result, removes clients from the work participation calculation for only a short period of time.

Another source of flexibility in meeting work participation rates stems from the small numbers of recipients who will be participating in alternative activities (e.g., treatment) at any given time. This flexibility may diminish if the percentage of recipients with significant barriers to work increases. Further, states have the flexibility to allow clients to engage in activities that don't count toward the work participation rate, once they have participated in countable activities for the required number of hours per week, thus contributing to the achievement of the participation rate. While some flexibility exists here, many clients with disabilities or unobserved barriers will be unable to meet this 30 hour per week requirement. However, for some clients, treatment may not be full-time, and, as a result, some clients may be able to combine treatment with part-time work or job search.

An example of using the flexibility within the TANF system is the Integrated Resources for Independence and Self-Sufficiency (IRIS) Program in Minneapolis, Minnesota. In Minneapolis, TANF clients who are believed to have a substance abuse or mental health problem are referred to IRIS. While in the IRIS program, a wide variety of activities are considered allowable work activities including: assessment for substance abuse or mental health problems, counseling (individual, family, and group), substance abuse treatment, medical appointments, support groups, basic education, GED, and English-as-a-Second-Language classes.

New Hampshire grants extensions to TANF clients with learning disabilities who were unable to complete education and training programs in the time allotted due to their disability. In the New Hampshire TANF employment program, vocational skills training and post-secondary educational activities are limited to 24 months full-time attendance or 36 months part-time attendance. Basic educational classes are limited to 12 months (extendable by 12 more months if there is a "high likelihood of GED attainment"). New Hampshire grants extensions to the time allowed in these activities (not to the lifetime limit on TANF benefit receipt) to those clients who are diagnosed with a learning disability.47


44  States face a base penalty of five percent of their federal TANF block grant for failing to meet the
work participation rate. The penalty may be increased in subsequent years if the failure to achieve the rate continues. Reductions from the maximum penalty may also be granted depending on the degree of non-compliance.

45  Families that have been sanctioned for three or more of the last 12 months are excluded from the rate calculation.

46  No caseload reduction credit is awarded for caseload declines due to changes in eligibility criteria.

47  To receive an educational/training activity extension clients with a learning disability must have an Individual Education Plan identifying education goals, milestones, accommodations, timeframes and action plans.

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