Under the final regulations, non-recurrent, short-term benefits (provided for four months or less) for crisis situations do not count as TANF assistance. Since diversion is not to be considered TANF assistance, families receiving diversion aid are not subject to TANF work requirements, time limits, child support assignment, or data reporting requirements. As noted above, one strategy states are using to reduce the need for ongoing welfare is referred to as "diversion"assistance. Diversion payments generally are equal to several months' benefits. It is generally offered as a one-time payment in lieu of extended cash benefits. Acceptance of a diversion payment usually makes a family ineligible for TANF assistance for a certain period of time. Welfare diversion comes in a variety of forms such as lump sum payments, vendor payments, supportive services, and resource referral. In addition, applicant job search is used by some states as a diversion activity. Sometimes it is not easy to identify what diversion is and what it is not. According to Nathan and Gais, an activity like eligibility screening may be a form of diversion when it is carried out in certain ways, while other times it may simply be part of an eligibility review. State Use of Welfare Diversion

Based on the annual state reports on the TANF program, in FY2005, 28 states and the District of Columbia provided lump sum diversion payments to TANF applicants ( see Table 1 ); 16 states and the District of Columbia required TANF applicants to engage in active job searches before their application for TANF is approved; and 15 states were using a "fairly aggressive" form of resource referral. A family will be eligible for only one diversion payment in a 12-month period.
One strategy that states are using to reduce the need for ongoing welfare is referred to as "diversion." Diversion is typically considered to be a payment, program, or activity that is intended to divert applicants for Temporary Assistance for Needy Families (TANF) benefits from completing the application process and thereby becoming potentially eligible for monthly TANF assistance. Welfare diversion comes in a variety of forms, such as lump sum payments, vendor payments, supportive services, and resource referral. In addition, applicant job search is used by some states as a diversion activity.
Sometimes it is not easy to identify what diversion is and what it is not. A procedure like eligibility screening may be a form of diversion when it is carried out in a certain manner, while at other times it may merely be part of an eligibility review. Diversion payments generally are equal to several months' benefits. They usually are offered as a one-time payment in lieu of extended cash benefits. Acceptance of a diversion payment ordinarily makes a family ineligible for TANF assistance for a certain period of time.
According to the latest available reported data, 28 states and the District of Columbia provided lump sum diversion payments to TANF applicants; 16 states and the District of Columbia required TANF applicants to engage in active job searches before their application for TANF was approved; and 15 states were using a fairly aggressive form of resource referral. Under the final TANF regulations, non-recurrent, short-term benefits (e.g., diversion) for crisis situations (provided for no more than four months) do not count as TANF assistance. Since diversion is not considered TANF assistance, families receiving diversion aid are not subject to TANF work requirements, time limits, child support assignment, or data reporting requirements.
This report discusses welfare diversion and state use of diversion strategies. It will be updated periodically as new data and information become available.