Policy Changes
State demonstration programs (known as waivers) and the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) have significantly changed US social policy, replacing AFDC with Temporary Assistance for Needy Families (TANF) block grants to the states that set time limits on receipt of assistance. Other changes include devolution of responsibility to the states, an expanded private sector role in implementation, and work requirements (with penalties for noncompliance) for recipients that limit and complicate access to education, training, child care, medical, nutritional, and other family support services. The law also significantly changed federal and state child care policies, child support enforcement, the Food Stamp program, assistance to disabled children, and public benefits eligibility for immigrants.

In Delaware, the A Better Chance program includes either a four or three year time limit on cash assistance (depending on whether the recipient applied for and began to receive assistance before or after January 1,2000), required school attendance for dependent children and teenage parents, a family cap, required immunization of minor children, required parenting classes, the ability for recipients to retain a portion of their grants while working (up to 75% of FPL), and 24 months of child care and health care coverage for income eligible recipients who leave welfare for work. As of January 1, 1999, no cash assistance is provided to any baby born to an unmarried teen mother. On January 1,200, retroactive to October 1, 1995, any month in which a person is working 20 or more hours per week is exempted from the ABC Lifetime Time Limit if the household is income eligible for ABC.

Since the law was enacted, the TANF assistance caseload has fallen significantly, from 4.4 million to 2.2 million by June 2000. In Delaware, the ABC caseload has declined from 10,260 in October 1995 (when the ABC waiver began) to 6,144 in June 2000, and 5,191 in September 2001. Caseload decline is sometimes cited as evidence of success in itself, but a state’s caseload can fall either because families no longer need assistance or because families who need assistance are not receiving it.

Work After Welfare
Nationwide, the research shows that most families leaving welfare are working, but that many of these families remain poor. There is also evidence that a significant group of families have left welfare but are not working. In Delaware, a survey of how the earliest ABC recipients were faring 46 months into the program revealed that although a high proportion of respondents (88%) had worked sometime during the two years proceeding the survey, only 61 percent were still working at the time of the survey. Slightly more than a third (36%) of families were above the federal poverty line ($17,050 for a family of three). However, 29 percent of families were below 50 percent of poverty. As might be expected, employed respondents (51% above poverty, 21 % above 150% of poverty) were much better off than those who were unemployed (21% above poverty, 47% below 50 percent of poverty).

Welfare reform has expanded the range of circumstances in which families can have their benefits reduced or canceled. In particular, sanctions (financial penalties for noncompliance with program requirements) and time limits on benefit receipt have become central features of TANF programs. While sanction policies have a historical role in enforcing program requirements, sanction policies under TANF have taken on much greater significance than in the past, in part due to the emergence of "full-family" sanctions that remove all, rather than part of a family’s cash assistance. Time limits, on the other hand, are most recent and set the 1990s reforms apart from previous efforts.

PRWORA established a five year time limit on the use of federal funds to provide a family with welfare benefits. It also allowed states to set even shorter time limits, and 20 (Delaware among them) did so. But relatively few families have yet reached their time limits. Although precise figures are not available, it is clear that the number of families nationwide who have been sanctioned is much larger than the number who have been terminated from welfare because of time limits. A number of studies (including one in Delaware) suggest that these families tend to be more disadvantaged and vulnerable than families that leave welfare for other reasons.

Strict State Sanction Policies
State sanction policies are influenced by federal TANF rules, but the block grant structure leaves states with greater flexibility to shape these policies. Federal law requires states to impose at least a pro-rata (partial) benefit reduction on families who do not satisfy work and child support enforcement compliance requirements. The sanction must remain in place until the family complies with the requirement. States have the option to impose more stringent penalties and can expand the penalties to program requirements other than work and child support enforcement. In addition, TANF sanctions can, under certain circumstances, affect Food Stamp benefits for the entire family and Medicaid coverage for the non-compliant adult.

Most states have chosen to implement sanction policies that are stricter than those required by federal law. In the long run, these policies may not serve, and indeed may interfere with the goal of moving families from welfare to work. The majority of states have adopted full-family sanctions where the penalty for noncompliance is loss of all cash assistance. Thirty seven states impose full-family TANF sanctions for noncompliance with work and/or other personal responsibility requirements. In 15 of these 37 states, a full family sanction is imposed immediately, while in the remaining 22, the grant is reduced. In seven states (Delaware, Georgia, Idaho, Mississippi, Nevada, Pennsylvania and Wisconsin), continued or repeated noncompliance may result in a lifetime bar from receiving cash assistance. Delaware has enacted personal responsibility ($50 reduction, increasing by $50 with each month of noncompliance) and work and training (1/3 reduction, 2/3 reduction, full reduction and permanent case closure) sanction policies.

Analysis of data from states and other sources indicates that under the TANF block grant, states and counties have imposed sanctions that reduced or terminated benefits to several hundred thousand families. In some states, the number of cases closed due to full-family sanction represents a significant share of case closures. State studies of families that have left welfare due to sanction have found that sanctions represented 20 % of case closures in Arizona, 28% in South Carolina, and 31 percent in Kansas over the specified periods of time covered in each study. In Delaware, families under sanction left ABC at twice the rate of families that did not receive sanctions. More than two-fifths (43%) of families enrolling in ABC had received a sanction by June 1998. The three most common reasons for sanctions were :failure to appear for a required work activity, failure to attend a required parenting education class, and failure to prove all children were immunized. Less than a third (32%) of sanctioned recipients eventually cured their sanctions. A larger group (45%) remained non-compliant until sanctions progressed to case closure, and 23 percent left the rolls before their sanctions progressed to case closure. The Abt Associates report identified reasons for noncompliance, including family circumstances (sanctions were more common among mothers with more children and those citing transportation needs), not understanding program requirements (suggested by higher sanction rates among recipients with less education), local welfare office practices (sanction rates differed substantially across local offices. Recipients with less work experience, longer welfare receipt, and lower education were also more likely to be sanctioned.

Research also shows that families leaving welfare due to sanctions fare less well than families that leave for other reasons. They are less likely to become employed and, if employed, have lower earnings than other families leaving welfare. In addition, sanctioned families may experience hardships resulting from the sanctions themselves; loss of income can precipitate a crisis in meeting basic needs that can lead to eviction or other circumstances that can compound a family’s problems and make it more difficult for a parent to work.

These research results point to a need to focus on two broad policy issues: 1) how to address the needs of families with multiple barriers to employment (known as hard-to-serve or hard-to-employ families) and 2) how to support working families in a time-limited environment. Redefining allowable work activities under TANF to include employment-related activities such as substance abuse assessment and treatment, mental health, adult basic education, supported work and specialized training, would go a long way towards improved employability for the first group. Adequate assessment and additional sanctions procedures (pre-sanction reviews, post-sanction follow up, emphasis on curing sanctions) would reduce the obstacles currently faced by sanctioned families (who tend to have more barriers). Policy responses to the second issue are more complex and include not only changes in the TANF and Food Stamps programs, but also more wide-reaching attempts to increase the minimum wage, promote a living wage, increase benefits for low-wage jobs, tailor job training programs to local employment needs, change Unemployment Insurance so that it benefits more low-income workers, support economic human rights (as spelled out in the Universal Declaration of Human Rights), promote asset based social policy (IDAs, micro-enterprise development), and make work pay (through federal and state Earned Income Tax Credits).