1. WORK AND PENALTIES General Session

2. Potential Penalties u Misuse of TANF funds u Intentional misuse of TANF funds u Failure to report required data u Failure to meet work rates u Failure to participate in IEVS

3. Penalties (cont.) u Failure to sanction for noncooperation with child support u Failure to repay loan u Failure to meet basic MOE u Failure to comply with 5-year limit on Federal assistance u Failure to remit contingency funds

4. Penalties (cont.) u Failure to maintain assistance to single custodial parent who cannot obtain care for child under 6 u Failure to replace penalty amounts u Penalty equal to WtW grant for failure to meet basic MOE u Failure to impose pro rata sanctions

5. Penalties (cont.) u NOTE: Failure to comply with child support enforcement program requirements is covered by separate rulemaking.

6. Sequential Penalty Process: ACF Notifies State of Penalty State Submits Reasonable Cause Claim 60 Days State Submits Corrective Compliance Plan 60 Days ACF Grants Reasonable Cause 60 Days State May Appeal ACF Responds ACF Accepts or Denies 60Days Basic Steps 60Days

7. Reasonable Cause

8. Determining Reasonable Cause u State has burden of proof u Reasonable cause not available for: –3 MOE penalties –Failure to repay a loan –Failure to replace penalty amounts u Consideration given to: –State’s efforts –Duration and severity of circumstances

9. Reasonable Cause General Factors u Three primary factors: –Natural disasters or other calamities –Formal Federal guidance that provided incorrect information –Isolated problems of minimal impact not indicative of a systemic problem u Secretarial discretion to consider others

10. Additional Factors for Work Participation Penalty u Federally recognized domestic violence waivers u Assistance to refugees in Fish-Wilson projects Reasonable Cause

11. u Federally recognized domestic violence waivers Additional Factor for Time Limit Penalty

12. Reasonable Cause Additional Factor for Reporting Penalty u Failure due to Y2K compliance activities –Applies only to 1st two quarters of FY 2000 –State submits required data by September 30, 2000*

13. Corrective Compliance Plan

14. Corrective Compliance Not Available For: u 3 MOE penalties u Failure to repay a loan u Failure to replace penalty amounts

15. Plan Must Include: u Analysis of reasons for failure u How State will fix problem u Time frames u Milestones, including interim process and outcome goals u Certification by Governor of commitment

16. Corrective Compliance Plan Acceptable Time Frames u For work rates and time limits -- by end of FY ending at least 6 months after ACF receives plan u Negotiable for other penalties

17. u No penalty if problem completely fixed u Reduction of penalty if State Demonstrates: –Significant progress –Natural disaster or regional recession –Federally recognized domestic violence waivers (discretionary for work & time limit penalties) Corrective Compliance Possible Outcomes

18. ork ork

19. States are accountable for moving families from welfare to self-sufficiency through work.

20. Work – Part 261 u Individual Responsibility u State Accountability u Work Activities u Caseload Reduction Credit u Work Penalties u Waivers u Nondisplacement

21. Participation Rates Two separate rates for each State u Overall rate -- success in engaging total caseload in work u 2-Parent rate -- success in engaging 2- parent families in work

22. Overall Rate Participation Rates

23. 2-Parent Rate Participation Rates

24. All families with: u 2 natural or adoptive parents of the same minor child, u receiving assistance, and u living in the home. Participation Rates Minimum Definition of 2-Parent Family

25. Caseload Reduction Credit

26. u Reduces a State’s minimum participation rate for a year. u Reduces the rate by: –the actual caseload decline from 1995 to prior year minus –net caseload decline due to eligibility changes and Federal requirements.

27. Caseload Reduction Credit u The credit for the overall rate is based on the decline in the total caseload. u The credit for the 2-parent rate, at State option, is based on either the decline in the 2-parent caseload or in the total caseload. Each rate (overall & 2-parent) is subject to a caseload reduction credit.

28. Caseload Reduction Credit u Calculation includes cases in separate State programs used to meet MOE requirement. u No caseload reduction credit without case-record information for SSPs that provide assistance.

29. Caseload Reduction Credit “Eligibility Change” includes full-family sanctions and behavioral requirements (e.g., applicant job search).

30. Caseload Reduction Credit “Eligibility Change” does not include the calculable effects of enforcement mechanisms or procedural requirements (e.g., fingerprinting) enforcing existing criteria, to the extent that they identify or deter ineligible families.

31. Caseload Reduction Credit “Netting Out” Caseload declines due to eligibility changes do not count toward the credit, but We will use the net effect of eligibility changes, adding back in caseload increases due to eligibility changes.

32. Caseload Reduction Credit Steps in Calculating the Credit 1) We compare 1995 AFDC/UP data to prior year TANF and SSP-MOE data the State reports. 2) State submits Caseload Reduction Report with data on eligibility changes and their impacts. 3) We compare and analyze State’s methodology and estimates to determine if plausible; may request additional information within 30 days.

33. Caseload Reduction Credit Due Dates A State must submit the Caseload Reduction Report by December 31. We will notify the State of its caseload reduction credit no later than March 31.

34. State Accountability A State that fails to meet participation rates is subject to a monetary penalty. The base penalty is 5% of the grant, increased by 2% for each successive failure.

35. Penalty Reduction A State may qualify for a reduced work penalty based on the “degree of noncompliance.” (required reduction)

36. 1) Reduce for failing only the 2-parent rate 2) Test for meeting 2 thresholds 3) Reduce based on severity of failure –degree of failure –adjustment factor –years of failure & number of rates failed (multiply all 3 severity factors for reduction) Penalty Reduction 3 Steps

37. Penalty Reduction Failing only the 2-parent rate We reduce the maximum penalty based on the proportion of 2- parent families in the caseload.

38. Threshold tests Penalty Reduction u achieve 50% of target rate (50% threshold) u increase the number of work participants over the prior year To qualify for further reduction, the State must:

39. Penalty Reduction Amount by which State failed If the State meets the threshold tests, we make a proportional reduction for its achievement above the 50% threshold.

40. Penalty Reduction Adjustment factor Adjusts for a State’s success in engaging more recipients in countable activities. If a State meets the threshold tests, the adjustment rewards it for increasing the working recipients by at least 15%.

41. Penalty Reduction Consecutive failures & Number of rates missed In 1st year of failure: miss one rate, receive full reduction; miss both rates, receive  of reduction. In 2nd year of failure: miss one rate, receive  of reduction; miss both rates, receive  of reduction. In 3rd year of failure: no reduction.

42. u Reduce based on proportion of 2-parent cases. u Test for meeting both thresholds. u Reduce on severity of failure –degree of failure –adjustment factor –years of failure & number of rates failed Penalty Reduction Summary

43. Corrective Compliance u General corrective compliance plan criteria apply. u Failure must be corrected by the end of the fiscal year that ends at least 6 months after we receive the plan.

44. Corrective Compliance Significant Progress We will only reduce the penalty further if the State fills at least half the gap between the rate it achieved in the penalty year and the rate required for the compliance period.

45. Two-Parent Families u Choice on the basis of the caseload reduction credit for the 2-parent rate; u Ability to “net out” eligibility changes that increase the caseload; u Penalty for failing just the 2-parent rate based on proportion of 2-parent families. Provisions in the final regulations that help States with 2-parent families:

46. General Rules--Time Limit u No Federal TANF funds for assistance to a family with an adult or minor-child head- of-household or spouse of the head of household who has received assistance for more than 5 years. u Lifetime limit u 5 years = 60 cumulative months

47. u State defines “family” and who receives assistance u Penalty is 5% of adjusted SFAG u Penalty does not apply to State’s shorter time limit u If Federal time limit inconsistent with State’s waiver, waiver policies continue More General Rules-- Time Limit

48. Time Limit Months Count When: u Family receives “assistance” u Federal TANF funds are used u Family includes an adult, minor-child, or pregnant minor head-of-household or spouse of the head-of-household u A noncustodial parent who is the spouse of the head-of-household, receives Federal TANF assistance

49. Time Limit Months Do Not Count When: u Family does not receive “assistance” u No Federal TANF funds are used u Family is a “child-only” family u Head-of-household and spouse do not receive assistance u Family lives in Indian country or a Native Alaskan Village where at least 50% of the adults are unemployed

50. 20% Exception to Time Limit u Assistance may extend beyond 5 years for up to 20% of cases u Assistance may be extended based on: –Hardship, as defined by State, or –Battery or extreme cruelty, as defined in statute u Exceptions apply after family reaches 60-month limit

51. 20% Exception to Time Limit (cont.) u For a fiscal year, the 20% exception is: (avg. mo. # of families with assistance > 60 mos.) divided by (avg. mo. # of all families with assistance)

52. WtW Cash Assistance u Affects whether clock on Federal assistance is running u Must be assistance u Must be for basic needs u Must be convertible to currency

53. Time Limit Treatment of Months When Only WtW Is Received u Months do not count when an adult receives only WtW noncash assistance u Months count when a family receives WtW cash assistance u WtW cash assistance can be provided after the TANF time limit is reached.