TANF replaced the Aid to Families with Dependent Children (AFDC) program, which was a cash assistance program for needy families with children. A major focus of the debates leading to the 1996 welfare reform law was how to move non-employed single mothers from welfare to work. That goal is enforced by TANF's measure of program performance: the work participation standard. The Temporary Assistance for Needy Families (TANF) Block Grant

The statutory purpose of the TANF block grant is to "increase the flexibility of states in operating a program" to achieve four statutory goals, which are to
1. provide assistance to needy families with children so that children may be cared for in their own homes or in the homes of relatives; 2. end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 3. prevent and reduce the incidence of out-of-wedlock pregnancies; and 4. encourage the formation and maintenance of two-parent families. Determination of the State Work Participation Rate (WPR)

The TANF WPR is a percentage that divides families receiving assistance who are considered "engaged in work" by the number of families receiving assistance with a work-eligible individual who are not disregarded from the rate. Unsubsidized Employment in Earnings Supplement Programs

Earnings supplement programs are separate from the regular TANF cash assistance program in the state and operate under separate rules. Other programs pay earnings supplements to working parents who had no necessary connection to the TANF cash assistance programs. The official rates used as the main TANF performance measure are computed for each state; the national TANF WPR represents the average for the states, with the average weighted by the size of each state's caseload. As shown in the figure, the national WPR has been below 50% for all years from FY2002 through FY2015. For the period from FY2003 through FY2011, the national WPR hovered around 30%. Through the history of TANF, participation in welfare-to-work activities has been relatively modest among non-employed work-eligible individuals. In FY2015, a monthly average of 143,000 TANF work-eligible individuals were not employed and were participating in activities, less than 1 in 5 non-employed TANF work-eligible individuals. Participation in Welfare-to-Work Activities in FY2015

 Figure 6 provides some more detail on participation in welfare-to-work activities in FY2015 among those who were not employed. The record of the past 20 years shows
declining cash assistance caseloads, with particularly large declines in the early years; and an increase in the share of families receiving assistance who have a working member. A third part of that record is modest rates of participation in welfare-to-work activities among those who were not otherwise employed. Credit for Excess State Spending

The excess spending credit was seen as an incentive for states to increase their investment in TANF-related activities. Additionally, there has been no research on the efficacy of earnings supplement programs that provide working families with a relatively small, and sometimes nominal, amount (e.g., $10 a month) to continue aid after recipients reach the end of eligibility for a state's regular assistance program, or provide it for families with no necessary connection to the cash assistance programs. What Activities Should Be Emphasized? Further, even fewer TANF work-eligible individuals were engaged in supported work activities—subsidized jobs, community service, work experience, and on-the-job training—than were engaged in pre-employment activities such as job search or education. The issues raised above do question whether the multiple routes to meeting the work participation standard—including caseload reduction and crediting states for unsubsidized employment—take the focus off of engaging non-employed recipients in welfare-to-work activities. Does TANF's current program structure give states the incentive to engage non-employed recipients in welfare-to-work activities? The TANF Work Participation Standard
The TANF work participation standard serves two purposes: (1) it is a measure of how a state is performing in engaging recipients in work or work activities, and (2) it reinforces the notion that participation in work or work activities in return for receiving welfare assistance is a policy goal of TANF.
The 1996 welfare reform law (P.L. 104-193) created the Temporary Assistance for Needy Families (TANF) block grant. TANF's predecessor program, Aid to Families with Dependent Children (AFDC), historically assisted non-working single mothers. The debates leading to the 1996 law focused on how to move those single mothers from welfare to work.
TANF provides states with flexibility in how they design their programs. It has national goals, one of which is ending dependence of needy parents on government benefits by, in part, promoting job preparation and work. To enforce that goal, TANF requires that 50% of each state's TANF families with an adult recipient include a member who is either working or engaged in welfare-to-work activities. There are credits that states may receive that lower the 50% goal for states that have reduced caseloads or spend from their own funds more than the amount required under TANF. Thus, there are four different routes for states to meet the work participation standard: (1) caseload reduction (i.e., reducing the number of families receiving TANF assistance); (2) excess state spending; (3) providing assistance to those already working ("unsubsidized employment"); and (4) engaging otherwise non-employed recipients in welfare-to-work activities, such as job search, education and training, community service, work experience, and subsidized employment.
The main performance measure for TANF is the work participation rate (WPR), which measures the share of families in the caseload with a member who is either working or engaged in welfare-to-work activities. The WPR is compared annually to the state's after-credit numerical goal to determine whether it met the work participation standard. The national average WPR fluctuated around 30% from FY2002 through FY2011. Most states met the work participation standard through a combination of caseload reduction, excess spending credits, and a WPR below 50%. Over that period, about half of the national WPR was comprised of recipients in unsubsidized jobs.
In recent years, the national TANF average WPR has increased; it approached 50% for the first time in FY2015. This increase is due to states using TANF dollars to implement "earnings supplement" programs, separate from the regular TANF cash assistance programs. Earnings supplement programs provide benefits, usually small ones ($10 to $50 per month), to families with working parents who are not in regular state TANF assistance programs. Some earnings supplement programs provide benefits to those who left regular state TANF cash assistance programs; others provide benefits to families without any necessary connection to regular TANF cash assistance. Despite this, families who receive these TANF-funded benefits are counted toward the WPR.
Throughout the history of TANF, participation in welfare-to-work activities has been relatively modest. In FY2015, out of a monthly average of 743,000 non-employed TANF work-eligible individuals, 143,000 (less than 1 in 5) were reported as engaged in welfare-to-work activities.
TANF now has a record of 20 years, highlighted by (1) caseload reduction, with particularly large caseload declines in the early years; (2) an increase in the share of families receiving assistance with a parent who is employed; and (3) modest rates of participation in welfare-to-work activities among those who are not otherwise employed. If policymakers wish to increase engagement of non-employed recipients, a number of questions would be raised—including whether TANF's flexibility with the performance standards structure provides sufficient incentives to increase engagement, or whether other program models, such as a separate program dedicated to work activities for assistance recipients, should be considered.