Before the passage of PRWORA, welfare offices reduced the AFDC payment for families with a household head who failed to participate in the work activities mandated under the Job Opportunities and Basic Skills (JOBS) training program. Believing that the penalty was not sufficiently severe to influence household heads' participation decisions, beginning in the early 1990s, many states applied for and received waivers to impose more stringent sanctions for program noncompliance. The majority of states then used TANF's flexibility to implement more stringent sanctions, though some chose to retain the structure that was in place before the advent of TANF. Under TANF, states are required to impose at least a "pro-rata" grant reduction for noncompliance but can impose a greater penalty if they choose to do so. It is also important to note that while state sanction policies are most often compared on the amount and structure of the benefit reduction, they often differ along other important dimensions such as the minimum duration, cure requirements, and approaches to repeated noncompliance (Pavetti et al. 2003).
Currently, state approaches to sanctioning follow one of four models: (1) partial, (2) gradual full-family, (3) immediate full-family, and (4) pay for performance. Fourteen states and the District of Columbia have implemented a partial sanction, which, as the name implies, reduces a family's cash assistance grant though the family continues to receive some portion of its benefits. In most cases, a partial sanction eliminates the noncompliant adult(s) from the grant, which all states did before the implementation of welfare reform. Some states that impose a partial sanction have deviated from this structure and instead reduce the family's grant by a specified percentage.
Seventeen states have implemented an immediate full-family sanction. When such a policy is in place, a family loses all of its cash assistance soon after it is identified as noncompliant. In some states, such cases become "zero-grant" cases and are counted as part of the TANF caseload for some specified period (usually three months). In most states, the case is closed with a sanction closure code that distinguishes families exiting TANF because of a sanction from those that have left for other reasons.
Nineteen states have implemented either gradual full-family or pay-for-performance approaches to sanctions, which include elements of both partial and full-family sanctions. Under a gradual full-family sanction policy, failure to comply with work requirements leads to an initial grant reduction for a period ranging from one to six months, depending on the state. If a family comes into compliance before the end of the period, it reverts to full-grant status, but if it remains noncompliant at the end of the period, it loses the entire grant. The philosophy behind such sanctions is that full-family sanctions should be imposed only when lesser penalties have failed to promote compliance. Pay for performance, implemented only in Wisconsin, can resemble either a partial or full-family sanction, depending on whether a family is fully or partially noncompliant. Under this model, a family receives assistance only for the hours it participates in required work activities. If it does not participate at all, it does not receive any assistance; thus, the policy operates in the same manner as an immediate full-family sanction. However, if the family participates to some degree, it receives payment for the hours of participation such that the policy functions like a partial sanction.