Getting On, Staying On, and Getting Off Welfare

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Congress reauthorized Temporary Assistance for Needy Families (TANF), the nation's primary cash assistance program for families with children, in February 2006 as part of the Deficit Reduction Act of 2005. Under reauthorization, Congress increased the share of the caseload that states must include when calculating work participation rates, and it restructured the caseload credit that states receive. These changes will require most states to greatly increase work participation among their caseloads in order to avoid financial penalties¹ and could cause many states to rethink their current welfare policies overall. This marks a good time to review states' current rules. Such a review can provide a benchmark against which future changes can be assessed.

Virtually any statement about welfare is no longer universally true across the country. While welfare benefit levels have always varied tremendously, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) gave states autonomy to set eligibility rules and to determine how participants will meet federal work and time limit requirements. In addition, states may now choose to use state funds for certain recipients who would not be covered by federal funds, furthering local options. As a result of this flexibility and the ensuing diversity of state policy choices,² it is difficult to summarize clearly and briefly the national picture of state welfare policy.

This brief reviews the multiple ways a family can get on welfare, stay on, and leave (or lose) assistance.³ It uses the Urban Institute's Welfare Rules Database (WRD) to examine the variation in key policies.⁴ Details are offered on how each state defines its program as of 2003.⁵ We include some discussion of how states' TANF programs differ from the program TANF replaced in 1996, Aid to Families with Dependent Children (AFDC), to highlight the changes that have occurred over the past decade.

Notes from this section of the report

1. The Sixth Annual TANF Report to Congress describes the FY 2002 effective caseload participation rates (actual participation rates minus caseload reduction credits) for the 50 states and D.C. http://www.acf. hhs.gov/programs/ofa/annualreport6/chapter03/chap03.htm.

2. PRWORA also reduced state flexibility and increased uniformity among the states on certain policies (e.g., child support enforcement, immigrant eligibility, and time limits).

3. For information on variations across all key TANF policies, including those not specifically discussed in this brief, see Rowe with Versteeg (2005).

4. The Department of Health and Human Services, Administration for Children and Families, and the Office of the Assistant Secretary for Planning and Evaluation fund the WRD project.

5. Throughout this brief, we use the WRD data as of July 2003—the most recent data publicly available. Also, the term "states" refers to the 50 states and the District of Columbia.

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