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The welfare reform legislation must be reauthorized by October 2002. The administration's reauthorization proposal builds upon the success of welfare reform by taking necessary steps to further help recipients achieve independence through work, protect children and strengthen families, and encourage state innovation. Information on the administration's proposal is available at www.whitehouse.gov/news/releases/2002/02/20020226.html.

MAKING WELFARE A TRANSITION TO WORK

PRWORA established the Temporary Assistance for Needy Families (TANF) program. It includes a wide range of provisions designed to encourage and support efforts by states to help individuals make the transition from welfare to work. These provisions include:

Work requirements. Under PRWORA, recipients must work after two years on assistance, with few exceptions. In fiscal year 2002, states are required to have 50 percent of all families engaged in a work activity for a minimum of 30 hours per week, and 90 percent of two-parent families engaged in work activity for at least 35 hours per week. The rates for all families started at 25 percent in 1997 and increased 5 percentage points each year to 50 percent in 2002. For two-parent families, the rates started at 75 percent and increased to 90 percent for 1999 and beyond. In fiscal year 2000, all states and Washington, D.C., met the overall participation rate for all families and 26 of the 38 states that were subject to the two-parent rate met the goal.

Child care support for families transitioning into jobs. Since the enactment of PRWORA, federal funds totaling more than $39 billion have supported the child care needs of families transitioning from welfare to work. These funds include both the mandatory and discretionary portions of the Child Care and Development Fund (CCDF), as well as funds made available for child care through the TANF block grant. During the same time period, states have provided more than $11 billion through the CCDF as a part of their commitment to child care. All told, more than $50 billion has been made available over the past six years to help more parents participate in the workforce.

Health care coverage. PRWORA guaranteed that individuals who meet pre-reform welfare-eligibility criteria continue to be eligible to receive Medicaid, including at least six months of transitional Medicaid coverage when they leave welfare for work. In addition, the State Children's Health Insurance Program (SCHIP) provides health insurance coverage for uninsured children, many of whom come from working families with incomes too high to qualify for Medicaid but too low to afford private health insurance. More information about the SCHIP program is available at www.insurekidsnow.gov and in HHS' SCHIP fact sheet at www.hhs.gov/news/facts.

Five-year time limit. Families with adult recipients who have received assistance for five cumulative years are ineligible for federally funded cash aid under the welfare reform law. States have the option of setting a shorter time limit. States also are permitted to provide extensions after reaching the federal time limit to 20 percent of their caseload, and states have the option to provide continued support to families that reach the time limit using Social Services Block Grant or state funds.

Performance bonuses. The law created a high performance bonus to reward states with the best performance in achieving TANF goals.

State maintenance of effort requirements. PRWORA requires states to maintain their own spending on welfare at a level equal to at least 80 percent of fiscal year 1994 levels or 75 percent if they meet the work participation requirements. In addition, states must maintain 100 percent of fiscal year 1994 or fiscal year 1995 spending on child care (whichever is greater) to access additional child care funds beyond their initial allotment. States are spending more per recipient now than in 1994. All states met the minimum spending requirements that applied to them in fiscal year 2000.

STRENGTHENING FAMILIES AND PROMOTING RESPONSIBILITY

Ending dependence and promoting two-parent families. Flexibility under PRWORA extends to providing services to non-custodial parents to ensure that they are able to support their children and have the skills necessary to be better parents. All states have the administrative flexibility to use TANF funding for programs that strengthen and encourage two-parent families. In addition, PRWORA includes grants to help states establish programs that support and facilitate non-custodial parents' visitation with and access to their children.

Teen pregnancy prevention. PRWORA provides $50 million a year in funding for abstinence education activities. This program provides states with grants to support a wide range of innovative abstinence programs for adolescents.

Strong child support enforcement measures. PRWORA includes strong child support enforcement measures. Collections rose to a record high of $18.9 billion in fiscal year 2001. The federal government collected a record $1.4 billion in overdue child support from federal tax refunds alone. Under PRWORA, each state must operate a child support enforcement program that meets federal requirements to be eligible for TANF block grants. > Streamlined paternity establishment. PRWORA streamlines the legal process for paternity establishment, making it easier and faster to establish paternity. It also expands the voluntary in-hospital paternity establishment program, started in 1993, and requires a state form for voluntary paternity acknowledgment. In addition, the law requires states to publicize the availability and encourage the use of voluntary paternity establishment processes. Welfare recipients who fail to cooperate with paternity establishment will have their monthly cash assistance reduced by at least 25 percent. Paternity establishments rose to nearly 1.6 million in 2000, an increase of 12 percent from fiscal year 1999.

REAUTHORIZATION OF WELFARE REFORM

The welfare reform law must be reauthorized by October 2002. Following are highlights of the administration's welfare reform reauthorization proposal, which builds on the successes of PRWORA:

Helping Welfare Recipients Achieve Independence Through Work

Requiring welfare agencies to engage all families. Under the President's proposal, states must engage all families with an adult recipient in work and other constructive activities leading to self-sufficiency. Within 60 days of opening a TANF case, states will ensure that the recipient's family has an individualized plan for pursuing their maximum degree of self-sufficiency. Each family's progress toward self-sufficiency will be monitored and reviewed regularly.

Increasing minimum work requirements. Under current law, at least 50 percent of welfare families are required to participate in work and other activities designed to help them achieve self-sufficiency. The President's plan changes those provisions that currently weaken the participation requirement and increases the work requirement by 5 percent per year until it reaches 70 percent in fiscal year 2007.

Requiring welfare recipients to put in a full work week. The President's proposal builds on the successful work requirements of the 1996 welfare reform law by requiring welfare recipients to participate in constructive work activities for 40 hours per week. Recipients must spend 24 of these hours each week in a direct work activity. The balance of 16 hours each week can be spent on education, training or other state-approved activities. The plan makes special accommodations for parents with infants and individuals who need substance abuse treatment, rehabilitation or special work-related training.

Protecting children and strengthening families

Protecting children continuing historically high child care funding. The President proposes to continue historically high levels of support for child care through the Child Care and Development Fund.

Improving child support enforcement. Under current law, the government keeps most of the child support paid on behalf of families receiving cash assistance and a substantial portion of past-due child support collections for families that formerly received welfare. The President's proposal provides financial incentives for states to provide more of these funds directly to families.

Encouraging healthy marriages and two-parent married families. The President's plan directs up to $300 million for programs that encourage healthy, stable marriages. These programs include premarital education and counseling, as well as research and technical assistance.

Continuing support of abstinence programs. The President's proposal reauthorizes the $50 million in annual funding for state abstinence education activities.

Enhancing state flexibility and encouraging innovation

Allowing states flexibility to better coordinate child care and other non-cash work support services. States support the transition from welfare to work by providing families with a range of benefits and services including food stamps, child care, income supplements and transportation assistance. Under the President's proposal, states would be given the flexibility to streamline and coordinate these support programs, which now operate under different agencies, different rules, and different reporting requirements.

More information on the implementation of PRWORA is available at the Web site of the HHS Administration for Children and Families (ACF) at www.acf.dhhs.gov.

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