Universal Engagement

States must ensure that adults are “engaged in work,” as determined by state, within 24 months of being on assistance.  Broad state discretion in determining what this means; no attached penalty for states. Provides for optional Individual Responsibility Plans and details contents of plans.

Beginning in FY2004, new parents/caretakers receiving assistance must have an Individual Responsibility Plan (IRP) within 60 days of receiving assistance. IRPs for current recipients must be completed by the end of FY2004.  IRPs must be developed in consultation with the family and detail required work activities and needed support services, address the issue of child well-being and, when appropriate, adolescent well-being, and must make available information concerning work supports for which the family may be eligible.  Recipient parents or caretakers must participate in activities in accordance with IRP, and state must have procedures for periodic review of IRPs. 

Provides $120M over 4 years (FY2003-FY2006) to help states implement new universal engagement rules.  These funds can be spent on training for and quality improvement of TANF agency staff; improving information communication to recipients and applicants, including those whose primary language is not English; coordination of and outreach to promote enrollment in support programs; and establishing an advisory panel on improving policies and procedures for assisting individuals with barriers.

States must require all parents and caretakers receiving assistance to engage in work or alternative self-sufficiency activities (as defined by the state).  Replaces current provision on Individual Responsibility Plans with provision on Family Self-Sufficiency Plans.  Every family with a work-eligible individual must have a plan within 60 days of opening an ongoing TANF case (with the requirements applicable to families currently receiving assistance no later than 12 months after enactment of the law).  States must require individuals to participate in activities pursuant to their plan; monitor the participation of individuals and review the progress of the family toward self-sufficiency; and revise the plan and activities as the state deems appropriate.

Penalty structure that currently applies for states failing to meet work participation rates applies when a state fails to meet either the universal engagement or full participation rate requirements.

Current law.

Does not address.

Current law.

Assessments

[Also see Wellstone-Corzine (S. 2610) and Murray (S. 2876) at the end of this document]

States required to conduct initial assessment of skills, prior work experience, and employability of recipient, and may, on the basis of the assessment, develop an Individual Responsibility Plan.

In addition to current law, requires states to screen and assess barriers to employment of parents/caretakers receiving assistance.

Requires HHS to develop/identify and disseminate model screening and assessment tools to identify barriers to employment or program compliance.

Requires assessment, “in the manner deemed appropriate by the State” of “skills, prior work experience and employability” of each work-eligible individual. 

Amends assessment language to include physical or mental impairments, proficiency in English, child care needs, and domestic violence.

Does not address.

Current law.  In addition, the proposal provides funding for various administrative costs associated with complying with new work requirements and enhancing states’ administrative capabilities.  This includes developing innovative training programs that cover, among other things, screening of recipients for serious barriers and referral of recipients with serious barriers to qualified specialists.

Participation Rates

50% all-families participation rate in FY2002 (increased from 25% in FY1997 to 50% in FY2002); 90% two-parent families participation rate in FY2002 (increased from 75% in FY1997 & FY1998 to 90% in FY1999 and thereafter).  States can receive a financial penalty of up to 5% of their block grants for failure to meet participation rates.

All-families participation rate calculation based on number of families including an adult or minor child head of household receiving assistance, not including families under sanction for failing to meet work requirements (for up to 3 months in a 12-month period.) 

State option to include individuals receiving assistance under Tribal Family Assistance Plan or Tribal Work Program.

Increases participation rates to 55% in 2004, 60% in 2005, 65% in 2006, and 70% in 2007.

Eliminates separate two-parent participation rate.

Increases participation rates to 55% in 2004, 60% in 2005, 65% in 2006, and 70% in 2007.

Eliminates separate two-parent participation rate.

A “work-eligible individual” is defined as an individual who is a married or single head of household, and whose needs are included (or for up to 3 months in a 12-month period, whose needs would be included but for a TANF or child support sanction) in determining the amount of cash assistance to be provided to the family.

(In Hutchinson bill, definition of “work-eligible individual” also includes individuals [married or single head of household] who ceased receiving assistance at a time within the previous 3 months when a family member was employed.)

Increases participation rates to 55% in 2004, 60% in 2005, 65% in 2006, and 70% in 2007.

Eliminates separate two-parent participation rate.

Does not address.

Increases participation rates to 55% in 2004, 60% in 2005, 65% in 2006, and 70% in 2007.

Eliminates separate two-parent participation rate.  Allows families in which two parents are meeting work requirements to count as two families.

Participation Rate Credits

Caseload reduction credit allows states to reduce required participation rate by number of percentage points that caseload fell since FY1995 for reasons other than changes in eligibility rules.

Replaces caseload reduction credit with an employment credit reflecting the number of families who are employed after leaving assistance; a larger credit would be allowed for those with higher earnings (at least 33% of state average wage).  These families would count as 1.5 families.  State option to receive credit for individuals employed after having received nonrecurrent short-term benefits (diverted individuals who are subsequently employed) and earning at least $1,000 during the applicable period.

Gives states option to include recipients of substantial child care or transportation assistance in work participation rate.

Gives states option to phase in replacement of caseload reduction credit and delay applicability of the above provisions until FY2005.  Under this option, in FY2004 states would receive a 50% caseload reduction credit and 50% of the new employment credit described above.

Except with respect to a state meeting at least two of the criteria for being a “needy” state (Contingency Fund provision), notwithstanding the extent of the caseload reduction credit and employment credit that might otherwise be available to a state, a state’s participation rate cannot be reduced below:

--20% in FY2004

--30% in FY2005

--40% in FY2006

--50% in FY2007.

“Recalibrates” caseload reduction credit so that it allows states to reduce required participation rate by the number of percentage points by which the caseload fell:

--between FY1996 and FY 2002 in FY2003,

--between FY1998 and FY 2003 in FY2004,

--between FY2001 and FY 2004 in FY2005,

--between FY2002 and FY 2005 in FY2006, and

--between FY2003 and FY 2006 in FY2007.

Designates states whose caseload in FY2001 has declined by at least 60% from the caseload for FY1995 as Superachiever states.  Superachiever states are eligible for a Superachiever credit equal to the number of percentage points by which the caseload decline from FY1995 to FY2001 exceeds 60%.  The participation rate that the state achieves is increased by the lesser of the amount of the Superachiever credit applicable to the state or the amount by which the required participation rate exceeds 50%.

(The Bush Administration plan and the Hutchinson bill phase out the caseload reduction credit by cutting it in half in FY2004 and eliminating it altogether in FY2005 and thereafter; and do not establish a Superachiever credit.  The Hutchinson bill allows caseload reductions due to changes in eligibility rules and due to requirements by federal law to count toward the caseload reduction credit in FY2003 and FY2004.)

(The Hutchinson bill includes an employment credit that allows a work-eligible individual not currently receiving assistance who ceased receiving assistance at a time within the 3 previous months when a family member was employed to be deemed to be engaged in a direct work activity for an average of 40 hours per week. The Bush Administration plan included a similar employment credit.)

(Under the Hutchinson Bill, notwithstanding the extent of the caseload reduction credit and employment credit that might otherwise be available to a state, a state’s participation rate cannot be reduced below:

--15% in FY2003

--25% in FY2004

--35% in FY2005

--45% in FY2006

--55% in FY2007.)

Replaces caseload reduction credit with an employment credit reflecting the number of families who are employed after leaving assistance; a larger credit would be allowed for those with higher earnings (at least 33% of state average wage).  These families would count as 1.5 families.  States could also count individuals employed after having received nonrecurrent short-term benefits. 

Gives states option to include recipients of substantial child care or transportation assistance in work participation rate.

Gives states option to phase in replacement of caseload reduction credit and delay applicability of the above provisions until FY2005.  Under this option, in FY2004 states would receive a 50% caseload reduction credit and 50% of the new employment credit described above.

“We further support the concept of providing flexibility and credit to states that want to invest in moving more people into good full-time jobs.”

Phases out caseload reduction credit.  The maximum caseload reduction credit would be 50% in FY2004 and 25% in FY2005.  The caseload reduction credit would be eliminated in FY2006.

For states that received a caseload reduction credit in FY2002, the required participation rate for a year will be the lesser of the listed rate and the prior year’s rate increased by 20 percentage points.

If a state would otherwise be subject to the bill’s listed participation rate, and if mandatory funding for child care is less than the amount required to be appropriated under the bill, the required participation rate for the previous FY will apply. Once child care funding is restored to the required amount for a given FY, the required participation rate for that year will be the rate for the previous FY plus 5%.

Provides an employment credit reflecting the number of families who are employed after leaving assistance for not more than 12 months after earnings from such employment began; a larger credit would be allowed for those with higher earnings (at least 50% of state average wage) —these families would count as 1.5 families.

Reduces participation rate by number of percentage points by which percentage of cases with child support collections for children in families receiving assistance or who received assistance in the preceding FY increased over percentage of cases with collections in the second preceding FY.

Exclusions from Participation Rates

State option to exclude single parents with children under 12 months from all-families rate calculation.

Removes TANF families that include an adult or minor child head of household who qualifies for SSI during the fiscal year from the work participation rate calculation for the entire year.

Allows state to exempt an adult recipient from the requirement to engage in work, and may exclude the family from the calculation of the state’s participation rate, if the adult is the primary caregiver for a disabled child or family member, provided there is no other able-bodied adult in the household.  The number of families excluded from the state’s participation rate under this provision may not exceed 10% of current year caseload or 10% of prior year average caseload, as the state elects.

State option to exclude participants in a direct services tribal job training program from participation rate calculations.

State option to exclude families from participation rate during first month of assistance and to exclude, on a case-by-case basis, a family (single, or two-parent) in which the youngest child has not attained 12 months of age.

(The  Hutchinson Bill does not allow for the exclusion of families during the first month of assistance.)

Removes TANF families that include an adult or minor child head of household who qualifies for SSI during the fiscal year from the work participation rate calculation for the entire year.

Does not address.

Removes TANF families that include an adult or minor child head of household who qualify for SSI during the FY from the work participation rate calculation for the entire year.

State option to not require individuals addressing barriers to work (such as substance abuse, mental health disorder, depression, having experienced domestic violence, or being in need of significant job training) to engage in work and to disregard such individuals from the participation rate for up to 3 months within a 24-month period.

Total Hours of Participation Required to Count Toward Rates

[Also see Murray (S.2876) at the end of this document.]

For all-families rate, 20 hours per week for single parents with a child under age 6; 30 hours per week for other families.  For two-parent rate, 35 hours per week for two-parent families; 55 hours per week if two-parent family receiving federally-funded child care. 

Current law, except that special rules regarding required hours of participation for two-parent families are eliminated. 

Partial credit for recipients who participate in core activities (see next section) at least 15 hours per week. 

To be fully countable toward participation rates, work-eligible family member must be engaged in activities for 40 hours per week.  Determination of whether family meets 40-hours-per-week requirement based on a 160-hour month.

(Bush Administration does not specify how hours will be calculated.)

States would receive partial credit toward meeting the work participation rate requirement for adults who participate in at least 24 hours of specified “direct work” activities.  Regardless of total hours of participation, no credit if family does not meet 24-hour direct work requirement.

Gives states the option to increase required hours to 40 hours per week only for those adults who are NOT single parents with a child under age 6.

Gives states partial credit toward work participation rate for recipients engaged part-time (an average of at least 50% of the minimum required hours for the month).

Current law.

20 hours per week for single parents with a child under age 6; 40 hours per week for other families.

States receive partial credit for recipients engaged in at least 24 hours of core work activities and less than 13 hours of self-sufficiency activities as follows:

--0 hours of self-sufficiency activities counts as 60% of a family engaged in work

--at least 1 but less than 5 hours counts as 70% of a family engaged in work

--at least 5 but less than 9 hours counts as 80% of a family engaged in work

--at least 9 but less than 13 hours counts as 90% of a family engaged in work.

A family engaged in at least 24 hours of core activities and at least 13 but less than 16 hours of self-sufficiency activities counts as a family engaged in work.

A family engaged in at least 24 hours of core activities and at least 16 hours of self-sufficiency activities counts as 1¼ families engaged in work.

If insufficient child care funding is appropriated, current law requirements with regard to required work hours and countable activities would apply.

Countable Activities

[Also see Bingaman-Wellstone

(S. 2548), Snowe-Baucus-Bingaman

(S. 2552) Pathways to Self-Sufficiency Act, and Murray (S.2876) at the end of this document.]

First 20 hours must be in one of several core activities, which include unsubsidized or subsidized employment, work experience, community service, on-the-job training, vocational educational training (for up to 12 months and subject to 30% cap on numbers of participants who may count by being in vocational educational training or being teen parents engaged in school completion), job search and job readiness (for up to 6 weeks/year), and providing child care for individuals participating in community service. 

Hours above 20 may be in any of the above activities or in job skills training and education directly related to employment.  For non-high school graduates, hours above 20 may be in high school attendance or in GED courses.

Parents under age 20 who are married or single heads of households can meet the full participation requirement through high school completion or participation in education directly related to employment for 20 hours per week.

Increases required hours in core activities from 20 to 24. 

Modifies current structure of countable core activities as follows:

1) Changes “vocational educational training” to “vocational education and training and post-secondary education;” removes teen parents engaged in school completion from 30% cap on number of participants who can be counted in this activity; and changes the 12-month limit to 24 months, or longer for an individual participating in a postsecondary education program under Section 404(l). (See next section.) 

2) Creates a new Section 404(l) providing a state option to create a postsecondary education program in which recipients are allowed to participate in two- or four-year postsecondary degree programs and to receive support services.  Use of TANF dollars to pay for tuition is prohibited. Individuals who comply with the requirements of a state’s postsecondary education programs may be considered to be engaged in work for purposes of determining the state’s participation rate, provided that the number of families treated as being engaged in work under a postsecondary education program may not exceed 10% of current year caseload or 10% of prior year average caseload, as the state elects. Families counted as engaged in work under Section 404(l) are not counted against the 30% cap on participants in vocational education and training.

3) Increases general 6-week limit on counting job search to 8 weeks.

4) States can count “rehabilitative” activities, such as substance abuse treatment, mental health treatment, vocational rehabilitation services, adult basic education, and ESL as core activities for up to 3 months out of 24 months, and for an additional 3 months if combined with work or job readiness activities.  After 6 months, these activities may count toward hours in excess of the first 24 hours of activity.

5) Gives states authority to define work activities for recipients in state TANF programs who live in Indian country or Alaska Native villages with “high joblessness” under section 408(a)(7)(D).

6) Allows satisfactory participation in a business link partnership or transitional jobs program funded under the bill to satisfy the full work participation requirements.  See Targeted Funding for Innovative Work Programs section.

At least 24 hours must be in “direct work activities,” which include unsubsidized employment, subsidized employment, on-the-job-training, supervised work experience, and supervised community service.

Substance abuse counseling or treatment, rehabilitation treatment and services, work-related education or training, job search or job readiness assistance, and any other activity that addresses a TANF purpose could count toward the first 24 hours for no more than 3 consecutive months within a 24-month period.

On a case-by-case basis, if needed to permit the individual to complete a certificate program or other work-related education or training directed at enabling the individual to fill a known job need in a local area, work-related education or training can count toward the first 24 hours for up to 4 consecutive months within a 24-month period.  (Under the Hutchinson Bill, such work-related education or training can be counted for up to 12 months within a 24-month period, for up to 30% of a state’s caseload.  The Bush Administration plan allows work-related education or training to count toward the first 24 hours for not more than 3 consecutive months within a 24-month period.)

Hours above 24, up to an average of not more than 16 hours per week, may be in activities determined by state that address a TANF purpose, subject to such regulations as the Secretary may prescribe.

(The Hutchinson bill requires hours above 24, up to an average of not more than 16 hours per week, to be in “organized” activities, such as substance abuse counseling or treatment, rehabilitation treatment and services, work-related education or training directed at enabling the family member to work, job search or job readiness assistance, parenting education, marriage and relationship skills training, domestic violence counseling, or any other activity that addresses a TANF purpose.)

Parents under age 20 who are married, or are single heads of households, will be considered to be engaged in direct work for an average of 40 hours per week if they maintain satisfactory attendance at secondary school or the equivalent or participate in education directly related to employment for an average of at least 20 hours per week.

(According to the Bush Administration plan

“Teen parents who are not satisfactorily attending school will have to meet the work and full participation standards in order to be counted toward a state’s participation rate.”)

Increases required hours in core activities from 20 hours to 24 hours.

Modifies current structure of countable core activities as follows:

1) Eliminates the 30% cap on vocational educational training; specifies that the vocational educational training category includes post-secondary education leading to a credential related to employment or a job skill, work study or internships related to vocational or postsecondary education, and GED or ESL (if state considers GED or ESL important for an individual to find and maintain employment); increases the time for which vocational educational training can count toward participation rates from 12 months to 24 months.

2) Adds up to 6 months of participation in services designed to improve future employment opportunities, including substance abuse treatment, services to address sexual or domestic violence, and physical rehabilitation and mental health services, to the list of countable activities and to the list of core activities that can count toward the first 20 hours.

Training and education – including vocational, post-secondary, and basic adult education, work-study, GED studies, ESL, and literacy activities – should count toward work requirements.

Time spent in barrier removal activities should count toward work requirements.  Activities should include participation in programs to address domestic violence, substance abuse, physical or mental impairments, limited English proficiency, limited literacy, learning disabilities, and caring for sick or disabled children.

First 20 hours must be in core work activities, which include unsubsidized employment, subsidized employment, work experience, on-the-job training, job search and job readiness assistance, community service programs, vocational educational training, and job skills training directly related to employment.

Hours above 20 must be in self-sufficiency activities, which include core activities described above; education directly related to employment, high school attendance, or GED courses for non-high school graduates; provision of child care services to an individual participating in a community service program; and any activity the state determines is reasonably related to a TANF purpose or certifies as achieving one or more TANF purposes, such as (but not limited to) language acquisition skills, ESL, education and training (including postsecondary education), substance abuse treatment, mental health services, and acquisition of child development and parenting skills.

Recipients considered full-time employees by their private sector employer are deemed as meeting 40-hour requirement.

Modifies current structure of countable activities as follows:

1) Removes teen parents engaged in school completion from 30% cap on number of participants who can be engaged in vocational educational training; provides state option to allow 15% (½ of 30%) to participate in vocational educational training for up to 24 months, if state certifies that a certificate or degree is likely to result.

2) Teen parents could meet the full work participation requirement through high school completion or participation in education directly related to employment, including vocational educational training, for 20 hours per week.

3) For up to a total of 30% of individuals in all families subject to work requirements, allows the following to count as ½ of a family engaged in work:

--Noncustodial parents (of children who receive assistance or who have received assistance not more than 2 years earlier) who receive employment services and agree to comply with child support obligations upon receiving such services, for up to 12 months.

--Recipients engaged in core work activities for at least 15 hours per week and self-sufficiency work activities for at least an additional 15 hours per week.

-Recipients of substantial child care or transportation assistance.

-Recipients engaged in higher education for at least 20 hours per week.

Sanction Review and Compliance Procedures

[Also see Wellstone-Corzine

(S. 2610), Murray (S. 2876), and Feingold (S. 2878) at the end of this document]

No provision.

Requires review of IRP prior to imposition of a sanction and requires state to make a good faith effort to consult with the family as part of such review. 

Requires HHS to fund a random assignment study comparing the effects of full-family sanctions, partial sanctions and other policies for increasing engagement in work activities.

No requirement to adopt particular procedures.  However, states must describe in their plans any strategies they may be undertaking to address “services for struggling and noncompliant families, and for clients with special problems.”

Requires states to impose sanctions if a family member fails to participate in required activities and activities in accordance with its self-sufficiency plan.  Specifically, the state shall reduce the grant at least pro rata for a partial failure or for failure that lasts less than 1 month.  If the failure is total and lasts for at least 2 months, a full-family sanction is required for at least 1 month and thereafter until the individual comes into compliance.  States are barred from using state maintenance of effort funds to provide cash assistance during this period.  The full-family sanction requirement does not apply if local government has an obligation to provide assistance under a constitutional or statutory provision that was in place prior to 1966.

(The Hutchinson bill does not include exception for local government obligations under constitutional or statutory provisions.  The Bush Administration’s plan did not require full family sanctions.)

A state may not impose a sanction unless it has:

--attempted at least twice to notify the person of the impending sanction, the reason for the proposed sanction, the amount of the sanction, the length of time during which the sanction would be in effect, and the steps required to come into compliance or to show good cause for noncompliance;

--afforded an opportunity to meet with a caseworker or another individual and explain the noncompliance; and

--specifically considered (using screening tools developed in consultation with experts) whether various barriers to employment contributed to the noncompliance.

A state that fails to comply with the above procedures is subject to 5% financial penalty of its block grant in the following fiscal year.

Does not address.

Current law.

Transitional Jobs

[Also see Bingaman-Murray (S. 2631) at the end of this document.]

Federal and state funds may be used to pay for subsidized employment for TANF recipients.  Federal funds may be used to pay the wages of recipients who have reached the 60-month federal time limit (as can state funds).  However, funds are not specifically designated for such programs.

Provides a minimum of $80M (and a maximum of $120M) annually (FY2003-FY2007) in competitive grants to local public or nonprofit entities to operate transitional jobs programs.  See Targeted Funding for Innovative Work Programs section.

Current law.

Current law.

“We also support wage-based transitional jobs programs to build the skills necessary to secure stable employment.”

Makes available $25 million each year (FY2003-FY2007) for grants to local nonprofit and for-profit agencies, workforce investment boards, and public agencies (including states) to establish transitional jobs programs.  The programs would serve recipients, former recipients (including those who have hit a federal time limit), and other low-income workers.

Targeted Funding for Innovative Work Programs

No provision.

Replaces High Performance Bonus with $200M annual competitive grants (FY2003-FY2007) to states, tribes, and local public or nonprofit entities (1) for innovative business link partnerships with employers to improve earnings through improving skills and providing supports for low-income and disabled individuals or (2) to operate transitional jobs programs or (3) for capitalization approaches to non-profit social service delivery.  At least 40% of the funding each year is to be used each for (1) and (2).

No provision.

Establishes $150 million annual (FY2003-FY2007) Employment Advancement Fund to provide grants to states and localities for research, evaluation, technical assistance, and demonstration projects that focus on improving wages for low-income workers and improving employment prospects for welfare recipients with barriers to employment.

No provision.

Provides $25M per year (FY2003-FY2007) for grants of up to $5M per year to encourage formation of public-private partnerships to provide educational opportunities to TANF recipients. 

Provides $25M per year (FY2003-FY2007) for grants to states to establish Parents As Scholars Programs.

WIA Coordination

No provision.

Requires TANF programs to be mandatory partners in the WIA one-stop system unless the state opts out.

Makes TANF a mandatory partner in WIA, unless the Governor of a state notifies both HHS and DOL in writing of decision not to make TANF mandatory partner.

State plans must describe any strategies and programs the state may be undertaking to address program integration, including extent to which TANF employment and training services are provided through WIA one-stop delivery system, and extent to which former TANF recipients have access to additional WIA core, intensive, or training services.

Within 6 months of enactment, HHS and DOL Secretaries must submit report to Congress describing common or conflicting data elements, definitions, performance measures, and reporting requirements in WIA and TANF.

Includes WIA within Superwaiver provision.

Does not address.

TANF agencies should be made mandatory partners with the workforce system created by WIA at the state and local level.

Does not address.

Miscellaneous

Requires GAO to conduct a study of combined effect of phase-out rates of work supports on welfare leavers, at all earning levels up to $35,000 per year, for at least 5 states including Wisconsin and California.  Also requires examination of any potential disincentives the combined phase-out rates create for families to achieve independence or marry.

(Hutchinson bill requires GAO to study 1) accuracy with which states are determining participants’ engagement in countable hours and 2) extent to which minimum participation rate required is reduced due to caseload reduction credit, employment credit, and other TANF provisions.)