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5 Ways TANF Work Requirements Could Better Promote Work

A congressional hearing this morning examined the Administration’s policy of giving states waivers to test new ways to help recipients of Temporary Assistance for Needy Families (TANF) move from welfare to work.  Unfortunately, this focus on waivers takes policymakers’ attention away from what really needs to happen:  improvements in the program’s complex and rigid work requirements, which can force states to design their TANF programs in ways that compromise the goal of connecting recipients to work. In fact, one of the biggest limitations of the work participation rate — the key measure by which the federal government judges states’ TANF programs — is that states don’t need to move TANF recipients into actual paid work to meet the rate.  TANF is likely the only federal or state employment program in which getting participants into paid employment is not a key measure of success. Many states say that, with more flexibility, they could operate more effective work programs.  As we explain in a new paper, policymakers have several options to give states more flexibility while strengthening the work provisions and making them more effective.

  1. Give states the option to be accountable for employment outcomes (i.e., jobs) instead of the work rate. Policymakers could empower the federal Department of Health and Human Services (HHS) to authorize a limited number of demonstration projects that would give states that option.  Such a demonstration project would give states the flexibility to design work requirements that better reflect the needs of their TANF caseload and take account of local labor market needs.
  2. Simplify the work requirements and reduce paperwork burdens. States spend lots of time tracking what activities can count toward the work rate and how many weeks or months individuals have already participated — as well as verifying every hour of participation.  They could better spend the time focused on improving employment outcomes.  Simplification efforts could include streamlining countable activities by easing complex limits on when certain activities can count, and allowing participation in more education activities to count.
  3. Focus states’ incentives on improving actual employment placements. Currently, a state gets no more recognition for preparing and placing a recipient in employment than for excluding a family from its caseload and giving it no employment help.  States should get credit for successful employment outcomes, not for failing to serve needy families and children.  Possible steps include:  eliminating or limiting the credit that states get for simply reducing their caseloads; providing an employment credit in lieu of the caseload reduction credit; or allowing a state to count people who have left TANF for employment toward the work rate for a period of time.
  4. Redesign the work measures to support engagement of all recipients in activities that will prepare them for work. Policymakers could:  allow a wider range of activities, including those addressing serious barriers to employment, to count (separate from the job search/job readiness category, which has severe restrictions); lift certain limits on when particular activities, like vocational education or job search, can count; and allow partial credit for recipients who are engaged in activities for less than the required 20 or 30 hours per week.
  5. Require greater investments in work activities. Policymakers should require states to spend a specified share of their TANF resources on activities designed to prepare recipients for work.  In addition, states that do not meet applicable performance measures should be required to invest additional funds in work-related activities.  The current penalty structure withdraws federal funds from state TANF programs, further shrinking state resources to meet families’ employment needs.  Rather than pay a fiscal penalty, a state that fails to meet performance measures should be required to increase the share of its state and federal TANF spending that goes to work-related activities for families receiving assistance.