Personal Responsibility and Work Opportunity Reconciliation Act Amendments of 2002 - Amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act (SSA) to: (1) reauthorize State family assistance grants and provide for their annual adjustment; (2) revise contingency fund requirements; (3) provide for bonuses for States that reduce child poverty; (4) repeal authority for Federal loans for State welfare programs; (5) replace the caseload reduction credit with employment credit to reward States in which families leave welfare for work; (5) increase guaranteed funding for child care; (6) authorize States to establish a parents as scholars program; (7) modify requirements with respect to vocational educational training and other preemployment activities; (8) eliminate the separate work participation rate for two parent families; (9) prohibit State imposition of stricter eligibility criteria for two-parent families; (10) establish grants to States for programs encouraging two-parent families and reducing teenage pregnancies; (11) require a child well-being plan as part of the individual responsibility plan; (12) exclude victims of domestic violence from the 20 percent limitation on hardship exception; (13) provide for continuation of certain pre-TANF waivers for States that elect to continue to operate under such a waiver; (14) authorize States to cover legal immigrants under SSA title XIX (Medicaid) and title XXI (State Children's Health Insurance) (SCHIP); (15) establish grants for second chance homes; and (16) authorize transfer of TANF funds to carry out an access to jobs or a reverse commute project.

Restores SCHIP funding for the social services block grant.

Directs the Secretaries of Health and Human Services and of Labor to award grants for projects related to promoting business linkages and providing for transitional jobs programs. Authorizes: (1) the Secretary to award grants to improve the coordination of support programs for low-income families and noncustodial parents; and (2) a State to use a family assistance grant for wage subsidies or other benefits or services to a family with an individual participating in certain work activities and meeting other specified requirements.

Amends SSA title IV part E (Foster Care and Adoption Assistance) to authorize States to align foster care and adoption assistance eligibility with TANF eligibility.

Amends the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to exclude State TANF assistance from the five year waiting period for legal immigrants.

Amends SSA title XIX (Medicaid) to revise and extend the transitional medical assistance (TMA) program.

Prohibits use of TANF funds to displace public employees.