The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements

The Temporary Assistance for Needy Families
(TANF) Block Grant: A Primer on TANF Financing
and Federal Requirements
Updated September 4, 2008
Gene Falk
Specialist in Social Policy
Domestic Social Policy Division

The Temporary Assistance for Needy Families (TANF)
Block Grant: A Primer on TANF Financing
and Federal Requirements
Summary
The Temporary Assistance for Needy Families (TANF) block grant provides
federal grants to states for a wide range of benefits, services, and activities. It is best
known for helping states pay for cash welfare for needy families with children, but
it funds a wide array of additional activities. TANF was created in the 1996 welfare
reform law (P.L. 104-193). TANF funding and program authority were extended
through FY2010 by the Deficit Reduction Act of 2005 (DRA, P.L. 109-171).
TANF provides a basic block grant of $16.5 billion to the 50 states and District
of Columbia, and $0.1 billion to U.S. territories. Additionally, 17 states qualify for
supplemental grants that total $319 million. TANF also requires states to contribute
from their own funds at least $10.4 billion for benefits and services to needy families
with children — this is known as the maintenance-of-effort (MOE) requirement.
States may use TANF and MOE funds in any manner “reasonably calculated”
to achieve TANF’s statutory purpose. This purpose is to increase state flexibility to
achieve four goals: (1) provide assistance to needy families with children so that they
can live in their own homes or the homes of relatives; (2) end dependence of needy
parents on government benefits through work, job preparation, and marriage; (3)
reduce out-of-wedlock pregnancies; and (4) promote the formation and maintenance
of two-parent families.
Though TANF is a block grant, there are some strings attached to states’ use of
funds, particularly for families receiving “assistance” (essentially cash welfare).
States must meet TANF work participation standards or be penalized by a reduction
in their block grant. The law sets standards stipulating that at least 50% of all
families and 90% of two-parent families must be participating, but these statutory
standards are reduced for declines in the cash welfare caseload. (Some families are
excluded from the participation rate calculation.) Activities creditable toward
meeting these standards are focused on work or are intended to rapidly attach
welfare recipients to the workforce; education and training is limited.
Federal TANF funds may not be used for a family with an adult that has
received assistance for 60 months. This is the five-year time limit on welfare receipt.
However, up to 20% of the caseload may be extended beyond the five years for
reason of “hardship,” with hardship defined by the states. Additionally, states may
use funds that they must spend to meet the TANF MOE to aid families beyond five
years.
TANF work participation rules and time limits do not apply to families
receiving benefits and services not considered “assistance.” Child care,
transportation aid, state earned income tax credits for working families, activities to
reduce out-of-wedlock pregnancies, activities to promote marriage and two-parent
families, and activities to help families that have experienced or are “at risk” of child
abuse and neglect are examples of such “nonassistance.” This report will be updated.

Contents
In troduction ......................................................1
Federal Grants and State Funds.......................................2
Federal Grants to States.........................................2
Basic Block Grant.........................................2
Supplemental Grants.......................................3
Contingency Funds........................................5
State Funds: the Maintenance-of-Effort, or MOE, Requirement..........6
TANF Benefits, Services, and Activities................................8
Using Federal TANF Grants.....................................8
Achieving TANF Goals.....................................9
“Grandfathered” Activities..................................9
Transfers to Other Block Grants..............................9
Matching for Reverse Commuter Grants.......................10
Using State MOE Funds.......................................10
Requirements for States............................................12
Rules When Funds Are Used to Provide Assistance .................12
Definition of Assistance....................................12
TANF Program and Separate State Programs...................12
Federal Eligibility Rules for Assistance........................13
TANF Work Participation Standards..........................14
Other Work-Related Requirements that Apply to Recipients
of Assistance........................................15
The TANF Time Limit.....................................16
Child Support Enforcement Requirements.....................16
Special Provisions for Victims of Domestic Violence............17
Rules When TANF or MOE Funds Are Used for Benefits
and Services Other Than “Assistance”........................17
State Accountability...........................................18
TANF State Plans........................................18
Data Reporting...........................................18
Other TANF Provisions............................................19
Healthy Marriage and Responsible Fatherhood......................19
Healthy Marriage Promotion Initiatives........................19
Responsible Fatherhood Initiatives...........................19
Tribal TANF................................................20
Research and Demonstration Funds...............................20
Census Bureau Funds..........................................20
Appendix A: Details of TANF Work Participation Rate Calculations........21
In troduction .................................................21
Families Included in the Participation Rate Calculation
(the Denominator of the Participation Rate)....................21

Families Considered “Engaged in Work”
(the Numerator of the Participation Rate)......................22
Creditable Activities......................................22
Minimum Required Hours in Work or Job Preparation Activities...24
List of Tables
Table 1. Federal TANF State Family Assistance
and Supplemental Grants, Annual Grant Amounts....................3
Table 2. Federal TANF and State MOE Funding Levels...................7
Table 3. Summary of Rules for the Use of Federal TANF
and State MOE Funds.........................................11
Table 4. Summary of TANF Requirements that Apply to
Recipients of Assistance, by Funding Source of the Benefit............13
Table A1. Creditable TANF Work Activities and Their Definitions.........22
Table A2. TANF Hours Requirements for the All-Family Rate and the
Two-Parent Family Rate (Excludes Special Rule for Teen Parents),
by Family Type..............................................25
Table A3. TANF “Core” and “Supplemental” Work Activities.............26

The Temporary Assistance for
Needy Families (TANF) Block Grant:
A Primer on TANF Financing
and Federal Requirements
Introduction
The Temporary Assistance for Needy Families (TANF) block grant provides
federal grants to states for a wide range of benefits and activities. It is best known
as the major source of funding for cash welfare for needy families with children.
However, federal law allows TANF funds to be used for other benefits and services
that provide economic help to low-income families with children and support the
goals of reducing out-of-wedlock pregnancies and promoting two-parent families.
The TANF program was created in the 1996 welfare reform law (P.L. 104-193).
Most recently, the Deficit Reduction Act of 2005 (DRA, P.L. 109-171), extended¹
funding and authority for TANF program operations through FY2010.
At the federal level, TANF is administered by the Department of Health and
Human Services. However, benefits and services are provided by the states. TANF
programs operate in all 50 states, the District of Columbia, Puerto Rico, Guam, and
the Virgin Islands. American Samoa is eligible to operate a TANF program, but has²
not opted to do so.
This report provides an overview of TANF financing and rules for state
programs, describing
^!federal TANF grants and state funds under a “maintenance-of-effort”
(MOE) requirement;
^!how states may use federal TANF and state MOE funds to help
achieve the purpose and goals of the TANF block grant;
^!rules that apply to states when they use TANF or MOE funds to
provide cash welfare to needy families with children;
^!rules that apply to states when they use TANF or MOE funds for
benefits and services other than cash welfare;

¹ For a summary of changes made in the Deficit Reduction Act of 2005, see CRS Report
RS22369, TANF, Child Care, Marriage Promotion, and Responsible Fatherhood Provisions
in the Deficit Reduction Act of 2005 (P.L. 109-171), by Gene Falk.
² American Samoa was also eligible to operate the pre-1996 program, Aid to Families with
Dependent Children (AFDC), but did not have such a program.

^!certain accountability requirements that apply to states, including
requirements that states submit plans and report data to the federal
government; and
^!provisions of TANF law not directly related to grants to states, such
as competitive grants for promoting healthy marriage and
responsible fatherhood, tribal TANF provisions, and research funds.³
Federal Grants and State Funds
Though TANF is called a block grant, it has a relatively complicated financing
system. There are three TANF grants to states — basic block, supplemental, and
contingency (recession-related) grants.⁴ Additionally, states are required to spend
a certain amount of their own funds on specified TANF-related activities for needy
families with children. Therefore, the TANF financial “system” consists of both
federal and state funds.
Additionally, there is funding for research, demonstrations, and technical
assistance for “healthy marriage promotion,” and competitive grants for “responsible
fatherhood” initiatives. These funds (which may go to other entities, as well as to
states) are discussed in “Other TANF Provisions,” later in this report.
Federal Grants to States
Federal TANF grants are entitlements to the states — the law entitles each state
to a specified amount of funding. The DRA provided an appropriation in advance
for the basic TANF block grant and contingency funds through fiscal year (FY) 2010,
but provided funding for TANF supplemental grants through only FY2008. P.L.

110-275 extended funding for TANF supplemental grants through FY2009.

Basic Block Grant. The 1996 welfare reform law entitled states to a basic
TANF block grant equal to peak expenditures for pre-TANF programs during the⁵
FY1992-to-FY1995 period. The mid-1990s were a period when the cash welfare

³ For current data and statistics on the TANF block grant, see CRS Report RL32760, The
Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently
Asked Questions, by Gene Falk.
⁴ Before enactment of the Deficit Reduction Act of 2005 (P.L. 109-171), TANF included
two bonus funds. States competed for up to $200 million per year in “high performance
bonus” funds. A second TANF bonus totaling $100 million per year was paid to the five
states with the greatest reduction in out-of-wedlock birth ratios that also had a decline in
abortions. Both of these bonuses were repealed by the Deficit Reduction Act of 2005,
beginning with FY2006.
⁵ Under the law, basic block grant amounts for each state are the same as provided for in the
original 1996 welfare reform law (P.L. 104-193). The national total state grant and each
state’s individual grant in the original TANF law is based on the federal share of
expenditures in the pre-1996 AFDC, Emergency Assistance (EA), and Job Opportunities
and Basic Skills (JOBS) training programs. The original formula entitled each state to the
(continued...)

rolls were at their all-time high; the block grant amount is based on federal
expenditures on the cash welfare, emergency aid, and job training programs for cash
welfare families that existed in that period. The basic block grant is legislatively
fixed — that is, it does not change when the cash assistance caseload decreases or
increases, nor is it adjusted for inflation.
Supplemental Grants. During consideration of legislation that led to the
1996 law, fixed funding based on historic expenditures was thought to disadvantage
two groups of states: (1) those that had relatively high population growth and (2)
those that had historically low welfare grants relative to poverty in the state.
Therefore, additional funding in the form of supplemental grants was provided to
states that met criteria of high population growth and/or low historic grants per poor
person. A total of 17 states (shown in Table 1, below) qualify for supplemental
grants.
Table 1 shows the basic TANF block grant and supplemental grants to the
states. The table separately shows the amount of each state’s basic and supplemental
grant combined, and the percent of the national total of the combined grants (basic
plus supplemental grant) for each state.
Table 1. Federal TANF State Family Assistance and
Supplemental Grants, Annual Grant Amounts
($ in thousands)
State family
assistanceSupplementalPercent of
StategrantgrantTotalnational total
Al abama $93,315 $11,093 $104,408 0.6%
Al a s ka 63,609 6,888 70,497 0.4
Arizona 222,420 23,925 246,345 1.5
Ar ka ns a s 56,733 6,218 62,951 0.4
California 3,733,818 0 3,733,818 22.2
Col o r a do 136,057 13,570 149,626 0.9
Connecticut 266,788 0 266,788 1.6
De l a wa r e 32,291 0 32,291 0.2
District of Columbia92,610092,6100.6
Florida 562,340 60,406 622,746 3.7
Georgi a 330,742 37,283 368,025 2.2
Ha wa i i 98,905 0 98,905 0.6
Id a h o 31,938 3,498 35,436 0.2

⁵ (...continued)
greatest of the average federal share of expenditures in these programs for FY1992 through
FY1994; the federal share of expenditures for these programs in FY1994, adjusted for states
that amended their EA programs in FY1994 or FY1995; or the federal share of expenditures
for these programs in FY1995. The FY1994 adjustment for EA program amendments is the
amount by which the federal share of EA expenditures in FY1995 exceeded that of FY1994.

State family
assistanceSupplementalPercent of
StategrantgrantTotalnational total
Illinois 585,057 0 585,057 3.5
Indiana 206,799 0 206,799 1.2
Io w a 131,525 0 131,525 0.8
Kansas 101,931 0 101,931 0.6
K e ntucky 181,288 0 181,288 1.1
Louisiana 163,972 17,027 180,999 1.1
Maine 78,121 0 78,121 0.5
Maryland 229,098 0 229,098 1.4
Massachusetts 459,371 0 459,371 2.7
Michigan 775,353 0 775,353 4.6
Minnesota 267,985 0 267,985 1.6
Mississippi 86,768 9,036 95,803 0.6
Missouri 217,052 0 217,052 1.3
Montana 45,534 1,133 46,667 0.3
Ne br a s ka 58,029 0 58,029 0.3
Ne va da 43,977 3,734 47,710 0.3
New Hampshire38,521038,5210.2
New Jersey404,0350404,0352.4
New Mexico126,1036,553132,6560.8
New York2,442,93102,442,93114.5
North Carolina302,24036,110338,3502.0
North Dakota26,400026,4000.2
Ohi o 727,968 0 727,968 4.3
Oklahoma 148,014 0 148,014 0.9
Or e gon 167,925 0 167,925 1.0
Pennsyl va nia 719,499 0 719,499 4.3
Rhode Island95,022095,0220.6
South Carolina99,968099,9680.6
South Dakota21,894021,8940.1
T e nnessee 191,524 21,565 213,089 1.3
T e xas 486,257 52,708 538,965 3.2
Ut a h 76,829 8,704 85,534 0.5
V e rmont 47,353 0 47,353 0.3
Virginia 158,285 0 158,285 0.9
Washington 404,332 0 404,332 2.4
West Virginia110,1760110,1760.7
Wisconsin 318,188 0 318,188 1.9
Wyoming 21,781 0 21,781 0.1
Tot a l s $16,488,667 $319,450 $16,808,117 100.0%
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^{) bas}^e^{d on}^{data f}^r^om^th^{e U.S.}
^Dep^a^rtm^eⁿ^t^o^f^Health^an^d^Hu^m^aⁿ^Serv^{ices (HHS).}

Contingency Funds. The fixed basic grant under TANF also led to concerns
that funding might be inadequate during economic downturns. Thus, TANF includes
additional matching contingency funds that can be used to provide additional funding
during recessionary periods if certain conditions are met.⁶ To draw upon contingency
funds, a state must both (1) meet a test of economic “need” and (2) increase spending
from its own funds above what the state spent in FY1994 on cash, emergency
assistance, and job training in TANF’s predecessor programs.
For purposes of the TANF contingency fund, a state meets the “economic need”
test if
^!its seasonally adjusted unemployment rate averaged over the most
recent three-month period is at least 6.5% and at least 10% higher
than its rate in the corresponding three-month period in either of the
previous two years; or
^!its food stamp caseload over the most recent three-month period is
at least 10% higher than the adjusted food stamp caseload in the
corresponding three-month period in FY1994 or FY1995. For this
purpose, FY1994 and FY1995 caseloads are adjusted by subtracting
out an estimate of participants who would have been made ineligible
for food stamps under the 1996 welfare law (e.g., noncitizens), had
it been in effect in those years.
Monthly payments from the contingency fund are limited to one-twelfth of 20%
of a state’s basic block grant, and states may receive these monthly payments on an
advance basis. However, the actual amount of contingency funds a state is entitled
to for the year depends on (1) how much it spends in advance contingency funds and
state funds over the FY1994 threshold, (2) its Medicaid matching rate, and (3) the
number of months the state was eligible for contingency funds. A state’s annual
entitlement to contingency funds is calculated as the Medicaid matching rate times
the state’s extra spending (above FY1994 amounts) during the fiscal year, prorated
by the number of months the state was eligible for contingency funds during the
fiscal year.⁷ A state that receives more in monthly advances from the contingency
fund than it is entitled to for the year must remit overpayments to the federal treasury.
A state may not receive more in contingency funds for the year than the total of its

⁶ P.L. 109-68, the TANF Emergency Response and Recovery Act of 2005, allowed states
to draw upon the contingency fund to aid families evacuated from states damaged by
Hurricane Katrina. States received 100% federal funding for families evacuated from a
hurricane-damaged state to another host state. This was a temporary measure for the period
September 2005 through August 2006. See CRS Report RS22246, Temporary Assistance
for Needy Families (TANF): Its Role in Response to the Effects of Hurricane Katrina, by
Gene Falk.
⁷ For example, if a state was eligible for contingency funds for three months in a fiscal year,
its proration factor would be one-fourth (three-twelfth). If it was eligible for contingency
funds for six months in a fiscal year, its proration factor would be one-half (six-twelfth).
A state eligible for contingency funds all year would not have its annual entitlement to funds
prorated (i.e., it would receive the full amount).

monthly advance payments, under an annual cap on contingency funds of 20% of the
state’s basic block grant.
State Funds: the Maintenance-of-Effort, or MOE, Requirement
TANF consolidated and replaced programs that provided matching grants to the
states. Under the pre-TANF cash welfare program, federal funding was generally
provided at the Medicaid matching rate (between 50% and 83%) to reimburse states
for a share of their expenditures in the program.⁸ This meant that there were
considerable state dollars contributing to the pre-TANF programs. It also meant that
the federal and state shares financing these programs varied by state, as the Medicaid
matching rate is higher in states with lower per-capita incomes than higher per-capita
incomes.
TANF requires states to maintain spending from their own funds on TANF or
TANF-related activities. States are required in the aggregate to maintain at least
$10.4 billion in spending on specified activities for needy families with children.
The $10.4 billion, called the “maintenance-of-effort” (MOE) level, represents 75%
of what was spent from state funds in FY1994 in TANF’s predecessor programs of
cash, emergency assistance, job training, and welfare-related child care spending.⁹
States are required to maintain their own spending of at least that level, and the MOE
requirement increases to 80% of FY1994 spending for states that fail to meet TANF
work participation requirements (discussed below). State expenditures under this
requirement are often referred to as state MOE funds.
A state’s failure to meet the MOE requirement results in a penalty. The penalty
is a reduction in a state’s subsequent year’s block grant by $1 for each $1 shortfall
from the required spending level.
Table 2 shows both federal TANF and state MOE funds. The MOE is shown
at both the 75% and 80% rates for each state. Also shown is the percent of total
federal and state funds in the TANF financial “system” that is accounted for by
federal funds. This percentage varies because the Medicaid matching rate used in the
pre-TANF programs varied by state. Mirroring the differences in federal shares

⁸ In the pre-1996 welfare law program, most administrative costs were reimbursed at a 50%
rate (though some expenditures on data systems were reimbursed at a 90% rate). TANF also
consolidated funding from two other programs: the Emergency Assistance program, which
had a 50% matching rate, and the Job Opportunity and Basic Skills (JOBS) training
program, which used the Medicaid matching rate but had a 60% (not 50%) minimum match.
⁹ Some TANF MOE expenditures can also be counted toward meeting a separate child care
“MOE” as part of the state spending requirements for the Child Care and Development
Block Grant (CCDBG) matching grants. The maximum amount of funds that may be
“double-counted” toward both the TANF and child care MOE requirements is $888 million,
equal to the greater of FY1994 or FY1995 state expenditures in the pre-1996 child care
programs. Analysis of combined federal and state funding or expenditures under the TANF
and child care block grants must recognize that some state spending can be double-counted
or it will overstate the amount of funding available or the amount of spending from the two
block grants. The minimum amount of TANF MOE funds that cannot be double-counted
toward CCDBG matching requirements is $9.5 billion.

under the pre-1996 programs, federal funds account for a greater share of total TANF
funding in states with low per-capita income compared to those with higher per-
capita income.
Table 2. Federal TANF and State MOE Funding Levels
($ in thousands)
^F^e^dera^{l f}^unds
^St^a^t^{e M}^O^{E f}^unds^T^o^tal^fed^eral^a^{nd st}^a^t^{e M}^O^E^as^{a percent of}^t^o^t^a^{l f}^unds
^f^unds^{(at 75%}
^St^a^t^e^F^edera^{l f}^unds^{(at 75% rate)}^MO^E^r^a^t^e⁾^75%^rate^80%^rate
^A^l^abam^a^$104,408^$39,214^$41,828^$143,623^72.7%
^Al^a^s^k^a^70,497^48,942^52,205^119,439^59.0
^A^rⁱ^z^on^a^246,345^95,028^101,363^341,373^72.2
^A^r^k^aⁿ^s^as^62,951^20,839^22,228^83,790^75.1
^C^a^lⁱ^f^ornⁱ^a³^,733,818^2,726,⁸⁹²^2,908,684^6,460,709^57.8
^Co^lo^r^a^d^o^149,626^82,871^88,396^232,497^64.4
^Co^nne^c^tⁱ^c^ut^266,788^183,421^195,649^450,209^59.3
^Delaw^a^re^32,291^21,771^23,222^54,062^59.7
^Distrⁱ^{ct o}^f^Co^lu^m^b^ia^92,610^70,449^75,146^163,059^56.8
^Flo^r^id^a^622,746^370,919^395,647^993,665^62.7
^Geo^r^gⁱ^a^368,025^173,369^184,926^541,393^68.0
^Haw^aⁱⁱ^98,905^72,981^77,847^171,886^57.5
^Idah^o^35,436^13,679^14,591^49,115^72.1
^I^llin^oⁱ^s^585,057^430,088^458,761^1,015,145^57.6
^In^di^an^a^206,799^113,526^121,094^320,325^64.6
^Iow^a^131,525^61,963^66,094^193,488^68.0
^Kan^s^as^101,931^61,750^65,866^163,681^62.3
^K^e^nt^uc^ky^181,288^67,418^71,913^248,706^72.9
^Lo^ui^sⁱ^aⁿ^a^180,999^55,415^59,109^236,414^76.6
^Main^e^78,121^37,524^40,026^115,645^67.6
^Mary^lan^d^229,098^176,965^188,763^406,063^56.4
^M^a^ssa^c^huse^t^t^s^459,371^358,948^382,877^818,319^56.1
^Mich^ig^an^775,353^468,518^499,753^1,243,871^62.3
^Mⁱ^nne^so^t^a^267,985^179,745^191,728^447,730^59.9
^Mⁱ^ssissip^pⁱ^95,803^21,724^23,173^117,528^81.5
^Mⁱ^sso^urⁱ^217,052^120,121^128,129^337,173^64.4
^Mon^t^an^a^46,667^15,716^16,764^62,383^74.8
^Neb^r^ask^a^58,029^28,629^30,538^86,658^67.0
^Nev^a^d^a^47,710^25,489^27,188^73,199^65.2
^New^Ham^p^sh^ire^38,521^32,115^34,256^70,636^54.5
^New^J^e^rsey^404,035^300,160^320,171^704,195^57.4
^New^Mexⁱ^co^132,656^37,346^39,836^170,002^78.0
^New^Yo^rk^2,442,931^1,718,578^1,^833,150^4,161,509^58.7
^Nort^h^C^a^rolⁱⁿ^a^338,350^154,176^164,454^492,525^68.7
^No^rth^Dak^o^ta^26,400^9,069^9,674^35,469^74.4
^Oh^io^727,968^390,831^416,887^1,118,800^65.1

^F^e^dera^{l f}^unds
^St^a^t^{e M}^O^{E f}^unds^T^o^tal^fed^eral^a^{nd st}^a^t^{e M}^O^E^as^{a percent of}^t^o^t^a^{l f}^unds
^f^unds^{(at 75%}
^St^a^t^e^F^edera^{l f}^unds^{(at 75% rate)}^MO^E^r^a^t^e⁾^75%^rate^80%^rate
^Ok^lah^o^m^a^148,014^61,250^65,334^209,264^70.7
^Oreg^oⁿ^167,925^92,255^98,405^260,179^64.5
^Penⁿ^s^y^l^v^aⁿⁱ^a^719,499^407,126^434,267^1,126,625^63.9
^R^h^{ode Is}^l^aⁿ^d^95,022^60,367^64,392^155,389^61.2
^So^ut^{h Ca}^r^o^lⁱⁿ^a^99,968^35,927^38,322^135,895^73.6
^So^ut^{h D}^a^ko^t^a^21,894^8,774^9,359^30,668^71.4
^T^e^nne^sse^e^213,089^82,810^88,331^295,899^72.0
^Te^x^a^s^538,965^235,726^251,441^774,691^69.6
^Utah^85,534^25,291^26,977^110,824^77.2
^Verm^oⁿ^t^47,353^25,550^27,253^72,903^65.0
^Vir^gⁱⁿ^ia^158,285^128,173^136,718^286,458^55.3
^W^a^shi^ngt^oⁿ^404,332^272,061^290,198^676,393^59.8
^W^e^{st Vir}^gⁱⁿ^ia^110,176^32,294^34,446^142,470^77.3
^Wⁱ^sc^oⁿ^sin^318,188^169,229^180,511^487,417^65.3
^Wy^omⁱⁿ^g^21,781^10,665^11,376^32,447^67.1
^T^o^tal^s^$16,808,117^$10,433,687^$11,129,266^$27,241,804^A^v^erage:^61.7%
^Source:^T^a^bl^{e prepared by}^C^R^S^bas^e^{d on}ⁱⁿ^f^o^rm^atⁱ^oⁿ^f^r^om^H^H^S^.
TANF Benefits, Services, and Activities
Congress decided that TANF was to be named a “block grant” program. In
public finance lingo, a block grant is a grant-in-aid given to states and local
governments to address “broad purposes.” Block grants also typically give
governmental entities discretion in both defining problems and expending funds to
address them.¹⁰ In a general sense, TANF meets this definition of a block grant, but
its financing is complex (discussed above), and it does attach some “strings” to a
state’s use of TANF funds (discussed below).
Using Federal TANF Grants
Federal TANF grants may be used for a wide range of benefits and services for
families with children. Grants may be used within a state TANF program or
transferred to either the Child Care and Development Fund (CCDF, the “child care
block grant”) or the Social Services Block Grant (SSBG).

¹⁰ See CRS Report RL30818, Block Grants: An Overview, by Eugene Boyd and Benjamin
B. Canada.

Achieving TANF Goals. TANF allows states to expend funds “in any
manner reasonably calculated” to achieve its statutory purpose within its state TANF
program. TANF’s purpose is to increase state flexibility to meet specified goals. Its
four statutory goals are to:
1. provide assistance to needy families so that children can be cared for in their
own homes or in the homes of relatives;
2. end dependence of needy parents on government benefits through work, job
preparation, and marriage;
3. reduce the incidence of out-of-wedlock pregnancies; and

4. promote the formation and maintenance of two-parent families.

The four goals of TANF encompass what is usually thought of as traditional
cash welfare (assistance to families) and work activities for cash welfare families.
However, the goals also provide authority for states to use funds for a wide variety
of benefits and services for welfare families and other low-income families with
children. States use TANF funds to help support work for low-income families
through providing child care or transportation aid. The authority to provide
assistance to care for children in the homes of relatives has been used by some states
to provide financial help for “kinship care” for children who have been, or are at risk
of, neglect or abuse and are placed in the care of a relative (e.g., grandparent, aunt,
uncle). Further, TANF funds have been used for programs and services aimed at
accomplishing the “family formation” goals of TANF (goals three and four listed
above, and ending dependence through marriage, which is a component of goal two).
“Grandfathered” Activities. In addition to using funds to promote the
purpose and goals of TANF, federal law allows states to use TANF funds to carry out
any program or activity that a state had conducted under its pre-1996 programs. This
provision permits states to continue activities they undertook under the pre-1996
Emergency Assistance (EA) program to provide help for foster care, adoption
assistance,¹¹ and juvenile justice programs.
Transfers to Other Block Grants. Federal law allows up to 30% of federal
TANF grants (except contingency funds) to be transferred to the CCDF and SSBG
combined, with a separate limit of 10% of TANF grants (except contingency funds)
that may be transferred to SSBG.¹² Funds transferred to these other block grants

¹¹ These would be foster care and adoption assistance cases that are ineligible for other
federal financing from programs under Title IV-E of the Social Security Act.
¹² The original welfare reform law (P.L. 104-193) set the limit on transfers from TANF to
SSBG at 10% of the TANF block grant. P.L. 105-178 (Transportation Equity Act for the^st
21 Century) reduced funding for SSBG and the transfer authority from TANF to SSBG to
4.25%, effective FY2001. However, annual appropriation bills through FY2005 provided
for a 10% transfer limit. The Deficit Reduction Act of 2005 (DRA, P.L 109-171)
permanently reinstated the 10% transfer limit. DRA extended the funding for TANF
through FY2010 on the terms in effect in FY2004. Because the FY2004 appropriation bill
(continued...)

become subject to the rules of the receiving block grant (CCDBG or SSBG), and are
not subject to TANF rules. However, TANF funds transferred to SSBG must be used
for families with incomes below 200% of the poverty line.
Matching for Reverse Commuter Grants. Federal law also allows states
to use federal TANF funds as a state match for reverse commuter grants. If a state
makes use of federal TANF funds for this purpose, it is counted against the 30% limit
for transfers to CCDBG and SSBG; that is, it reduces the amount of federal TANF
funds that could be transferred to those other block grants.
Using State MOE Funds
Most, but not all, benefits, services, and activities that may be funded from
federal TANF funds may also be financed by state MOE funds. States may count
toward the MOE expenditures for any program that provides cash assistance,
administration, child care, education, and training (though not educational activities
for the general population), and other activities to further a TANF purpose. The
major restrictions that apply to MOE (but not federal TANF) funds are
^!for benefits, services, and activities that were not a part of the pre-
1996 welfare law programs, expenditures count only to the extent
that they exceed the FY1995 level of expenditure in the program;
and
^!expenditures on activities that were part of the pre-1996 welfare law
programs that are not aimed to achieve a TANF goal
(“grandfathered” activities) are not countable toward the MOE.
Table 3 provides a brief summary of the types of benefits, services, and activities that
may be funded by federal TANF funds and with state MOE funds.¹³

¹² (...continued)
set the TANF transfer limit to SSBG at 10% for that fiscal year, the transfer limit to SSBG
through FY2010 will be 10%. This is despite the fact that the Social Security Act provision
for TANF transfers to SSBG continues to set the limit at 4.25%.
¹³ Prior to the enactment of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) MOE
funds used to achieve TANF’s family formation goals were restricted to expenditures on
“needy” families with children. The DRA had a provision that allows a state’s total
expenditure on activities to achieve these goals to be counted without regard to a family’s
need. However, HHS regulations issued on February 5, 2008, limit MOE expenditures
related to the family formation goals except for activities related to promoting healthy
marriage and responsible fatherhood. (See Appendix A, “Families Considered ‘Engaged
in Work’ (the Numerator of the Participation Rate)” later in this report for a listing of these
activities. For a discussion of this regulatory provision, see Federal Register, vol. 73, no.

24, p. 6517-6318.

Table 3. Summary of Rules for the Use
of Federal TANF and State MOE Funds
May states use funds for ...Federal TANF fundsMOE funds
Cash welfare, administration ofYesYes
cash welfare, and work
programs?
Child care?Yes, either throughYes. States may not
transfer to the Childcount child care funds
Care and Developmentspent for the state match
Fund, up to 30% of thefor CCDBG matching
grant, or within TANF.funds, but may count up
to $888 million spent
toward the CCDBG
MOE and any additional
child care spending.
Activities to help achieve TANFYesYes, though under
family formation goals?regulations many of
these expenditures are
limited to families that
meet a need-test. Only
expenditures on
activities that seek to
promote healthy
marriage or responsible
fatherhood may be
available to the general
population without a
need-test.
Other benefits and services toYesIf activity was not
help achieve TANF goals?authorized in pre-1996
programs, expenditures
in ongoing programs
only count if above
FY1995 levels.
Activities in the pre-1996 welfareYesNo
programs that are not reasonably
calculated to help achieve TANF
goals (“Grandfathered”
activities)?
^Source:^T^a^{ble prepared by}^C^R^S^.

Requirements for States
As discussed above, TANF provides states with broad authority to spend
federal and MOE funds on a wide range of benefits and services. Though TANF is
a block grant, there are some strings attached to states’ use of funds, particularly for
families receiving “assistance” (essentially cash welfare). As discussed below,
TANF funds used for benefits and services that are not considered assistance are
generally free of most requirements.
Rules When Funds Are Used to Provide Assistance
Federal law specified that most TANF requirements apply only with respect to
families receiving assistance. Further, different TANF requirements apply to
families receiving assistance within “the state TANF program” versus in “separate
state programs.” Separate state programs are state-funded programs with
expenditures counted toward the TANF MOE, but the state has made a decision to
consider as distinct from “the state TANF program.”
Definition of Assistance. Federal TANF law does not define “assistance.”
However, the Department of Health and Human Services (HHS) defines assistance
in regulation as payment to families to meet “ongoing basic needs” such as food,
clothing, shelter, utilities, household goods, personal care items, and other personal¹⁴
expenses. Generally, such payments correspond to what most call cash welfare.
Further, the regulations define TANF assistance to include child care and
transportation aid for nonworking persons. Child care and transportation for working
parents are explicitly excluded from the definition of assistance.
TANF Program and Separate State Programs. As discussed above,
states may count their expenditures in any program toward meeting the MOE
requirement. Programs other than TANF that contribute toward the MOE are known
as “separate state programs.” Table 4 summarizes the application of TANF
requirements for assistance recipients based on whether a benefit was financed from
federal funds, state funds within the “TANF program,” or separate state programs.
TANF requirements apply when assistance is financed via federal TANF grants.
Before FY2007, the major distinction in the rules for using state MOE funds under
TANF and separate state programs was that the TANF work participation standards
and child support requirements did not apply to families in separate state programs.
Beginning in FY2007, work participation standards do apply to families in a separate
state program. This leaves the major distinction that child support requirements do
not apply to states for families in separate state programs.

¹⁴ The regulatory definition of assistance is found at 45 C.F.R. § 260.31.

Table 4. Summary of TANF Requirements that Apply
to Recipients of Assistance, by Funding Source of the Benefit
State funds
expended in the
Federal TANF“TANFSeparate state
TANF requirementfundsprogram”programs
Work participation rateYesYesBeginning in
requirementsFY2007, yes
Time limitYesNoNo
Prohibition for noncitizensYesNoNo
during the first five years in
the country
Assignment of child supportYesYesNo
to the state
^Source:^T^a^{ble prepared by}^C^R^S^.
Federal Eligibility Rules for Assistance. TANF requires that a family
have a dependent child to be eligible for assistance, including ongoing cash welfare.
That is, childless individuals and couples are not eligible for TANF assistance.
Additionally, a family receiving assistance must be needy — that is, having income
below a specified level, though the level is determined by the state.
Federal law also prohibits states from using federal TANF funds to aid the
following persons and families:
^!families with an adult who has received federally funded aid for 60
months (see “The TANF Time Limit,” discussed later in this report);
^!unwed teen parents, unless living in an adult-supervised setting;
^!teens who have not completed high school, unless they are making
satisfactory progress toward achieving a high school or equivalent
credential;
^!noncitizens who arrived in the United States after August 22, 1996,
for the first five years after arrival;¹⁵
^!fugitive felons and parole violators; and
^!persons convicted of a drug-related felony, unless the state¹⁶

affirmatively opts out of this provision.
¹⁵ This prohibition is not found in TANF law itself, but was enacted in Title IV of the 1996
welfare law (P.L. 104-193), which generally set rules for noncitizens’ access to publicly
funded benefits.
¹⁶ This prohibition is also not in TANF law itself, but was enacted in Section 115 of the

1996 welfare law (P.L. 104-193), and applies to both TANF and Food Stamps.

States that misuse federal TANF funds and aid such persons or families are penalized
through a reduction in their block grant. However, states may provide assistance to
these persons and families using MOE funds.
Aside from the requirement that TANF assistance be restricted to needy families
with children and the listed statutory prohibitions on the use of federal funds, states
have broad leeway to define eligibility for TANF cash assistance. States determine
actual income eligibility standards (to determine whether a family is needy) and can
determine other conditions and criteria for eligibility. States also determine benefit
amounts paid to families.
TANF Work Participation Standards. TANF sets minimum work
participation standards that a state must meet. The standards are performance
measures computed in the aggregate for each state, which require that a specified
percentage of families be considered engaged in specified activities for a minimum
number of hours.
A state that fails to meet TANF work participation standards is penalized by a
reduction in its block grant. The penalty is a 5% reduction in the block grant for the
first year’s failure to meet the standard, and increased by 2 percentage points each
year (that is, a total reduction of 7% in the second year and 9% in the third year, etc.),
up to a maximum penalty of 21%. However, the law requires that this penalty be
based “on the degree of noncompliance”; hence, actual penalties may be lower than
the amounts set in statute. Further, penalties may be reduced if a state is in recession
(based on the contingency fund’s indicators of an economically needy state; see
“Contingency Funds,” earlier in this report) or if the noncompliance was due to
“extraordinary circumstances, such as a natural disaster or regional recession.”
Additionally, penalty relief is granted to a state that has failed to comply with
participation standards because of waivers of program requirements provided to
victims of domestic violence (see “Special Provisions for Victims of Domestic
Violence,” later in this report).
Numerical Participation Standards. To comply with TANF requirements,
a state must meet two standards each year — the “all family” and the “two-parent”
family participation standards. The standards are that (1) 50% of all families and (2)

90% of two-parent families must meet participation standards.

Caseload Reduction Credits. The above-mentioned TANF work
participation standards are reduced by a caseload reduction credit. The caseload
reduction credit reduces the 50% and 90% standards for a state by one percentage
point for each percent decline in the cash assistance caseload from FY2005 levels.¹⁷
States are not given a credit for caseload reduction attributable to more restrictive
policy changes made since FY2005.
State Participation Rates. To determine compliance with TANF federal
work standards, a state’s effective participation standard (i.e., its numerical standard

¹⁷ Before FY2007, a state was given a caseload reduction credit of 1 percentage point for
each percent decline in the TANF caseload that occurred from its FY1995 (pre-welfare
reform) level.

minus its caseload reduction credit) is compared against its TANF work participation
rate. The TANF work participation rate represents the percent of non-excluded
families receiving assistance who participate in creditable activities for the requisite
number of hours.
Most families with an adult recipient receiving assistance are included in the
participation rate calculation — that is, in the denominator of the participation rate
— but certain families are excluded. A family is considered “engaged in work” —
and counted in the numerator of the participation rate — if a member is participating
in creditable activities for a minimum number of hours. Federal law lists 12
categories of activities that count toward meeting the participation standards, with
regulations defining which specific activities count in each of the categories. Federal
law also sets the minimum number of hours of participation required for a family to
be considered “engaged in work.” For a detailed discussion of the calculation of
participation rates for the purpose of determining whether states have met TANF
work participation standards, see Appendix A.
Verifying Work Participation. States are required to have procedures to
verify recipients’ work participation: identifying who is subject to or excluded from
work standards; how a recipient’s activities represent countable TANF work
activities; and how to count and verify reported hours of work. HHS regulations
require that descriptions of these procedures be included in a state work verification
plan. States that fail to comply with these work verification requirements are subject
to a penalty of between 1% and 5% of the state’s block grant. Additionally, the HHS
regulations also include requirements that activities be “supervised,” many on a daily
basis.
Other Work-Related Requirements that Apply to Recipients of
Assistance. In addition to the TANF work participation standards (aggregate
performance measures), there are three work-related requirements that apply to each
adult or teen parent recipient: assessment, sanction for refusal to comply with work
requirements, and a requirement that all parents and caretakers be engaged in work
within 24 months.
Employability Assessment. States are required to assess each adult
recipient’s or teen parent’s skills, work experience, and employability. The
assessment is required to be made within 90 days of determination of the recipient’s
eligibility for assistance. States may use this assessment to develop an Individual
Responsibility Plan (IRP) that sets forth employment goals and obligations of the
recipient and describes the services the state will provide the individual. The IRP is
an option to the states; it is not required by federal law. States may sanction families
for failure to comply with IRPs.
Sanctions for Failure to Comply with Work Requirements. States are
required to sanction a family with a member who refuses to comply with its work
requirements without “good cause.” States are free to determine the sanction
amount, and whether to reduce benefits or terminate benefits for families that fail to
comply with work requirements (a full-family sanction). States also determine what
constitutes “good cause” for not complying with work requirements.

States are prohibited from sanctioning a family with a single parent with a child
under the age of six if he or she refuses to comply with work requirements because
she cannot find affordable child care. The parent must demonstrate to a state that the
inability to find affordable child care is because (1) appropriate child care within a
reasonable distance from the parent’s work or home is unavailable; (2) informal child
care by a relative or other arrangement is unavailable or unsuitable; and (3)
appropriate and affordable child care is otherwise unavailable.
Work Within Two Years. States are required to engage each parent or
caretaker adult in “work,” as defined by the state, within 24 months of his or her
coming on the rolls. For this requirement, the state is free to determine what
constitutes being engaged in work; it need not follow the federal rules for the
activities and hours that determine whether the family is counted as a participant
toward the work participation performance standard. This requirement is a part of
the TANF state plan, and there is no specific penalty for a state that fails to engage
a parent or caretaker in work by the 24-month deadline.
The TANF Time Limit. States may not use federal TANF funds to provide
assistance to a family containing an adult who has received five years (60 months)
of assistance. The federal five-year time limit is a prohibition on states’ use of
federal TANF funds, not a direct limitation on how long a particular family may
receive welfare. How time limits affect families is determined by states, which have
wide latitude in implementing them.
Federal law provides a hardship exception to the time limit, allowing federal
funds to be used in cases of hardship for up to 20% of the caseload beyond the five-
year limit. Further, federal law explicitly allows a state to use state MOE funds to
aid a family beyond the time limit.
TANF penalizes states that have more than 20% of their caseload on the rolls
for more than five years. The penalty is a 5% reduction in the block grant. However,
it is unlikely that a state will breach the 20% limit of families because of its ability
to assist families beyond five years with state MOE funds.
Many states have adopted the five-year limit as their own; others have shorter
time limits. Some states effectively do not limit the amount of time a family may
receive assistance (using state funds or the 20% hardship exception). The time limit
does not apply to families without an adult recipient, known as “child-only” cases.
Child Support Enforcement Requirements. The majority of families
receiving cash assistance are in families headed by a single mother. In most of these
families, there is a noncustodial parent who is also likely to be financially responsible
for the children’s economic well-being.
Families receiving TANF assistance must cooperate with certain child support
enforcement requirements. They must cooperate with the state in establishing the
paternity of a child and in establishing, modifying, or enforcing orders that the
noncustodial parent pay child support. Federal law requires states to penalize
families who do not cooperate with child support enforcement requirements by

cutting their benefits at least 25%. States could penalize families by more, and even
end assistance for failure to cooperate with child support enforcement requirements.
Families receiving TANF assistance must assign (legally turn over) any child
support they receive from noncustodial parents to their state as a reimbursement for
welfare costs. The federal government and the states split the receipts from assigned
child support. A state has the option of passing through assigned child support to
TANF families, but until October 1, 2008, must pay for it (e.g., from the state’s share
of assigned child support). Beginning on October 1, 2008, the federal government
will share in the cost of passing through child support paid to TANF families as long
as the child support is also disregarded in determining TANF eligibility and benefit
amounts.¹⁸ State expenditures from the pass-through of child support, if disregarded
in determining a welfare family’s benefit, are countable toward the TANF MOE.
Special Provisions for Victims of Domestic Violence. Federal law
provides for an optional certification that a state has procedures in place to screen for
and identify victims of domestic violence, refer such victims to supportive services,
and waive certain program requirements. The program requirements that may be
waived include work requirements, the time limit, and cooperation with child support
enforcement rules.
Though the state may waive certain program requirements for victims of
domestic violence, federal law does not exclude them from the TANF work
participation rate standard calculation or from the 20% limit on hardship cases that
exceed the five-year time limit. However, HHS regulations allow a state to provide
victims of domestic violence a federally recognized good cause domestic violence
waiver, and provides that a state would have “good cause” for failing the
requirements if that failure was due to providing such waivers.¹⁹
A federally recognized domestic violence waiver must identify program
requirements that are being waived; be granted based on an individualized
assessment; and be accompanied by a services plan. These waivers must be
reassessed at least every six months.
Rules When TANF or MOE Funds Are Used
for Benefits and Services Other Than “Assistance”
As previously discussed, most TANF federal requirements relate to “assistance.”
However, TANF gives states permission to spend federal funds and count state
spending toward the MOE on a wide range of benefits and services other than
assistance. Essentially, TANF and MOE funds may be spent on benefits, services,
or activities aimed to achieve any of the goals of TANF. Examples of such benefits

¹⁸ The amount of the pass-through that the federal government will share the cost of is
limited to $100 for a family with one child and $200 for families with two or more children.
This is a provision of the Deficit Reduction Act of 2005. See CRS Report RS22377, Child
Support Provisions in the Deficit Reduction Act of 2005 (P.L. 109-171), by Carmen
Solomon-Fears.
¹⁹ See regulations at 45 C.F.R. §§ 260.50-260.59.

and services include short-term, non-recurring aid,²⁰ child care for families with
working members, transportation aid for families with working members, refundable
tax credits for working families with children,²¹ funding of Individual Development
Accounts (IDAs), education and training for low-income parents, and activities that
seek to achieve the family formation goals (goals three and four) of TANF. Such
benefits and services may be provided to families receiving assistance, but also might
be provided to other families who have no connection to the cash welfare rolls.
State Accountability
Federal law gives states broad flexibility in designing and implementing state
programs operated with TANF and MOE funds. It also requires states to develop
plans that outline their intended use of funds and report data on families receiving
assistance.
TANF State Plans. States are required to submit state plans every three years
as a condition of receiving TANF block grant funds. The bulk of these plans are an
“outline” of the program the state “intends” to operate. The Secretary of HHS cannot
disapprove a state plan based on its content. Rather, the role of the Secretary is to
determine whether the state has included information on all required elements of the
plan. State plans have no set format, and vary greatly in their content and detail.
State plans are not required to have — and often do not have — information on
basic financial and nonfinancial eligibility rules for TANF assistance. For example,
a state is not required to provide information on income eligibility rules, treatment
of earnings, or information on its time limit in the state plan. Some eligibility
information is collected for programs funded with MOE dollars in annual program
reports, but it is not of the detail necessary to describe, for example, the maximum
amount of earnings a family may have and still remain eligible for TANF assistance.
Data Reporting. TANF law and regulations require states to provide
information on families receiving assistance. States must provide both caseload
counts and family- and recipient-level information on families receiving assistance.
Family- and individual-level information that states must report includes basic
demographic information, the work activities hours of adults, and the financial
circumstances of families and individual recipients receiving assistance. Neither

²⁰ HHS regulations define short-term, nonrecurring benefits as meeting the following
criteria:
^!paid once in a 12-month period;
^!paid within 30 days; and
^!cover needs that do not extend beyond a 90-day period.
²¹ HHS regulations provide that refundable state earned income tax credits are not
considered assistance. It should be noted that only the “refundable” portion of a state tax
credit may be financed through either federal TANF or MOE funds. That is, the portion of
the tax credit that exceeds a family’s state tax liability and requires a payment (expenditure)
from the state treasury may be financed via TANF. Tax credits that reduce a family’s tax
liability are not allowable uses of federal TANF funds nor are they countable toward the
MOE.

caseload counts nor characteristic information is required to be reported for families
receiving TANF-funded benefits and services that are not considered assistance.
Other TANF Provisions
Healthy Marriage and Responsible Fatherhood
The Deficit Reduction Act of 2005 created new TANF funding for healthy
marriage promotion, Indian child welfare, and responsible fatherhood initiatives. An
appropriation of $150 million per year is provided for each of five years (FY2006
through FY2010) for the following initiatives:
^!up to $50 million per year may be used to fund responsible
fatherhood initiatives (see below);
^!up to $2 million per year may be used to fund demonstration projects
to test the effectiveness of Indian tribal governments in coordinating
child welfare services to children at risk of abuse and neglect; and
^!the remainder (a minimum of $98 million per year) is for
demonstration projects and technical assistance on healthy marriage
promotion initiatives (see below).
Healthy Marriage Promotion Initiatives. The healthy marriage promotion
initiative funds (1) awards by HHS to public or private entities to conduct research
and demonstration projects; and (2) technical assistance to states, Indian tribes and
tribal organizations, and other entities. The activities supported by these initiatives
include
^!programs to promote marriage in the general population, such as
public advertising campaigns on the value of marriage and education
in high schools on the value of marriage;
^!education in “social skills” (e.g., marriage education, marriage skills,
conflict resolution, and relationship skills) for engaged couples,
those interested in marriage, and married couples; and
^!programs that reduce the financial disincentives to marry, if
combined with educational or other marriage promotion activities.
Applicants for marriage promotion grants must ensure that participation in such
activities is voluntary and that domestic violence concerns are addressed (e.g.,
through consultations with experts on domestic violence).
Responsible Fatherhood Initiatives. Up to $50 million per year (for
FY2006 through FY2010) is available for competitive grants made by HHS to states,
territories, Indian tribes, tribal organizations, and public and nonprofit community
organizations (including religious organizations) for responsible fatherhood
initiatives. Allowable activities under such initiatives include those to promote
marriage; teach parenting skills through counseling; mentoring, mediation, and
dissemination of information; employment and job training services; media
campaigns; and development of a national clearinghouse focused on responsible
fatherhood.

Tribal TANF
Federally recognized Indian tribes and certain Alaskan Native organizations
have the option to operate their own TANF programs for needy families with
children. Tribes are entitled to receive a grant equal to the amount of FY1994 federal
expenditures in pre-TANF programs attributable to Indian families residing in the
area to be served by the tribal program. This is financed by a reduction in the state’s
block grant amount. States may, but are not required to, provide tribes with MOE
funds.
Tribes seeking to operate TANF programs must submit plans to the Secretary
of HHS for approval. The Secretary of HHS — with the participation of the tribes
— establishes work requirements and time limits for each tribe operating its own
TANF program.
Additionally, tribes that operated pre-TANF work and education programs are
provided grants to operate tribal work programs that total $7.6 million per year. The
amount of each grant equals what the tribe received in FY1994 under pre-TANF
programs.
Research and Demonstration Funds
TANF law appropriates $15 million per year for research and evaluation
activities for state TANF programs. (Before FY2002, these funds were annually
rescinded in appropriations acts, with welfare-related research funded through
another HHS research and evaluation account.) Half of these funds must be used for
state-initiated research projects; the remainder is to be used for federally initiated
projects.
Census Bureau Funds
TANF law also appropriates $10 million per year to the U.S. Census Bureau to
fund a longitudinal survey of a representative sample of households to examine the
effects of welfare reform. This survey is known as the Survey of Program Dynamics,
and includes information on the sample for a 10-year period spanning 1992-2003.

Appendix A: Details of
TANF Work Participation Rate Calculations
Introduction
TANF work participation standards are numerical performance measures that
each state must meet or be subject to a financial penalty (a reduction in a state’s
block grant). The standards themselves set a target participation rate for a state to
meet. The participation rate itself is expressed as a percentage: the number of
families considered engaged in work (the numerator) is divided by the total number
of families included in the participation calculation (the denominator). The percent
of families meeting participation requirements is computed monthly, and for the
fiscal year, the annual participation rate is the average of the participation rates for
each month over the year.
This appendix provides the details of the TANF work participation rate
calculation. It first describes the total number of families included in the work
participation calculation, and then discusses the rules for a family to be considered
“engaged in work.”
Families Included in the Participation Rate Calculation
(the Denominator of the Participation Rate)
Most families receiving assistance from federal TANF or state MOE funds are
included in the participation rate calculation. However, certain families are excluded
either by statute or regulation. Such families may be exempted from TANF work
requirements without creating the potential that their nonparticipation would result
in a lower participation rate.
The families excluded from the participation rate are
^!certain families without an adult recipient. This category includes
families with adult nonrecipients who are (a) non-parent caretakers
(e.g., grandparent, aunt, uncle), (b) ineligible noncitizen parents, (c)
and, at state option, adults receiving Supplemental Security Income²²
(SSI);
^!at state option, families with a single parent caring for a child under
the age of one — this exclusion is limited to a maximum of 12
months in a lifetime for the family;

²² Before October 1, 2006, all families without an adult recipient were excluded from the
work participation rate calculation. The Deficit Reduction Act of 2005 (P.L. 109-171)
required HHS to issue regulations to determine the circumstances under which a family with
a non-recipient parent must be included in the work participation rate calculation. The HHS
regulations generally require that states include the following types of families without an
adult recipient in the work participation rate calculation: (1) except for three months in a
12-month period, families subject to a sanction that removes the adult from the TANF
assistance unit; and (2) families that reach state time limits that remove the adult from the
TANF assistance unit but continue aid on behalf of the family’s children.

^!families with adults who are needed in the home to care for disabled
family members;
^!at state option, families with adult Social Security Disability (SSDI)
recipients;
^!at state option, families with an adult that became eligible for SSI
during the fiscal year;
^!at state option, families participating in a tribal TANF or tribal work
program; and
^!families under a sanction for refusal to comply with work
requirements, for up to three months in a 12-month period.
Families Considered “Engaged in Work”
(the Numerator of the Participation Rate)
For a family to be considered “engaged in work” it must have members who
participate in creditable activities for at least a minimum number of hours. The rules
emphasize that recipients get a job quickly; education and training are limited.
Creditable Activities. Federal law lists 12 categories of activities creditable
toward meeting TANF work participation standards. HHS regulations define what
specific types of activities count under each of the 12 categories. Table A1 lists the

12 creditable categories of activities and the HHS regulatory definition for each.

Table A1. Creditable TANF Work Activities and Their Definitions
Activity Def i ni tion
Unsubsidized employmentMeans full- or part-time employment in the public or
private sector that is not subsidized by TANF or any
other public program.
Subsidized private sectorMeans employment in the private sector for which the
employmentemployer receives a subsidy from TANF or other public
funds to offset some or all of the wages and costs of
employing an individual.
Subsidized public sectorMeans employment in the public sector for which the
employmentemployer receives a subsidy from TANF or other public
funds to offset some or all of the wages and costs of
employing an individual.
Job search and readiness Means the act of seeking or obtaining employment, or
preparation to seek or obtain employment, including
Participation in thislife skills training and substance abuse treatment,
activity may be counted formental health treatment, or rehabilitation activities.
six weeks (12 weeks inSuch treatment or therapy must be determined to be
certain circumstances) in anecessary and documented by a qualified medical,
fiscal year.substance abuse, or mental health professional.

Activity Def i ni tion
Community serviceMeans structured programs and embedded activities in
which TANF recipients perform work for the direct
benefit of the community under the auspices of public
or nonprofit organizations. Community service
programs must be limited to projects that serve a useful
community purpose in fields such as health, social
service, environmental protection, education, urban and
rural redevelopment, welfare, recreation, public
facilities, public safety, and child care. A state agency
shall take into account, to the extent possible, the prior
training, experience, and skills of an individual in
making appropriate community service assignments.
Work experienceMeans a work activity, performed in return for welfare,
that provides an individual with an opportunity to
acquire the general skills, knowledge, and work habits
necessary to obtain employment. The purpose of work
experience is to improve the employability of an
individual who cannot find unsubsidized full-time
employment.
On-the-job trainingMeans training in the public or private sector that is
given to a paid employee while he or she is engaged in
productive work and that provides knowledge and skills
essential to the full and adequate performance of the
job.
Vocational educationalMeans organized educational programs that are directly
trainingrelated to the preparation of individuals for employment
in current or emerging occupations.
Participation in this
activity is limited to 12
months in a lifetime.
Caring for a child of aMeans providing child care to enable another cash
recipient in communitywelfare recipient to participate in a community services
serviceprogram. This is an unpaid activity and must be a
structured program to improve the employability of
participating individuals.
Job skills training directlyMeans training or education for job skills required by
related to employmentan employer to provide an individual with the ability to
obtain employment or to advance or adapt to the
changing demands of the workplace.
Education directly relatedMeans education related to a specific occupation, job,
to employment (for thoseor job offer.

without a high school or
equivalent degree

Activity Def i ni tion
Completion of a secondaryIn the case of a recipient who has not completed
school program (for thosesecondary school or received such a certificate, this
without a high school ormeans regular attendance, in accordance with the
equivalent degree)requirements of a secondary school or course of study,
at a secondary school or in a course of study leading to
a certificate of general equivalence.
^Source:^T^a^bl^e^prepared^by^C^R^S^bas^e^{d on}^H^H^S^reg^u^l^atⁱ^oⁿ^s^{. S}^ee^Feder^a^{l Regis}^t^er^{, v}^o^l^.^{73, n}^o^.^24,
^F^e^bru^a^ry^{5, 2008, pp. 6772-}⁶⁸²⁸.
Minimum Required Hours in Work or Job Preparation Activities. To
be considered a “participant” and counted by a state toward meeting its standard, a
family member or members must also be engaged in these activities for a minimum
number of hours per week in a month. Table A2 outlines the TANF work
participation hours standards. For meeting the “all family” standard, the hours
requirement varies depending on family type and the age of the youngest child. The
general hours requirement is an average of at least 30 hours per week during the
month. However, for single parents caring for a child under the age of six (about half
the caseload of families with an adult recipient), an average of 20 hours per week
during the month is needed in work activities for a state to deem them as
participants. Higher hours are required for two-parent families to meet the standard.
In two-parent families, the combined hours of both parents are considered in
determining whether a family can be considered a participant family.
Table A2 shows that certain hours of participation must be in “core” activities,
while remaining hours may be in “supplemental” activities. The concepts of core and
supplemental activities are discussed below.

Table A2. TANF Hours Requirements for the All-Family Rate
and the Two-Parent Family Rate (Excludes Special Rule
for Teen Parents), by Family Type
All-family rateTwo-parent family rate
Tw o- parent Tw o-parent
familiesfamilies not
Single parentreceivingreceiving
families with afederally fundedfederally funded
child under age 6Other familieschild carechild care
Total hoursAn average of 20An average of 30An average of 55An average of 35
requirementhours per weekhours per weekhours per weekhours per week
during the monthduring the monthduring the monthduring the month
Required hours inAn average of 20An average of 20An average of 50An average of
core activitieshours per weekhours per weekhours per week30 hours per
during the month during the monthduring the monthweek during the
month
Allowable hoursNot applicableUp to an averageUp to an averageUp to an average
in supplementalof 10 hours perof 5 hours perof 5 hours per
activitiesweek during theweek during theweek during the
monthmonthmonth
^Source:^T^a^{ble prepared by}^C^R^S^.
Table A3 lists the 12 activities, classifying them as either “core” or
“supplemental.” In general, participation in a core activity may be a recipient’s sole
or primary activity used to fully satisfy TANF participation requirements. On the
other hand, participation in supplemental activities often must be done only in
conjunction with participation in core activities, with hours that count only after the
core requirement is met.
Most of the core activities focus on work or activities designed to move a
family quickly into work. The notable exception is vocational educational training,
which is creditable for 12 months in an individual’s lifetime as a sole or primary
TANF activity. All supplemental activities are education-related.

Table A3. TANF “Core” and “Supplemental” Work Activities
“Core” activities — Unsubsidized employment;
— Subsidized private sector employment;
— Subsidized public sector employment;
— Job search and readiness (usual limit of six weeks in a fiscal year.^a
This limit is converted to an “hourly equivalent” basis, see
below );
— Community service;
— Work experience;
— On-the-job training;
— Vocational educational training (limited to 12 months in an
individual’s lifetime); and
— Caring for a child of a recipient in community service.
“Supplemental” — Job skills training directly related to employment;
activities — Education directly related to employment (for those without a high
school or equivalent degree); and
— Completion of a secondary school program (for those without a
high school or equivalent degree).
^Source:^T^a^{ble prepared by}^C^R^S^.
^{a. T}^h^{e lim}^{it on}^j^{ob s}^earch^an^{d readin}^es^s^isⁱⁿ^creas^ed^{to 12 w}^eek^s^f^o^{r a s}^t^{ate th}^{at h}^a^s^an^uⁿ^e^m^p^loy^m^en^t
^{rate at leas}^{t 50% abov}^{e th}^{e n}^a^tion^a^{l av}^erag^{e u}ⁿ^e^m^p^loy^m^en^{t rate or m}^eets^th^{e “}^econ^o^mⁱ^{c n}^eed”
^cr^iterⁱ^{a f}^o^r^coⁿ^tin^g^eⁿ^c^y^f^uⁿ^d^{s (}^s^{ee “}^C^oⁿ^tin^g^eⁿ^c^y^Fuⁿ^d^{s,” ear}^lierⁱⁿ^th^{is r}^e^p^o^r^t)^.
HHS regulations clarify that only actual hours of participation count toward
meeting these standards. However, they also created an excused absence policy. For
paid activities, states are credited for all hours for which an individual is paid,
including any holidays or paid leave (e.g., paid sick leave). For unpaid activities, the
regulations allow for up to 10 holidays plus 80 hours of other excused absences over
a year.
The regulations require that hours in unpaid activities be supervised on a daily
basis. The daily supervision requirement means that a responsible party has daily
oversight of an individual’s participation, not necessarily daily in-person contact with
the participant.
Limit on Job Search and Readiness. HHS regulations also provide that
the 6- (or sometimes 12-) week limit on participation in job search and readiness be
expressed in terms of hours over a calendar year. For a single parent caring for a pre-
school child with a minimum 20 hours per week participation requirement, the 6-
week limit on job search and readiness is converted to a 120-hour per year limit. For
others, the limit is converted to 180 hours per year.
Under the statute, the 6-week limit on job search and readiness is increased to
12 weeks, on the basis of conditions in the state (rather than the characteristics of the
individual). The limit rises if the state’s unemployment rate is at least 50% greater
than the national average unemployment rate or the state is considered an
economically “needy” state for the purposes of the TANF contingency fund (see

“Contingency Fund” section earlier in this report). Those in states that meet either
of these criteria may exceed the usual limits, up to 240 hours per year for single
parents families with a pre-school child or 360 hours per year for others.
Teen Parents. Teen parents have a special rule for determining their
participation. A state may deem a teen parent as engaged in work if she or he is
participating in education directly related to employment for an average of at least 20
hours per week during the month or is making satisfactory progress toward
completion of a secondary school program.
Limitation on Participation in Education. There is a cap on participation
in education activities. A maximum of 30% of families considered participating may
be participating by virtue of vocational educational training or by being a teen parent
deemed to be participating through education directly related to employment or
satisfactory progress in a program of secondary school education.
Deeming Hours of Participation in Workfare. Participation in work
experience or community service is sometimes called “workfare” because recipients
are effectively working off their welfare grant. Guidance issued by the U.S.
Department of Labor in May 1997 directed that states must comply with minimum
wage rules for participants of work experience or community service if a specific
activity comes under the Fair Labor Standards Act’s (FLSA) definition of
employment.
For activities covered by minimum wage rules, the maximum number of hours
of participation allowed would be the grant divided by the minimum wage. In some
cases, this could result in fewer hours than required to meet TANF participation
standards. States determine TANF benefit amounts, which also often vary by family
size. Moreover, most states reduce TANF benefits for other income (e.g., Social
Security and unemployment insurance). The reduced benefit may be smaller than
needed to comply with both minimum wage requirements and TANF participation
standards.
The May 1997 DOL guidance provided that if a state has a Food Stamp
workfare program, the state may count the value of both TANF and food stamp
benefits received by a family when determining the maximum number of workfare
hours. The HHS regulations issued on February 5, 2008, provide that a workfare
recipient may be deemed to meet the core TANF work participation hours standard
if the state has a Simplified Food Stamp program that aligns food stamp and TANF
work rules and if the maximum number of workfare hours based on both TANF and
Food Stamp benefits is still below that required to comply with TANF work
participation standards.