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Tuesday, April 16, 2013

Temporary Assistance for Needy Families (TANF): Welfare Waivers

Gene Falk
Specialist in Social Policy

The Department of Health and Human Services (HHS) announced a new initiative in July 2012, under which it would be willing to waive certain federal work participation standards under the Temporary Assistance for Needy Families (TANF) block grant to permit states to experiment with “alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.” Some in Congress have opposed the Administration’s waiver initiative. The House has twice (once in the 113th Congress; once in the 112th Congress) passed measures to bar HHS from moving forward with granting waivers of the TANF work participation standards. Opponents of the waiver initiative question its legality and the process used in forwarding the initiative, and they claim that granting waivers of the participation standards would weaken the work requirements.

The major provision that HHS would waive is the numerical performance standards that states must meet or risk being penalized through a reduction in their TANF block grant. The TANF statute provides that 50% of all families and 90% of two-parent families included in a participation rate are required to be engaged in work, though few states have ever faced the full standard because this percentage is reduced for certain credits. To be considered engaged in work under the TANF standard, a family must either be working or in specified welfare-to-work activities for a minimum number of hours per week. Pre-employment activities such as job search, rehabilitative activities, and education count for a limited period of time or under limited circumstances. Though these counting rules apply to states, and not directly to individual recipients, they may influence the requirements that states place on recipients.

The new waivers would permit states to have welfare-to-work initiatives assessed using different measures than the TANF work participation rate. Thus, states could test alternative welfare-towork approaches by engaging recipients in activities currently not countable without risk of losing block grant funds. States would have to apply for waivers, which must be approved by HHS and the Office of Management and Budget (OMB). States would also be required to monitor performance measures and evaluate the alternative welfare-to-work program. HHS also indicated it might waive some requirements that apply to states for verifying work activities. As of April 3, 2013, no state had requested a waiver.

The new initiative would allow the first new waivers to test welfare-to-work strategies in more than 15 years, although waivers were used extensively in the years immediately preceding the 1996 welfare reform legislation. The pre-welfare reform research found that “work-first,” education-focused, and certain “mixed strategy” programs all moved recipients from welfare to work. However, the education-focused programs did not outperform the “work-first” programs even over a five-year timeframe. This lent support to TANF’s focus on rapid job attachment and limits on counting education and training toward the participation standards. This research is now 15 to 20 years old, and certain newer workforce strategies (e.g., “career pathways”) have yet to be tested in a welfare-to-work setting. The waiver initiative would also allow states to evaluate their welfare-to-work programs by focusing on outcomes, such as the rate at which recipients leave welfare for work, rather than participation. This might focus state behavior on increasing such outcomes. However, it could also alter state behavior in ways not anticipated or desired by policymakers.

Date of Report: April 3, 2013
Number of Pages: 43
Order Number: R42627
Price: $29.95

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