Tip Sheet: Welfare Reform Policies

Problem

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), implemented in 1996, ended the national entitlement to welfare for families with dependent children and created Temporary Assistance for Needy Families (TANF), a block-grant program that allows states the flexibility needed to reform their welfare systems. More than 15 years after PRWORA was first enacted, some governors and legislators have seized the opportunities offered by the law, developing thoughtful policies and integrating services needed to help recipients move into the workplace.

However, many states’ current mix of welfare and anti-poverty programs is acting as a disincentive for work, trapping welfare recipients into long-term poverty.

In March 2014, the U.S. House of Representatives’ House Budget Committee issued a report describing the $799 billion spent through 129 programs for lower-income Americans in 2012. Together with state and local programs, total spending is well over $1 trillion per year, most of it intended to help those in poverty. This massive amount of money could be better used to help more people move from dependency to self-sufficiency.

Solution

Policies should emphasize opportunities for upward mobility and self-sufficiency. While each state is diverse, with its own set of demographic and economic conditions, the most successful states have been those implementing policies and integrating in a coordinated, holistic, “one-stop” fashion the services needed to help recipients permanently move into the workplace.

Providing aid to those in need should include policies to help individuals become independent. Lawmakers should consider strengthening welfare work requirements, tightening lifetime limit eligibility requirements, providing a short-term cash diversion program, implementing strict sanctions, and integrating other social services.

Policy Message

Point 1: TANF recipients who are required to participate in work or work-related activities immediately upon receiving benefits can improve their family’s well-being socially and economically.

Point 2: Strengthening the sanctions for failure to participate in work activities would likely lead to an increase in work participation and encourage recipients to gain the skills they need to become self-sufficient and leave welfare rolls permanently.

Point 3: While federal TANF rules set a lifetime eligibility limit of five years, some states have adopted shorter lifetime limits, helping to create a stronger incentive for TANF recipients to prepare for work and accept job opportunities when available.

Point 4: Rather than requiring full enrollment in TANF and needlessly creating more dependency, 33 states have adopted a cash diversion program that allows case workers to make grants to people who need short-term assistance.

Point 5: Integrating welfare programs and social services such as alcohol and substance abuse treatment and childcare by co-locating service providers gives case workers more flexibility to direct their clients to the services they need.