Since creation of the Temporary Assistance for Needy Families (TANF) program in 1996 (and even before then in some states) states have greatly restructured their welfare programs to move families from welfare to work. The entitlement to cash assistance, in effect for more than 60 years, has been eliminated. Instead, states and counties have received broad flexibility under TANF to help low-income families with children move to self-sufficiency. These policy choices, as highlighted here, will significantly affect society's ability to address the needs of low-income families

Eileen Sweeney

Harold Leibovitz

John Martinez

Juliane Baron

Sheila Zedlewski

English

IssueLab

1Income SupportCaseload Reduction Brings New ChallengesIntroductionSince the passage of the law creating the TemporaryAssistance for Needy Families (TANF) block grant in1996, and even before then in some states, significantpolicy changes have occurred as states have restructuredtheir welfare programs to move families from welfare towork.1 The entitlement to cash assistance, in effect formore than 60 years, has been eliminated. Instead, stateshave received broad flexibility under TANF to help low-income families with children move to self-sufficiency.The result has been a wide variety of policies acrossstates – and, in states that have devolved TANF imple-mentation to the county level, within states as well. Welfare reform remains a work in progress. The pol-icy choices that states are making will significantlyaffect their ability to address the needs of low-incomefamilies, including those who are working as well asthose with barriers to work. Statistical PortraitCash assistance caseloads have dropped dramatically inrecent years, from 14.4 million recipients in 1994 underAFDC to 5.8 million recipients in June 2000. Sinceenactment of the welfare law in 1996, the caseload hasfallen by at least 50 percent in 29 states and by at least20 percent in every state. Caseload decline is sometimes cited as evidence ofwelfare reform’s success, but the caseload can fall eitherbecause families no longer need assistance or becausefamilies who need assistance are no longer receiving it.Part of the caseload decline is clearly due to reducedneed: child poverty fell from 21.8 percent in 1994 to16.9 percent in 1999. However, welfare participation fellmuch more rapidly than child poverty. In 1994, 62 per-cent of poor children were receiving AFDC assistance;by 1999, only 37.8 percent of poor children were receiv-ing TANF assistance.2The Urban Institute reports that 66 percent of singleparents who left welfare between 1995 and 1997 wereemployed and that the employment rate increased to 71percent for those single parents who left welfare between1997 and 1999.3 In addition, median monthly wages forformer recipient families were $1,093 in 1999, approxi-mately the federal poverty level for a family of three.However, as the Urban Institute notes, some adults maywork only a portion of the months in a year, leading tolower annual earnings levels than this monthly figurewould suggest. Welfare reform has increased employment amongsingle parents, but it largely has not helped newly work-ing parents escape poverty. While incomes have risen formany, there are troubling findings related to the lowest-income quintile of families headed by single mothers. A Center on Budget and Policy Priorities study,based upon the Current Population Survey, reports thatthe average disposable incomes of the poorest fifth of allsingle mothers fell 3 percent between 1995 and 1999,despite increased earnings. Some 700,000 single-motherheaded families had significantly less income in 1999than their counterparts in 1995.4 These negative resultscould have been largely reduced if more working fami-lies were participating in safety net programs. Becausethe earnings of many working parents are not sufficientto support a family of three, government supports suchas food stamps, health insurance, subsidized child care,and the Earned Income Tax Credit are essential.However, the Urban Institute reported in 2001 thatonly 43 percent of families that left welfare and hadincomes below 130 percent of the poverty line receivedfood stamps. Even more disturbing, only half of familiesthat left welfare and had incomes below 50 percent ofthe poverty line received food stamps.5 Among citizenchildren in immigrant families, food stamp participationdeclined by 75 percent between 1994 and 1998.6Similarly, while Medicaid provides 12 months oftransitional coverage to adults that leave welfare for Technical PaperIncome Supportwork, state leaver studies report that roughly half ofparents in families that left welfare had lost Medicaid.7Administrative complexities such as frequent recertifica-tions and limited welfare office hours may make it moredifficult for families to remain enrolled once they beginworking, despite ongoing eligibility. Many immigrantsalso face significant cultural and linguistic barriers.In addition, studies show that many families thathave left cash assistance return to the program. Likemany families still receiving TANF cash assistance, thesefamilies often have multiple barriers to work and needadditional assistance to succeed in a work setting.The Urban Institute’s national survey of current wel-fare recipients found that 48 percent had either poor gen-eral or mental health.8 A recent MDRC report found ahigh incidence of severe impairments among women inTANF families and their children.9 Other recent statestudies report a high incidence of mental impairmentsamong TANF parents, such as clinical depression, learn-ing disabilities, and low intelligence. Some parents havephysical impairments or substance abuse problems. Oftena parent with a disability faces multiple barriers to work.States have begun to recognize that these familiesoften will need additional supports that are more inten-sive, require more resources, and of greater durationthan other families need. Much more remains to bedone in this area.10Many families have lost cash assistance as the resultof state sanctions for violating TANF work requirementsor other rules. The Center on Budget and PolicyPriorities estimates that about 540,000 families nation-wide lost assistance following a full-family sanctionsometime from 1997 through 1999. Approximately two-thirds of these families (370,000) are likely to haveremained off of assistance at the end of 1999. Those wholeave because of a sanction often have greater barriers towork, lower employment rates, and (when working)tend to earn less than others who have left TANF forother reasons. They often do not understand why theylost benefits or how to come into compliance.11 MDRCrecently reported that women with multiple healthproblems and women who have been physically abusedwere more likely than other women to have been sanc-tioned by the welfare agency in the previous year.12Also, strong statistical correlations have been foundbetween states that had high proportions of minoritieson TANF and the use of strong sanctions, a factor whichaffected income security.13In addition, families have begun to reach time limitsin 21 states. The welfare law generally imposes a five-year limit on receipt of TANF-funded assistance; statesalso may impose shorter time limits. Sixteen of thesestates terminate benefits completely when the limit isreached; the other five states reduce benefits. In most ofthe remaining states, families will start to reach timelimits this fall or next year. However, a few states eitherdo not terminate benefits at all when time limits arereached, including New York, Michigan, and Maine, orcontinue providing benefits at a reduced level, mostnotably California.14Based on information gathered directly from states,the Center on Budget and Policy Priorities estimates thatapproximately 130,000 families have had their cash assis-tance benefits reduced or terminated due to time limits.The potential impact nationally of time limits is muchgreater, since many of the states with short time limitshave exempted large portions of their caseloads from timelimits or provided them with extensions.Approximately $27 billion is available annually forthe TANF program. In fiscal year 2001, this includesabout $17 billion of federal funds and about $10.4 bil-lion of state “maintenance of effort” funds, which statesare required to spend in order to receive their federalgrants. The amount of federal funds a state receives isbased on its spending levels from the early 1990s, whencaseloads were high. The recent drop in caseloads hasfreed up funds that states can use to meet the needs oflow-income families. It took a while for many states to understand theflexibility that Congress had given them to decide howto spend their TANF funds. In the early years of theprogram, many states had large unspent TANF balances:through October 2000, states had a total of $8 billion inunspent or unobligated TANF funds. By the end of fiscalyear 2000, however, states were using, on average, 95percent of their annual TANF allocations.15State Strategies & Innovations• Recent experiments show that policies that increasefamily economic resources can help families move toself-sufficiency and increase children’s well-being.For example, Milwaukee’s New Hope program andthe Minnesota Family Investment Program (MFIP)combine mandatory work with increased income(by allowing workers to keep some of their welfarecheck) and a good service- delivery system thatensures families receive the entire package of sup-ports available. Evaluations of these programs showpositive effects for families and children, such as lessstress and fewer hardships for New Hope partici-pants and better educational outcomes for childrenin both programs.162Technical Paper• Many states have invested more of their TANF fundsin key areas, including supports for low-incomeworking families and more-intensive supports forfamilies with barriers to work. For example, statespending of TANF dollars on child care, state earnedincome tax credits, transportation assistance, educa-tion and training, and programs that help addressbarriers to work has increased. Some states aredesigning their programs to help parents retainemployment and advance to better-paying jobs.17• Sixteen states and two counties have enacted anearned income tax credit to build on the federalEITC, helping to move more families out of poverty.18• Texas initiated a pilot program in 2000 to promotejob stability among former welfare recipients by pro-viding intensive case management services andstipends of at least $1,200 per year to help familiesmeet work-related costs, such as transportation, uni-forms, or training.19• Some states are using TANF funds to provide worksupports for families with incomes up to 200 per-cent of the federal poverty level (roughly $29,000for a family of three and $35,000 for a family offour), including those with no connection to thecash assistance program. Some states have moveddecisively in this area; others have not.20• Some states are designing programs that are better ableto assist families with barriers to work. For example,under Tennessee’s Family Services Counseling pro-gram, families that are not immediately ready to workhave an option to enter a more intensive programthrough which masters-level social workers from localcounseling agencies under contract with the TANFagency provide intensive case management and refer-rals. The counselors can redesign individual responsi-bility plans, make reasonable accommodations for dis-abilities, and help families secure the services and sup-port they need to move to work.21• Some states and counties, such as Mesa County,Colorado, and Cuyahoga County, Ohio, havedesigned conciliation procedures that help familiescome into compliance with TANF requirements andavoid sanctions. While most states impose a mini-mum of one month of sanction at the first instanceof noncompliance, and some are far longer, at leasteight states restore benefits upon compliance for anyinstance of noncompliance.22• Some states, such as Arizona, Delaware, Illinois,Maryland, and Rhode Island, exempt some workingfamilies from federal and state welfare time limits –called “stopping the clock” – by using state funds tosupport their benefits.23Implications for Federal PolicyThere are now vast differences across the states in thesafety net. Time limits on receipt of cash assistance rangefrom none to five years. State sanction and conciliationprocedures vary widely. Some states place a premium onhelping parents find jobs and advance in them, whileothers do not. Some states focus on providing servicesfor families with significant employment barriers, whileothers simply exempt them from work requirements.Some states spend all of their TANF funds to supportlow-income families, while others leave funds unspent oruse part of them to replace other state spending.An important part of the next phase of welfare reformwill be to identify, strengthen, and promote policies andprograms that help move families to work and out of pover-ty. Reducing family poverty and promoting family economicwell-being should be made explicit goals of TANF. As states that are seriously working to achieve thesegoals understand, however, and as demonstrations likeMFIP and New Hope show, the services and supportsthat families need to succeed require financial resources.Maintaining a strong federal financial commitment toTANF will therefore be essential. That commitment will become even more criticalduring a significant economic downturn. The nation’sstrong economy has facilitated the goals of TANF; areversal would make it extremely challenging for states tocontinue expanding the safety net for low-income fami-lies while also addressing increased demands for basiccash assistance. The federal government needs to assurestates that it will maintain a level of support to TANF thatwill help them in bad times as well as good ones.Given the clear indication that race and ethnicitymay be factors in prohibiting a significant number offamilies from achieving income security, states TANFprogams should be mandated to collect race and ethnicdata related to their TANF population and provided withdisincentives for the application of strong sanctionswithout adequate justification.3Income SupportWorking Group:Juliane Baron, Johns Hopkins UniversityHarold Leibovitz, The Urban Institute John Martinez, Manpower Demonstration Research Corporation Eileen Sweeney, Center on Budget and Policy PrioritiesSheila Zedlewski, The Urban InstituteEndnotes:1 Personal Responsibility and Work OpportunityReconciliation Act of 1996, Public Law 104-193, signedAugust 22, 1996.2 Wendell Primus and Kathryn Porter, Changes Since 1995 inthe Safety Net’s Impact on Child Poverty (Center on Budget andPolicy Priorities, December 1999), available on the Internet atwww.cbpp.org/12-23-99wel.pdf. This report includes datathrough 1998. Data on 1999 will be in a forthcoming CBPPreport.3 Pamela Loprest, How Are Families That Left Welfare Doing? AComparison of Early and Recent Welfare Leavers, Policy Brief B-36 (Washington, DC: Urban Institute, April 2001).4 Wendell Primus et al., The Initial Impacts of Welfare Reformon the Economic Well-being of Single Mother Families(Washington, DC: Center on Budget and Policy Priorities,August 1999), available on the Internet at www.cbpp.org/8-22-99wel.pdf. This report includes data through 1997; aforthcoming CBPP report will include 1999 data.5 Sheila Zedlewski, Former Welfare Families and the FoodStamp Program: The Exodus Continues, Policy Brief B-33(Washington, DC: Urban Institute, April 2001. ) available onthe Internet at http://www.urban.org6 Center on Budget and Policy Priorities tabulations of foodstamp quality-control data for 1994 and 1998.7 Jocelyn Guyer, Health Care After Welfare: An Update ofFindings from State-level Leaver Studies (Washington, DC:Center on Budget and Policy Priorities, August 2000), avail-able on the Internet at www.cbpp.org/8-16-00wel.pdf. 8 Sheila Zedlewski, Work Activity and Obstacles to Work amongTANF Recipients,Series B No. B-2 (Washington, DC: UrbanInstitute,  September 1999). Available on the Internet athttp://www.urban.org.9 Denise F. Polit, Andrew S. London, John M. Martinez, TheHealth of Poor Urban Women: Findings from the Project onDevolution and Urban Change (Manpower DemonstrationResearch Corporation, May 2001). Available on the Internetat http://www.mdrc.org.10 Eileen P. Sweeney, Recent Studies Indicate that Many ParentsWho Are Current or Former Welfare Recipients Have Disabilitiesand Other Medical Conditions (Washington, DC: Center onBudget and Policy Priorities, February 2000), available on theInternet at http://www.cbpp.org/2-29-00wel.htm11 Heidi Goldberg and Liz Schott, A Compliance-orientedApproach to Sanctions in State and County TANF Programs(Washington, DC: Center on Budget and Policy Priorities,October 2000), available on the Internet at http://www. cbpp.org/10-1-00sliip.htm.12 Polit, London, and Martinez, The Health of Poor UrbanWomen.13 Joe Soss, Sanford F. Schram, Thomas P. Vartanian and ErinO’Brien, “Setting the Terms of Relief: Explaining State PolicyChoices in the Devolution Revolution,” The AmericanJournal of Political Science, Vol. 45, No. 2, April 2001, pp.378-395.14 State Policy Documentation Project, a joint project of theCenter for Law and Social Policy and the Center on Budgetand Policy Priorities.15 Ed Lazere, Unspent TANF Funds at the End of Federal FiscalYear 2000 (Washington, DC: Center on Budget and PolicyPriorities, January 2001), available on the Internet athttp://www.cbpp.org/1-22-01sfp00surplus.htm.16 Dan Bloom and Charles Michalopoulos, How Welfare andWork Policies Affect Employment and Income: A Synthesis ofResearch (Manpower Research Demonstration Corporation,May 2001), available on the Internet at http://www.mdrc.org/Reports2001/NG-AdultSynthesis/NG-AdultResearchSyn-May2001.pdf.17 Julie Strawn and Karin Martinson, Steady Work and BetterJobs: How to Help Low-income Parents Sustain Employment andAdvance in the Workforce (Manpower Demonstration ResearchCorporation, June 2000). Available on the Internet athttp://www.mdrc.org.18 Colorado, District of Columbia, Illinois, Iowa, Kansas,Maine, Maryland, Massachusetts, Minnesota, New Jersey, NewYork, Oklahoma, Oregon, Rhode Island, Vermont, andWisconsin; Montgomery County, Maryland, and DenverCounty, Colorado. Ed Lazere, Shawn Fremstad, and HeidiGoldberg, States and Counties Are Taking Steps to Help Low-Income Working Families Make Ends Meet and Move Up theEconomic Ladder (Washington, DC: Center on Budget andPolicy Priorities, May 2001), available on the Internet atwww.cbpp.org/11-27-00sfp.htm. Since issuance of this paper,Oklahoma and Denver County, Colorado have also enactedearned income credits.19 Ibid.20 Ibid.21 Goldberg and Schott, A Compliance-oriented Approach toSanctions in State and County TANF Programs.22 Arizona, Arkansas, Kentucky, Massachusetts, Oregon,Rhode Island, Utah, and Washington. Ibid.23 Lazere, Fremstad, and Goldberg, States and Counties AreTaking Steps to Help Low-Income Working Families Make EndsMeet and Move Up the Economic Ladder.4DE3888Item #1191001SCGPrinted on Recycled Paper

Income Support: Caseload Reduction Brings New Challenges

https://search.issuelab.org/resources/35174/35174.pdf

Income Support: Caseload Reduction Brings New Challenges

Abstract

Similar works

Full text

Available Versions

IssueLab