TANF in the “Great Recession” and Beyond

Elizabeth Lower-BaschCLASP

July 16, 2009CCD Webinar

The “Great Recession:” Challenges

• Rising unemployment and underemployment– Individuals with disabilities may be affected

directly or by loss of private supports

• Severe state budget crises, with many services being cut

• State human services agencies must serve rising caseloads with fixed or declining staff levels

The “Great Recession:” Opportunities?

• Increased recognition that caseload decline is not the goal, work-first can’t be only solution?

• Reduced focus on work participation rates?– ARRA included “hold harmless” provision on

caseload reduction credit that will help states– HHS has authority to waive work participation

penalties during recession

• New $$ through the TANF Emergency Fund

TANF Emergency Fund• States will receive 80 percent of increases in

spending in one or more of three areas:– Assistance– Non-recurrent, short-term benefits– Subsidized employment

• States can receive up to 50 percent of block grant over two years (FY 09 and 10) from Emergency Fund and Contingency Fund combined

• Total pool of $5 billion• States can apply for funds for upcoming quarter

based on projected spending

Can only qualify under assistance if caseload has risen vs. 07 or 08

Wall Street Journal, June 22, 2009

TANF assistance• Caseloads starting to rise in many states, but

by modest amounts compared to the decline• Should consider outreach to food stamp

households that appear to be eligible for TANF, former TANF households

• Assuming a state qualifies based on caseload increases, Emergency Fund will pay for 80 percent of benefit increase for TANF recipients.

Non-recurrent short-term benefits

• Energy assistance – prevent utility shutoffs• Homelessness prevention – first and last

month’s rent, security deposit, moving costs• Back to school clothing allowance• Not limited to families receiving cash

assistance

Subsidized employment• Includes the cost of overseeing the program,

developing work sites, supervising participants and providing training

• Range of models – including supported work, transitional jobs.

• Opportunity for existing programs to expand – states are excited about model, but concerned about ability to get up and running before Emergency Fund ends in FY 2010.

What counts for Emergency Fund reimbursement?

• Combined MOE/TANF spending

• Must be an increase over comparable quarter in FY 07 or 08

• Can be spending from Contingency Fund

• Can be redirected from other TANF categories

• Can be third-party spending claimed as MOE

TANF Reauthorization

• Scheduled to occur by September 30, 2010.• Hearings likely in early 2010• Current work participation rate requirements

provide a disincentive to provide assistance to “hard to serve” populations, no reward for providing services that don’t count toward the work participation rate.

Different possible approaches

• Add to list of activities that are countable toward work participation rate, allow partial credit for less than full participation

• Replace work participation rate with other performance measures that have less of a “one size fits all” attitude

• Allow states to serve individuals with disabilities through separate programs that establish different expectations than TANF

Thank you

For more information:

Elizabeth Lower-Baschelowerbasch@clasp.org202 906-8013

CLASPwww.clasp.org1015 15th St, NWSuite 400Washington, DC 20005

Q and As on the TANF Emergency Fund:http://www.clasp.org/publications/tanf_efc_qanda0409.pdf