In October 1999, Department of Workforce Development Secretary Linda Stewart commissioned a study to examine every closure which occurred between September 1997 and September 1999 for families who were receiving cash assistance or W-2 case management services. The study overlapped the end of AFDC and the start of W-2 and thus included AFDC families and new W-2 families. (It did not include the AFDC families who were not eligible for W-2 but who were eligible for the Kinship Care or the Caretaker Supplement programs.) See Chart 1.

Secretary Stewart emphasized that the study must go beyond surveys or samples by examining 100 percent of the closures. She directed the research to focus on both economic reasons for closure and other closure circumstances. She requested that data be taken first from the state?s CARES eligibility/case management system, and if that data was not specific enough for some cases, then the data should come from CARES case narratives or from local agency paper files.

The study was completed between October 1999 and January 2000. DWD staff managed the study with the assistance of several contractors and the full cooperation of all of the W-2 agencies.

This is a comprehensive study of participating families in the first two years of the W-2 program. It followed all 39,979 families headed by an adult capable of work that received welfare payments or case management services at any time between August 1997 and September 1999.

The purpose was to review the status of families that stopped receiving cash assistance or stopped receiving case management services. The study focused on two groups: families that had a closure event but returned to W-2 cash assistance; and families that had a closure event and were still off of W-2 cash assistance as of October 1999.

Not all families that received W-2 cash assistance or case management services had a closure event during the study period. There were 7,722 families that either had their last closure event reversed or did not have a closure event and are still receiving W-2 cash assistance or case management services. These 7,722 families are not included in the study. The study identified 32,257 families that had a total of 56,460 closure events.

Extensive data was obtained from the CARES system for each of the 32,257 families that had a closure during the period of the study. For each family, a "profile" record was created for each closure. 56,460 profiles were created. Each profile contains the following types of information:

• Type and month of the closure

• Location of the family (county, worker)

• Data about all individuals in the family (earnings, other income, etc.)

• Eligibility and closure data for AFDC and W-2

• Eligibility data for food stamps, Medicaid (and Badger Care) and child care

Local agencies reviewed 19,925 of the closures and provided additional information on the data collection documents by checking any of 29 items that applied to the closure. Multiple items may have applied to a single closure. The reasons identified by the local agencies are summarized below:

CARES data was used to identify each closure. Over the study period, 32,257 families had a total of 56,460 closure events. Some families had more than one closure over the period of the study. There were five types of closure events:

11,707 AFDC payment to AFDC closure with no W-2 payment or case management

4,112 AFDC payment to non-payment W-2 case management

30,197 W-2 payment to W-2 non-payment (closure or W-2 case management)

10,240 W-2 case management to W-2 closure

204 W-2 trial job to W-2 closure or W-2 case management

Analysis of the CARES data identified 19,925 closure events which required local agencies to research the case narratives or the paper files. Each of these events was placed on a data collection form and sent to the W-2 agency responsible for the event. The agencies reviewed each event and identified which of 29 specific reasons were responsible for the closure event. The information from the data collection forms was merged with the other CARES data to produce a complete picture for all 56,460 closure events. (See Local Agency Data Collection Document.)

The analysis of the complete set of closure events involved several steps. The first step was to separate the 3,180 families who were receiving cash assistance from the 29,077 families who were not receiving cash assistance as of October 1999.

The study then focused on the families who were not receiving cash assistance as of October 1999. To do this, the data for the most recent closure event for each family was analyzed. Based on the data, one of six categories for each closure was assigned in the following order of importance:

1) employment

2) unearned income

3) refused to enroll in W-2 or have an eligibility review

4) refused to participate in program requirements

5) did not meet program eligibility requirements

6) chose other options to receiving public assistance

The results of the study explain the most recent closure for the families that are not receiving W-2 cash assistance. Analysis of the 3,180 families who were receiving cash assistance as of October 1999 is also presented in this report.

01___EMPLOYMENT/SELF EMPLOYMENT
02___WORKER DETERMINED PARTICIPANT WAS JOB READY
03___CHILD SUPPORT INCOME
04___SSI INCOME
05___SSA INCOME
06___UNEMPLOYMENT INSURANCE OR WORKERS COMPENSATION INCOME
07___OTHER INCOME NOT LISTED ABOVE
08___ASSETS

09___MISSED SCHEDULED APPOINTMENT(S)
10___DID NOT COMPLETE WORK ASSIGNMENT(S)
11___QUIT JOB OR REFUSED EMPLOYMENT
12___CLOSED BY WORKER BECAUSE OF MULTIPLE MONTHS OF SANCTIONS
13___FAILED TO ENROLL IN W-2

14___MISSED 6 MONTH ELIGIBILITY REVIEW
15___WRITTEN OR SPOKEN REQUEST NOT TO RECEIVE W-2
16___FAILED TO PROVIDE INFORMATION OR VERIFICATION
17___NO LONGER PROVIDING CARE/CONTROL FOR CHILDREN IN HOUSEHOLD
18___DID NOT WANT TO COOPERATE WITH CHILD SUPPORT
19___GOT MARRIED/LIVING WITH PARTNER
20___MOVED TO A DIFFERENT COUNTY IN WISCONSIN
21___MOVED OUT OF STATE
22___YOUNGEST CHILD NO LONGER ELIGIBLE (TURNED 18 OR 19)
23___GOING TO SCHOOL
24___INCARCERATED
25___NO LONGER PREGNANT
26___DIED
27___CLOSURE ACTION REVERSED - SUPPLEMENTAL PAYMENT ISSUED FOR EVENT MONTH
28___NON-QUALIFIED ALIEN ? NOT ELIGIBLE FOR W-2
29___SERVED/COVERED BY TRIBAL FEDERAL TANF PROGRAM ? NOT ELIGIBLE FOR W-2

For both groups, the study found that the primary cause of closure events was due to employment and to other income. It is important to note that the study included the employment and other income available to the entire family, not just to the participant.

Employment and other income was a larger factor for the Group 1 families (75.9%) than for the Group 2 families (66.7%). Choosing not to enroll or participate was a larger factor for the Group 2 families (29.3%) than for the Group 1 families (17.3%). This indicates that the Group 2 families have more difficulty with getting and keeping employment and with meeting program requirements.

What were the causes for the last closure for the Group 1 (Not on W-2 Cash Assistance as of 10/31/99) families?

What were the reasons for the 5,799 closures among the 3,180 Group 2 (On W-2 Cash Assistance as of 10/31/99) families?

(These are families that have gone on and off of public assistance one or more times. W-2 agencies continue to help and work with them as they continue their efforts to establish their independence from public assistance.)

The W-2 program has always encouraged families to seek full-time employment and other sources of income while offering a host of supportive services to help them on their path to self-sufficiency. These supportive services include food stamps, health care (Medicaid and Badger Care), child care and W-2 case management services. All but a few of the Group 2 families receive one or more of these supportive services.

How many of the 29,077 Group 1 families continued to receive one or more of the supportive services provided by the W-2 agencies?

• 20,561 families, or 70.7%, were still receiving some supportive services. (W-2 Case Management Services, Food Stamps, Health Care, or Child Care)

• 8,516 families, or 29.3%, were not receiving W-2 case management services, Food Stamps, Health Care or Child Care supportive services through the W-2 agency.

Use of supportive services by the 18,715 families whose last closure was due to employment was 75.9%.

The study also sought to find out how much those families who left cash assistance for employment were earning. For this data, the study relied on several sources of information. It first relied on the exact, verified administrative data used for eligibility; secondly, it relied on case management information from the Financial and Employment Planners (FEPs); and lastly, it relied on the case notes and paper files.

For the 18,715 families who left solely due to employment, the study was able to obtain exact earnings for 13,428 of the families. The other sources of information were used to determine that the remaining 5,287 families left due to employment although specific earnings could not be obtained. The earnings are from the time of the closure. Table 4 shows the monthly earnings for this group. Other unearned income was also known for these families and is displayed in Table 5.

The following calculations add the annualized earnings with annualized benefit amounts and include applicable Earned Income Tax Credits (EITC). Generally, as families earn more, their usage of supportive services declines as they become eligible for less and grow more independent of government assistance. The federal poverty level (FPL) in 1999 is approximately $13,880 for a single mother with two children, the average configuration of the families who left W-2.

Table 6 shows the annualized earnings and annualized benefit amounts for the 13,428 families not receiving W-2 cash assistance because of employment where exact earnings could be obtained. The monthly amount of earnings at the time of the last closure was used for this calculation. This assumes monthly income will continue at the same level for a year. Additionally, this table assumes that families were using EITC and all available benefits. The benefit levels were calculated for a single parent with two children. As income goes up, benefit levels go down or end.

• 69% of the 13,428 families had earned income and available benefits worth between $34,344 - $38,004 annually.

• 31% of the 13,428 families had earned income and available benefits worth between $31,596 - $33,840 annually.

It is useful to compare the annualized totals from Table 6 with two examples of families as if the AFDC program was still in existence and had not been replaced by the W-2 program.

Table 7 shows the annualized earnings and annualized benefit amounts for two typical AFDC families. The first family has no income other than the AFDC grant. The second family has $673 of earned income and is paying for child care through the AFDC child care disregard. Additionally, this table assumes that families were using EITC and all available benefits. The benefit levels were calculated for a single parent with two children. It is important to note that the second family is paying for child care with the AFDC grant as a disregard of earned income and therefore shows no monthly child care benefit.

A comparison of Table 6 and Table 7 shows that families are better off and will have more annual income to meet their needs under the W-2 program than they had under AFDC. This is particularly true for families with full-time employment who take advantage of EITC and the supportive services that exist as a part of W-2.

TABLE 9

1. The primary cause of closure events for study families was employment.
2. Those study families no longer receiving W-2 cash assistance, who left due to reasons other than income or employment, left due to choice or inaction.
3. 70.7% of families that are no longer receiving W-2 cash assistance still receive one or more supportive service.
4. With the combination of earned income, EITC, and the supportive services available under the W-2 program, families have more income and are becoming more self-sufficient than they were under the AFDC program.

The early years of W-2 have worked for families in Wisconsin by encouraging them to seek full-time employment and other sources of income while offering a host of supportive services to help them on their path to self-sufficiency.

We know from our surveys of those leaving AFDC or W-2, that many families do not work continuously after leaving cash assistance. At the same time, we know that with continuous work and use of available benefits families will be much better off.

An ongoing challenge and next focus of W-2 will be to provide the services needed to ensure that these families remain employed and encourage their advancement in the workplace. W-2 has begun this effort through new contractual requirements and through the Workforce Attachment and Advancement initiative.

Table 10 compares Milwaukee county with the balance of state. The comparison is of the reasons for the last closure event for the Group 1 (Not on W-2 Cash Assistance as of 10/31/99) families. Summary data sheets for Milwaukee county and summary data sheets for the balance of state (all counties except Milwaukee) are attached.

TABLE 10

While very similar, the percentage of employment and other income as the cause of closure is slightly lower in Milwaukee than in the balance of state. The percentage of families choosing or refusing to participate is higher in Milwaukee than in the balance of state.