Welfare-to-Work Grants Programs: Adjusting to Changing Circumstances. 1. Are WtW Grant-Funded Programs Affected by TANF Policies or Funding?

11/01/2003

None of the WtW grantees or program operators in the study sites is a TANF agency, but all of the programs are affected in one way or another by TANF policies, since most WtW participants are current or former recipients of TANF cash assistance. In addition, many of the WtW programs are operated by agencies that also have TANF contracts to provide work-related services to TANF recipients. Thus, both the time limits and the block grant mechanism itself could affect programs like those operated with WtW grants, either because some participants might be reaching their welfare time limit, or because TANF funds and WtW grant funds are "blended" in many programs.

TANF Time Limits

Nationwide, TANF recipients began to reach the federal five-year limit on the receipt of welfare in late 2001. We asked WtW administrators whether the federal five-year TANF time limit has had an effect on their own programs and whether any program modifications were made in light of the fact that some of their participants might be reaching their TANF time limits. If work program participants are approaching their TANF time limits, it is possible that programs might alter their strategies in some way to help individuals prepare for the loss of benefits. For instance, the service delivery model might be altered to accelerate entry into jobs, rather than encouraging enrollment into extended training or education programs.

In 2003, TANF time limits did not seem to have any noticeable effects on either the types of services offered by WtW programs in the study sites or on the number or types of clients served. Administrators in some sites indicated that they had expected to see a substantial number of clients reaching the time limit and going off assistance, but as of Spring 2003, it had yet to happen. None of the WtW administrators in the study sites reported any specific program adjustments made to accommodate the needs of clients who had reached or were close to reaching the time limits. Of course, this is not to say that the TANF-funded work programs themselves have not changed, or that TANF recipients have not been affected by time limits, just that in mid-2003 time limits had not had much effect on programs in the study sites funded with WtW grants.

There are some obvious reasons why these programs have not changed as TANF time limits take effect. First, WtW grantee administrators explained that their state TANF agencies have various policies in place that act as alternatives to the time limit that appear to help buffer the effects of time limits. Some clients can receive extensions of or exemptions from the time limit, and in some states, some individuals can be transferred from TANF-funded benefits to a state program, meaning their monthly welfare checks continue. In Tennessee, for example, a TANF customer service review process requires that a client's time clock be restarted if it can be shown that the client was denied any available services while receiving benefits. Welfare recipients also can move in and out of the time-limited system while receiving various work-related services or participating in approved work programs such as those funded with WtW grants. Similarly, in Washington State, TANF clients are not terminated from receipt of benefits if they continue to participate in some work program; instead they continue to receive benefits under the state-funded program. No participants in the Yakima WtW programs have had their welfare benefits terminated due to time limits, although a few had exceeded the 60 months and were moved to the state program. Staff from TWC in Philadelphia also noted a TANF "time-out" policy, which allows the TANF clock to be stopped for up to one year for various reasons (e.g., short-term physical problems) if a client continues to meet other requirements.

Thus, while policy and program changes may be occurring in the TANF agency in response to the five-year time limit, no additional programmatic changes were identified in the specific programs funded by WtW grants in the study sites. This was true in sites where some TANF funds were being contributed to the program as well as in programs that used WtW funds exclusively.

A second reason why WtW grant-funded programs evidently have not felt it necessary to change programs in response to time limits relates to the flexibility in the WtW eligibility criteria. Several administrators in study sites noted that even if participants lost their TANF status, they would still be eligible for WtW services and most also would be able to continue receiving food stamps and child care. The main program concern would be to identify components or employment that would provide income if TANF payments stop. In programs that use WIA funds as well as WtW and, often, TANF funds, administrators noted that if they were to have any participants reach the point of having their welfare checks terminated, they felt it would not interfere with their ability to complete the program because individuals remained eligible for employment services under WIA whether or not they were receiving TANF.

TANF Funds

While the WtW grant programs in the study sites have not been affected by TANF time limits, there is some evidence that TANF block grant funding constraints have affected these and other work programs in some (but not all) sites. Administrators in a few of the study sites indicated that TANF funds for work activities are becoming somewhat scarce restricted, although they remain an important funding source for work programs in most places, including those operating with WtW grant funds. Again, it is important to note that the administrators with whom we spoke are not in the TANF agencies. Their observations convey the perspective of TANF contractors and service providers, who may not necessarily know why TANF resources seem more scarce restrictive in the past year.

In some study sites, administrators reported that state TANF funds for work programs and related support services in 2003 were lower than they had been two years earlier, and that they were concerned about future TANF funds for work and training activities and for child care. Some administrators noted that they had heard that TANF caseloads were increasing (although they could not confirm this) and that block grant funds for work programs were going to be redirected to pay for cash benefits. In two sites, program administrators explained that state budget reductions were occurring in all agencies, and not just in the TANF agency.

The operational result of tight state fiscal conditions is that in some study sites, there is anxiety about possible service cuts in the coming year, or concern because of budget reductions that have already occurred. In Boston, for example, tight fiscal constraints have reportedly resulted in termination of some TANF contracts and programs, including contracts with One-Stop Career Centers to assess and refer TANF recipients to work or training programs. The ten-year-old TANF Employment Services Program which funded skills training for TANF recipients in Massachusetts was terminated suddenly in June 2003 (six months early). That loss, together with the discontinuation of TANF contracts to the One-Stop Centers, called Career Centers, for structured job search and the elimination of TANF transportation money, contributed to the characterization of the TANF funding situation in that city as "grim." Grantee agencies in West Virginia and Indiana also reported substantial reduction in TANF funding to their agencies, which at least indirectly affected WtW participants who were faced with reduced service options in their communities.

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