July 17, 2006

GEORGIA’S INCREASED TANF WORK PARTICIPATION RATE
IS DRIVEN BY SHARP CASELOAD DECLINE
Available Data Raise Questions About Whether Georgia
Should Be Labeled as a Model for the Nation
by  Liz Schott

Overview

Georgia’s success at increasing its TANF work participation rate has been touted as a welfare reform model for other states — most recently, HHS featured the Commissioner of Georgia’s Department of Human Resources at a press event related to the release of new federal TANF regulations.  An examination of available data on Georgia’s TANF program and of the state’s policies and procedures, however, raises serious questions about whether the state has achieved its higher participation rate by doing a better job to help parents move from welfare to work or by restricting poor families' access to assistance.

Under federal law, states must meet a specified “work participation rate” in its TANF programs.  The work participation rate is simply the ratio of the number of adult TANF recipients who are working or in specified work-related activities to the number of families with adults receiving cash assistance through TANF-related programs.[1]  Georgia’s work participation rate has increased dramatically in recent years.  But since at least October 2004, the number of TANF adults participating in work or work-related activities has decreased, not grown.  The reason that the state’s work participation rate has increased during this period is that fewer families receive assistance.

If the number of families receiving assistance had fallen because the number of families that need assistance was falling, these data would not necessarily be cause for concern.  At this point, however, there is no evidence that the number of very poor families (to be eligible for TANF in Georgia families typically must have incomes well below the poverty line) in Georgia has been cut in half in just 18 months.  There is strong evidence, however, that since 2004, a series of policies and procedures in the state’s TANF program have been put in place that likely have had the effect of discouraging needy families from applying for TANF assistance or remaining assistance recipients.

• Data show, for example, that most families that leave Georgia’s TANF program are not working: during the last 18 months, less than one-third of TANF case closures are due to the family having earnings and no longer needing assistance.

• Georgia’s own research shows that the proportion of former recipients who are working in the quarter they exit the rules has been falling.  The report by the state’s Department of Human Resources states that the decreased rate of employment at the time that families leave TANF suggests that the state’s new policies were "more powerful in motivating recipients to leave TANF without employment than in moving recipients from welfare to employment."[2]

• Data on new applications show a sharp rise in the number of applications that are denied as a result of the state’s new policies — one-third of Georgia’s TANF denials are due to withdrawal of application and another third are due to failure to cooperate in new application procedures.  Only 7 percent of denials are due to the family having too much income and not being in need.

Over the past twenty years, much has been learned about how best to help families move from welfare to work.  Models have been developed through careful evaluations and research.  New strategies certainly are needed to improve the shortcomings in TANF and other programs designed to help families succeed in the labor market.  At this time, there is no data or research to suggest that Georgia provides a model to other states for how to engage more recipients in work activities, help recipients overcome barriers to employment, or assist parents secure jobs.  Before national leaders tout the state's approach as one to be emulated across the nation, more information is needed about whether the states' caseload decline has been caused by a reduction in the number of needy families or a policy and program changes that restrict needy families' access to poor families.

Work Participation Rate Driven By Declining Caseloads

Between July 2004 and January 2006, the state's work participation rate increased from about 31 percent to 66 percent.[3]   The number of adults participating in work activities, however, has decreased, not grown.  In October 2004 (these data are not publicly available for July), there were 8,750 families in Georgia that met the federal work participation standards — that is, the adult was participating in a federally-countable activity for at least the minimum number of hours required by federal law.  In January 2006, only 4,715 families met the work requirement standards. [4]  (See Figure 2.)

The state’s federal work participation rate increased because during this same time period the number of families with an adult receiving assistance plummeted.[5] Since July 2004, the number of families with an adult receiving TANF assistance has declined by nearly three-quarters, from more than 26,800 to just 7,200 families in April 2006. [6]

In addition to families in which both adults (generally parents) and children receive assistance, there are some families in Georgia (as in all states) that receive assistance only for the children in the family.  These so-called “child-only cases” are typically cases in which children are cared for by relatives other than their parents, by parents who receive SSI, or by parents who are ineligible for TANF based on their immigration status.  In April 2006, there were roughly 23,000 child-only cases in Georgia, only a slight decline from the number of such cases in 2004.  Child-only cases now represent three of every four TANF cases in Georgia.

What is Causing Georgia's Caseload Decline?

The caseload decline appears to be due to a range of factors, including changes in statewide policies and new procedures individual counties have developed in response to statewide directives to reduce the number of families receiving assistance and to increase work participation rates. Georgia’s TANF program is county-administered, which means that each county determines eligibility and manages the program subject to state-set policies and directives.  It is not always clear what means any given county used to achieve its caseload reduction or work rate results and the extent to which a practice in one county is found in others as well.

Based on the state's directives to counties, its recent changes to its policy manual, and available data on application denials and case closures, the following appear to be factors in the decline:

• Work rate performance mandate and goals:  In early 2004, the state sent a strong directive to counties to achieve a 50 percent work participation rate.  The statewide average work participation rate at the time was about 20 percent. Counties have since been told that they are expected to achieve a 70 percent work rate.  Counties' work participation rates have been measured and monitored each month against these goals, with special recognition of the counties that have achieved 100 percent participation.

• Culture and message change:  The agency touts culture and message change as a big part of the caseload drop, with the oft-repeated message from DHR Commissioner B. J. Walker that “Welfare is not good enough for any family.” [7] There is evidence, discussed below, that at a minimum raises questions about whether this message has been translated at the local office level into caseworkers actively discouraging families from following through on their applications for TANF assistance and encouraging families to leave the program.

• Changes in the application process and application approvals:  Under new statewide rules, families must attend an orientation and develop an “employment plan” before the family’s application can be approved.  This can mean that families are required to participate in multiple meetings and perform various tasks — which can include job search — before their benefits can be approved.

Data show a sharp decline — 25 percent — in the number of applications submitted and an even sharper drop in the number of filed applications that are approved.  In April 2006, only 20 percent of applications were approved, down from 40 percent in January 2004.  (The latest year for which national data are available is 2002 when nationally 53.5 percent of all applications were approved.)

A large share of TANF applications in Georgia are denied for reasons unrelated to whether the family was poor enough to qualify for TANF and whether they met other basic eligibility criteria (such as having a child in the family).

• Of the Georgia TANF applications denied so far in 2006, about one in three was denied because the family chose to withdraw its application before the state made an eligibility determination.  In 2002 and 2003, by contrast, just one in five applications was denied for this reason.  As is discussed below, this increase in “voluntary withdrawals” appears related to a new emphasis on discouraging applicants from following through on their application for aid.

• Another one-third of all applications denied so far this year was denied because, according to the state, the family failed to cooperate with the eligibility process; this too represents an increase from 2002 and 2003 when one if four applications were denied for non-cooperation.  Again, this increase in application denials appears related to policy and procedural changes that have increased the number of “hoops” families must go through before their application is approved.  These hoops — such as attending multiple meetings with caseworkers and completing job search activities — can make it particularly difficult for families with significant problems to complete the application process.

• Only 7 percent of applications were denied in 2006 due to the family having too much income, down from 11 percent of denials in 2002 and 2003.[8]

• Benefit terminations have been a major factor in declining caseload:  A significant portion of the caseload decline comes from the increased rate at which families’ benefits are terminated.  A recent study of families leaving TANF conducted by the Georgia Department of Human Resources notes that while the number of families applying for and opening new TANF cases has fallen significantly, a majority of the caseload decline in 2004 and 2005 was attributable to the increase in the number of families leaving the TANF program.[9]

What is less clear is precisely why the number of terminations has increased. Data from a study conducted by the Georgia TANF agency shows that most families that leave TANF do not exit because they have earnings to meet their needs and no longer need assistance.

• Since October 2004, the share of TANF closures (among cases with an adult) due to income has fluctuated somewhat but generally represent one-fourth to one-third of TANF adult closures.[10]  Instead, TANF benefits often are closed for other reasons that do not reflect a successful transition from welfare to work.

• About 16 percent of TANF case closures (among cases that include an adult) were families requesting that their TANF benefits be terminated but that their other benefits, such as food stamps and Medicaid, continue.[11]  These data suggest that poor families may be encouraged to withdraw from the TANF program even if they remain eligible and wish to continue receiving other forms of assistance.

• According to the state's study of families leaving TANF, 52 percent of adults who left TANF in 2004 had some earnings at some point in the calendar quarter in which their TANF benefits ended.  The share of TANF leavers with earnings in the quarter in which they left TANF has declined each year and is down from 61 percent of 2001 TANF leavers having earnings in the quarter they left TANF.[12]

• Economy does not appear to be the major reason for decline:  The recent report on Georgia families that left TANF in 2004 issued by the Georgia DHR notes that despite some job growth in the economy since 2004, "persistent losses in manufacturing and information have muted Georgia's economic recovery and limited employment opportunities for TANF recipients and leavers."  The report concludes that the pattern of caseload decline in light of the labor market circumstances "suggests that something other than the economy was contributing to the decreasing caseload."

The report further notes that the program changes appeared to be effective in keeping families that left TANF without work from returning to the program, as there was no corresponding increase in employment to suggest that the families no longer needed assistance.[13] Georgia's food stamp and Medicaid caseloads increased during this time period, also suggesting that the state was not experiencing a sharp reduction in the number of poor families with children.[14]

Survey of Caseworkers from Domestic Violence Shelters Provides Further Evidence that Families are Discouraged from Applying and Encouraged to Leave the TANF Program

The Georgia Coalition Against Domestic Violence conducted a survey in February 2006 of "TANF Assessors" — domestic violence shelter employees who typically are stationed at county welfare offices to provide on-site assistance to victims of domestic violence. The survey was designed to learn more about recent changes in application procedures in county welfare offices in response to concerns by shelters that families were finding it increasingly difficult to apply for and receive TANF.  The survey generated more than three dozen responses, providing information on patterns and practice inside Georgia welfare offices that go beyond anecdotal reports.  The survey — while not definitive — points to the need for more research and analysis of Georgia’s policies and procedures before concluding that they should serve as a national model.

Some of the key points about the application process that the survey results reveal include:

• More than two-thirds of respondents indicated that they had seen “indicators that something is happening during orientations which results in applicants leaving before the TANF application is completed.”[15]   Some respondents reported that county staff or directors talk with clients before the orientation with the result that applications are dropped and the client does not attend the orientation.  (Cases in which a family decides not to continue with the application are likely coded as “voluntary withdrawal of application,” which accounted for one-third of application denials in April 2006.)

• More than two-fifths (44 percent) of respondents report that they have seen cases in which applicants were assigned to work activities that were difficult or impossible because of the individual’s disability.  One noted that clients who claim they have a disability are encouraged to withdraw their applications and generally do.  Another reported that a client (with medical documentation of inability to work) was told that she could not apply for TANF because she could not work.

• Nearly two-fifths (39 percent) report that they have seen cases in which applicants were assigned to work activities that were difficult or impossible because of pregnancy.  Several reported seeing cases in which pregnant women were told (incorrectly) they could not get TANF or should come back and apply after the baby is born.

• In response to open-ended questions, some respondents reported seeing cases in which individuals that came to a welfare office were dissuaded from filing an application and circumstances where the director of the welfare office personally talked with families to discourage them from applying.  A few even reported that some families were told that if they applied for TANF assistance, child protective services might investigate their ability to meet their children's needs.

Conclusion

The Deficit Reduction Act passed earlier this year requires states to meet much higher TANF work participation requirements starting in October 2006.  Many states (and others) are concerned that it will be difficult to increase states’ work participation rates this quickly and that significantly increasing work participation rates will require increased resources and creative new strategies that will take time to develop.  To assuage these concerns, federal officials often tout the Georgia experience as evidence that states can quickly increase their work participation rates.  These officials tell a simple story — Georgia more than doubled its work participation rate in under two years, so other states can and should do so as well.

At this time, however, far too little is known about the impact of Georgia's policies and procedures on important welfare reform goals — including helping parents prepare for and secure employment and reducing hardship among families — to conclude that Georgia’s program should serve as a national model.  In fact, data showing sharply increased application denials, high rates of benefit terminations among families that are not working, and an increasing share of families leaving TANF when they do not have jobs all suggest that more research — and healthy skepticism — are called for.

End Notes:

[1]  There are two types of TANF cases — cases in which both children and the adults in the family (typically the parents) receive assistance and cases in which only the children receive assistance.  The work participation rate calculation only considers families in which adults are receiving assistance.  So-called “child-only” cases are typically cases in which children are being cared for by relatives other than their parents, parents who receive SSI, or parents who are ineligible for TANF based on their immigration status.

[2] "Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System," Georgia Department of Human Resources, May 2006. The report, while useful, covers a period of significant change in Georgia's TANF program and, thus, does not provide a complete picture of the ultimate and more recent impact of the new policies that were just being put in place.  This recent report looks at the circumstances of families that have left TANF through 2004; Georgia's adult TANF caseload has declined by more than 60 percent since the end of 2004.

[3] The data shown here are the participation rates reported by the state.  http://dfcs.dhr.georgia.gov/DHR-DFCS/DHR-DFCS-publication/04_2006_OM_FI_State.pdf. Federal statistics are not available for years after 2004.

[4] This is the window of time for which we have monthly data on the number of adults meeting the federal work participation rate standards.  For this time period, the state's participation rate increased from 45 percent in October 2004 to 66 percent in January 2006.  Because fewer adults were engaged in work activities in January 2006 as compared to October 2004, , this 21 point increase was due to the fact that fewer families were receiving TANF, and thus the denominator of the work rate calculation was reduced. 

Data on the number of families participating in work activities are available for the 2004 federal fiscal year as a whole (but not on a monthly basis).  For FY 2004, Georgia's average monthly participation rate was 24.8 percent and the average number of adults counting as participating in work activities was 6,052.  Thus, the number of adults participating in work activities in October 2004 (the first month in FY 2005) was higher than the average number participating over the course of FY 2004.  By January 2006, however, the number participating had fallen dramatically.

[5] Georgia did increase its work participation rate between 2003 and 2004 significantly — from 10.9 percent to about 24.8 percent — by increasing the number of adults participating in activities.  During this earlier time period the caseload remained essentially flat.

[6]  http://dfcs.dhr.georgia.gov/DHR-DFCS/DHR-DFCS-publication/04_2006_OM_FI_State.pdf.

[7] http://www.gov.state.ga.us/press/2006/press1173.shtml; see also, Georgia DHR TANF Program Manual, Section 1801.

[8] TANF Application Denials, 2002-2006YTD, Georgia DHR.

[9] "Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System," Georgia Department of Human Resources, May 2006.

[10] TANF Adult Closures: Closures Due to Income, October 2004-April 2006.  Georgia DHR.

[11] Mandatory Adult Closure Reasons, January 2006, Georgia DHR.

[12] "Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System," Georgia Department of Human Resources, May 2006. There are several reasons why the state's case closure data shows less than one-third of adult closures due to income and the leaver study reflects about half of leavers with some earnings in the quarter of closure.  The leaver study includes earnings that might be from a period after the TANF case has closed but within the same calendar quarter.  In addition, coding of reasons for closure do not always capture all of a family's circumstances; a case might be coded with another reason for closure (such as failing to provide information or complete a renewal) when a family with earnings discontinues TANF.

[13] "Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System," Georgia Department of Human Resources, May 2006.

[14]  http://dfcs.dhr.georgia.gov/DHR-DFCS/DHR-DFCS-publication/04_2006_OM_FI_State.pdf.  Both food stamp and Medicaid caseloads increased significantly during 2004 and 2005.  While the caseloads for both programs have dropped somewhat in recent months, they are still well above the 2004 levels.[15]  Survey on Current TANF Benefit Access in Georgia.