QUESTIONS & ANSWERS ON THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (Recovery Act)
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) PROGRAM
EMERGENCY FUND Topics on this page: Q1: How much additional funding does the Emergency Contingency Fund (Emergency Fund) provide? A1: The Emergency Fund was appropriated $5 billion covering fiscal year (FY) 2009 and FY 2010. Q2: What can Emergency Fund dollars be used for? A2: Emergency Fund grants can be used to provide benefits and services to families that comply with the four statutory purposes of the Temporary Assistance for Needy Families (TANF) program. The four purposes are: (1) to provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) to end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) to prevent and reduce the incidence of out-of-wedlock pregnancies and establish numerical goals for preventing and reducing the incidence of these pregnancies; and (4) to encourage the formation and maintenance of two-parent families. However, the funds cannot be transferred to either the Social Services Block Grant or the Child Care and Development Block Grant. Emergency funds are available until expended; a jurisdiction may carry over emergency funds for use in a later fiscal year. Q3: Who is eligible to apply for these funds? A3: States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, and federally-recognized Indian Tribes and Alaska Native Organizations that are operating TANF programs are eligible to apply for these funds. Q4: Are there conditions that must be met in order to apply for these funds? A4: Yes, a jurisdiction eligible to apply for emergency funds must meet at least one of the following three conditions for a quarter during FY 2009 or FY 2010: (1) The jurisdiction’s average monthly assistance caseload in a quarter is higher than its average monthly assistance caseload for the corresponding quarter in the Emergency Fund base year (i.e., FY 2007 or FY 2008), and its expenditures for basic assistance in the quarter are higher than its expenditures for such assistance in the corresponding quarter of the Emergency Fund base year; (2) The jurisdiction’s expenditures for non-recurrent short-term benefits in the quarter are higher than its expenditures for such benefits in the corresponding quarter of the Emergency Fund base year (i.e., FY 2007 or FY 2008); (3) The jurisdiction’s expenditures for subsidized employment in the quarter are higher than such expenditures in the corresponding quarter of the Emergency Fund base year (i.e., FY 2007 or FY 2008). Q5: How does a jurisdiction apply for funding? A5: We are developing an application form to facilitate the submittal of necessary data to us. Jurisdictions may apply for funds for the first three quarters of FY 2009 before the form has been approved for use by submitting the information described in the statute (see A4 above). Q6: Are jurisdictions permitted to apply for funds using estimates for the base-year quarters of FY 2007 or FY 2008? A6: No, estimates for base-year quarters are unacceptable. This is because the base years have passed and actual quarterly expenditures are available. However, we will permit estimates for request-year quarters, but awards based on estimates must be revised once final data become available. Q7: What is the time frame for availability of these funds? A7: The $5 billion in emergency funds are available until the end of FY 2010. Q8: If a jurisdiction qualifies for funds, what amount can it receive? A8: A jurisdiction that qualifies under one or more of the aforementioned conditions will receive 80 percent of the amount by which Federal TANF expenditures and qualified State expenditures (Maintenance-of-Effort, or MOE) in the quarter for which it is requesting emergency funds exceed such expenditures in the corresponding base-year quarter. Under the law, the Emergency Fund base year is the lesser of FY 2007 or FY 2008 for a category. In other words, for the first category, it is the year with the lower assistance caseload; for the second, it is the year with the lower non-recurrent short-term benefit expenditures; for the third, it is the year with the lower subsidized employment expenditures. A jurisdiction may request funds under any or all of the three categories. The law imposes a cumulative cap on the amount of emergency funding that a jurisdiction can receive for the two-year period. Cumulative combined grants from the existing Contingency Fund and the Emergency Fund cannot exceed 50 percent of the jurisdiction’s annual Federal TANF family assistance grant. For example, if a State’s Federal TANF family assistance grant is $100 million, the State could receive no more than $50 million in funding from both the TANF Contingency Fund and the Emergency Fund combined during the two-year period. Q9: Can income-eligible adults without children receive any of the TANF services that qualify a state to receive emergency funds (e.g., subsidized jobs and/or non-recurrent benefits), or are only low-income families with children able to benefit from the Emergency Fund? A9: Under limited circumstances an adult without children can receive a TANF service, as long as it does not constitute “assistance” as defined in the TANF regulations. Some categories of increased spending on these adults could make a jurisdiction eligible for emergency funds (for example, increased spending on subsidized employment). While eligibility for the Emergency Fund is based on only three categories of increased expenditures, once they are awarded, Emergency Fund grants are Federal TANF funds. Therefore, a jurisdiction that receives emergency funds must use the funds in virtually the same ways as it may use its annual Federal TANF block grant funds (except that emergency funds may not be transferred to either the CCDF or the SSBG programs). For example, Federal TANF funds may be used in any manner that is reasonably calculated to accomplish a purpose of the TANF program. Those are: (a) help needy families so that children may be cared for in their own homes or in the homes of relatives; (b) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (c) prevent and reduce the incidence of out-of-wedlock pregnancies; and (d) encourage the formation and maintenance of two-parent families. Examples of services (that do not meet the definition of “assistance”) that potentially could be provided to some single individuals without children include jobs skills training or re-training activities, employment placement services, subsidized employment, employment counseling services, mentoring and tutoring services, pre-marital and marital counseling, parental counseling or mediation services, teen pregnancy prevention services, financial counseling services, and financial planning seminars (e.g., topics such as household management, budgeting, banking, and handling of financial transactions). Q10: Can emergency funds be used for non-assistance poverty reduction programs such as teen pregnancy prevention? A10: Yes. If a jurisdiction receives emergency funds, then it may use those funds in any manner that is reasonably calculated to accomplish a purpose of the TANF program. One TANF purpose is to prevent and reduce the incidence of out-of-wedlock pregnancies. Teen pregnancy prevention activities would be reasonably calculated to accomplish this purpose. Q11: Must a jurisdiction have both an increase in TANF expenditures and an increase in caseload to receive TANF emergency funds? A11: Not necessarily. Emergency Fund grants are available to a jurisdiction if it has increased expenditures in any one of three categories: basic assistance expenditures; non-recurrent short-term benefits expenditures; or subsidized employment expenditures. Only for the basic assistance expenditures category must a jurisdiction also have an increase in its assistance caseload. Q12: Can a State use its TANF Contingency Fund dollars for expenditures in one of the three Emergency Fund categories to help it qualify for Emergency Fund dollars (e.g., use a TANF Contingency Fund award to create subsidized jobs)? A12: Yes. For each Emergency Fund category, a jurisdiction that qualifies may request 80 percent of the amount by which Federal TANF expenditures (including both TANF contingency funds and TANF emergency funds) and qualified State expenditures (i.e., maintenance-of-effort (MOE)) in the quarter for which it is requesting emergency funds exceed such expenditures in the corresponding base-year quarter. Q13: For a jurisdiction receiving a TANF Emergency Fund award for a prior quarter (for example the first two quarters of FY 2009), is the requirement that this award be expended in accordance with section 404 of the Social Security Act satisfied by the increased expenditures made by the jurisdiction during these quarters (for assistance, short-term non-recurrent benefits or subsidized employment) that exceeded the base year spending levels? A13: The requirement to use Emergency Funds in accordance with section 404 of the Social Security is not satisfied simply because the jurisdiction received an Emergency Fund award due to increased expenditures in a quarter. See section 403(c)(6) of the Social Security Act (as amended by ARRA) which expressly addresses the use of emergency funds. The Congressional Conference Report (111-16) for section 2101 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) explicitly states that the TANF Emergency Fund “. . . reimburses States for 80% of the increased expenditures on basic assistance (cash welfare), short-term non-recurrent benefits, or subsidized employment in TANF and separate State programs, up to a cap.” Therefore, jurisdictions may use Federal TANF Emergency Funds to reimburse themselves for expenditures in past quarters that were made in accordance with section 404 of the Social Security Act. They may also decide to spend those funds in the future on allowable benefits/activities that are in accordance with section 404 of the Social Security Act. Also, please be advised of the following caveats: - Jurisdictions must report any revisions in expenditure amounts for all quarters in which they received Emergency Funds, as we must reconcile the award amounts accordingly.
- Federal TANF Emergency Funds must be spent in the jurisdiction’s TANF program in accordance with section 404 of the Social Security Act, unless a limitation, restriction, or prohibition elsewhere in law or the TANF regulations applies. However, jurisdictions may not transfer any emergency funds to either the Social Services Block Grant or the Child Care and Development Block Grant because the transfer authority in section 404(d) of the Social Security Act only applies to Federal TANF grants under section 403(a) of the Social Security Act.
- The same TANF programmatic rules that apply to Federal TANF block grant funds also apply to the use of Federal TANF emergency funds. For example, if emergency funds are spent on assistance, requirements such as assignment of support rights and the Federal 60-month time limit must be met.
- If Federal TANF Emergency Funds are used to replace State-funded expenditures, the State must still meet its maintenance-of-effort requirement for the fiscal year.
Q14: On a prospective basis, does the jurisdiction satisfy the requirement of section 404 of the Social Security Act by using a TANF Emergency Fund award for current or future expenditures on assistance, short-term non-recurrent benefits or subsidized employment that exceeds the base year expenditures? A14: Yes, a jurisdiction that receives a TANF Emergency Fund award can use these funds to cover current and future expenditures for basic assistance, short-term non-recurrent benefits, and subsidized employment. Those expenses may be the basis for subsequent TANF Emergency Fund awards. Q1: Who qualifies for TANF Supplemental Funds, which have been extended via the Recovery Act through FY 2010? A1: A total of 17 States qualify for TANF Supplemental Funds for FY 2010. They are as follows: Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Louisiana, Mississippi, Montana, Nevada, New Mexico, North Carolina, Tennessee, Texas, and Utah. Q1: Did the Recovery Act include a change in the use of unspent Federal TANF funds carried over into a succeeding fiscal year? A1: Yes. The Recovery Act includes a provision that lifts the restriction on unspent Federal TANF funds reserved or “carried over” into a succeeding fiscal year. Previously, carry-over funds could only be used to provide assistance (the ongoing basic needs payment, and supportive services such as transportation and child care to families not employed). Now jurisdictions (States, Territories, D.C., and Tribes) may use any unspent Federal TANF money from a prior fiscal year to provide any allowable TANF benefit, service, or activity – i.e., not just assistance. Q2: Is it possible to transfer any of the carry-over money to the Social Services Block Grant Program and/or the Child Care and Development Block Grant Program? A2: No. This part of the law did not change. States, D.C., and Territories may only transfer up to 30% of their current fiscal year Federal TANF block grant funds to these programs. (The transfer provision has never applied to Tribes operating approved Tribal TANF programs.) Jurisdictions must spend any carry-over funds in their TANF programs. Q3: Is this change permanent? A3: Yes. Q4: Can TANF carry-over funds be used for non-assistance poverty reduction programs? A4: Yes, the ARRA allows jurisdictions administering TANF programs to use TANF program funds carried over from a prior year for any allowable TANF benefit, service, or activity. Prior to FY 2009, these funds could be used to provide assistance to needy families. However, such carry-over funds may not be transferred to either the CCDF or the SSBG programs. Q1: Did the Recovery Act include a change in calculating a State’s caseload reduction credit for determining the work participation rate it must meet? A1: Yes, the caseload reduction credit reduces a State’s required work participation rate for a fiscal year by the decline in its caseload between FY 2005 and the year prior to the current fiscal year, called the comparison year. The Recovery Act allows a State to substitute the lower of the FY 2007 or FY 2008 caseload for the normal comparison-year caseload in FYs 2009, 2010, and 2011. This means that if a State serves more TANF families in the normal comparison year than it did in FYs 2007 or 2008, this provision holds the State harmless in the caseload reduction credit calculation. This lowers the State’s target work participation rate for that year compared to what it would have been had we used the normal comparison year. Q1: For a jurisdiction receiving a TANF Emergency Fund award for a prior quarter (for example the first two quarters of FY 2009), is the requirement that this award be expended in accordance with section 404 of the Social Security Act satisfied by the increased expenditures made by the jurisdiction during these quarters (for assistance, short-term non-recurrent benefits or subsidized employment) that exceeded the base year spending levels? A1: The requirement to use emergency funds in accordance with section 404 of the Social Security Act (Act) is not satisfied simply because the jurisdiction received an Emergency Fund award due to increased expenditures in a quarter. See section 403(c)(6) of the Act which expressly addresses the use of emergency funds. The congressional conference report for section 2101 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) explicitly states that the TANF Emergency Fund “. . . reimburses States for 80% of the increased expenditures on basic assistance (cash welfare), short-term non-recurrent benefits, or subsidized employment in TANF and separate State programs, up to a cap.” Therefore, jurisdictions may use Federal TANF emergency funds to reimburse themselves for expenditures in past quarters that were made in accordance with section 404 of the Act. They may also decide to spend those funds in the future on allowable benefits/activities that are in accordance with section 404 of the Act. Also, please be advised of the following caveats: - Jurisdictions must report any revisions in expenditure amounts for all quarters in which they received emergency funds, as we must reconcile the award amounts accordingly.
- Federal TANF emergency funds must be spent in the jurisdiction’s TANF program in accordance with section 404 of the Act, unless a limitation, restriction, or prohibition elsewhere in law or the TANF regulations applies. However, jurisdictions may not transfer any emergency funds to either the Social Services Block Grant or the Child Care and Development Block Grant because the transfer authority in section 404(d) of the Act only applies to Federal TANF grants under section 403(a) of the Act.
- The same TANF programmatic rules that apply to Federal TANF block grant funds also apply to the use of Federal TANF emergency funds. For example, if emergency funds are spent on assistance, assignment of support rights and the Federal 60-month time limit requirements must be met.
- If Federal TANF emergency funds are used to replace State-funded expenditures, the State must still meet its maintenance-of-effort requirement for the fiscal year.
Q2: On a prospective basis, does the jurisdiction satisfy the requirement of section 404 of the Social Security Act by using a TANF Emergency Fund award for current or future expenditures on assistance, short-term non-recurrent benefits or subsidized employment that exceeds the base year expenditures? A2: Yes, a jurisdiction that receives a TANF Emergency Fund award can use these funds to cover current and future expenditures for basic assistance, short-term non-recurrent benefits, and subsidized employment. Those expenses may be the basis for subsequent TANF Emergency Fund awards. |
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