Final

Issued by: Administration for Children and Families (ACF)

Issue Date: August 18, 2009

TO:

State Agencies Administering the Temporary Assistance for Needy Families (TANF) Program and Other Interested Parties

SUBJECT:

Work Participation Rates for FY 2007

BACKGROUND:

The Social Security Act requires the U.S. Department of Health and Human Services (HHS) to issue annual TANF work participation rates, which measure how well States engage families receiving assistance in certain work activities. A State must meet both an overall (or “all-families”) and a two-parent work participation requirement or face a potential financial penalty. The statutory requirements for fiscal year (FY) 2007 are 50 percent for all families and 90 percent for two-parent families, but a State’s individual target rates equal the statutory rates minus a credit for reducing its caseload.

A State’s caseload reduction credit equals the percentage point decline in its average monthly assistance caseload between the previous year and a base year, originally FY 1995, but set at FY 2005 by the Deficit Reduction Act of 2005 (DRA). (For a caseload reduction credit toward the two-parent work participation rate, the State has the option of using its overall caseload reduction credit or a separate one calculated using the decline in the two-parent caseload.) In calculating the caseload reduction, HHS must exclude any caseload reductions resulting from changes in State or Federal eligibility requirements. In addition, a State that is investing State maintenance-of-effort (MOE) funds in excess of the required 80 percent or 75 percent basic MOE amount need only include the pro rata share of caseloads receiving assistance that is required to meet basic MOE requirements.

The DRA and regulations implementing that law made significant changes to work participation requirements by: (1) recalibrating the caseload reduction credit to a base year of FY 2005 (rather than FY 1995), as noted above; (2) adding families to the calculation of the work participation rates (e.g., those in separate State programs and certain families in which children receive assistance but parents do not); and (3) defining the activities and hours of participation that could count toward those rates. FY 2007 was the first year in which those changes took effect, and they became fully effective in that year, with no phase-in period.

CONTENT:

As a result of the major DRA-related changes to work participation requirements, many States found meeting the FY 2007 work participation rates difficult. Indeed, 13 States and three Territories failed to meet one or both of their required FY 2007 work participation rates. We realize that States faced significant challenges in meeting these new requirements. We will work closely with the States that fell short of their work participation requirements to ensure that they understand their options for penalty relief and to help them come into compliance as soon as possible.

This memorandum transmits the work participation tables for FY 2007. All States were required to report work participation information for the months of October 2006 through September 2007. The FY 2007 national average overall work participation rate was 29.7 percent. Twelve States and three Territories failed to meet their overall work participation rate requirements. The FY 2007 national average two-parent work participation rate was 35.7 percent. Seven States and one Territory failed to meet their two-parent work participation rate requirements. (Twenty-one States, the District of Columbia, and two Territories were not subject to the two-parent work participation rate due to the manner in which they structured their programs.) The attached tables provide detailed State-by-State information regarding work participation rates and standards, caseload reduction credits, the number of work-eligible individuals, and the activities in which individuals participated.

We have notified States individually of their work participation rates for FY 2007. States that failed to meet either of their minimum work participation requirements are, by statute, subject to a potential penalty; however, they will have an opportunity to file a request for a reasonable cause exception from that penalty and/or to submit a corrective compliance plan to correct the failure before any penalty is imposed.

ATTACHMENT:

TANF Work Participation Rate Tables for FY 2007.

INQUIRIES:

Please direct any inquiries to the TANF Program Manager in your Region.

 

/s/

Ann Barbagallo,
Acting Director
Office of Family Assistance

DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.