Elizabeth LowerBasch Senior Policy Analyst The TANF Emergency

Elizabeth Lower-Basch Senior Policy Analyst The TANF Emergency Fund and Domestic Violence March 1, 2010 www. clasp. org

A Short History of TANF • 1996 Personal Responsibility and Work Opportunity Reconciliation Act replaced AFDC with TANF – “welfare reform” • Welfare caseloads dropped dramatically. • More low-income single mothers working, but also increasing share not working, not receiving welfare. • Block grants fixed at $16. 5 billion a year – purchasing power has eroded by ~30 % since 1996. • Share of TANF block grant spent on cash assistance declined sharply. www. clasp. org 2

The TANF Emergency Contingency 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 • Each state can receive up to 50% of block grant over two years. • Total pool of $5 billion. • Expires on September 30, 2010 www. clasp. org 3

TANF Assistance • Can only qualify under assistance if caseload has risen vs. 07 or 08 • Nationally, TANF caseload has risen by ~7% vs. 29% increase in SNAP receipt. • CBPP: 26 states “minimally responsive; ” 11 “moderately responsive; ” 14 states grew by 15% or more. • Assuming a state qualifies based on caseload increases, ECF will pay for 80 percent of benefit increase for TANF recipients. www. clasp. org 4

Non-recurrent short-term benefits • Energy assistance – prevent utility shutoffs. • Homelessness prevention – first and last month’s rent, security deposit, moving costs. • Domestic violence services, car repairs, legal aid, dentures • One-time payments to broad population of needy families (eg. New York’s back to school payment to all TANF or SNAP families) • Refundable EITC www. clasp. org 5

Short-Term Non-Recurrent Benefits for Domestic Violence Survivors • Emergency shelter • Short-term counseling • Short-term medical treatment, including dental work or replacement eyeglasses • Legal services and court-related costs • Help in applying for TANF or other benefits • Replacement locks • Moving costs, including security deposits • Purchase of clothing or household goods www. clasp. org 6

Subsidized Employment • HHS has said that employers’ costs of supervising and training participants can be deemed as equal to 25% of wage costs – no state $$ required • Can be Transitional Jobs for individuals with barriers to employment. § Combines work, skill development, and supportive services § http: //www. transitionaljobs. net/ www. clasp. org 7

Subsidized jobs are better than workfare • Can deem hours of participation for 6 months, rather than having to document them every week – less paperwork for states. • Much better financially for the participant – earnings count towards tax credits. • Generally, more like real work situations – need to be timely, deal with supervisors and coworkers, can learn skills. Not pushing a broom in the park. www. clasp. org 8

Los Angeles Transitional Subsidized Employment • One of largest programs in the country – goal of placing 10, 000 participants by September. • Up to 12 months of subsidized employment at $10/hour per hour with non-profit and public agencies and 6 months with private entities • TANF Emergency Fund pays the full cost of wages; employers’ costs of supervising and training are counted as the 20% match. • Targets Cal. WORKS recipients, parents in DV shelters, foster care youth. www. clasp. org 9

TANF Work Participation Rates • Work participation rates only apply to recipients of “assistance. ” • Nonrecurrent short-term benefits and work subsidies are not “assistance. ” • Recovery act included a “hold harmless” – states can use previous caseload reduction credit if caseloads increase. • Existing regulations allow for “reasonable cause” for failure to meet rates in recession. www. clasp. org 10

What counts for ECF reimbursement? • Combined MOE/TANF spending • Must be an increase over comparable quarter in FY 07 or 08 • Can be redirected from other TANF categories • Can be third-party spending claimed as MOE www. clasp. org 160 140 120 100 80 60 40 20 0 Base year quarter Current year quarter 11

Third Party MOE Spending • • • Can be cash or in-kind Must meet definition of “expenditure” Must benefit members of “eligible families” Third party must give state permission Funds can not come from another federal program, and can not have been used for matching or MOE requirement of other program • Employer costs of supervision and training can be counted. www. clasp. org 12

Two Approaches to Funding Reimbursement Advance Funding • State increases spending on countable activities by $5 million • State applies for and receives $4 million from Emergency Fund. • Funds received can be spent on any allowable TANF activity, and can be used after Sept 2010. • State projects that it will increase spending on countable activities by $5 m. • State applies for and receives $4 million from the Emergency Fund. • Full $5 million ($4 million from EF + $1 million of MOE) must be spent on countable activity by Sept 2010 www. clasp. org 13

States have been drawing down the ECF. . . • 34 states have received $804 million based on increased cash assistance caseloads. • 19 states have received $367 million based on increased spending in short-term non-recurrent assistance. • 22 states (plus the District of Columbia) have received $138 million based on increased spending on subsidized employment. www. clasp. org 14

. . . but many states have received far less than their maximum possible allocations www. clasp. org 15

September 30 is Approaching • Funds must be expended, not just obligated by September 30, to be reimbursed. • LA is planning on phasing out subsidized jobs program in May unless there is an extension. • President Obama’s budget calls for extending program for one year, providing extra $2. 5 B, and 100% reimbursement of subsidized jobs. • HR 4564 has 57 cosponsors. • Extension should happen sooner rather than later so states can make plans: UI/COBRA extension is best vehicle. www. clasp. org 16

Thank you For more information: Elizabeth Lower-Basch elowerbasch@clasp. org 202 906 -8013 CLASP www. clasp. org 1015 15 th St, NW Suite 400 Washington, DC 20005 The TANF Emergency Fund: A New Resource for Domestic Violence Programs www. clasp. org/TANFEmergency. Fund www. clasp. org 17