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Temporary Assistance for Needy Families (TANF)

Caseload Reduction Credit Methodology for FFY 2009

Introduction
The Deficit Reduction Act of 2005 (P.L. 109-171) reauthorized the Temporary Assistance for Needy Families (TANF) Program. As a condition of the receipt of TANF, states are currently required to achieve two minimum work participation rates. The first, the overall work participation rate, requires that 50% of all families receiving assistance must participate in work activities in the fiscal year. The second, the work participation rate for adults in two-parent families, requires that 90% of two-parent families participate in work program activities in the fiscal year. States that successfully meet their work participation rates receive a reduction in their maintenance-of-effort (MOE) requirement. Failure to meet the required work participation rates may result in a financial penalty to a state under federal regulations at 45 CFR 261.50.

The Act directed the Secretary of the Department of Health and Human Services (DHHS) to establish regulations to grant states a caseload reduction credit. This credit reduces the work participation rate that a State is required to meet for a fiscal year. This adjusted target rate then becomes the work participation rate that a state must meet in order to receive a reduced MOE requirement and to avoid a financial penalty.

The caseload reduction credit for Federal Fiscal Year (FFY) 2009 equals the reduction in the State's caseload from
FFY 2005 (i.e., the base year) to FFY 2008 (i.e., the year before the reporting year) that is not due to program effects
(i.e., changes in Federal or State eligibility criteria since the base year) divided by the caseload in FFY 2005
(i.e., the base year). States have the option of applying the all-family credit to both all-family and two-parent caseloads or developing a separate credit for two-parent families. Wisconsin has chosen the option of calculating separate credits for all-family and two-parent caseloads.

Federal Requirements
To receive the caseload reduction credit, Wisconsin must submit its report by December 31, 2008 to the Administration for Children and Families (ACF) of DHHS. Under the final TANF regulations, ACF has determined that it will use the following process to determine the appropriate caseload reduction credit to apply to FFY 2009:

  1. Determine the all-family caseloads for FFY 2005 and FFY 2008 by calculating respectively the average monthly number of TANF (Wisconsin Works,1 Caretaker Supplement,2 and Kinship Care3) cases and Separate State Program (SSP-MOE)4 cases in each year.

  2. Determine the two-parent caseloads for FFY 2005 and FFY 2008 by calculating respectively the average monthly number of TANF (Wisconsin Works) two-parent cases and SSP-MOE two-parent cases in each year.

  3. Review the Caseload Reduction Report provided by the State that includes:

    4. a.) a list of all State and Federal eligibility changes made by the State since the base year and their respective implementation dates;

    b.) estimates of the net impact on the all-family and two-parent caseloads as a result of the eligibility changes and a description of the methodology used in these estimates;

    c.) calculations of the State's all-family and two-parent caseload reduction credits; and

    d.) certification that the report included all net reductions resulting from Federal and State eligibility changes, that it provided the public an opportunity to comment on the estimates and methodology, and that it considered their comments.

  4. Evaluation of the adequacy of the information and calculation of the caseload reduction credit using the above information.

All-Family Caseload Reduction Credit
The reduction in average monthly all-family caseload from FFY 2005 (20,721 cases) to FFY 2008 (17,657 cases) is 3,064. Since there were no eligibility changes for all-family cases after FFY 2005, the entire reduction was a non-program effect. The actual percentage reduction is 14.8 percent. Assuming the MOE requirement is 80% and adjusting the reduction for excess MOE, the All Family Caseload Reduction Credit for FFY 2009 is 21.4 percent. If Wisconsin meets its required work participation rates in the comparison year (FFY 2008), it will request that ACF adjust its MOE requirement to 75% so that the All-Family Caseload Reduction Credit for FFY 2009 will be 23.5 percent.

Two-Parent Caseload Reduction Credit
The reduction in average monthly two-parent caseload from FFY 2005 (466 cases) to FFY 2008 (167 cases) is 299. Since there were no eligibility changes for two-parent cases after FFY 2005, the entire reduction was a non-program effect. The actual percentage reduction is 64.2 percent. Assuming the MOE requirement is 80% and adjusting the reduction for excess MOE, the Two-Parent Caseload Reduction Credit for FFY 2009 is 66.9 percent. If Wisconsin meets its required work participation rates in the comparison year (FFY 2008), it will request that ACF adjust its MOE requirement to 75% so that the Two-Parent Caseload Reduction Credit for FFY 2009 will be 67.8 percent.

Footnotes:
1 Wisconsin Works (W-2) is a program based on work participation. Under W-2, participants are assigned to placements. Whether or not these placements are subsidized is based on an assessment of available personal and community resources and ability to work.

2 Caretaker Supplement is a cash assistance program for eligible parents who receive Supplemental Security Income (SSI) but are not eligible for the W-2 program.

3 Kinship Care is a cash assistance program for eligible caretaker relatives of minor children.

4SSP-MOE refers to Separate State Program (SSP) caseloads that meet the State’s maintenance-of-effort (MOE) requirements.

Opportunity for Public Comment
The Department will publish a notice about the caseload reduction credit methodology in the State of Wisconsin official newspaper, the Wisconsin State Journal, by Friday, November 28, 2008, and concurrently announce the methodology is available on the Department's website at: http://dcf.wisconsin.gov/researchandstatistics/tanf/cr2009.htm. Comments on the methodology may be sent to:  Amy Wick, Bureau of Working Families, 201 E. Washington Avenue, P.O. Box 8916, Madison, WI 53708-8916, Fax 608-266-6836, or e-mail: Amy.Wick@wisconsin.gov.

Comments must be received by Monday, December 29, 2008.

For additional information about the TANF caseload reduction credit methodology, requestors may e-mail Michael Soref at: Michael.Soref@wisconsin.gov, or write to: Michael Soref, Division of Family and Economic Security, P.O. Box 8916, Madison, WI 53708-8916.


Updated January 14, 2009