Temporary Assistance for Needy Families
Update on Families Served and Work Participation Gao ID: GAO-11-880T September 8, 2011The Temporary Assistance for Needy Families (TANF) program, created in 1996, is one of the key federal funding streams provided to states to assist low-income families. A critical aspect of TANF has been its focus on employment and self-sufficiency, and the primary means to measure state efforts in this area has been TANF's work participation requirements. When the Deficit Reduction Act of 2005 (DRA) reauthorized TANF, it also made changes that were generally expected to strengthen these work requirements. Given the impending extension or reauthorization of TANF, this testimony primarily draws on previous GAO work to focus on (1) how the welfare caseload and related spending have changed since TANF was created and (2) how states have met work participation rates since DRA. To address these issues, in work conducted from August 2009 to May 2010, GAO analyzed state data reported to the Department of Health and Human Services (HHS); surveyed state TANF administrators in 50 states and the District of Columbia; conducted site visits to Florida, Ohio, and Oregon, selected to provide geographic diversity and variation in TANF program characteristics; and reviewed relevant federal laws, regulations, and research. In July 2011, GAO updated this work by analyzing state data reported to HHS since that time. In addition, GAO gathered information on caseload changes through its forthcoming work on TANF child-only cases.
Between fiscal years 1997 and 2008, the total number of families receiving welfare cash assistance decreased by almost 50 percent. At the same time, there have also been changes in the types of families receiving cash assistance. Specifically, child-only cases--in which the children alone receive benefits--increased from about 35 percent of the overall TANF caseload in 2000 to about half in 2008. As the number of families receiving TANF cash assistance declined, state spending shifted to support purposes other than cash assistance, which is allowed under the law. However, because states are primarily required to report data to HHS on families receiving cash assistance and not on families receiving other forms of aid funded by TANF, this shift in spending has left gaps in the information gathered at the federal level to understand who TANF funds are serving and ensure state accountability. Nationally, the proportion of TANF families who met their work requirements changed little after DRA was enacted, and many states have been able to meet their work participation rate requirements because of various policy and funding options allowed in federal law and regulations. Although federal law generally requires that a minimum of 50 percent of families receiving TANF cash assistance in each state participate in work activities, both before and after DRA, about one-third of TANF families nationwide met these requirements. Nonetheless, many states have been able to meet their required work participation rates because of policy and funding options. For example, states receive a caseload reduction credit, which generally decreases each state's required work participation rate by the same percentage that state caseloads decreased over a specified time period. States can further add to their credits, and decrease their required work rates, by spending their own funds on TANF-related services beyond the amount that is required to receive federal TANF funds. In fiscal year 2009, 7 states met their rates because 50 percent or more of their TANF families participated in work activities for the required number of hours. However, when states' caseload decreases and additional spending were included in the calculation of state caseload reduction credits, 38 other states were also able to meet their required work participation rates in that year.
GAO-11-880T, Temporary Assistance for Needy Families: Update on Families Served and Work Participation
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Human Resources, Committee on Ways and
Means, House of Representatives:
For Release on Delivery:
Expected at 2:00 p.m. EDT:
Thursday, September 8, 2011:
Temporary Assistance for Needy Families:
Update on Families Served and Work Participation:
Statement of Kay E. Brown, Director:
Education, Workforce, and Income Security:
GAO-11-880T:
GAO Highlights:
Highlights of GAO-11-880T, a testimony before the Subcommittee on
Human Resources, Committee on Ways and Means, House of Representatives.
Why GAO Did This Study:
The Temporary Assistance for Needy Families (TANF) program, created in
1996, is one of the key federal funding streams provided to states to
assist low-income families. A critical aspect of TANF has been its
focus on employment and self-sufficiency, and the primary means to
measure state efforts in this area has been TANF‘s work participation
requirements. When the Deficit Reduction Act of 2005 (DRA)
reauthorized TANF, it also made changes that were generally expected
to strengthen these work requirements. Given the impending extension
or reauthorization of TANF, this testimony primarily draws on previous
GAO work to focus on (1) how the welfare caseload and related spending
have changed since TANF was created and (2) how states have met work
participation rates since DRA. To address these issues, in work
conducted from August 2009 to May 2010, GAO analyzed state data
reported to the Department of Health and Human Services (HHS);
surveyed state TANF administrators in 50 states and the District of
Columbia; conducted site visits to Florida, Ohio, and Oregon, selected
to provide geographic diversity and variation in TANF program
characteristics; and reviewed relevant federal laws, regulations, and
research. In July 2011, GAO updated this work by analyzing state data
reported to HHS since that time. In addition, GAO gathered information
on caseload changes through its forthcoming work on TANF child-only
cases.
What GAO Found:
Between fiscal years 1997 and 2008, the total number of families
receiving welfare cash assistance decreased by almost 50 percent. At
the same time, there have also been changes in the types of families
receiving cash assistance. Specifically, child-only cases”-in which
the children alone receive benefits-”increased from about 35 percent
of the overall TANF caseload in 2000 to about half in 2008. As the
number of families receiving TANF cash assistance declined, state
spending shifted to support purposes other than cash assistance, which
is allowed under the law. However, because states are primarily
required to report data to HHS on families receiving cash assistance
and not on families receiving other forms of aid funded by TANF, this
shift in spending has left gaps in the information gathered at the
federal level to understand who TANF funds are serving and ensure
state accountability.
Nationally, the proportion of TANF families who met their work
requirements changed little after DRA was enacted, and many states
have been able to meet their work participation rate requirements
because of various policy and funding options allowed in federal law
and regulations. Although federal law generally requires that a
minimum of 50 percent of families receiving TANF cash assistance in
each state participate in work activities, both before and after DRA,
about one-third of TANF families nationwide met these requirements.
Nonetheless, many states have been able to meet their required work
participation rates because of policy and funding options. For
example, states receive a caseload reduction credit, which generally
decreases each state‘s required work participation rate by the same
percentage that state caseloads decreased over a specified time
period. States can further add to their credits, and decrease their
required work rates, by spending their own funds on TANF-related
services beyond the amount that is required to receive federal TANF
funds. In fiscal year 2009, 7 states met their rates because 50
percent or more of their TANF families participated in work activities
for the required number of hours. However, when states‘ caseload
decreases and additional spending were included in the calculation of
state caseload reduction credits, 38 other states were also able to
meet their required work participation rates in that year.
Figure: Factors That Helped States That Met Their Work Participation
Rates in Fiscal Years 2007 through 2009:
[Refer to PDF for image: stacked vertical bar graph]
Number of states in each category, by year:
Fiscal year: 2007;
State spending + caseload reduction credit + work rates: 22;
Caseload reduction credit + work rates: 8;
Work rates of 50% or more: 9;
Total: 39.
Fiscal year: 2008;
State spending + caseload reduction credit + work rates: 14;
Caseload reduction credit + work rates: 22;
Work rates of 50% or more: 8;
Total: 44.
Fiscal year: 2009;
State spending + caseload reduction credit + work rates: 17;
Caseload reduction credit + work rates: 21;
Work rates of 50% or more: 7;
Total: 45.
Source: GAO analysis of HHS data.
[End of figure]
View [hyperlink, http://www.gao.gov/products/GAO-11-880T] or key
components. For more information, contact Kay E. Brown at (202) 512-
7215 or brownke@gao.gov.
[End of section]
Chairman Davis, Ranking Member Doggett and Members of the Subcommittee:
I am pleased to have the opportunity to participate in today's
discussion of the $16.5 billion Temporary Assistance for Needy
Families (TANF) block grant. As you know, the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (PRWORA)[Footnote 1]
introduced sweeping changes to federal welfare policy. It ended Aid to
Families with Dependent Children, which entitled eligible families to
monthly cash payments, and created TANF, a capped block grant provided
to states to operate their own welfare programs within federal
guidelines.[Footnote 2] Those guidelines, in part, emphasize
employment and work supports, and as such, designate specific work
participation requirements for many families who receive cash
assistance.[Footnote 3] For example, in December 2010, approximately
60 percent of the 1.9 million families receiving TANF cash assistance
included an adult or teen parent who was required to participate in
work activities as a condition of benefit receipt. The remaining
families were excluded from the work requirements, often because those
families included only children receiving benefits. Although the work
requirements have been in place since TANF was created, Congress took
steps through the Deficit Reduction Act of 2005 (DRA)[Footnote 4] that
were generally expected to strengthen these requirements, including
adding several provisions to improve the reliability of work
participation data.[Footnote 5] Both the U.S. Department of Health and
Human Services (HHS), which oversees TANF at the federal level, and
states were required to take steps to implement the DRA changes
beginning in fiscal year 2007.
My remarks today are primarily based on our past work, specifically
our May 2010 report examining how DRA affected state TANF programs and
work participation rates.[Footnote 6] I will focus on (1) how the
welfare caseload and related spending have changed since TANF was
created and (2) how states have met work participation rates since
DRA. To develop our findings for our May 2010 report on work
participation, we used multiple methodologies. We reviewed state TANF
data reported to HHS, as well as relevant federal laws, regulations,
and guidance; and interviewed HHS officials. We also surveyed state
TANF administrators from the 50 states and Washington, D.C.; and
conducted site visits to meet with state and local TANF officials in
Florida, Ohio, and Oregon, selected because they made varied
modifications to their TANF programs after DRA and varied in
geographic location and selected TANF program characteristics. We
conducted our work for that report from August 2009 to May 2010,
[Footnote 7] and in July 2011, we obtained more recent data on work
participation from HHS to supplement our earlier work. This statement
also draws from our February 2010 report on TANF caseloads,[Footnote
8] as well as our recent work on TANF child-only cases, which examines
cases in which the children alone receive benefits.[Footnote 9] We
determined that the data we obtained were sufficiently reliable for
the purposes of this testimony. Our performance audit was conducted in
accordance with generally accepted government auditing standards.
Those standards required that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Data Gaps Hinder Full Assessment of Families Being Assisted with TANF
Funds:
The number of families receiving welfare cash assistance fell
significantly after the creation of TANF, decreasing by almost 50
percent from a monthly average of 3.2 million families in fiscal year
1997 to a low of 1.7 million families in fiscal year 2008 (see figure
1). Several factors likely contributed to this caseload decline, such
as the strong economy of the 1990s, declines in the number of eligible
families participating, concurrent policy changes, and state
implementation of TANF requirements, including those related to work
participation.[Footnote 10] However, since fiscal year 2008 and the
beginning of the recent economic recession, the number of families
receiving TANF cash assistance has increased by 13 percent to a
monthly average of 1.9 million families in fiscal year 2010. Comparing
the types of families that receive TANF cash assistance, the number of
two-parent families increased at a faster rate than single-parent
families or child-only cases, in which only the children receive
benefits, during this time period.[Footnote 11]
Figure 1: Changes in the Average Monthly Number of Families Receiving
TANF Cash Assistance Since Fiscal Year 1997:
[Refer to PDF for image: line graph]
Average number of families receiving TANF cash assistance per month:
FY 1997: TANF created: 3.19 million;
FY 2006: DRA enacted: 1.95 million;
FY 2008; Economic downturn: 1.69 million;
FY 2010: 1.91 million.
Source: GAO analysis of HHS data.
Note: The provisions of PRWORA that created TANF were not effective
until fiscal year 1997.
[End of figure]
The number of child-only cases has increased slightly from fiscal year
2000 to fiscal year 2008; however, these cases make up an increasing
proportion of the total number of families receiving cash assistance
because TANF cases with adults in the assistance unit have decreased
substantially. Specifically, the number of TANF child-only cases
increased from approximately 772,000 cases to approximately 815,000
cases, but the number of families with adults receiving assistance
decreased from about 1.5 million to about 800,000 cases (figure 2). As
a result, the share of child-only cases in the overall TANF caseload
increased from about 35 percent to about half.
Figure 2: Number of TANF Cases with Adults in Assistance Unit and
Number of TANF Child-Only Cases (Fiscal Years 2000-2008):
[Refer to PDF for image: stacked vertical bar graph]
Total TANF caseload:
Fiscal year: 2000;
Families with adults in the assistance unit: 1.33 million;
Child-only (families without adults in the assistance unit): 0.77
million;
Total: 2.2 million.
Fiscal year: 2001;
Families with adults in the assistance unit: 1.32 million;
Child-only (families without adults in the assistance unit): 0.78
million;
Total: 2.1 million.
Fiscal year: 2002;
Families with adults in the assistance unit: 1.23 million;
Child-only (families without adults in the assistance unit): 0.77
million;
Total: 2.0 million.
Fiscal year: 2003;
Families with adults in the assistance unit: 1.1 million;
Child-only (families without adults in the assistance unit): 0.80
million;
Total: 1.9 million.
Fiscal year: 2004;
Families with adults in the assistance unit: 1.14 million;
Child-only (families without adults in the assistance unit): 0.86
million;
Total: 2.0 million.
Fiscal year: 2005;
Families with adults in the assistance unit: 1.03 million;
Child-only (families without adults in the assistance unit): 0.87
million;
Total: 1.9 million.
Fiscal year: 2006;
Families with adults in the assistance unit: 0.95 million;
Child-only (families without adults in the assistance unit): 0.85
million;
Total: 1.8 million.
Fiscal year: 2007;
Families with adults in the assistance unit: 0.88 million;
Child-only (families without adults in the assistance unit): 0.82
million;
Total: 1.7 million.
Fiscal year: 2008;
Families with adults in the assistance unit: 0.79 million;
Child-only (families without adults in the assistance unit): 0.81
million;
Total: 1.6 million.
Source: GAO analysis of HHS TANF administrative data.
Note: These data are national estimates produced from our analysis of
HHS's TANF data and are subject to sampling error. See appendix II for
the 95 percent confidence intervals associated with these estimates.
[End of figure]
There are four main categories of "child-only" cases in which the
caregiver (a parent or non-parent) does not receive TANF benefits: (1)
the parent is receiving Supplemental Security Income;[Footnote 12] (2)
the parent is a noncitizen or a recent legal immigrant;[Footnote 13]
(3) the child is living with a non-parent caregiver, often a relative;
and (4) the parent has been sanctioned and removed from the assistance
unit for failing to comply with program requirements, and the family's
benefit has been correspondingly reduced. Families receiving child-
only assistance are generally not subject to work requirements.
[Footnote 14]
Between fiscal years 2000 and 2008, increases in two of the categories
were statistically significant: children living with parents who were
ineligible because they received SSI benefits and children living with
parents who were ineligible because of their immigration status. Cases
in which the parents were ineligible due to immigration status almost
doubled and increased from 11 percent of the TANF child-only caseload
in fiscal year 2000 to 19 percent in fiscal year 2008 (see figure 3).
This increase of 8 percentage points is statistically significant and
represents an increase from about 83,000 in fiscal year 2000 to over
155,000 in fiscal year 2008, with the greatest increase occurring in
California.[Footnote 15] However, in some cases, the relationship
between the child and the adult living in the family is not known. The
number of these cases decreased significantly over the same period,
and it is possible that some of the increase in cases with ineligible
parents due to SSI receipt or immigration status resulted from better
identification of previously unknown caregivers. However, given
available data, we were unable to determine how much of the increase
was due to better reporting versus an actual increase in the number of
cases.
Figure 3: Changes in Child-Only Cases by Type of Case, Fiscal Years
2000 and 2008:
[Refer to PDF for image: 2 pie-charts]
2000 (772,227 total cases):
Unknown caregiver: 24%;
Non-parent caregiver: 31%;
Parent, SSI: 18%;
Parent, Sanction: 5%;
Parent, Immigration status: 11%;
Parent, other: 11%.
2008 (814,977 total cases):
Unknown caregiver: 12%;
Non-parent caregiver: 33%;
Parent, SSI: 22%;
Parent, Sanction: 5%;
Parent, Immigration status: 19%;
Parent, other: 9%.
Source: GAO analysis of HHS TANF administrative data.
Note: These data are national estimates produced from our analysis of
HHS's TANF data and are subject to sampling error. See appendix II for
the 95 percent confidence intervals associated with these estimates.
[End of figure]
Both the composition of the overall TANF caseload, as well as the
composition of the TANF child-only caseload, varies by state. For
example, in December 2010, 10 percent of TANF cases in Idaho were
single-parent families, compared to almost 80 percent in Missouri. In
both of these states, child-only cases comprised the rest of their
TANF caseloads. Concerning the variation in child-only cases by state,
almost 60 percent of TANF child-only cases in Tennessee included
children living with non-parent caregivers, compared to 31 percent in
Texas, according to state officials.
As the overall number of families receiving TANF cash assistance has
declined, so has state spending of TANF funds on cash assistance.
[Footnote 16] TANF expenditures for cash assistance declined from
about 73 percent of all expenditures in fiscal year 1997 to 30 percent
in fiscal year 2009 (see figure 4) as states shifted spending to
purposes other than cash assistance, which is allowed under the law.
[Footnote 17] States may use TANF funds to provide cash assistance as
well as a wide range of services that further the program's goals,
including child care and transportation assistance, employment
programs, and child welfare services. While some of this spending,
such as that for child care assistance, relates directly to helping
current and former TANF cash assistance recipients work and move
toward self-sufficiency, other spending is directed to a broader
population that did not ever receive TANF cash assistance.
Figure 4: TANF Expenditures for Cash Assistance and Other Purposes,
Fiscal Years 1997 and 2009:
[Refer to PDF for image: stacked horizontal bar graph]
Fiscal year: 1997;
Expenditures on cash assistance: 73%;
All other expenditures: 27%.
Fiscal year: 2009;
Expenditures on cash assistance: 30%;
All other expenditures: 70%.
Source: GAO analysis of HHS data,
Note: We use the term cash assistance in this figure, although HHS
uses the term "basic assistance." The cash assistance category
includes benefits designed to meet ongoing basic needs, including
cash, payments, or vouchers.
[End of figure]
Tracking the number of families receiving monthly cash assistance--the
traditional welfare caseload--no longer captures the full picture of
families being assisted with TANF funds. As states began providing a
range of services beyond cash assistance to other low-income families,
data collection efforts did not keep pace with the evolving program.
Because states are primarily required to report data to HHS on
families receiving TANF cash assistance but not other forms of
assistance, gaps exist in the information gathered at the federal
level to understand who TANF funds are serving and services provided,
and to ensure state accountability. For example, with the flexibility
allowed under TANF, states have used a significant portion of their
TANF funds to augment their child care subsidy programs. However,
states are not required to report on all families provided TANF-funded
child care, leaving an incomplete picture of the number of children
receiving federally funded child care subsidies. Overall, data on the
total numbers of families served with TANF funds and how states use
TANF funds to help families and achieve program goals in ways beyond
their welfare-to-work programs is generally unavailable. When we first
reported on these data limitations to this Subcommittee in
2002,[Footnote 18] we noted that state flexibility to use TANF funds
in creative ways to help low-income families has resulted in many
families being served who are not captured in the data reported to the
federal government. At that time, it was impossible to produce a full
count of all families served with TANF funds, and that data limitation
continues today.
National Work Participation Rates Changed Little after DRA, and
States' Rates Reflected Both Recipients' Work Participation and
States' Policy Choices:
Because job preparation and employment are key goals of TANF,[Footnote
19] one of the federal measures of state TANF programs' performance is
the proportion of TANF cash assistance recipients engaged in allowable
work activities.[Footnote 20] Generally, states are held accountable
for ensuring that at least 50 percent of all families receiving TANF
cash assistance participate in one or more of the 12 specified work
activities for an average of 30 hours per week.[Footnote 21] However,
before DRA, concerns had been raised about the consistency and
comparability of states' work participation rates and the underlying
data on TANF families participating in work activities. Although DRA
was generally expected to strengthen TANF work requirements and
improve the reliability of work participation data and program
integrity by implementing federal definitions of work activities and
participation verification requirements, the proportion of families
receiving TANF cash assistance who participated in work activities for
the required number of hours each week changed little after DRA, as
did the types of work activities in which they most frequently
participated. Specifically, in fiscal years 2007 through 2009, from 29
to 30 percent of TANF families participated in work activities for the
required number of hours, which is similar to the 31 to 34 percent of
families who did so in each year from fiscal years 2001 through 2006.
Among families that met their work requirements both before and after
DRA, the majority participated in unsubsidized employment. The next
most frequent work activities were job search and job readiness
assistance, vocational educational training, and work experience.
Although fewer than 50 percent of all families receiving TANF cash
assistance participated in work activities for the required number of
hours both before and after DRA, many states have been able to meet
their work participation rate requirements because of various policy
and funding options allowed in federal law and regulations.
Specifically, factors that influenced states' work participation rates
included not only the number of families receiving TANF cash
assistance who participated in work activities, but also:
1. decreases in the number of families receiving TANF cash assistance,
2. state spending on TANF-related services beyond what is
required,[Footnote 22]
3. state policies that allow working families to continue receiving
TANF cash assistance, and:
4. state policies that provide nonworking families cash assistance
outside of the TANF program.
Beyond families' participation in the 12 work activities, the factor
that states have commonly relied on to help them meet their required
work participation rates is the caseload reduction credit.
Specifically, decreases in the numbers of families receiving TANF cash
assistance over a specified time period are accounted for in each
state's caseload reduction credit, which essentially then lowers the
states' required work participation rate from 50 percent.[Footnote 23]
For example, if a state's caseload decreases by 20 percent during the
relevant time period, the state receives a caseload reduction credit
equal to 20 percentage points, which results in the state work
participation rate requirement being adjusted from 50 to 30 percent.
While state caseload declines have generally been smaller after DRA
because the act changed the base year for the comparison from fiscal
year 1995 to fiscal year 2005,[Footnote 24] many states are still able
to use caseload declines to help them lower their required work
participation rates. For example, in fiscal year 2009, 38 of the 45
states that met their required work participation rates for all TANF
families did so in part because of their caseload declines (see figure
5).
However, while states' caseload reduction credits before DRA were
based primarily on their caseload declines, after DRA, states'
spending of their own funds on TANF-related services also became a
factor in some states' credits. Specifically, states are required to
spend a certain amount of their funds every year in order to receive
their federal TANF block grants. However, if states spend in excess of
the required amount, they are allowed to correspondingly increase
their caseload reduction credits.[Footnote 25] In fiscal year 2009, 32
of the 45 states that met their required work participation rates for
all families receiving cash assistance claimed state spending beyond
what is required toward their caseload reduction credits. In addition,
17 states would not have met their rates without claiming these
expenditures (see figure 5).[Footnote 26] Among the states that needed
to rely on excess state spending to meet their work participation
rates, most relied on these expenditures to add between 1 and 20
percentage points to their caseload reduction credits (see figure 6).
Figure 5: Factors That Helped States That Met Their Work Participation
Rates for All TANF Families in Fiscal Years 2007 through 2009:
[Refer to PDF for image: stacked vertical bar graph]
Number of states in each category, by year:
Fiscal year: 2007;
State spending + caseload reduction credit + work rates: 22;
Caseload reduction credit + work rates: 8;
Work rates of 50% or more: 9;
Total: 39.
Fiscal year: 2008;
State spending + caseload reduction credit + work rates: 14;
Caseload reduction credit + work rates: 22;
Work rates of 50% or more: 8;
Total: 44.
Fiscal year: 2009;
State spending + caseload reduction credit + work rates: 17;
Caseload reduction credit + work rates: 21;
Work rates of 50% or more: 7;
Total: 45.
Source: GAO analysis of HHS data.
[End of figure]
Figure 6: Extent to Which States' Caseload Reduction Credits Increased
because of State Spending beyond What Is Required (for Those States
That Relied on Such Spending to Meet Their Work Participation Rates
for All TANF Families):
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2007;
Percentage points added to credit from state spending:
1-10: 10 states;
11-20: 8 states;
21-35: 4 states.
Fiscal year: 2008;
Percentage points added to credit from state spending:
1-10: 7 states;
11-20: 7 states;
21-35: 0 states.
Fiscal year: 2009;
Percentage points added to credit from state spending:
1-10: 10 states;
11-20: 6 states;
21-35: 1 state.
Source: GAO analysis of HHS data.
[End of figure]
Certain policy changes states made to their TANF programs in recent
years, which ensure families complying with the work requirements
continue to receive TANF cash assistance, are another factor that have
helped some states meet their required rates. For example, some states
reported that they implemented or modified worker supplement programs
and earned income disregard policies after DRA. Worker supplement
programs provide monthly cash assistance to low-income working
families previously on TANF or about to lose TANF eligibility due to
increases in their incomes, which can result in these families being
included in the calculation of states' work participation rates. On
our survey of states conducted between November 2009 and January 2010,
23 states reported that they had worker supplement programs, and 18 of
these states had implemented their programs since fiscal year 2006.
Further, 49 states reported having policies that disregard part of a
family's earned income when determining the family's monthly cash
assistance benefit, and 9 states reported that they had increased the
amount of income disregarded since fiscal year 2006.[Footnote 27]
Disregarding more earned income allows a family to continue receiving
cash assistance longer as their income grows.
States reported that they also made policy changes to their TANF
programs after DRA to provide nonworking families with cash assistance
outside of the TANF program, as providing TANF assistance to such
families would lower states' work participation rates. Specifically,
some states opted to fund cash assistance for certain types of low-
income families completely outside of their TANF programs. Because
such state spending is not connected to the TANF program, states are
able to exclude families provided cash assistance through these funds
from their work participation rate calculations. According to several
state TANF administrators who responded to our survey and officials we
interviewed during a site visit, states typically use this approach to
provide cash assistance to those families who have the most difficulty
meeting the TANF work requirements. Through our survey, 29 states
reported that they funded cash assistance in this way for certain
types of families, such as two-parent families, families with
significant barriers to employment, families enrolled in postsecondary
education, and others. Almost all of those states (28) used this
approach to provide cash assistance to low-income, two-parent
families, likely because the higher work participation rate required
for TANF families in that group can be difficult to meet.[Footnote 28]
Concluding Observations:
As traditional cash assistance caseloads declined and states broadened
the types of services provided and the number of families served,
existing data collection efforts resulted in an incomplete picture of
the TANF program at the national level. In effect, there is little
information on the numbers of people served by TANF funds other than
cash assistance and no real measure of how services supported by TANF
funds meet the goals of welfare reform. This leaves the federal
government with underestimates of the numbers served and potentially
understated results from these funds.
In addition, as before DRA, states have continued to take advantage of
the various policy and funding options available to increase their
TANF work participation rates. As a result, while measuring work
participation of TANF recipients is key to understanding the success
of state programs in meeting one of the federal purposes of TANF,
whether states met the required work participation rates provides only
a partial picture of state TANF programs' effort and success in
engaging recipients in work activities. Although the DRA changes to
TANF work requirements were expected to strengthen the work
participation rate as a performance measure and move more families
toward self-sufficiency, the proportion of TANF recipients engaged in
work activities remains unchanged. States' use of the modifications
currently allowed in federal law and regulations, as well as states'
policy choices, have diminished the rate's usefulness as the national
performance measure for TANF, and shown it to be limited as an
incentive for states to engage more families in work.
Lack of complete information on how states use funds to aid families
and to measure work participation hinders decision makers in
considering the success of TANF and what trade-offs might be involved
in any changes to program requirements. In addressing these issues,
care must to be taken to ensure that data requirements are well
thought out and do not present an unreasonable burden on state
programs.
We provided drafts of the reports we drew on for this testimony to HHS
for its review, and copies of the agency's written responses can be
found in the appendices of the relevant reports. We also provided HHS
a draft of this testimony for technical comments on the new
information on child-only TANF cases and updated TANF work
participation data. HHS had no technical comments.
Chairman Davis and Ranking Member Doggett, and Members of the
Subcommittee, this concludes my statement. I would be pleased to
respond to any questions you may have.
GAO Contacts and Acknowledgments:
For questions about this statement, please contact Kay E. Brown at
(202) 512-7215 or brownke@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this statement. Individuals who made key contributions to this
statement include James Bennett, Rachel Frisk, Alex Galuten, Gale
Harris, Jean McSween, and Cathy Roark.
[End of section]
Appendix I: How a State's Work Participation Rate Is Calculated When
It Claims State Expenditures in Excess of Its Requirement:
[Refer to Image: illustration]
Work participation rate:
Percentage of TANF families with work requirements participating in
the 12 approved work activities for the required number of hours:
All families receiving TANF cash assistance:
Not Working: 7;
Working: 3;
3 of 10 families = 30%;
Federal minimum = 50%.
The state in this example would fall well short of federal
requirements to have at least half of its families receiving TANF cash
assistance participating in work activities.
Impact of the caseload reduction credit:
Decline In Caseload:
Compares the number of families receiving welfare cash assistance in
2005 to the number in the year preceding the current year:
Caseload in 2005: 11;
Caseload last year: 10;
Percent reduction: 9%.
Excess State Spending:
Spending on programs in excess of the amount a state is required to
spend increases the state‘s caseload reduction credit;
Excess State Spending calculation = 15%.
Federal law allows states to apply for caseload reduction credits,
which decrease their required work participation rates. The state in
this example would have its minimum work participation rate reduced to
26 percent for all TANF families;
Adjusted minimum = 26%.
With the caseload reduction credit, the same state would meet its
adjusted work participation rate.
Work participation rate:
Percentage of TANF families with work requirements participating in
the 12 approved work activities for the required number of hours:
All families receiving TANF cash assistance:
Not Working: 7;
Working: 3;
3 of 10 families = 30%.
Source: GAO analysis of 42 U.S.C. § 607 and 45 C.F.R. § 261.43.
[End of figure]
[End of section]
Appendix II: TANF Child-Only Caseload Estimates and 95 Percent
Confidence Intervals:
The following tables provide the estimates and 95 percent confidence
intervals for the data we present in figures 2 and 3:
Table 2: Data for Figure 2: Number of TANF Cases with Adults and
Number of Child-Only Cases, Fiscal Years 2000-2008:
Number of TANF cases:
2000: 2,232,570 (2,229,148-2,235,992);
2001: 2,090,024 (2,087,255-2,092,793);
2002: 1,983,862 (1,970,328-1,997,396);
2003: 1,948,820 (1,939,976-1,957,664);
2004: 1,965,713 (1,963,769-1,967,657);
2005: 1,898,118 (1,895,362-1,900,874);
2006: 1,786,245 (1,784,557-1,787,933);
2007: 1,682,143 (1,680,459-1,683,827);
2008: 1,613,032 (1,611,315-1,614,749).
Number of child-only cases:
2000: 772,227 (731,702-812,751);
2001: 781,677 (743,671-819,684);
2002: 771,031 (736,694-805,367);
2003: 799,506 (765,729-833,282);
2004: 860,317 (825,456-895,178);
2005: 866,378 (831,273-901,483);
2006: 846,523 (813,218-879,827);
2007: 818,289 (782,715-853,864);
2008: 814,977 (779,313-850,642).
Percent of TANF cases that were child-only:
2000: 34.6% (32.8-36.4);
2001: 37.4% (35.6-39.2);
2002: 38.9% (37.1-40.6);
2003: 41.0% (39.3-42.8);
2004: 43.8% (42.0-45.5);
2005: 45.6% (43.8-47.5);
2006: 47.4% (45.5-49.3);
2007: 48.6% (46.5-50.8);
2008: 50.5% (48.3-52.7).
Source: GAO analysis of HHS administrative data.
[End of table]
Table 2: Data for Figure 3: Composition of TANF Child-Only Caseload in
Fiscal Years 2000 and 2008 (Percentage of Each Type of Case):
Type of child-only case: Non-parent caregiver;
2000 estimate: 31.1%;
95 percent confidence interval: 28.3-33.9;
2008 estimate: 32.5%;
95 percent confidence interval: 29.8-35.2.
Type of child-only case: Parent ineligible due to immigration status;
2000 estimate: 10.8%;
95 percent confidence interval: 8.1-13.5;
2008 estimate: 19.1%;
95 percent confidence interval: 15.9-22.3.
Type of child-only case: Parent ineligible due to receipt of SSI;
2000 estimate: 18.2%;
95 percent confidence interval: 15.8-20.5;
2008 estimate: 22.4%;
95 percent confidence interval: 19.9-25.0.
Type of child-only case: Parent ineligible due to sanction;
2000 estimate: 4.6%;
95 percent confidence interval: 2.7-6.5;
2008 estimate: 4.9%;
95 percent confidence interval: 2.8-7.0.
Type of child-only case: Parent, other;
2000 estimate: 11.0%;
95 percent confidence interval: 9.2-12.8;
2008 estimate: 9.3%;
95 percent confidence interval: 6.8-11.9.
Type of child-only case: Unknown caregiver;
2000 estimate: 24.3%;
95 percent confidence interval: 21.6-26.9;
2008 estimate: 11.7%;
95 percent confidence interval: 10.8-12.6.
Source: GAO analysis of HHS administrative data.
[End of figure]
[End of section]
Footnotes:
[1] Pub. L. No. 104-193, 110 Stat. 2105.
[2] Id. § 103(a)(1), 110 Stat. 2112.
[3] 42 U.S.C. § 607.
[4] Pub. L. No. 109-171, 120 Stat. 4 (2006).
[5] Id § 7102, 120 Stat. 136.
[6] GAO, Temporary Assistance for Needy Families: Implications of
Recent Legislative and Economic Changes for State Programs and Work
Participation Rates, [hyperlink,
http://www.gao.gov/products/GAO-10-525] (Washington, D.C.: May 28,
2010).
[7] For more information on our methodology, see appendix I of
[hyperlink, http://www.gao.gov/products/GAO-10-525].
[8] GAO, Temporary Assistance for Needy Families: Fewer Eligible
Families Have Received Cash Assistance Since the 1990s, and the
Recession's Impact on Caseloads Varies by State, [hyperlink,
http://www.gao.gov/products/GAO-10-164] (Washington, D.C.: Feb. 23,
2010). Also see GAO, Temporary Assistance for Needy Families:
Implications of Caseload and Program Changes for Families and Program
Monitoring, [hyperlink, http://www.gao.gov/products/GAO-10-815T]
(Washington, DC: Sept. 21, 2010).
[9] We examined the (1) trends and composition of the child-only
caseload; (2) characteristics of caregivers and children in non-parent
child-only cases; (3) factors influencing the level of benefits and
services for children with non-parent caregivers; and (4) coordination
efforts between state TANF and child welfare programs. To address
these objectives, we analyzed federal TANF and child welfare data;
surveyed state TANF and child welfare administrators; interviewed HHS
officials and researchers; and conducted site visits in Tennessee,
Texas, and Washington.
[10] For more information on factors that led to the decline in TANF
caseloads, see [hyperlink, http://www.gao.gov/products/GAO-10-164].
[11] While the number of two-parent families receiving cash assistance
increased by 61 percent during this time period, this group is a small
portion of all families receiving cash assistance. Specifically, in
December 2010, two-parent families comprised 5 percent of all families
receiving cash assistance nationwide.
[12] Supplemental Security Income (SSI) is federally administered by
the Social Security Administration and provides cash assistance to low-
income aged, blind, and disabled individuals.
[13] Under PRWORA, legal immigrants who entered the country after
August 1996 must be in the United States for 5 years to be eligible
for TANF. 8 U.S.C. § 1612(b).
[14] See 45 C.F.R. § 261.2(n).
[15] The 95 percent confidence interval for the estimate of 83,000
cases is 61,064 to 105,358 and for 155,000 cases is 127,595 to 183,880.
[16] TANF funds include both federal TANF funds and the funds that
states are required to spend to receive their federal TANF block
grants.
[17] 42 U.S.C. § 604(a).
[18] GAO, Welfare Reform: States Provide TANF-Funded Services to Many
Low-Income Families Who Do Not Receive Cash Assistance, [hyperlink,
http://www.gao.gov/products/GAO-02-564] (Washington, D.C.: Apr. 5,
2002).
[19] 42 U.S.C. § 601(a)(2).
[20] 42 U.S.C. § 607. The 12 work activities are: unsubsidized
employment, subsidized private sector employment, subsidized public
sector employment, work experience (if sufficient private sector
employment is not available), on-the-job training, job search and job
readiness assistance, community service programs, vocational
educational training, job skills training directly related to
employment, education directly related to employment (for recipients
who have not received a high school diploma or certificate of high
school equivalency), satisfactory attendance at secondary school or in
a course of study leading to a certificate of general equivalence (for
recipients who have not completed secondary school or received such a
certificate), and the provision of child care services to an
individual who is participating in a community service program. 42
U.S.C. § 607(d).
[21] To be counted as engaging in work for a month, most TANF families
are required to participate in work activities for an average of 30
hours per week in that month. However, PRWORA defined different weekly
work hour requirements for teen parents attending school, single
parents of children under age 6, and two-parent families. Further,
certain families are not included in the calculation of state work
participation rates, such as child-only families and, at state option,
single parents of children under age 1. In fiscal year 2009, about
130,000 families were excluded from the calculation of the all
families work participation rate.
[22] 42 U.S.C. § 609(a)(7). To receive its annual federal TANF block
grant, each state is generally required to spend 75 or 80 percent of
what it was spending in fiscal year 1994 on welfare-related programs,
including Aid to Families with Dependent Children, Job Opportunities
and Basic Skills Training, Emergency Assistance, and welfare-related
child care programs.
[23] 42 U.S.C. § 607(b)(3).
[24] For example, in fiscal year 2006 before the DRA changes were
implemented, states' caseload declines ranged from 11 to 91 percent,
and 18 states had declines that were at least 50 percent, which
reduced their required work participation rates to 0. However, in
fiscal year 2007, following the implementation of the DRA changes, 3
states did not have caseload declines, and the declines in the
remaining states ranged from 1 to 26 percent.
[25] 45 C.F.R. § 261.43. When calculating the caseload reduction
credit, federal regulations allow a state that spent in excess of its
required amount in the year preceding the current one to include only
the pro rata share of the total number of families receiving state-
funded cash assistance required to meet the state's basic requirement.
For an illustration of how these excess state expenditures are
factored into a state's caseload reduction credit and its work
participation rate, see appendix I.
[26] Although the majority of states reported excess state
expenditures after DRA, which helped some states to meet work
participation rates, we did not determine whether these increases
reflect new state spending or spending that had been occurring before
DRA but was not reported as state TANF spending at that time.
[27] Another state reported that it had begun indexing the amount
disregarded on an annual basis since fiscal year 2006. No states
reported that they had decreased or eliminated their earned income
disregards since fiscal year 2006.
[28] States are generally held accountable for ensuring that one or
both adults in at least 90 percent of all two-parent families
receiving TANF cash assistance participate in one or more of the 12
work activities for a minimum number of hours per week.
[End of section]
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