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Temporary Assistance for Needy Families (TANF)

Caseload Reduction Credit Methodology for FFY 2012

Summary

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 grant, states are required to achieve two minimum work participation rates: an overall rate and a two-parent rate. The overall work participation rate requires that fifty percent (50%) of all families receiving TANF assistance participate in work activities during the fiscal year. The second requires that ninety percent (90%) of two-parent families receiving TANF assistance during the fiscal year participate in work activities. States that successfully meet their work participation requirements receive a reduction in their maintenance-of-effort (MOE) requirement. Failure to meet the requirements may result in financial penalty to the 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.
The credit reduces a State's required work participation rate for a fiscal year by the number of percentage points its caseload declined between FY 2005 and the comparison year which is the year before the current fiscal year. This adjusted target rate becomes the work participation rate that the state must meet to receive a reduced MOE requirement and to avoid penalty.

Methodology
Wisconsin’s FFY 2012 caseload reduction credit is based on the change in caseload between FFY 2005 (the base year) and FFY 2011 (the comparison year) that is not due to program effects, divided by the base year caseload. The State has decided not use a separate credit for its two-parent caseload. Rather, it has chosen to apply the credit calculated for the all-family caseload to its two-parent caseload.

The computation includes several eligibility changes enacted since FFY 2005. The changes increased the all-family caseload by 1,062 cases a month and include:

1. Elimination of the CMS Placement from the W-2 program. The CMS placement was an unpaid non-TANF placement for job-ready participants. It was eliminated by a change in state policy effective August 20, 2007. As a result, new job-ready participants would have received a CSJ placement (which is a paid TANF placement) after the eligibility change. This change increased the TANF all-family monthly caseload by 835.
2. Elimination of the 24-Month Time Limit for Wisconsin Works (W-2) Employment Positions. Both CSJ and W-2T placements are paid TANF placements in the W-2 program. Prior to FFY 2010, W-2 participants at or above 24 months on their CSJ or W-2T clocks required an extension to continue on that clock. The elimination of this requirement in October 2010 resulted in a higher proportion of CSJ and W-2T cases continuing on TANF between consecutive months. A monthly average of 227 cases was added to the TANF caseload due to this eligibility change for FFY2011.

TANF program total expenditures in Wisconsin for FFY 2011 were $531,636,321. The Federal portion of the expenditures was $253,745,131 (48%) and the State’s MOE Expenditures was $277,887,190 (52%). The State’s required MOE (75%) is $167,266,705 resulting in Excess MOE Expenditures for FFY 2011 of $110,620,485 ($277,887,190 - $167,266,705).

Wisconsin’s total Expenditures on Assistance (Federal and MOE) was $142,735,828. Expenditures on Assistance were 26.85% of total expenditures. Excess MOE on Assistance is $29,700,008 ($110,620,485 X 26.85%). The average expenditure per case on assistance was $5,456 (Total Expenditures on Assistance ($142,735,828) divided by Total FFY 2011 caseload (26,163).The number of assistance cases funded by excess MOE is 5,444 ($29,700.008/$5456).

All-Family Caseload Reduction Credit
The State’s average monthly caseload increased by 5,442 cases from 20,721 in FFY 2005 to 26,163 cases in FFY 2011. Adjusting for the 4895 assistance cases funded by excess MOE resulted in a caseload decline of 2 cases for a Caseload Reduction Credit of 0.01% for the All-Family credit. Wisconsin has chosen to apply the 0.01% credit to its two-parent caseload as well. The net impact due to eligibility changes was an average monthly increase of 1,062 cases.

Comments and/or Additional Information
Comments on the methodology may be sent to: Naomi Rivers, Bureau of Working Families, 201 E. Washington Avenue, P.O. Box 8916, Madison, WI 53708-8916, Fax 608-267-0513, or e-mail: Naomi.Rivers@wisconsin.gov.

Comments must be received by Friday, December 30, 2011.

For additional information about the TANF Caseload Reduction Credit methodology, requestors may e-mail Maura Taggart at: Maura.Taggart@wisconsin.gov, or write to: Maura Taggart, PhD, Division of Family and Economic Security, P.O. Box 8916, Madison, WI 53708-8916.