States were required in federal fiscal year 2002 to meet a work participation rate of 50 percent for all TANF families with adult members—referred to as the rate for all families. In addition to establishing federal participation rate requirements, PRWORA specified that the required rates are to be reduced if a state’s TANF caseload declines. Separating: A state can use its state MOE to provide cash assistance to needy families in any one or more non-TANF state programs, referred to as “separate state programs.”
Each state may choose one or more of these options to provide cash assistance. In addition, while not required by federal law, states may choose to apply work requirements or time limits on their state-funded assistance. Of 2.1 Million Families Receiving Federal or State MOE- Funded Cash Assistance, One Third Are Child-Only Cases

States reported that in the fall of 2001, 2.1 million families received cash assistance funded with federal TANF or state MOE dollars. However, this caseload is not included in the TANF caseload data. With PRWORA Flexibility, the Percentage of Welfare Recipients Participating in Work Activities Varied Greatly among States

Reduced federal participation rate requirements and states’ use of their MOE funds give states considerable flexibility in implementing work requirements. Almost all the states had more adults participating in work and work-related activities than they were required to, but the percentage of adults participating varied greatly among the states. The percentage of the adult caseload involved in work or work-related activities (as defined by the state) ranged from 6 percent to 93 percent. For example, 13 states exclude families with an adult who is disabled and 13 states exclude families who care for someone with a disability. While States Had Excluded 11 Percent of Families with Adults from Time Limits as of Fall 2001, This Percentage May Increase as More Families Reach Their Time Limits

States have excluded from time limits 11 percent (about 154,000) of the approximately 1.4 million families with adults receiving federal- or state- funded cash assistance.
What GAO Found

Congress created the Temporary Assistance for Needy Families (TANF) block grant to replace the previous welfare program and help welfare recipients transition into employment. To this end, states are required to enforce work requirements, and face financial penalties if a minimum percentage of adults receiving cash assistance do not participate in work or work-related activities each year. This federal participation rate requirement has increased each year, reaching 50 percent for all families in fiscal year 2002, but it can be adjusted if caseload declines. In addition to work requirements, TANF places a 60 month lifetime limit on the amount of time families with adults can receive cash assistance. To receive TANF block grants, each state must also spend a specified amount of its own funds, referred to as state maintenance-of-effort (MOE) funds. The law allows states considerable flexibility to exclude families from work requirements and time limits. In addition, states may provide cash assistance to families and exempt them from work requirements and time limits by using state MOE in specified ways. States provided cash assistance funded by federal TANF or state MOE dollars to 2.1 million families in 2001. For 736,000 of these families, only the children in the family received assistance. When only children receive the benefits, it is typically because they are cared for by someone who is not their parent or because their parents are noncitizens. The percentage of adults in work or work-related activities varied greatly among the states because of the flexibility allowed. Most states met or exceeded their adjusted required rate in fiscal year 2000. However, the fiscal year 2000 federal participation rates varied, ranging from 6 percent to more than 70 percent. States excluded 154,000 families from federal or state time limits, or 11 percent of the 1.4 million families with an adult receiving cash assistance.