Welfare Reform

One-third of the 2.1 million cases of cash assistance provided under federal or state welfare programs in the fall of 2001 went to children. Because no adults in these families received either Temporary Assistance for Needy Families (TANF) or state maintenance-of-effort funds, work requirements and time limits did not apply. Welfare reform legislation passed in 1996 included a caseload reduction credit that reduces each state's mandated participation rate if its welfare caseload declines. Because of the dramatic declines in welfare caseloads since 1996, states have generally seen greatly reduced participation rates for TANF programs. After accounting for cases involving only children, states excluded 11 percent of the remaining 1.4 million families with an adult from federal or state time limits. States' experiences with work requirements and time limits highlight key issues Congress may wish to consider when reauthorizing TANF provisions, including the relatively few families who have reached their time limit so far and the future adequacy of the federal 20-percent extension.