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Home > Advocacy > Temporary Assistance for Needy Families (TANF) > Summary of the Work, Opportunity, and Responsibility for Kids (WORK) Act of 2002


Summary of the Work, Opportunity, and Responsibility for Kids (WORK) Act of 2002 as Approved by the Senate Finance Committee

June 26, 2002

On June 26, the Senate Finance Committee voted to approve an amended version of H.R. 4737, the Work, Opportunity, and Responsibility for Kids (WORK) Act of 2002. Drafted by Senate Finance Committee chairman Max Baucus (D-MT), the bill reauthorizes the Temporary Assistance for Needy Families (TANF) program for five years and sets the guaranteed funding level for child care services.

The full Senate may consider the Finance Committee-passed bill in late July or in the fall. The WORK Act differs from the House-passed TANF reauthorization bill (H.R. 4737) most significantly in the level of child care funding and work requirements for TANF recipients. A summary of the House-passed bill can be accessed online at

TANF Funding

  • Maintains the current TANF funding level at $16.5 billion through 2007. Increases the $319 million a year in supplemental grants to $441 million a year and extends the grant from the current 17 states to 24 states.

  • Redesigns the existing two state bonuses. Currently, $200 million is provided to states in the form of a high performance bonus. This bonus has been split between many states based on their accomplishments in moving people to work and reaching other targets. A second $100 million bonus has been awarded to the top 4 or 5 states that reduced the out-of-wedlock birth rates for the entire state population. A new $200 million "Healthy Marriage Promotion" grant program is created to address efforts to encourage marriage, teen pregnancy prevention, and income support strategies.

  • Continues the $50 million "abstinence-only" program for another 5 years and creates a new $50 million program to fund "abstinence-plus" programs. Two new block grants are also created - a $25 million a year fatherhood program to assist non-custodial fathers in meeting their child support obligations and a $33 million a year program to assist unwed teen mothers through the creation of "second chance homes."

Social Services Block Grant

  • Funding for the Social Services Block Grant (SSBG) is increased by $252 million in 2005 to a total of $1.95 billion. The bill assumes that Congress would approve S.1924, the CARE Act, which would increase SSBG funding to $1.9 billion in 2003 and $2.8 billion in 2004. The CARE Act would also restore a state's ability to transfer 10% of their federal TANF funds into SSBG.

  • In 1996, SSBG was cut from $2.8 billion to $2.38 billion as a way to offset the costs of the 1996 TANF law. Under that 1996 law, it was to be restored to $2.8 billion by 2003. Congress has consistently reduced funding. SSBG is currently funded at $1.7 billion.

Child Care Reauthorization

  • Reauthorizes mandatory funding for the Child Care and Development Fund (CCDF) through 2007. Mandatory, or guaranteed, funding would increase from $2.7 billion in 2002 to $3.7 billion in 2003, 2004, and 2005. In 2006 it would increase by $250 million to $3.967 billion and remain at that same level through 2007.

  • The Congressional Budget Office (CBO) calculates the total cost of this two-part increase (one increase in 2003 with a freeze through 2005 and a second increase in 2006) as a $5.5 billion total five year increase in child care funds. By comparison, the House-passed bill increases mandatory child care funding by $200 million in 2003 and then freezes it for the remaining four. CBO calculates the total cost of the House child care increase to be $1 billion.

  • The $1 billion increase for child care in the Senate Finance Committee-passed bill for 2003 through 2005 would not require a match in state spending. The bill does require states to maintain the same level of child care spending as existed in 2002. The $250 million increase in 2006 would require states to match the funds with state dollars.

  • The Senate Finance Committee-passed bill does not reauthorize the discretionary CCDF funding since this will be considered in separate legislation under the jurisdiction of the Senate Health, Education, Pensions, and Labor Committee.

  • The Senate Finance Committee-passed bill clarifies that child care paid directly out of TANF is not considered "assistance." Under current law, child care paid for with TANF funds had been considered assistance if the adult is not working. This form of assistance is then counted against a TANF recipient's 5-year limit on benefits. If a state spends TANF funds on child care, there is no requirement to include a set-aside of funds for quality initiatives as required under CCDF.

  • The bill also clarifies that any TANF funds a state carries over from the previous fiscal year can be spent on either assistance or services. Current regulations limit TANF funds carried over from previous fiscal years to be spent only on assistance.

  • With these two changes included (definition of "assistance" and the ability to spend previous fiscal year TANF funds on assistance or non-assistance), states will have an incentive to spend TANF funds directly on child care. By doing so, they can avoid the current child care law requirement to set-aside 4% for quality and the requirement that funds be spent within 3 years.

State TANF Maintenance of Effort

  • The current requirement that states spend 75% to 80% of what that state had spent under the previous Aid to Families with Dependent Children (AFDC) program, the Maintenance-of-Effort (MOE) requirement, is broadened to include child support payments a state passes through to former TANF families.

Purposes of the Act

  • The Senate Finance Committee-passed bill does not make changes to the current purposes of the TANF law. Several proposals to change the purposes to emphasize, marriage, poverty, and child well-being were rejected.

Child Well-being

  • Requires an individual responsibility plan (IRP) for each adult, detailing required work activities and needed work supports. The plans must address the issue of child well-being and adolescent well-being. [The bill does not specify how this would be addressed.]

Universal Engagement and Individual Responsibility Plan

  • The current law requirement to have an individual assessment is expanded to require states to screen and assess skills, prior work experience, work readiness, and barriers to employment.

  • Beginning in 2004, recipient parents or caretakers must have an Individual Responsibility Plan (IRP). The IRP must detail required work activities and needed work supports and, with the assistance of the parent or caretaker, address the issue of child and/or adolescent well-being.

  • The U.S. Department of Health and Human Services (HHS) is required to develop model tools for states to use for screening and assessment. The Senate Finance Committee-passed bill provides $120 million over four years to assist in the training of caseworkers, the coordination of support programs, and outreach for services.

  • HHS is required to consult with the National Governors Association, the American Public Human Services Association, and the National Conference of State Legislators in the development and implementation of these screening requirements.


  • The Senate Finance Committee-passed bill does not require states to impose the full "check" sanction included in the House-passed bill. These full family sanctions cut-off assistance if individuals fail to meet certain work and TANF requirements. States have this option under current law, but are not required to impose a total cut-off of benefits.

  • The Senate Finance Committee-passed bill requires a review of the IRP before a sanction is imposed. This change in the bill was the result of an amendment offered by Senator John Kerry (D-MA).

Work Requirements

  • Current law requires states to have 50% of their caseload in federally- defined work. In addition, if a state chooses to serve two-parent families, these families are calculated separately, and a state must have 90% of these families in federally defined work. The House-passed bill increases the 50% work requirement by 5% a year until it reaches 70% in 2007. No separate calculation is required for two-parent families. The Senate Finance Committee-passed bill makes the same change.

  • Under current law, states can reduce work requirements when they receive a caseload credit. The House-passed bill modifies the current caseload reduction credit, which is based on how much a state's caseload has decreased since 1995. The modified credit for 2003 would be based on the drop in caseload between 1996 and 2003. Eventually, the credit would be based on the caseload that existed four years earlier. The formula is intended to be an incentive for states to continually reduce the number of families receiving cash assistance.

    The Senate Finance Committee-passed bill creates a new employment credit. The credit is based on the number of adults who leave TANF for work, using available labor data. States receive a larger credit for those adults who leave TANF for jobs that pay at 33% of the average wages in that state. States will be limited in how much of this employment credit they can receive so that the 70% work requirement cannot be totally eliminated. The limit on the employment credit will be phased in and by 2007 the maximum credit a state can take will be 20%. In other words, in 2007, a state must have 70% of their adult caseload meeting the work requirements. The employment credit will allow states to reduce this 70% requirement by up to 20%. So a state receiving the maximum credit of 20% would have to have 50% of TANF adults in work (70% requirement reduced by 20%).

  • Currently, TANF recipients must work 30 hours per week. Mothers with children under age six are required to work 20 hours. An individual meets this goal only if they are engaged in activities that are defined as "work." In addition, current law requires that 20 of these 30 hours be spent in a limited number of work categories. The House-passed bill requires TANF recipients to be engaged in 40 hours of work per week. Twenty-four hours of that 40-hour total must be in a limited number of work activities-narrower than current law. Substance abuse treatment, rehabilitation services, work-related education or training, or job search can be counted as work activities for three months over an individual's two-year period. For the remaining 16 of the 40 hours, an individual must be engaged in activities defined by the state. In addition, under the House-passed bill mothers with children under six are no longer able to meet the work requirement with 20 hours of work per week and are required to work the full 40 hours.

    The Senate Finance Committee-passed bill leaves intact the categories of work a person must be engaged in to count toward the state work requirement. The Senate bill maintains the current law requirement that adults be engaged in 30 hours of work per week. It also continues current law that allows mothers with children under six to meet the work requirement with 20 hours of work per week. The Senate bill does require individuals to be engaged in at least 24 hours of work in the core work activities instead of the current 20 hours. The Senate bill also allows up to 6 months of substance abuse treatment, mental health services, and other treatment and services to count toward work.

  • The Senate Finance Committee-passed bill expands the use of vocational education by allowing states to count up to two years of vocational education toward the work requirement. Current law allows states to count only one year of vocational education toward work. The Senate bill incorporates an amendment offered by Senator Olympia Snowe (R-ME) that would allow states to have up to 10% of their caseload enrolled in college education. These recipients would not be subject to the two-year limitation on vocational education, but could instead pursue a four-year degree.

  • The Senate Finance Committee-passed bill includes an amendment offered by Senator Kent Conrad (D-ND) that would allow states the option to exempt an additional 10% of their caseload from work if the adult in the TANF family is a caretaker of a disabled family member. To qualify for the exemption four specific conditions must be met: 1) the recipient must be the only able-bodied adult in the family; 2) the recipient must be the primary caregiver for a disabled child or other family member; 3) the recipient must be unable to work of at least 30 hours per week because of caregiving; and 4) the need to provide caregiving must be included in the individual's IRP and reviewed annually.

TANF Time Limits

  • No changes were made to the current law, which dictates that no adult may receive more than 5 years of federally funded TANF assistance.

Child Welfare

  • Similar to the House-passed bill, the Senate Finance Committee-passed bill includes an extension and expansion of HHS's authority to approve child welfare waivers through 2007. That authority was due to expire this year. The legislation does not limit the number of waivers or demonstration projects that may be granted to a single state.

  • Both the House- and Senate Finance Committee-passed bills do not make changes to the current eligibility link between AFDC standards (as of July 16,1996) and Title IV-E Foster Care and Adoption Assistance. To determine Title IV-E eligibility, a state must look back to the AFDC rules that existed on July 16, 1996.

Services to Legal Immigrants

  • States have had the option to cover legal immigrants under TANF if they were in the country before August 22, 1996, the date in which the TANF legislation was signed into law. Under current law, any immigrant entering the U.S. after August 22, 1996, is banned from TANF for five years and then for the next five years the income of their legal sponsor is "deemed" as their income in determining program eligibility. The Senate Finance Committee-passed bill allows states the option to use federal TANF funds to provide assistance to legal immigrants who entered the U.S. after August 22, 1996. If a state takes such an option, they must deem the sponsor's income for the first three years after the immigrant has entered the country.

  • As a result of an amendment offered in the Finance Committee by Senator Bob Graham (D-FL), states will also have the option of covering legal immigrant pregnant women and their children under Medicaid and the State Children's Health Insurance Program (SCHIP). This repeals the five-year ban and five-year deeming requirement. Children of legal immigrants born in this country are U.S. citizens and current restrictions do not apply.

Super-waiver Authority

  • The Senate Finance Committee-passed bill does not include a provision included in the House-passed bill to create super-waiver authority for various cabinet departments. Under the House bill, the Secretaries of the U.S. Departments of Health and Human Services, Labor, Education, Housing and Urban Development, and Agriculture would have the power to waive various program requirements and laws.

  • The Senate Finance Committee-passed bill does allow for states to continue their AFDC waivers that existed under TANF and allows states to request new ones under TANF lasting up to four years.

Abstinence Education

  • Current funding for the "abstinence-only" education program is $50 million for FY 2002. To receive funding under this program, only an abstinence-unless-married curriculum can be taught. States are restricted from using these funds to teach both abstinence and contraception. The bill continues this $50 million program for an additional 5 years.

  • Creates an additional $50 million "abstinence-plus" fund. The fund will cover programs that deliver a message strongly emphasizing abstinence, but may discuss other teen pregnancy prevention methods.

Tribal Provisions

  • The Senate Finance Committee-passed bill would allow tribes to apply directly to HHS to run their own IV-E foster care and adoption assistance programs. Currently, tribes can access these funds only by contracting with states.

  • The Senate Finance Committee-passed bill directs HHS to issue final tribal child support regulations within one year of enactment.

  • A $75 million "tribal improvement fund" is established for fiscal years 2003 through 2006. These funds are to assist tribes to build capacity and infrastructure in the delivery of human services. Since 1996, applying tribes have been eligible to run their own TANF programs. This fund is intended to assist in the implementation of these plans.

Child Support

  • Currently, states reimburse the federal government for a share of child support that is collected for families on TANF assistance. Under current law, when states collect past child support for a family on assistance, the recovered child support must be used (in part) to reimburse the federal government for past assistance costs. States also take a share of the recovered child support to reimburse their own treasuries. States can pass-through a minimal amount to the family on assistance without being required to reimburse the federal government.

  • The Senate Finance Committee-passed bill allows states to pass through to families that have left TANF the full amount of child support collected on their behalf. The federal government will share in the cost.

  • States may use federal TANF funds to pass through child support arrearages to former TANF families or may use state funds to accomplish the same purpose and count this toward their maintenance-of-effort requirement.

  • The Senate Finance Committee-passed bill also includes numerous provisions that will allow greater intercepts or recoupment of past due child support through changes to the immigration, veterans, and Social Security systems.

Transitional Medical Assistance

  • Extends the transitional medical assistance program (TMA) through FY 2007. TMA provides temporary health care coverage to families who have become ineligible for Medicaid, usually due to the move from welfare to self-sufficiency.
For more information, contact John Sciamanna, CWLA Senior Government Affairs Associate, at 202/639-4919 or

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