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              Congjressional
          ~ ~Research Service






Temporary Assistance for Needy Families

(TANF) and Work Requirements



Updated June 5, 2023

The Fiscal Responsibility Act of 2023 (H.R. 3746), signed by President Biden on June 3, 2023, alters the
work requirements that apply under Temporary Assistance for Needy Families (TANF). The TANF work
requirement changes are part of budgetary and policy changes that accompany an increase in the national
debt limit. TANF is a broad purpose block grant, which is best known for helping to fund states' family
cash assistance (sometimes called welfare) programs. TANF was created by the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (also known as the 1996 welfare reform law; P.L. 104-
193) and is associated with policies that sought to increase work.

TANF's Mandatory Work Participation Standards and Caseload
Reduction Credit

The main TANF  work requirements are numerical performance standards that states must meet. The law
says that a state must have 50% of all families and 90% of two-parent families receiving assistance
engaged in either work or activities. In turn, it is the states that determine the work participation
requirements that apply to individual recipients. States have flexibility in setting work rules for
individuals (see state rules here), though many have based their requirements for individuals on the
federal rules for what counts as being engaged in work.
A state can meet its mandatory work participation standard either partially or wholly through reducing the
number of families receiving cash assistance, and thus receiving a caseload reduction credit. States can
receive a caseload reduction credit of 1 percentage point for each percent decline in the caseload from the
base year. Through FY2025, the base year for measuring caseload change for the credit is FY2005. Only
caseload reductions not explicitly caused by policy changes count toward the credit.

Historical   Context

Most states were never required to meet TANF's 50% or 90% participation standards. The standards,
particularly the 50% standard that applies to all families, are round numbers that straddle sending signals
of high expectations and allowing flexibility. Pre-1996 welfare-to-work experiments, sometimes used
today as evidence of the impact of work requirements, did not achieve these participation rates. The single
                                                               Congressional Research Service
                                                               https://crsreports.congress.gov
                                                                                    IN12150

CRS INSIGHT
Prepared for Members and
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