Rule: Reauthorization of The Temporary Assistance For Needy Families (TANF) Program

Tuesday,
February 5, 2008
Part II
Department of
Health and Human
Services
Administration for Children and Families
45 CFR Parts 261, 262, 263, and 265

Reauthorization of the Temporary
Assistance for Needy Families (TANF)
Program; Final Rule
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6772 Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Rules and Regulations
DEPARTMENT OF HEALTH AND to issue an interim final rule, implicitly for a State to exclude a parent who is
HUMAN SERVICES recognizing that States may have to a recipient of Social Security Disability
revise practices once final regulations Insurance (SSDI) benefits from the
Administration for Children and were published. Under the interim final definition of a work-eligible individual,
Families rule, States were able to begin planning as is the case with a recipient of
and implementing necessary changes to Supplemental Security Income (SSI);
45 CFR Parts 261, 262, 263, and 265 their TANF programs and procedures clarifying that excused holidays are
RIN 0970–AC27
under the new requirements. Under this limited to 10 days in a year; and
final rule States are accountable for enhancing State flexibility by allowing a
Reauthorization of the Temporary moving more families to self-sufficiency State to account for ‘‘excused hours’’
Assistance for Needy Families (TANF) and independence. rather than an ‘‘excused day.’’ We have
Program Comment Overview summarized the public comments and
our response to them throughout
AGENCY: Administration for Children We provided a 60-day comment sections III through VIII of this final
and Families (ACF), Department of period, during which interested parties rule.
Health and Human Services (HHS). could submit comments in writing by
mail or electronically. During this Table of Contents
ACTION: Final rule.
period, we also held five listening I. The Statutory Framework: TANF and the
SUMMARY: This final rule implements sessions across the country in which Deficit Reduction Act of 2005
changes to the Temporary Assistance for State and local officials, legislators and II. Regulatory Principles and Provisions
Needy Families (TANF) program key associations representing them III. Cross-Cutting Issues
A. Individuals With Disabilities
required by the Deficit Reduction Act of could provide oral comments that were
B. Domestic Violence
2005 (DRA) (Pub. L. 109–171). The DRA officially recorded and considered in C. General Topics
reauthorized the TANF program through developing this final rule. D. Tribal TANF
fiscal year (FY) 2010 with a renewed We received 470 letters of comment IV. Part 261—Ensuring That Recipients Work
focus on work, program integrity, and on the interim final rule, representing V. Part 262—Accountability Provisions—
strengthening families through healthy State human service agencies, State General
marriage promotion and responsible legislators, national associations, VI. Part 263—Expenditures of State and
fatherhood. On June 29, 2006, ACF advocacy and disability groups, Federal TANF Funds
published an interim final rule community and faith-based VII. Part 265—Data Collection and Reporting
organizations, Indian Tribes and Tribal Requirements
implementing the required statutory
organizations, educators, and the VIII. Paperwork Reduction Act of 1995
changes with a 60-day comment period IX. Regulatory Flexibility Analysis
that ended on August 28, 2006. We have general public. Most commenters
X. Regulatory Impact Analysis
considered all comments received addressed several provisions of the XI. Unfunded Mandates Reform Act of 1995
during this period and made necessary interim final rule. Some comments XII. Congressional Review
changes as reflected in this final rule. favored the rule, for example: ‘‘Overall XIII. Assessment of Federal Regulations and
EFFECTIVE DATE: October 1, 2008.
the regulations are very positive and set Policies on Families
the correct tone that countable activities XIV. Executive Order 13132
FOR FURTHER INFORMATION CONTACT: need to meet the new federal definitions
Robert Shelbourne, Director, Division of I. The Statutory Framework: TANF and
and be verified.’’ But, in general, most
State TANF Policy, Office of Family the Deficit Reduction Act of 2005
commenters had mixed views,
Assistance, ACF, at (202) 401–5150. supporting some provisions and Enacted as part of the Personal
SUPPLEMENTARY INFORMATION: On June opposing others. A significant number Responsibility and Work Opportunity
29, 2006, the Administration for of commenters expressed concerns Reconciliation Act (PRWORA) of 1996
Children and Families published an about statutory provisions of the DRA or (Pub. L. 104–193), the TANF program is
interim final rule implementing key of existing law, over which we have no a Federal block grant to States designed
provisions of the Deficit Reduction Act regulatory discretion. Others expressed to provide temporary assistance while
of 2005. The DRA required States to concerns about the policies reflected in moving recipients into work and self-
implement certain work requirements the rule. In response to these comments, sufficiency. States must help recipients
effective October 1, 2006, among which ACF is committed to working with find work and meet work participation
were including families with an adult states, particularly with regard to TANF rates and other critical program
receiving assistance in a separate State adult recipients living with disabilities, requirements to avoid financial
program funded with qualified State to explore additional approaches and penalties. States have broad flexibility
maintenance-of-effort expenditures innovative efforts to promote and to design and operate their TANF
(SSP–MOE) in the work participation support their employment. programs and to determine eligibility
rates and revising the base year of the As discussed in more detail criteria and the benefits and services
caseload reduction credit from FY 1995 throughout this preamble, the final rule that families receive to achieve the four
to FY 2005. The law also directed us to includes a number of important changes program purposes:
issue regulations to ensure consistent to address these policy concerns. These (1) To provide assistance to needy
measurement of work participation include: Allowing time spent in a families so that children may be cared
rates, including defining work activities, bachelor’s degree program to count as for in their own homes or in the homes
determining the circumstances under vocational educational training; of relatives;
which a parent who resides with a child allowing up to an hour of unsupervised (2) To end the dependence of needy
who is a recipient of assistance should homework time for each hour of class parents on government benefits by
be required to participate in work time in all educational activities; promoting job preparation, work, and
activities, and requiring States to expanding State flexibility by marriage;
establish and maintain work converting the six-week limit on job (3) To prevent and reduce the
participation verification procedures. search and job readiness assistance to an incidence of out-of-wedlock pregnancies
Congress also explicitly permitted HHS hourly equivalent; adding the flexibility and establish annual numerical goals for
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Rules and Regulations 6773
preventing and reducing the incidence TANF, waivers, charitable choice, participation rates or subject to other
of these pregnancies; and application of relevant Federal civil program requirements.
(4) To encourage the formation and rights laws, and the limitation on The Deficit Reduction Act also
maintenance of two-parent families. Federal authority. Our charge from changed the base year of the calculation
PRWORA initially authorized TANF Congress was to regulate in accordance of the caseload reduction credit from FY
through September 30, 2002. Congress with the changes made by the Deficit 1995 to FY 2005. While the statutory
then funded TANF through a series of Reduction Act, via an interim final rule work participation rates did not change,
short-term extensions until the Deficit if appropriate. Since none of these recalibrating the caseload reduction
Reduction Act of 2005 reauthorized the provisions changed in the statute, the credit has the effect of increasing the
program through FY 2010 with a associated regulatory provisions did not work participation requirements. For
renewed focus on work, program change in either the interim final or this most States, we estimate that in FY 2007
integrity, and strengthening families final rule. the overall work participation
through marriage promotion and Congress also made few changes in requirement will be between 40 and 50
responsible fatherhood. Signed into law reauthorizing TANF funding. The law percent, depending upon the amount of
by President Bush on February 8, 2006, retained the $16.5 billion per year caseload reduction they had over the
the DRA maintained State flexibility capped entitlement for State Family course of FY 2006 compared to the new
and many provisions of PRWORA, but Assistance Grants and funding for the baseline of FY 2005.
included important changes to improve Contingency Fund. It extended the Congress required HHS to do a
the effectiveness of the TANF program. Supplemental grants for the 17 States number of things through regulation:
Some comments on the interim final • To define the meaning of each of
with historic low grants per poor person
rule reflected a misunderstanding of the the 12 countable work activities
and/or high population growth in the
Deficit Reduction Act confusion over specified in PRWORA, primarily
amount of $319 million through FY
which original provisions of TANF because a U.S. Government
2008. Mandatory child care funding was
Congress retained, which ones it Accountability Office (GAO) study
increased by $1 billion over five years.
changed, what Congress directed the (GAO–05–821) reported that there was
Department to do by regulation, and The law eliminated provisions for
great variation in State definitions of
how HHS exercised this regulatory Federal loans, the High Performance
work activities. As a result, State
authority in the interim final rule. This Bonus and the Illegitimacy Reduction
participation rates were not comparable.
section explains these distinctions. Bonus and replaced them with a $150
Of the activities, the underlying statute
The Deficit Reduction Act retained million-a-year research, demonstration,
also specified which nine activities
nearly all of the TANF provisions and technical assistance fund for
count toward meeting the first 20 hours
enacted in the original welfare reform competitive grants to strengthen family
of a 30-hour average weekly
law. For example, the law retained the formation, promote healthy marriages,
requirement; we refer to them as ‘‘core
requirement that 50 percent of all and support responsible fatherhood.
activities.’’ Any additional hours
families with an adult participate in the The Deficit Reduction Act also
needed to meet the requirement can
12 allowable work activities for expanded a State’s ability to meet its
come from any of three ‘‘non-core
specified hours each week and that 90 maintenance-of-effort (MOE)
activities’’ or from core activities. Under
percent of two-parent families similarly requirement. A State may now count
the statute, non-core activities may not
participate for certain, specified hours. expenditures that provide certain non-
count as core activities.
The hourly work participation assistance, pro-family activities to
• To clarify who is a work-eligible
requirements that adults must achieve anyone, without regard to financial need
individual. In addition to families with
to count in the State’s work or family composition, if the
an adult receiving TANF assistance,
participation rates also did not change. expenditure is reasonably calculated to
who were already a part of the work
This requires a single custodial parent prevent and reduce the incidence of out-
participation rates, the DRA required us
with a child younger than six to of-wedlock births (TANF purpose three)
to include such families receiving
participate for at least an average of 20 or encourage the formation and
assistance under a separate State
hours a week and for all others to maintenance of two-parent families
program and to specify the
participate for at least an average of 30 (TANF purpose four).
circumstances under which a parent
hours a week to count in the overall The new law did make several key who resides with a child who is a
participation rate. Similarly, two-parent statutory changes and also required recipient of assistance should be
families must participate for at least an HHS to promulgate rules in several included in the work participation rates.
average of 35 hours a week (or an areas. The statute added separate State • To ensure that State internal control
average of 55 hours a week if federally- program cases receiving assistance procedures result in accurate and
funded child care is provided) to count funded with qualified State consistent work participation
in the two-parent participation rate. maintenance-of-effort expenditures information. Each State must establish
The DRA maintained the penalty (SSP–MOE) to the calculation of the and maintain work participation
associated with failing to meet these work participation rates. This is a new verification procedures that are based
work requirements. As a result, we requirement of law, not within the on regulations promulgated by the
made no changes to the regulatory discretion of our regulatory authority. Secretary.
process associated with a State’s failure Thus, regardless of how commenters • To establish a process for a new
to meet the work participation rate viewed this statutory provision, we penalty in the event that a State fails to
requirement in the interim final or final could not change it by regulation. The establish and maintain adequate
rule. DRA continues to exclude any solely- procedures to verify reported work
Further, the Deficit Reduction Act State-funded (SSF) program, that is, one participation data.
maintained provisions related to the for which it does not claim the State
TANF purposes, State plan expenditures as MOE under the TANF II. Regulatory Principles and Provisions
requirements, use of grants, program. If a State established a SSF, To address these new statutory
administrative provisions, prohibitions, such cases would not be included in the provisions and requirements of the
appeals of adverse decisions, Tribal calculation of a State’s work Deficit Reduction Act, the final rule:
1. Defines each of the 12 countable FY 1995 to FY 2005. As under behalf: the Assistant Secretary for
work activities. Defining work activities PRWORA, the credit excludes caseload Children and Families, the Regional
is necessary for consistent measurement changes due to changes in Federal law Administrators for Children and
and will ensure an equitable and level or State eligibility criteria since the base Families, the Department of Health and
playing field for the States. Because the year. Human Services, and the
statute provides 12 distinct activities, 5. Requires each State to establish Administration for Children and
we have tried to define them as and maintain work participation Families. The term ‘‘Act’’ refers to the
mutually exclusive, while still leaving verification procedures through a Work Social Security Act. We use the terms
flexibility for States to address the Verification Plan. Each State must: (1) ‘‘Deficit Reduction Act of 2005,’’
critical needs of families. Determine which work activities may ‘‘Deficit Reduction Act,’’ ‘‘DRA,’’ or
2. Defines the term ‘‘work-eligible count for participation rate purposes; (2) ‘‘Pub. L. 109–171’’ when we refer to the
individual.’’ Generally a ‘‘work-eligible determine how to count and verify new law. States, the Territories, and the
individual’’ is: (1) An adult (or minor reported hours of work; and (3) identify District of Columbia are all subject to
child head-of-household) receiving who is a work-eligible individual. The the TANF requirements, but a reference
assistance under TANF or a separate State must also develop and use internal to States means this entire group. Except
State program; or (2) a non-recipient controls to ensure compliance with its as otherwise noted, we use the term
parent living with a child receiving procedures and submit them in a ‘‘TANF’’ to refer to TANF and any SSP–
assistance. The definition excludes the complete Work Verification Plan to the MOE programs in a State.
following non-recipient parents: a minor Secretary for approval.
parent who is not the head-of- 6. Establishes a new penalty for III. Cross-Cutting Issues
household, a non-citizen who is failure to comply with work verification Many commenters raised general or
ineligible to receive assistance due to procedures. The final rule specifies that cross-cutting issues about the overall
his or her immigration status, or, at if a State fails to establish or comply impact of the interim final rule or the
State option on a case-by-case basis, a with its work participation verification impact on specific populations. We
recipient of Supplemental Security procedures and fails to correct the address these issues in this section,
Income (SSI) benefits. In addition, the compliance deficiency, we will impose followed by comments on each section
term excludes some parents, whether a penalty of between one and five of the interim final rule.
they are recipients or not: a parent percent of the State Family Assistance
A. Individuals With Disabilities
providing care for a disabled family Grant (SFAG). The rule outlines the
member living in the home, if there is criteria under which we will impose Comment: Many commenters
medical documentation to support the this penalty and explains how a State maintained that the interim final rule
need for the parent to remain in the may claim reasonable cause or submit a would hamper State efforts to design
home to provide that care; and, at State corrective compliance plan to correct programs appropriate for people with
option on a case-by-case basis, a parent the violation and avoid the penalty. disabilities and discourage them from
who is a recipient of Social Security 7. Allows additional pro-family addressing their needs. Commenters
Disability Insurance (SSDI) benefits. We expenditures to count toward a State’s expressed concern that States would be
exclude these parents because they maintenance-of-effort (MOE) much less likely to invest the resources
either cannot work legally or we believe requirement. The final rule allows a needed to provide the services that
it would be inappropriate to require State to count expenditures on certain families with disabilities need if they
them to work. pro-family activities without regard to are not able to count those families
3. Clarifies that a State may count financial need or family composition, if toward the work participation rates.
only actual hours of participation. the expenditure is reasonably calculated Some commenters recommended that
Under the original TANF rule, some to prevent and reduce the incidence of we broaden work activity definitions to
States reported scheduled hours of out-of-wedlock births (TANF purpose accommodate the participation of
participation, which created an three), or encourage the formation and people with disabilities. Others urged us
inconsistency among States and reduced maintenance of two-parent families to permit lower hourly standards as an
incentives to ensure that individuals (TANF purpose four), as long as they accommodation. Otherwise, they
actually participated for assigned hours. meet all applicable MOE requirements recommended that we exclude clients
Under the final rule, we clarify that each and limitations. States receiving Healthy with disabilities from the definition of
State must report only actual hours of Marriage or Responsible Fatherhood a work-eligible individual.
participation; nevertheless, for grants may count State expenditures for Response: We recognize that many
individuals in unpaid work activities, any required match toward the State’s individuals with disabilities are capable
we permit States to count up to 10 days TANF MOE requirement, provided the of participating in productive work
of holidays and an additional 80 hours expenditure also meets all applicable activities and encourage States to
excused absences. To reduce the MOE requirements and limitations. explore these capabilities, rather than
documentation burden on both Based on the consideration of all focusing on their limitations. In fact, in
employers and workers, we also permit timely comments, this final rule reflects the preamble to the interim final rule,
States to report projected hours of adopted changes to 45 CFR Parts 261, we encouraged States to provide self-
employment on the basis of prior, 262, 263, and 265 of the interim final sufficiency opportunities to individuals
documented actual hours of work. rule of June 29, 2006. The comments with disabilities and to engage them in
Similarly, to reduce the documentation and changes are discussed in the appropriate work activities. We offered
burden on both educational providers preamble. Changes to these parts appear concrete examples, such as specialized
and participants in an educational in sections IV to VII of this document. work experience sites, that would
activity, we also allow States to count As in the interim final rule, the term provide and demonstrate the skills and
up to one hour of unsupervised ‘‘we’’ is used throughout the regulatory experience needed to obtain
homework time for each hour of class text and preamble to mean the Secretary employment. However, given the
time. of the Department of Health and Human concern expressed by commenters on
4. Recalibrates the caseload reduction Services (HHS) or the following this critical issue, we intend to expand
credit by updating the base year from individuals or agencies acting on his our technical assistance efforts in
identifying and sharing effective models comply with relevant civil rights laws, also have the option of declining to
that have been developed by vocational including the ADA and Section 504 of accept a particular accommodation.
rehabilitation agencies and the entire the Rehabilitation Act of 1973 (Section Thus, State agencies must offer people
disability community. 504). We believe that this final rule with disabilities an equal right to
Under the TANF statute, the work gives States several ways to count participate in programs instead of
participation rate calculations generally activities that they would be legally automatically exempting them from
include all families with an adult required to provide under the ADA and participation requirements.
receiving assistance. When Congress Section 504. It is also important to note The Supreme Court, in School Board
replaced the Aid to Families with that a State may be legally obligated to of Nassau County v. Arline noted,
Dependent Children (AFDC) program provide a reasonable accommodation/ ‘‘* * * society’s accumulated myths
with TANF, it eliminated a number of modification under the ADA and and fears about disability and disease
statutory exemptions related to Section 504 even if it will not receive are as handicapping as are the physical
incapacity, temporary illness, and age. credit toward its Federal work activity limitations that flow from actual
There was no suggestion in PRWORA requirements for the accommodation/ impairment.’’ 480 U.S. 273, 284 (1987).
that the activities or hours that count modification. As identified in the Provisions of the ADA and the
toward the work participation rate preamble of the interim final rule, HHS Rehabilitation Act prohibit exclusion
should vary for clients with disabilities. developed and will develop additional and segregation of individuals with
By limiting the maximum participation technical assistance related to the disabilities and the denial of equal
rate to 50 percent, Congress recognized application of civil rights laws in the opportunities enjoyed by others, based
that some individuals would not be able TANF context. Existing tools may be on, among other things, assumptions,
to satisfy the full requirements. found at the HHS Office for Civil Rights patronizing attitudes, fears, and
However, we believe States should work (OCR) Web site at http://www.hhs.gov/ stereotypes about individuals with
with and provide services to ocr/tanf. Among other help, the disabilities. Public agencies are required
individuals, whether they can webpage includes guidance entitled to ensure that their actions are based on
participate for enough hours to count ‘‘Prohibition Against Discrimination on facts applicable to individuals and not
toward the work participation rates or the Basis of Disability in the on assumptions as to what a class of
not. Because families with adults Administration of TANF,’’ which individuals with disabilities can or
receiving Federal assistance are subject addresses the application of the ADA cannot do.
to time limits, it is important for States The ADA covers individuals who vary
and Section 504 in the TANF context,
to serve the entire caseload so that all widely in the severity of their disability,
the legal requirements of ensuring equal
recipients progress toward self- degree of disadvantage, capabilities, and
access, reasonable accommodations/
sufficiency. States should also provide skills, and their appropriate path to self-
modifications, nondiscriminatory
needed accommodations that can help sufficiency and independence must be
operational methods, and includes a
all individuals reach their full potential. assessed on an individual basis, just like
discussion of promising practices. everyone else. It is exactly for these
We believe the regulation provides
Complaints alleging violations of these reasons that Congress chose not to
States with increased flexibility and
requirements are not infrequent. OCR exclude individuals with disabilities
incentives to work with people with
currently has open TANF complaints, from the participation requirements and
disabilities. In the definition of ‘‘work-
many of which allege that States are the benefits and results that accrue to
eligible individual’’ in § 261.2, we give
denying TANF applicants and working individuals and families. We
States the option of either including or
beneficiaries with disabilities equal believe that potential danger lies in
excluding parents who receive SSI or
access and/or not providing reasonable altered expectations and opportunities,
SSDI benefits and whose children are
TANF recipients. If the parent works accommodations/modifications. Such in automatic exemptions, and in
enough to count in the rate, the State complaints are often resolved by a State exclusions from integrated requirements
can include the family, but it is not agreeing to implement effective and and services designed to lead to self-
disadvantaged if the parent receiving comprehensive screening and sufficiency and independence. TANF
SSI or SSDI cannot work. In the final assessment of TANF applicants and agencies must provide programs in the
rule, we allow States to adjust prior beneficiaries. most integrated setting appropriate to
reported data and to back out of the We were also trying to make one other the needs of people with disabilities.
participation denominator any key point. It is discriminatory to deny Agencies should take steps to ensure
appropriate family with a work-eligible a person with a disability the right to that individuals with disabilities can
individual whose application for SSI or participate in or benefit from the aid, participate in all programs and services
SSDI was approved retroactively, as benefit, or service provided by a public for TANF clients, not just those
long as the adjustment is within the entity. The benefits and services programs and services that are designed
allowable reporting time frame for the provided must be equal to those solely for people with disabilities. In
fiscal year. Also, we have reaffirmed in provided to others, and as effective in addition, TANF agencies must ensure
the final rule that a parent needed in the affording equal opportunity to obtain equal access to programs and services
home to care for a disabled family the same result, to gain the same benefit, for TANF clients. In ensuring equal
member is also excluded from the or to reach the same level of access, it is critical that TANF agencies
participation rate. achievement as those provided to have comprehensive and effective
Comment: Many commenters others. Services, programs, and screening and assessment tools in place.
suggested that the interim final rule activities must be administered in the Clearly, a State must provide
makes it difficult for States to meet the most integrated setting appropriate to appropriate accommodations and
work requirements and to comply with the needs of qualified individuals with services when necessary to afford an
the Americans with Disabilities Act disabilities. Separate or different aids, individual with a disability an equal
(ADA) of 1990 and Section 504 of the benefits, or services are permitted, but opportunity to participate in, and enjoy
Rehabilitation Act of 1973. only when necessary to ensure that they the benefits of, the service, program, or
Response: We recognize and are as effective as those provided to activity, and the opportunity to request
underscore that States must continue to others. Persons with disabilities must such accommodations and services.
States can and must make necessary rule did not offer practical ways to assist organizations serving the needs of
accommodations in the number of hours States in doing so. The commenter individuals with disabilities. ACF will
and types of activities they require, if urged us to ensure that the final rule use its Welfare Peer Technical
needed. But, accommodations that includes better mechanisms to allow all Assistance Network to disseminate
enable clients to work are clearly just as TANF recipients with disabilities to information on promising practices for
critical. States must ensure that meet work participation requirements. serving individuals with disabilities. In
individuals with disabilities are not Response: We agree that TANF addition, ACF will work with States to
excluded from services, programs and agencies need to find more effective explore additional approaches and
activities because buildings are ways to engage people with disabilities innovative efforts to promote and
inaccessible, and these include the in their caseloads than many have used support the employment of TANF adult
buildings of contractors and providers. in the past. Increased efforts should be recipients living with mental,
Agencies must also provide pursued in a number of areas. For some intellectual and physical disabilities.
accommodations to individuals with States, TANF agencies need to re-engage Comment: Many commenters urged
disabilities, at no additional cost, where with State rehabilitation agencies to use us to permit ‘‘deeming’’ for individuals
necessary to ensure effective their proven knowledge and expertise to with disabilities. They recommended
communication with individuals with address the barriers individuals with that we allow States to count recipients
hearing, vision, or speech impairments. disabilities face and to help them enter who participate in accordance with an
(Accommodations include but are not the workplace. Much needs to be done employment plan that includes
limited to such services or devices as to overcome negative stereotypes and accommodations for disabilities as
qualified interpreters, assistive listening misperceptions among the public. Job having met required hours to count in
headsets, television captioning and developers need to educate employers, the participation rate. They stressed that
decoders, telecommunications devices since research shows that working this would give States an incentive to
for the deaf [TDDs], videotext displays, individuals with disabilities are very engage such individuals to their greatest
readers, taped texts, materials in Braille, effective employees. Agencies need to ability. Similarly, they urged us to let
and large print materials.) improve their marketing of the States count recipients who miss
Comment: One commenter suggested, advantages and benefits of work to scheduled hours of work participation
‘‘Employment of individuals with individuals with disabilities, while because they were caring for a family
mental illness should be a top priority ensuring that benefits, such as medical member with a disability. They
for policy makers at all levels of coverage, are sustained. suggested that, in the same way that we
government. Unfortunately, due to In the first 10 years of the TANF permit ‘‘deeming’’ to respond to the
stigma, organizational, financial and program, there has been inadequate requirements of the Fair Labor
other barriers, employment is often a attention to engaging individuals with Standards Act, we should allow lesser
low priority, if it is a priority at all. It’s disabilities in work; however, few States hours of participation to count for the
doubtful that the Interim Final Rules, as raised concerns to us about their ability full required number of hours when
currently drafted, will result in greater to serve people with disabilities during needed to make accommodations
work opportunities for people with this period. Oftentimes, individuals required under the ADA.
psychiatric disabilities.’’ with disabilities face challenges in Response: We agree with the
Response: We agree that employment entering the workforce and pose commenters’ concerns that individuals
of individuals with disabilities should challenges to State agencies trying to with disabilities should have
be a priority, and this Administration help them enter the workforce. appropriate accommodations in their
has made it a priority for all executive Sometimes, a disability is debilitating work assignments and believe this
agencies. President Bush, in announcing enough that a person cannot work. regulation provides States with more
his ‘‘New Freedom Initiative’’ in 2001, Federal programs such as SSI and SSDI flexibility and incentives to work with
stated, ‘‘Every American should have serve such people. But for many others, people with disabilities than they have
the opportunity to participate fully in a disabling condition does not preclude ever had previously. As we noted in
society and engage in productive work. the possibility and the rewards of work, response to earlier comments, the TANF
Unfortunately, millions of Americans even if it creates challenges. work participation rates have always
with disabilities are locked out of the It is precisely for this reason that we included people with disabilities. States
workplace because they are denied the have not categorically removed can and must make necessary
tools and access necessary for success.’’ individuals with disabilities from the accommodations in the number of hours
The number of recipients with definition of work-eligible individual. and types of activities they require of
disabilities who are currently working Individuals who happen to have individuals with disabilities.
significantly understates both the disabilities should be afforded the same As noted earlier, ACF is committed to
capability and desire of people with opportunities to engage in work—to find working with States to explore
disabilities to work. Under significant work-related training, work experience, additional approaches and innovative
work participation requirements, States and employment—as those who do not efforts to promote and support the
will need to expand preparatory and have a disability. By keeping such employment of TANF recipients living
employment options for individuals individuals in the work participation with disabilities. As we work with
with disabilities. We will continue to rate, as they have been since the States, we will begin to get a better
work closely with our colleagues in the inception of TANF, States have an understanding of the potential promises
Substance Abuse and Mental Health added incentive to address the needs of and logistical challenges of all such
Services Administration, the Social people with disabilities. approaches.
Security Administration, and the We look forward to working with With respect to individuals caring for
disability community to enhance States in this area through our technical people with disabilities, the regulation
services to all people with disabilities. assistance efforts and anticipate makes two accommodations. First, the
Comment: One commenter noted that disseminating information about definition of a work-eligible individual
the preamble to the interim final rule promising approaches to helping excludes a parent caring for a disabled
often encouraged States to engage individuals with disabilities and family member living in the home, as
individuals with disabilities but that the establishing linkages between long as there is medical documentation
to support the need for that parent to domestic violence waiver of work participation requirements in any
remain in the home to care for the participation requirements. particular month, including illness,
disabled family member. Second, the We believe the 1999 TANF final rule temporary gaps between work
regulation gives States credit for regarding the treatment of victims of components, and family emergencies
excused absences for all work-eligible domestic violence ensures services and such as trying to forestall an eviction,
individuals in unpaid work activities. waivers for victims and provides the need to find new housing, the need
Thus, if a State excuses an individual adequate ‘‘reasonable cause’’ reduction to care for an ill relative who may not
who misses time because she must care or elimination of penalties for States. live with the recipient, or the need to
for a disabled family member, the State Consequently, we did not propose attend to a domestic violence issue.’’
could count those missed hours as revision to Part 260, Subpart B in the One commenter said that the rules
actual participation, within the limits interim final rule; therefore, general ‘‘would steadily diminish state
the regulation sets out. Please refer to concerns related to rules on victims of flexibility through the imposition of
§ 261.60 for further discussion of domestic violence are outside the scope rigid federal mandates.’’ Another stated,
excused absences. of this rulemaking. ‘‘The new regulations have eliminated
C. General Topics the states’ ability to be flexible in
B. Domestic Violence determining what they may assess for
• Alternative Measures of countable work activities when in
Comment: Some commenters asserted
Performance reality the needs of the particular
that the interim final rule conflicted
Comment: Several commenters participants and states vary vastly.’’
with the Family Violence Option (FVO).
suggested shifting the focus of Response: We do appreciate the
One commenter noted, ‘‘The regulations
participation from process to outcome difficulty in engaging a large and varied
are also silent on how domestic violence
measures. One commenter found that client population in countable work
services are allowed and how domestic
the existing participation rates were too activities for enough hours to meet the
violence cases are treated.’’ Another
limited for purposes of assessing State work participation rate. Instilling the
commenter asserted, ‘‘Women need time
performance measuring comparability work habits and providing the supports
to effectively remove the barriers that
across States. The commenter suggested that different families need to engage in
have prevented them from obtaining
that we use alternative measures of work is a challenge that all States must
quality employment.’’ Another
program success, including measures strive to achieve. We have given serious
suggested that ‘‘the limited time allowed
related to poverty, the employment rates consideration to the commenters’
in job search and job readiness for
of current and former recipients, and the concerns and would like to point out
barrier removal activities is inflexible
completion rates for applicants and certain aspects of statute as well as
and should not apply to family violence
recipients enrolled in education and others of the TANF rule that help States
victims.’’
training programs. One commenter achieve the work participation rate.
Response: Existing provisions in the recommended continuing the High There are several categories of
law address work participation rate Performance Bonus outcome measures, individuals that continue to be excluded
issues for States dealing with victims of even though bonuses are no longer from the calculation of the work
domestic violence. A State that elects available under the DRA. Another participation rate under the new law.
the Family Violence Option under commenter urged work participation One of the largest is the State option to
Section 402(a)(7) of the Social Security credit for those families who get jobs disregard, on a case-by-case basis,
Act must screen and identify victims of and work their way off welfare. single-custodial-parent families caring
domestic violence, refer such Response: We do not have the for a child under the age of one year. A
individuals to services and, if needed, regulatory discretion to replace the State may also disregard a family subject
waive participation and other program existing work participation rate to a work-related sanction for up to
requirements for as long as necessary to requirements with alternative, three months in the preceding 12
escape domestic violence. The rules at performance-based measures. months. In addition, the interim final
Part 260, Subpart B allow States to grant Nevertheless, we do continue to track rule allowed States to exclude from the
good cause domestic violence waivers to several of the outcome measures from definition of ‘‘work-eligible individual’’
victims of domestic violence that waive the high performance bonus. parents caring for a disabled family
various program requirements, • Negative Consequences and member living in the home. Our
including work requirements. States Challenging Standards of Participation excused absence policy addresses
have broad flexibility in determining Comment: Several commenters concerns related to hours missed due to
which program requirements to waive suggested that the interim final rule short-term illnesses or emergencies.
and for how long. Although these makes it more difficult for States to Finally, States have a special reasonable
recipients remain in the work design effective programs to move cause provision if they miss the work
participation rate calculation, there may families from welfare to work. Some participation rate because they serve a
be some activities that meet one of the commenters predicted that States may large number of families dealing with
work activity definitions that would adopt punitive approaches to reduce the domestic violence issues.
make them countable toward the denominator for the work participation Also, we would like to emphasize that
participation rate. If a State fails to meet rate. when States cannot count the
a work participation rate, we will Some commenters suggested that we participation of some individuals in
determine that it had reasonable cause do not appreciate the need for flexibility certain activities because they do not
if the State can demonstrate that it failed and the difficulty of meeting a 50- meet one of the work activity definitions
to meet the rate due to granting federally percent overall participation rate. As an or because the hours of participation are
recognized good cause domestic example, one commenter thought that not sufficient, the States should still
violence waivers. In this circumstance, we failed to recognize ‘‘the reality that serve these individuals. The
we would recalculate the work reaching a 50 percent participation rate requirements and expectations for each
participation rate taking out any is difficult in large part because of the family should be set by the State taking
families in which individuals received a many legitimate reasons why a recipient into consideration the needs of the
federally recognized good cause may not meet the full hourly family, obligations under the ADA and
Section 504 of the Rehabilitation Act of the regulatory text of those sections and • Monitoring
1973, and program goals. Thus, in any to the preamble discussion in the Comment: Several commenters
individual case, a State may require original TANF rule at 64 FR 17771. In suggested that the rule imposes rigid
fewer hours of an adult than needed to addition, the excused absence policy monitoring and reporting requirements.
count toward the Federal participation described in § 261.60(b) allows a State Some expressed concern that frequent
rate and that family will not help the to receive credit for short-term excused demands for proof of participation
State meet its work participation rate. absences and allows some families that could overburden providers or cause
Similarly, a State may, and many do, would otherwise fall short of the families to lose assistance.
require more hours of an adult than minimum hourly requirements to count Response: We believe that the rule
needed to count the family in the in the participation rate. simply clarifies what has always been
participation rate. Moreover, States • Increased Costs the expectation of law, of the original
continue to have the flexibility to allow Comment: Some commenters TANF rule, and of the requirements of
families to engage in broader and suggested that the new regulations 45 CFR part 92: That a State should
different activities from those that count would require States to increase report only actual participation that it
for the Federal participation rate. participation in work activities, which has adequately documented and
We are convinced that States can and would raise program costs. This, in turn, verified. As a result of numerous single
will meet these challenges, thus they thought, would force States to audit findings questioning the validity
dramatically improving the lives of curtail services because TANF is a fixed of participation rates, we decided to
families. We also believe that the block grant. clarify this expectation in the rule so
standards must be challenging to ensure Response: The dramatic decline in that States may avoid potential
that the maximum number of recipients welfare caseloads since the 1996 welfare penalties. In addition, for the four
move toward self-sufficiency. This reform has produced savings that far activities involving paid employment,
conviction is based on the well- exceed any additional costs from new which historically have represented the
documented results and achievements work requirements. More specifically, bulk of State work participation, we
made by States in response to PRWORA. TANF funding, measured on a per have substantially reduced the burden
We believe the DRA provides the TANF family basis, was $9,100 in 1996 on clients, employers, and States by
appropriate steps and direction for the (inflation-adjusted) compared to allowing the reporting of projected
next phase of welfare reform. $15,977 in 2007 (projected), an increase actual hours of participation for up to
We are confident that, under the new of $6,877 per family, or 76 percent. six months based on current,
rule, States that operate effective and While we recognize that States have documented hours of work.
efficient welfare-to-work programs will dramatically extended work services • Consultation
be able to satisfy their work and support benefits to low-income Comment: One commenter stated that
participation rate standards and working families, and pre-kindergarten we did not consult Tribes about the
enhance the services to clients at the care and education to children that are interim final rule and that Tribes were
same time. not receiving ‘‘assistance,’’ we believe expressly discouraged from providing
• Partial Credit that States have sufficient resources to input because the rule was directed at
Comment: Several commenters allocate among priority programs while States and was not intended to impact
suggested that we should give States implementing these new requirements. Tribal TANF programs directly.
partial or pro rata credit for individuals • Child Care Needs Response: The rulemaking process
who are engaged in work activities for Comment: Some commenters thought included a period for public comment
some hours, but not enough to be that there was not enough child care on the interim final rule. Tribes as well
included in the work participation rate funding to pay for the added costs as other organizations and individuals
calculation. One commenter pointed out associated with implementing the work were free to express their opinions and
that this would avoid the current ‘‘all- requirements under the Deficit to offer advice on the rule. Several
or-nothing’’ standard and would permit Reduction Act of 2005, particularly for Tribes and Tribal Organizations took the
some individuals who have limitations child care for non-recipient parents. opportunity to submit comments, which
to be credited with participating. Response: Since 1996, Federal child we have addressed in the preamble to
Another maintained that partial credit is care funding through the Child Care and this final rule. Further, ACF
not prohibited, even if the rules do not Development Fund (CCDF) has more representatives actively participated in a
specifically allow it. than doubled—from $2.2 billion in FY National Summit on State and Tribal
Response: Neither PRWORA nor the 1996 to $4.8 billion in FY 2005. HHS TANF in July 2006, at which State and
DRA provided for counting partial data on Federal and State child care Tribal representatives discussed the
participation of a case in meeting the spending in just three programs—TANF, provisions of the DRA and the interim
work participation rates; either the adult CCDF, and the Social Services Block final rule in detail and expressed
meets the requirements for being Grant (SSBG)—show that spending comments. The National Alliance of
‘‘engaged in work’’ and the family increased by nearly 225 percent Tribal TANF, one of the Summit
counts in the rate or the adult does not between FY 1996 and FY 2005, from sponsors, summarized these comments
meet the hours requirement and the $3.6 billion to $11.5 billion. The Deficit and formally submitted them to us.
State does not get credit for that family Reduction Act increases Federal child They are also addressed in this
in the participation rate. We remind care funding in the CCDF from $4.8 preamble.
readers that the regulations at billion to $5 billion, effective FY 2006.
§§ 261.22(d)(1) and 261.24(d)(1) do In addition to increasing child care D. Tribal TANF
provide the flexibility of counting a funding, the Deficit Reduction Act fully Comment: One commenter observed
partial month of assistance as a month funds TANF at $16.5 billion per year for that Tribal TANF programs could be
of participation if a work-eligible five years. With significantly lower adversely affected by States that fail to
individual is engaged in work for the caseloads than in 1996, we believe that meet the work participation rates
minimum average number of hours in States should have adequate funding to because the funds that States transfer
each full week that the family receives provide needed child care under the are critical to the operation of Tribal
assistance in that month. Please refer to Deficit Reduction Act requirements. TANF programs. This commenter also
expressed concern that funding and regulatory changes promulgated in care) as ‘‘core’’ activities and the three
regulatory changes to State TANF response to the enactment of the DRA activities that can only count as
programs will negatively affect various only apply to States, the District of participation after the core requirement
Tribal programs. Columbia, and the Territories of Guam, is met as ‘‘non-core’’ activities.
Response: State MOE funding plays Puerto Rico, the Virgin Islands, and We were guided by four basic
an important role for Tribal TANF American Samoa. We are not planning principles in developing the work
programs. We will continue to to amend the Tribal TANF program activity definitions in this final rule.
encourage States to support the Tribal regulations at 45 CFR part 286 to First, we attempted to define each
TANF grantees with MOE funding; comport with these DRA 2005 final work activity in a common sense way.
however, the decision to provide MOE rules. If a particular activity was not explicitly
funding rests solely with the States. listed in the statute, we attempted to see
States may also impose conditions on IV. Part 261—Ensuring That Recipients if it could fit under one of the 12
Tribal TANF programs on the use of Work activities listed in law. For example,
State MOE funds. Primarily, the Federal Section 261.2 What Definitions Apply treatment, counseling, and
role regarding State MOE is to ensure to This Part? rehabilitation activities, in our
that States expend the required amount judgment, fit best under job search and
of funds in compliance with This section of the regulation defines
job readiness assistance, when such
requirements. (For a more detailed work activities and work-eligible
activity prepares an individual for work.
discussion of Federal policy on MOE individuals. Section 407(d) of the Social
However, we could not add wholesale
funds provided to Tribal TANF Security Act specifies 12 separate and
categories of work activities to the 12
programs, please see our Policy distinct activities. Under the original
listed in the law. Our task was to specify
Announcement, TANF–ACF–PA–00–4 TANF rule, we chose not to define these
whether and where certain activities fit
dated November 27, 2000.) work activities to provide maximum
within these already existing statutory
We do not think it is likely that State program design flexibility to States. We
categories.
TANF agencies will reduce MOE simply listed the 12 work activities in Second, we defined each activity to
funding for Tribal TANF programs. If a 45 CFR 261.30 in the order they appear focus on work and help move families
State does fail a work participation rate, in the Act. As GAO found, this led to to self-sufficiency. Work activities
it must meet an 80 percent MOE disparities in State definitions of work should help individuals develop the
requirement. States that meet the work activities that resulted in inconsistent skills necessary to become job ready and
participation rates need only spend at work participation measurement and go to work. We do not want families to
the 75 percent MOE level. Any State undermined the principle of equitable exhaust their time-limited benefits and
that may potentially fail either the treatment. In particular, States with discover that they are not prepared to
overall or two-parent participation rate narrow definitions were at a support themselves.
needs to ensure that it has expended 80 disadvantage in meeting the Third, we tried, as far as possible, to
percent of its historic level of spending, participation requirements compared to make the definitions mutually exclusive
a five percentage point increase for States with broader definitions. In of one another. Since Congress created
many States. In addition to the need to addition, the GAO report (GAO–05–821) 12 distinct activities, we wanted to
expend additional MOE funds, we have raised concerns that some States bring meaning to them as distinct
heard no State indicate that it is integrated activities to avoid various activities.
contemplating any reductions in statutory limitations on some TANF Fourth, we made supervision an
providing funding to Tribal TANF work activities, such as the six-week explicit part of each definition. For
programs. time limit on counting hours spent in programs to be successful, it is
Comment: A few commenters job search and job readiness assistance. important that the case manager or
expressed concern that restrictions The Deficit Reduction Act of 2005 provider knows what each person is
imposed by this regulation could create required HHS to promulgate regulations supposed to be doing and that he or she
an influx of Tribal clients moving to to ensure consistent measurement of is accountable on a timely basis for
areas in which Tribal TANF programs work participation rates. The law ensuring that the client actually
exist, thereby increasing the costs to specifically required us to determine performs such assigned tasks.
these programs. Because Tribal funding whether an activity of a recipient of
is based on 1994 caseload data, Tribes assistance may be treated as a work Comments and Responses on Cross-
have substantially limited ability to activity. Thus, in the interim final rule, Cutting Issues for Work Definitions
renegotiate effectively for increased we defined each of the countable work We received many comments on this
funding. activities to promote consistency in the section of the interim final rule. Some
Response: We understand the measurement of work participation rates comments applied to multiple activities
commenters’ concerns; however, we and to maintain the integrity of the work or applied generally to defining the
have seen no evidence that this rule will participation rates. By defining work activities at all. We respond to those
prompt Tribal members to move into activities, we ensure that all States are cross-cutting comments in this section
areas served by a Tribal TANF program judged on the same basis that is, that and have grouped the comments and
or that such a potential influx would there is a level playing field. our responses by topic for the ease of
exceed the 1994 caseload level. In fact, Our definitions follow the order of the the reader. We respond to comments
if States effectively implement the DRA list of work activities in section 407(d) that focus more narrowly on a specific
provisions, we expect further caseload of the Social Security Act. For ease of definition in the discussion of each
declines. reference, we refer to the nine work activity below.
Comment: One commenter expressed activities that count for the first 20
opposition to any attempt to extend hours of required work or the General Topics
these regulations to the Tribal TANF corresponding 30-hour requirement for Comment: Some commenters wrote
program regulations. two-parent families (or 50-hour that the work activity definitions in the
Response: As we noted in the requirement for two-parent families interim final rule narrowed the range of
preamble to the interim final rule, the receiving federally subsidized child what States can count toward their work
participation rates and recommended under more than one work activity the activities would not achieve the
giving States more flexibility in defining definition. For example, many of the suggested administrative simplification.
work activities. One commenter training activities counted under Comment: Many commenters
recommended allowing States to vocational educational training can also expressed general support for education
develop their own definitions. count under job skills training directly activities or for the ability to count a
Response: The DRA directed HHS to related to employment and education wider array of educational activities.
define work activities to achieve greater directly related to employment. The Several commenters asserted that the
consistency among States. For some former is a core work activity that is regulations will limit access to
States, the new definitions may narrow limited to 12 months in a lifetime, education and training, and were
countable activities, but we believe they whereas the latter are non-core activities concerned that this would hinder client
actually expand them in other States. that can only count once the core access to higher paying jobs and
For example, under the original rule, activity requirement has been met. undermine their efforts to become self-
some States counted substance abuse Comment: Some commenters sufficient. For those with limited basic
and mental health treatment as maintained that the most effective skills and language difficulties, some
community service or as job search and welfare-to-work programs included a commenters proposed expanding the
job readiness assistance. Some States variety of employment and education definitions of various core activities to
did not count these activities at all, even and training activities. In their opinion, increase opportunities of countable
if a substantial number of individuals mutually exclusive definitions would participation. Commenters also
participated in such treatment. Our new discourage States from combining work suggested that we expand the definition
definitions make substance abuse activities. Moreover, they maintained of vocational educational training to
treatment, mental health treatment, or that doing so would require separate include education directed at achieving
rehabilitation activities an explicit part tracking of each activity and impose an a baccalaureate or advanced degree.
of job search and job readiness added administrative burden. In
Response: We appreciate the value of
assistance. This will allow all States to addition, because some activities, such
education and training for all
count individuals participating in these as job search and job readiness
individuals. Some recipients need to
activities and thus could actually assistance and vocational educational
develop skills to become employable;
increase work participation rates in training, have statutory limitations on
others benefit from education and
these States. In general, we believe the their duration, the commenters thought
training in order to advance in the
work activity definitions specified in that States might be reluctant to include
the interim final rule were reasonable these activities in a broader program workplace. While we cannot add
and consistent with the goals of the that blends activities because it would educational categories to the explicit 12
TANF program, and thus we have limit the long-term use of those activities listed in the TANF statute, we
retained them, with appropriate activities. Commenters urged us to believe that our definitions permit
modification, in the final rule. As a allow States to combine activities and considerable flexibility to provide a
practical matter, we do not believe that report all participation under one range of education and training services
these definitions have a restrictive effect activity. Several commenters suggested to TANF families. Under vocational
on what most States currently count that States should be allowed to count educational training, we permit a
because the dominant activity in most an individual participating in more than variety of postsecondary education
States has traditionally been one activity in the activity that makes activities, including associate degree
unsubsidized employment, an activity up the majority of the hours of programs, instructional certificate
whose definition most commenters did participation. For example, many of programs, industry skill certifications,
not find restrictive. these commenters recommended that and other course work. In addition, the
Comment: Several commenters we allow States to count a limited definition of job skills training directly
expressed the view that the emphasis on number of hours of job search or related to employment permits virtually
mutually exclusive activities restricts training as part of another activity, such all vocational educational training
State flexibility in developing cost- as work experience, if the other activity activities to count under that
effective programs by making it more represents the majority of the hours of component as well. States may choose
difficult for them to ‘‘blend’’ program participation. this activity for those individuals who
activities. The commenters Response: We strongly support State have exhausted their 12-month limit on
recommended that we make the programs that combine activities and vocational educational training or to
definitions more ‘‘flexible’’ and permit believe that our definitions fit well with conserve these months for those who
program approaches that integrate and such blended programs. It is important have sufficient additional participation
combine activities under one work that States report the hours of in other core work activities. Remedial
activity definition. participation for each work activity in education and ESL can count under
Response: Programs that combine the appropriate category to ensure that vocational educational training, if they
work with training or other services the data are comparable across States. If are a necessary and regular part of the
have shown promise in helping TANF an individual has exhausted the time work activity, and also can count under
recipients make the transition to the allowed to count an activity, it does not education directly related to
labor force and move toward self- prevent a State from continuing to employment. States have considerable
sufficiency. We believe that the final combine it with other activities; it only flexibility to mix and match work
rule gives States the flexibility to affects what a State can report toward activities so that they can count a wide
operate programs of blended activities. the participation rates. We note that a range of activities. Although the interim
Section 407(d) of the Act specifies 12 policy that allows some activities to final rule did not permit States to count
separate and distinct activities. Thus, count within others based on standards participation in baccalaureate or
we have tried to define each activity to such as what constitutes a ‘‘significant advanced degree programs in vocational
have a specific and distinct meaning, majority’’ of hours would still require educational training, we have been
but it was not always possible to make States to track the hours of each activity persuaded by commenters to allow such
them mutually exclusive. In fact, some separately to determine which activity participation and have changed the
types of activities can be categorized is the primary activity. Thus, combining definition accordingly.
Comment: Some commenters thought Response: The statute is generally their assigned activities. A work site
that the new work activity definitions silent on what we should include in sponsor, classroom instructor,
‘‘do not allow for the singular economic, most definitions. In defining the work contracted service provider,
cultural, and geographic circumstances’’ activities, we found it necessary to community-based provider, job search
that characterize some States. For specify what can count as part of an instructor, treatment provider, or even a
example, they pointed out that the rural activity and the conditions that must be TANF agency employee could fulfill
nature of some communities makes it met to ensure that actual participation that role. In addition, the supervision
difficult to serve some work-eligible in the activity occurs and thus keep need not involve in-person contact, but
individuals, both because the range of definitions consistent across States. can be by telephone or electronic
activities may be limited and also Comment: One commenter urged us contact where those methods are
because various documentation and to count as part of a work activity the suitable.
supervision standards are hard to apply. time it takes to travel to and from the Daily supervision as described above
Response: We are sympathetic to work or training site. The commenter is a central part of the final rule. It
concerns related to serving remote areas thought this was particularly important ensures that individuals who participate
and areas where employment in rural areas that are isolated and lack in work activities make progress in their
opportunities are limited due to high public transportation. assigned activities. Supervision is part
unemployment or other conditions. Response: Travel time to and from of everyday life in paid employment,
However, the statute does not make any work sites does not count toward the despite the cost and time involved,
allowance for such factors in the participation rates. We chose not to because it provides value. We should
calculation of work participation rates, count commuting time to and from a expect no less for all TANF work
except that it limits the maximum work site because commuting is not activities.
overall rate to 50 percent. Under one of ‘‘engaging’’ in the activity for which the Comment: One commenter asked for
TANF’s predecessor programs, the Job State gets credit and because this clarification regarding whether
Opportunities and Basic Skills Training approach is analogous to the work ‘‘supervision is only required on days
(JOBS) program, States could exempt world, since most employees receive no when an individual is scheduled to
individuals living in remote areas, but pay for the time it takes them to participate,’’ noting that it would not
commute to their jobs. However, we do make sense to require supervision on
Congress chose not to continue this
allow a State to count the time an the other days.
exemption when it enacted TANF in
individual spends in job search and job Response: We agree and have clarified
1996. The law does provide penalty
readiness assistance traveling between the final rule to indicate that
relief, though, if a State can demonstrate
multiple interviews. Please refer to the supervision is only required for days
that high unemployment or regional
preamble discussion of that work when an individual is scheduled to
recession caused or contributed to its
activity for more detail in this area. participate.
failure to meet the work participation
rates. Readers should refer to Daily Supervision Distance Learning Activities
§§ 261.51(d) and 262.5 of this chapter Comment: Several commenters asked Comment: Several commenters asked
for more information on penalty relief. for clarification regarding the daily whether time spent in distance learning
Comment: Some commenters supervision requirement for unpaid programs could count toward the work
suggested that the work activity work activities. Several commenters participation rates. They noted that this
definitions exceeded our legal authority. objected to the requirement that job was particularly important in rural areas
One commenter noted, ‘‘Many states search and job readiness assistance and that some programs keep track of
have used more expansive definitions include daily supervision because they the time individuals spend on a
over the past 10 years, and HHS has said it is a costly and time-consuming computer in ways that participants
never suggested that they were in requirement. These commenters cannot change.
violation of the statute.’’ Another generally noted that the time and Response: We agree that distance
commenter asserted that there is ‘‘no resources spent on daily supervision learning is an important way for some
statutory basis to impose a mutually should be focused on providing direct families to gain the skills needed to
exclusive list of definitions to what services to help families move toward move toward self-sufficiency. We will
Congress said should be viewed as a self-sufficiency. Several commenters count time spent in distance learning to
whole.’’ Some commenters contended suggested that we limit the requirement the extent that such programs otherwise
that specific regulatory provisions were so that ‘‘someone with responsibility for meet the work activity definitions and
not consistent with the statute. oversight of the individual’s include supervision. A State should
Response: The Deficit Reduction Act participation had contact with the explain in its Work Verification Plan
of 2005 specifically required us to recipient, and that the supervision does how it will provide supervision and
determine ‘‘whether an activity * * * not have to be done by the TANF agency monitor hours of participation in
may be treated as a work activity. itself or an employment services distance learning.
* * *’’ We believe the interim final rule contractor.’’ Some commenters
was consistent with Congressional and recommended eliminating the Good or Satisfactory Progress
statutory intent. We did not intend to requirement altogether. Under the definitions in the interim
suggest that States were in violation of Response: We agree with many of final rule, two of the TANF work
the prior statute and rules. Rather, these points and would like to clarify activities involving education required
Congress saw a need for uniform this requirement. Daily supervision that participants make ‘‘good or
definitions and the rule provides them. means that a responsible party has daily satisfactory progress’’ in order for their
Comment: Some commenters wrote responsibility for oversight of the hours of participation to count:
that aspects of our definitions were not individual’s participation, not Education directly related to
necessary because they were not necessarily daily, in-person contact with employment and satisfactory attendance
required by the statute, for example, the the participant. The goal of such at secondary school or in a course of
limitation that only supervised supervision is to ensure that individuals study leading to a certificate of general
homework can count. are participating and making progress in equivalence (GED). The preamble to the
interim final rule explained that this asked us to clarify that States would not private sector that is not subsidized by
includes a standard of progress be retroactively denied credit toward TANF or any other public program. We
developed by the educational institution the participation rate because a client did not change the definition in the
or program in which the individual was participated for the required hours but final rule. We have responded to
enrolled. It also said that good or failed to make adequate progress. comments concerning self-employment
satisfactory progress should be judged One commenter noted that the interim activities in the discussion of
by both a qualitative measure of final rule did not specify the frequency § 261.60(c).
progress, such as grade point average, as with which ‘‘good or satisfactory Comment: Commenters found our
well as a quantitative measure, such as progress’’ should be verified and definition of unsubsidized employment
a time frame within which a participant commented that some measures of to be appropriate.
is expected to complete such education. progress, such as grade point average, Response: We agree and have retained
We expressed interest in receiving may not be available until the end of a the same definition in the final rule.
comments that describe other possible quarter or semester. The commenter also Sections 261.2(c) and (d) Subsidized
criteria or definitions for what explained that some educational Private Sector Employment and
constitutes making ‘‘good or satisfactory programs, such as Adult Basic Subsidized Public Sector Employment
progress.’’ Education, may not have testing that
Comment: Several commenters produces grades to calculate a grade In the interim final rule, we defined
observed that the preamble to the point average. The commenter both subsidized private sector
interim final rule described ‘‘good or recommended that States use employment and subsidized public
satisfactory progress’’ somewhat ‘‘subjective performance evaluations sector employment as employment for
differently for the two activities to provided by the instructor to which the employer receives a subsidy
which it applied. In the case of demonstrate progress * * * that simply from TANF or other public funds to
‘‘education directly related to indicate if academic performance was offset some or all of the wages and costs
employment’’ we wrote that the unsatisfactory or satisfactory.’’ of employing a recipient. We described
standard could be developed by either Response: The commenters raised three possible subsidized employment
the education institutions or the many compelling points. We believe program approaches: (1) To use TANF
program. For ‘‘satisfactory attendance at that the easiest way to accommodate funds that would otherwise be paid as
secondary school,’’ we allowed the State these concerns is simply to delete the assistance to reimburse some or all of an
or the educational institution/program requirement for ‘‘good or satisfactory employer’s costs; (2) to rely on a third
to set the standard. The commenters progress’’ from the definitions of party as the employer of record during
asked for clarification of this policy and education directly related to the trial employment period, like a
recommended a wide variety of employment and satisfactory attendance temporary staffing agency; and (3) to
approaches for setting ‘‘good or at secondary school or in a course of develop ‘‘supported work’’ programs for
satisfactory progress’’ standards. Some study leading to a GED. Although we individuals with disabilities.
commenters urged us to leave the believe such standards are valuable and In the final rule, we made a minor
standards to educational institutions should be part of any educational wording change to the definitions of
and programs, while others activity, based on the input from each of these activities, substituting the
recommended that States establish commenters, we have determined that word ‘‘individual’’ for ‘‘recipient.’’ We
them. A number of commenters also the appropriate standards can vary made this change both for consistency
proposed giving States the flexibility to based on too many circumstances to with other definitions and to make clear
choose to establish either or both mandate their inclusion in these two that these activities are allowable for
qualitative and quantitative measures. activities. Educational institutions are any work-eligible individual.
Several commenters cautioned that generally in the best position to Comment: Several commenters asked
the criteria for ‘‘good or satisfactory establish standards of progress, but they whether participation in various
progress’’ should not discourage placing may not make separate determinations supportive activities, such as substance
individuals with barriers in education, of progress based on the circumstances abuse treatment, mental health
noting that they may require more time of individuals, a role a caseworker treatment, and rehabilitation activities
and help in meeting such standards. might best perform. Therefore, the final could count as subsidized private sector
They suggested that the standards rule gives States flexibility in deciding or public sector employment. These and
should include appropriate whether to set standards of ‘‘good or other activities are often integrated as
accommodations for individuals with satisfactory progress’’ and, if they do, to part of a supported work program,
disabilities. Other commenters develop the standards that are best transitional jobs program, or other
recommended that we eliminate the suited for their clients. subsidized employment activity.
requirement of ‘‘good or satisfactory Response: Hours of participation in
progress’’ because many individuals Assessment various supportive activities can count
with learning disabilities are often not Comment: Several commenters if they are integrated parts of subsidized
identified by State agencies and fall recommended that the definition of employment. This means that, in order
through the cracks. various work activities include the to count, the individuals must be paid
Some commenters recommended assessment of participants’ skills. for all of the hours they participate in
creating good cause exceptions for those Response: Our work activity such activities. For example, some
facing unusual or unexpected definitions permit assessment of an transitional jobs programs are structured
circumstances that prevented them from individual’s suitability for a particular to include direct work and 10 to 15
making progress as expected. Good work activity. hours of barrier removal or other
cause exceptions, they maintained, activities, including mental health and
would prevent States from being Section 261.2(b) Unsubsidized substance abuse treatment, job search,
penalized when individuals participate Employment and training. Participants are paid
for the required number of hours but are In the interim final rule, we defined wages for all hours of participation.
unable to progress due to various unsubsidized employment as full-or Otherwise, if the individuals are not
circumstances. Another commenter part-time employment in the public or paid while participating in these
activities, the participation should be noted that the preamble to the interim of services offered under subsidized
reported as a blend of subsidized final rule suggested ‘‘that States employment.
employment and another appropriate generally limit the duration of Response: We believe the details of
activity. Most likely this would be job subsidized employment programs to six program design should be left to the
search and job readiness assistance, but to twelve months.’’ States because the circumstances of
could be another activity. Response: The limited duration is a individuals and the effectiveness of
Comment: Several commenters noted recommendation, not a requirement. program activities may vary based on a
that some individuals assigned to Longer placements may be appropriate, number of factors.
subsidized employment soon have for example, in supported employment
earnings that are sufficient to make of individuals with disabilities or for Section 261.2(e) Work Experience
them ineligible for assistance. They other participants based on their In the interim final rule, we defined
asked whether such individuals could individual circumstances, economic work experience (including work
continue to count in the numerator of conditions, or other factors. associated with the refurbishing of
the participation rate. Comment: One commenter noted, publicly assisted housing) if sufficient
Response: Although we understand ‘‘Congress listed public and private private sector employment is not
the commenters’ concern, the work sector subsidized employment as available, as a work activity performed
participation rate calculations include separate work activities; therefore it is in return for welfare that provides an
only families with a ‘‘work-eligible reasonable to have different individual with an opportunity to
individual.’’ (Please refer to the expectations depending on the sector of acquire the general skills, training,
discussion of § 261.2(n) for more the employer.’’ In particular, the knowledge, and work habits necessary
detailed information about the commenter suggested that it may be to obtain employment. We reminded
definition of ‘‘work-eligible appropriate to limit the duration of the readers that work experience
individual.’’) If a State wants to count a employment subsidy to private sector participants continue to receive their
family participating in subsidized employers ‘‘where there is an TANF grants and that they do not
employment that is ineligible for a expectation of continued employment receive wages or compensation by virtue
regular assistance payment, it could with that employer,’’ but that such of participating in the activity.
create and pay an alternative assistance limits should not be placed on public Nonetheless, they may be considered
grant. The State could then count the sector (and non-profit) employment. employees for the purpose of the Fair
family toward the rate. Of course, since Response: We agree that durational
Labor Standards Act (FLSA), which
the family retains assistance, this would limits help ensure that the primary
means that they must be compensated at
not generate a caseload reduction credit, benefit of the subsidy is to the
no less than the higher of the Federal or
as might be the case otherwise. employee, but do not see the need to
State minimum wage.
Comment: Several commenters asked apply different standards to the private
whether employers would be required and public sectors. We leave it to States Comment: Several commenters
to hire and retain individuals engaged to determine such limits regardless of suggested that work experience could
in subsidized employment once the whether they apply to private sector or sometimes be considered a ‘‘paid’’
subsidy period ended. The preamble public sector employment. activity. Others thought that the
guidance to the interim final rule stated, Comment: One commenter definition should exclude the phrase
‘‘At the end of the subsidy period, the recommended that States describe in ‘‘performed in return for welfare.’’
employer is expected to retain the their Work Verification Plans how a Response: We considered these views
participant as a regular employee subsidized employment program will carefully but chose to retain the
without receiving a subsidy.’’ Some lead to unsubsidized employment definition of work experience we
commenters explained that many ‘‘where there is an expectation of published in the interim final rule,
transitional jobs programs place continued employment with the same keeping it as an unpaid activity to
participants in short-term subsidized employer, and how the program will distinguish it from the four ‘‘paid’’
employment to provide experience, avoid displacement of current workers.’’ activities that already exist. In our view,
training, and guidance that enable that Response: We agree that the ultimate the purpose of work experience is to
individual to obtain unsubsidized goal of subsidized employment is to gain the skills needed to acquire a paid
employment elsewhere, even though it move the individual to unsubsidized position. States that have work
may not result in a permanent position employment and off welfare. However, experience programs that involve the
with the same employer. Other the purpose of the Work Verification payment of wages should reclassify
commenters recommended that we limit Plan is to ensure that States report them as subsidized employment or on-
the expectation of continued participation data that is consistent with the-job training. The fact that there may
employment to private sector employers the law and regulations and that States be an employer-employee relationship
to avoid creating a ‘‘revolving door’’ of adequately verify the accuracy of that in a work experience assignment,
subsidized employees. participation data. The Work triggering the minimum wage
Response: The preamble language in Verification Plan does require States to requirements of the FLSA, does not
this regard was a suggestion, not a describe how their services and make the work activity ‘‘paid.’’ Rather,
requirement. We continue to caution programs meet the definition of a work the individual is receiving
that States should not allow employers activity. compensation from the family’s TANF
to recycle TANF recipients in There is a statutory prohibition on grant in lieu of wages.
subsidized employment slots simply to displacement for all work activities in Comment: Several commenters asked
reduce their competitive labor costs. section 407(f) of the Act and the existing us to clarify that not all work experience
The positions should lead to ongoing, regulatory provision at § 261.70. Thus, activities are subject to the FLSA. One
stable employment or prepare we do not believe the Work Verification commenter asked for clarification on
individuals for such employment. Plan needs to include this information. who the employer is with respect to
Comment: Several commenters asked Comment: One commenter work experience positions—the State or
whether they must limit the duration of recommended that HHS ‘‘design the the work site sponsor (if other than the
subsidized employment positions. They payment structure’’ to reflect the range State). The commenter was unsure
because the State provides worker’s of an individual assigned to clerical count under vocational educational
compensation. support who needs to attend a computer training, if it is a necessary and regular
Response: It is the responsibility of training class. They suggested that a part of the work activity, and also can
the Department of Labor to determine similar provision should apply to work count under education directly related
whether or not the FLSA applies to an experience and that we should expand to employment. However, we note that
activity and who the employer is. We it to include other forms of educational States can count short absences from
recommend that readers direct any or vocational educational training various activities to participate in, for
questions regarding the FLSA to the activities. example, a job search activity under the
Wage and Hour Division of the U.S. Response: States may wish to excused absence policy (described in
Department of Labor at 1–866–4– supplement work experience with § 261.60(b) of this chapter). In addition,
USWAGE, TTY 1–877–889–5627 or the training, but we do not believe that as we describe in the section on job
following Web site: http://www.dol.gov/ formal training, education, and search and job readiness assistance, we
esa/whd/flsa/index.htm. vocational educational training give States greater flexibility to count
Comment: Several commenters asked programs should be considered part of sporadic hours of participation in job
whether the definition of work work experience. Work experience is search and job readiness assistance
experience precludes a State from defined as work performed in return for without triggering a full week in that
counting a participant who combines welfare and is intended to provide an activity that would otherwise count
unsubsidized employment with work individual with an opportunity to against its durational limits.
experience because the statutory acquire the general skills, knowledge, Comment: One commenter
language limits work experience to and work habits necessary to obtain recommended that we require States to
situations where ‘‘sufficient private employment. We make an exception in ‘‘consider TANF workers as employees
sector employment is not available.’’ In community service because that activity of the state, eligible therefore for all
addition, the interim final rule defined involves a service that is of direct state employee benefits and covered by
the purpose of work experience as benefit for the community and limited all worker protection statutes.’’
improving the employability ‘‘of those training may count if it is an integral Response: The DRA did not change
who cannot find unsubsidized part of the activity. We have deleted the the worker protections or employee
employment.’’ reference to ‘‘training’’ in the definition benefits available to work activity
Response: The statutory language of ‘‘work experience’’ to clarify this participants, so the final rule does not
does not prevent States from using work point, as that reference referred to make any changes to existing policy in
experience for those who are in paid training in general workplace skills, not this regard. The original TANF rule
employment. We recognize that there to formal instruction that can be clarified that, notwithstanding specific
may be circumstances in which an provided through other TANF work language limiting the scope of the TANF
individual’s employment is not activities. rules, TANF programs are subject to
sufficient to meet the work activity Comment: Several commenters asked Federal employment and non-
requirement and a State may place such whether short periods of job search and discrimination laws. These protections
an individual in another work activity. job readiness assistance or vocational continue to apply under the final rule.
In this circumstance, work experience educational training could be embedded Since there is no statutory basis for a
could be appropriate because sufficient and counted within work experience. requirement such as the commenter
employment may not be available for These commenters suggested that such suggested, we do not believe we have
‘‘full-time’’ work. Although we cannot programs are more effective than work the authority to require TANF workers
strike the statutory phrase, ‘‘if sufficient experience alone and that not to be considered employees of the State.
private sector employment is not permitting such embedded activities to State law generally governs whether an
available,’’ we are clarifying that count would discourage States from individual must be considered an
‘‘sufficient’’ means enough for full-time combining work experience with employee or may be considered an
employment. activities designed to move TANF employee for purposes of State
Comment: Several commenters recipients into unsubsidized jobs. Other employee benefits. Also, the worker
recommended that the definition of commenters contended that ESL should protection statutes themselves define
work experience (and community be included as part of work experience the situations that they cover, many of
service) include ‘‘background checks because the ability to speak English is which apply to individuals participating
and assessment of participants’’ skills as a prerequisite for employment. in TANF work activities.
they related to a job site and required by Response: As we have noted before, Comment: One commenter asked for
a specific work experience slot.’’ we fully support State efforts to clarification that work experience
Response: Our definition permits integrate and combine work activities. positions could be created with private
background checks and the on-site Reporting hours of work separately for sector employers. The commenter stated
assessment of an individual’s suitability the different activities should not that this would expand the number of
for a particular work experience slot. impede a State’s ability to offer placement opportunities and the
States must assess each recipient of integrated services or encourage chances for individuals to transition
assistance over 18 years of age or who individuals to combine activities. We into unsubsidized employment.
has not finished high school (or the attempted to define activities so that Response: Work experience positions
equivalent). they are mutually exclusive because the may be created with public sector,
Comment: Some commenters law provides 12 distinct activities, so in private sector, community-based, faith-
suggested that we consider training, general, including activities that meet based, or nonprofit employers or work
education, and vocational educational one of the other work activity site sponsors.
training to be part of work experience. definitions would be inappropriate,
They noted that the preamble particularly in the case of activities with Section 261.2(f) On-the-Job Training
discussion of community service established limitations in statute, i.e., In the interim final rule, we defined
programs in the interim final rule job search and job readiness assistance on-the-job training (OJT) as training in
offered a rationale for providing training and vocational educational training. the public or private sector that is given
within that activity, citing the example ESL is an educational activity that can to a paid employee while he or she is
engaged in productive work and that assistance activity. Also, such activities comments on this provision. Most
provides knowledge and skills essential can count as unsubsidized or subsidized commenters contended that six weeks
to the full and adequate performance of employment if the individual is paid was not enough time to help individuals
the job. In the preamble to the interim during the time of participation in such with barriers to employment. Many
final rule we invited comments on activities. others urged us to consider an hourly
whether the definition of OJT should be Comment: Several commenters asked equivalent to these limitations to
broadened ‘‘beyond paid employment to whether an employer was expected to increase State flexibility.
include other aspects of training.’’ hire an OJT participant, based on the In order to respond adequately to the
Comment: Several commenters statement in the preamble: ‘‘Upon comments we received, we determined
suggested that we expand the definition satisfactory completion of the training, that it was necessary to include
to include unpaid training, such as we expect the employer to retain the § 261.34, which specifies the limitations
occupational training, basic skills participant as a regular employee. on counting job search and job readiness
remediation, and English language * * *’’ assistance, in this final rule, despite the
instruction, as well as pre-employment Response: The preamble language was fact that it was not in the interim final
skill upgrading. Several commenters a suggestion, not a requirement. As with rule. Based on these comments, we have
noted that many employers provide subsidized employment, we expect adopted an hourly equivalent for
both on-site and off-site training to employers to provide training, guidance, purposes of the six-week (or 12-week)
employees. The commenters maintained and direction to help employees obtain limit, giving States more flexibility to
that including unpaid training positions unsubsidized employment, whether provide job search and job readiness
would help ensure that recipients with the employer providing the assistance services, especially when
receive needed work skills and would training or with another employer. As such services are only needed for a few
simplify reporting. Other commenters long as the position is designed to lead hours per week. We describe the
recommended including unpaid to unsubsidized employment, the policies on these limitations in more
internships or externships, arguing that activity would meet the primary goal of detail in the discussion of § 261.34, but
participants would have an opportunity the program. also respond to comments on this topic
to learn in a work setting that could lead Section 261.2(g) Job Search and Job here.
to employment opportunities. For the ease of the reader, we have
Readiness Assistance
Response: We considered all of these grouped the comments and our
suggestions carefully in writing the final In the interim final rule, we defined responses by topic within this section.
rule. Ultimately, we chose not to expand job search and job readiness assistance
as the act of seeking or obtaining Treatment of Barrier Removal Activities
OJT to include unpaid training
activities. We made this decision employment, preparation to seek or Comment: Many commenters
because, first, we could not reconcile obtain employment, including life skills welcomed the inclusion of substance
the notion of unpaid training with being training, and substance abuse treatment, abuse treatment, mental health
‘‘on-the-job,’’ and second, such unpaid mental health treatment, or treatment, and rehabilitation activities
training can count under a variety of rehabilitation activities for those who as countable activities. However, many
other work activities, including are otherwise employable. Such commenters also expressed concerns
vocational educational training and job treatment or therapy must be about limiting these specific activities to
skills training directly related to determined to be necessary and certified the category of job search and job
employment. We think this is the most by a qualified medical or mental health readiness assistance alone, an activity
common-sense way to bring meaning to professional. We retained the general that can count for only six weeks in a
the 12 distinct work components. framework of the definition in the final fiscal year (or 12 weeks, for qualifying
Regarding the location of training, we rule, but deleted the requirement that an States). They said that these barriers to
would like to emphasize that paid individual be ‘‘otherwise employable’’ work are prevalent among the TANF
training, whether provided off-site or at because the term was confusing and population and that States need more
the work site, fits the definition of OJT. raised concerns that it could potentially time to address them than the
Comment: Several commenters deny treatment to those who have a durational limits allow. A number of
recommended expanding the definition disability or face multiple barriers to commenters recommended that we
of OJT to include training for employment. We also deleted the term allow these activities to count under
prospective employees in addition to ‘‘certified’’ because it too created some community service, job skills training
paid employees. confusion. The final rule requires that directly related to employment, or
Response: We have not included there must be a documented need for education directly related to
training for prospective employees treatment or therapy determined employment.
under OJT because they are not yet ‘‘on- necessary by a qualified medical, Response: Under the final rule, we
the-job.’’ Instead, such training could substance abuse, or mental health generally limit the counting of
count under other work activities, professional. substance abuse treatment, mental
including vocational educational The preamble to this section of the health treatment, and rehabilitation
training or job skills training directly interim final rule also defined a ‘‘week’’ activities to the job search and job
related to employment, depending on for purposes of counting no more than readiness assistance activity. In defining
the nature of the training. six weeks per fiscal year (or 12 weeks, work activities, we tried to determine
Comment: Several commenters for qualifying States) of job search and whether such services appropriately fit
recommended including barrier-removal job readiness assistance, no more than in any work component. The statute
activities in OJT if integrated into the four of which may be consecutive. We does not specifically name substance
program. explained that the most commonly abuse treatment, mental health
Response: We fully support the use of understood and simplest way to answer treatment, and rehabilitation activities
barrier-removal activities for individuals this question was to use the ordinary as work activities or even otherwise
who need these services. States may definition of a week: seven consecutive refer to these services. Because these are
generally include such services as part days, regardless of which day activities designed to make somebody
of a job search and job readiness participation starts. We received many work-ready, we count them as job
readiness activities. We realize this States could use it to deny such domestic violence often require job
means that counting participation in treatment to those who have a disability readiness activities akin to
these activities is limited to six weeks or face multiple barriers to employment. rehabilitation activities to transition to
(or 12 weeks, for qualifying States) in The commenters noted that such self-sufficiency, citing the following
the preceding 12-month period, of individuals may need a broad range of examples of domestic violence
which no more than four weeks may be services beyond job search and job resolution activities: ‘‘having to relocate
consecutive, but this was the only readiness, such as subsidized due to the violence, apply for court
category where it made sense to include employment or vocational educational orders of protection, attend court
them. However, if a portion of substance rehabilitation, before they are hearings, address children’s needs for
abuse treatment, mental health employable. One commenter suggested trauma counseling or other supports,
treatment, or rehabilitation service that individuals who are not ‘‘otherwise attend counseling and support groups at
meets a common-sense definition of employable’’ should be excluded from a domestic violence program, meet with
another work activity, then the hours of the definition of a ‘‘work-eligible case managers at domestic violence
participation in that activity may count individual.’’ Some commenters also programs, etc.’’ One commenter
under the appropriate work category, claimed that the determination of who explained that these were important
such as work experience. In addition, if would be employable and who would activities that were apparently
hours in unsubsidized, subsidized not would create an added consciously omitted from the interim
private sector, and subsidized public administrative burden. Finally, they final rule. Another recommended
sector employment include treatment or noted that job search and job readiness allowing a certified domestic violence
rehabilitation services, a State may assistance is already limited to six professional to certify the need for such
count those paid hours under that work weeks per fiscal year and that this activities. A number of commenters
category. language was more restrictive than indicated that counting domestic
Because counting participation in job needed and could discourage States violence resolution activities would
search and job readiness assistance is from providing these kinds of services address a problem noted in the
time-limited by statute, we caution to individuals facing barriers to work. preamble to the interim final rule,
States to assess carefully the use of Response: We think the commenters notably the concern that ‘‘States have
treatment, counseling, and raised reasonable concerns. We never been less effective in placing clients
rehabilitation activities so that they intended the phrase ‘‘otherwise with multiple barriers in work,
count participation in these activities employable’’ to exclude individuals including * * * those subject to
only when they are needed to prepare who need more than one form of service domestic violence.’’ They contended
recipients for work. or training before they could become that the limitations of job search and job
Comment: Several commenters employed from counting via readiness assistance ‘‘exacerbate the
objected to the requirement that a participation in mental health or difficulty victims have in participating
qualified medical or mental health substance abuse treatment or and advancing towards financial
professional must determine when rehabilitation activities. Our intention stability.’’
treatment or therapy is necessary. One was to ensure that the necessary Response: We fully support the efforts
commenter maintained that it could services that work-ready individuals of States to identify victims of domestic
discourage some individuals from may require were delivered in a logical violence and to assist them in accessing
acknowledging the presence of such and sequential fashion. Too frequently, appropriate services to abate ongoing
barriers and delay or prevent the State an applicant or new recipient is violence, to recover from physical and
from addressing them. In addition, the automatically assigned to job search and emotional trauma, and to help children
commenter thought that the certification job readiness assistance, regardless of cope with the effects of domestic
process would pose an administrative the needs identified in the client’s violence. In the original TANF rule, all
burden for the States. initial assessment or in the individual of Part 260, Subpart B was devoted to
Response: Substance abuse treatment, responsibility plan. Because the the special provisions for victims of
mental health treatment, and counting of this activity is time-limited domestic violence. Those rules are
rehabilitation activities are important by statute, we wanted to ensure that unchanged and continue to offer the
activities that can help individuals such services were available and same protections they have since their
overcome serious barriers to appropriately provided at the time they promulgation. The interim final rule did
employment. We eliminated the would do the most good in preparing for not make modifications to that part of
requirement for a ‘‘certification’’ but we and finding work for participants. the regulation, in part because it was
believe that States must document the However, we agree that this phrase may outside the scope of our interim final
need for such treatment or therapy by a be confusing or could be misconstrued. rule authority, but also because we
qualified medical, substance abuse, or Thus, we have deleted it from the final stand by those protections. We continue
mental health professional to ensure rule; however, we still encourage States to encourage States to adopt the Family
that a proper diagnosis is made and an to develop and deliver services based on Violence Option (FVO), to implement
effective remedy is prescribed. the individual needs of clients, rather comprehensive strategies to identify and
than in automatic sequential steps. serve domestic violence victims, and to
Otherwise Employable
grant federally recognized good cause
Comment: Several commenters Domestic Violence Activities
domestic violence waivers where
recommended that substance abuse Comment: Some commenters victims need them.
treatment, mental health treatment, and recommended that we expand the Many domestic violence resolution
rehabilitation activities should not be definition of job search and job activities should already meet the
limited to those who are ‘‘otherwise readiness assistance to include definition of job search and job
employable.’’ They suggested that such participation in domestic violence readiness assistance because they
a limitation may be a violation of the resolution activities. One commenter accomplish the very goal of that work
Americans with Disabilities Act of 1990 suggested that we should classify such component: To help individuals go to
(ADA) and Section 504 of the activities as ‘‘rehabilitation activities.’’ work. Any domestic violence service
Rehabilitation Act of 1973 because The commenter noted that victims of that directly relates to preparing for
employment could be considered a job and identify victims of domestic housing might be a job readiness
readiness activity. A State should violence, refer such individuals to activity.
describe the activities it will offer in its services and, if needed, waive Response: We appreciate the added
Work Verification Plan and explain how participation and other program challenges that homeless individuals
it prepares someone for employment. If requirements for as long as necessary to face in entering and participating in the
the State provides domestic violence escape domestic violence. However, in workforce. We encourage States to
services as ‘‘rehabilitation activities,’’ providing this option to States, Congress develop strategies that best meet the
they should be included in a service did not remove such families from the needs of their various client
plan developed by a trained individual denominator of the participation rate populations, including the homeless.
and must be designed to lead to work. during the period of the domestic Although a person with stable housing
We note that few States counted violence waiver. We believe the original may have an easier time finding a job
domestic violence resolution activities rules concerning victims of domestic and performing well on the job, the act
under the original rules, despite the violence explained above ensure of looking for a home is not an
flexibility they had to do so. services and waivers for victims and employment activity. A job search and
In addition, as we noted in the cross- provide necessary ‘‘reasonable cause’’ job readiness assistance activity must
cutting issues section of this preamble, reduction or elimination of penalties for have a direct connection to improving
existing provisions in the law address States. employability or finding employment.
work participation rate issues for States Comment: One commenter suggested
dealing with victims of domestic Other Activities that we allow travel time required to
violence. In particular, section 402(a)(7) Comment: Some commenters complete job search activities to count.
of the Social Security Act and the rules recommended expanding the definition Travel is an integral part of job search,
at Part 260, Subpart B allow States to of job readiness to include activities the commenter explained, as clients go
grant good cause domestic violence such as English as a Second Language from one interview to another,
waivers to victims of domestic violence. (ESL) and remedial education— especially in large metropolitan or rural
States have broad flexibility to activities that the preamble to the areas.
determine which program requirements interim final rule indicated would not Response: A State may count travel
to waive and for how long. Although be countable. Other commenters time between interviews as part of a job
these families remain in the work suggested new activities, such as search and job readiness assistance
participation rate calculation, there may behavioral health services and parenting activity, but not the travel time to the
be some activities that meet one of the skills training. first job search interview or the time
work activity definitions that would Response: As we indicated in the spent returning home after the last one.
make them countable toward the preamble to the interim final rule, only We make this distinction so that it is
participation rate. If a State fails to meet programs that involve seeking and consistent with the treatment of other
a work participation rate, we will preparing for work can meet the work activities and analogous to the
determine that it had reasonable cause definition of job search and job work world, since most employees
if the State can demonstrate that its readiness assistance. Although some of receive no pay for the time it takes them
failure was due to granting federally the activities commenters recommended to commute to and from their jobs.
recognized good cause domestic
are valuable and may be medically Using Job Interviews as Proxy for Hours
violence waivers. As a matter of course,
appropriate, they do not constitute work
when we determine the amount of a Comment: Several commenters urged
or direct preparation for work. Some
penalty for failure to meet the work allowing States to use a job application
activities meet the definition of one of
participation rate requirements, we as a proxy for a standard set of hours of
the other 11 work activities. For
recalculate the work participation rate participation, e.g., completing one
example, ESL would more closely fit the
taking out any families in which application or going on one interview
definition of education directly related
individuals received a federally would constitute two hours of
to employment and should be counted
recognized good cause domestic participation. They contended that this
under that activity.
violence waiver of work requirements. approach is easier to administer and
This may result in no penalty or a Comment: One commenter expressed more consistent with existing State
reduction in the penalty associated with appreciation for ‘‘the ability to count the practice.
failure to meet the work participation time spent in a substance abuse Response: While we sympathize with
rate. Please refer to § 261.51 for more treatment facility or halfway house the commenters’’ desire to minimize
information about the formula for doing work activities such as preparing administrative burdens, we believe the
calculating the work participation rate meals, housecleaning, or scheduling most effective welfare-to-work programs
penalty. group activities.’’ The commenter incorporate close supervision and
Comment: One commenter asserted suggested extending this to ‘‘persons careful monitoring. This allows program
that the interim final rule conflicted living in supported residential facilities administrators to track actual hours.
with the Family Violence Option in for both mental health and domestic Thus, we explicitly require States to
Federal law, which provides for waivers violence reasons.’’ report the actual hours of participation
of requirements that would place Response: We do not distinguish for each work activity. The rule does not
victims of domestic violence at between countable work activities based allow a State to report estimated hours
increased risk. The commenter added, on whether an individual lives in a of participation based on the number of
‘‘As those situations are going to have to residential facility or not. As long as the job search contacts an individual makes.
be determined on a case-by-case basis, activity fits within an approved
the limited time for barrier removal definition, it can count for participation Four-, Six-, and 12-Week Limits
activities is inflexible and should not rate purposes. Comment: Several commenters
apply to barrier removal for family Comment: Several commenters suggested eliminating the six-week and
violence victims.’’ indicated that six weeks may not be other durational limits on job search
Response: As the commenter noted, a long enough for a homeless person to and job readiness assistance because six
State that elects the FVO must screen find a job, implying that looking for weeks is not sufficient to address the
barriers faced by some recipients. Some Converting Weeks to Hours for the Six- families that have been subject to a
commenters suggested limiting such Week (or 12-Week) Limit work-related sanction for up to three
extensions to those with short-term Comment: Several commenters months in ‘‘the preceding 12-month
disabilities that need more than six contended that the definition of a week period.’’ Similarly, this same time frame
weeks of treatment. in the interim final rule was too rigid. is used for the ‘‘excused absence’’
It specified that even one hour of policy.
Response: The six-week and other Defining a week in this way allows
durational limitations are statutory and participation in job search and job
readiness assistance triggered a week for States to provide job search and job
cannot be changed through regulation. readiness assistance activities
the six-week (or 12-week) limit on the
Comment: Several commenters activity. They suggested defining a week incrementally and stretched over an
recommended not counting entire year or in six actual weeks,
in terms of countable hours for job
participation in job search and job depending upon how the State chooses
search and job readiness assistance, that
readiness activities against the various to structure its particular work program
is, an hourly equivalent of six weeks.
durational limits under certain for an individual. Defining a week in
For example, one commenter
circumstances, including situations in this manner is consistent with
recommended that we define six weeks
which the participant does not have Congressional intent because it provides
as 120 hours for a single custodial
enough hours to count in the work an overall cap on the amount of job
parent with a child under six years of
participation rate or has enough hours search and job readiness assistance that
age and 180 hours for all other work-
States can count as work participation,
to count in the rate without counting the eligible individuals. This
while still giving States the ability to
hours in job search and job readiness recommendation was based on the fact provide recipients with meaningful job
assistance. Some commenters noted that that such families need an average of 20 search and job readiness assistance
States could simply fail to report such and 30 hours, respectively, to count activities.
hours so as to avoid triggering the toward the overall work participation
durational limits or report them under rate. The commenters asserted that an Counting Sporadic/Episodic Periods of
the category ‘‘Other Work Activities’’ on hourly conversion would give States Job Search and Job Readiness Assistance
the TANF and SSP-MOE Data Reports, more flexibility to structure work Comment: Some commenters objected
which reflects the hours of participation activities to meet the needs of the to counting limited periods of
but does not apply them in determining participants. participation in job search and job
the work participation rates or the Response: In defining work activities readiness assistance as a full week of
and related terms, we had to balance participation in the activity. They
durational limits. The commenters
legitimate practical concerns with contended that this would discourage
noted, however, that this would
statutory language. The statute limits job States from engaging individuals in this
understate their true level of search and job readiness assistance to
participation and could be construed as activity or sending them on job
six weeks (or, under certain conditions, interviews. They suggested giving States
violating the ‘‘complete and accurate’’ 12 weeks), with no more than four flexibility to integrate short periods of
data reporting standard. Instead, they consecutive weeks. These limitations participation in this activity with other
recommended allowing States to submit were specifically included, in large part countable activities. They noted that
this information, but not to count because, under the former JOBS even a single hour of job search reported
participation if it were not needed to program, unstructured and ongoing job in a week would ‘‘constitute a full week
meet the work participation rate. search was the primary or only activity for purposes of the limitation [on
Response: We understand the for many participants. We share the counting job search and job readiness
commenters’’ concerns regarding the commenters’’ interest in increasing State assistance].’’ They maintained, ‘‘The
durational limits on job search and job flexibility and have redefined a ‘‘week’’ statutory time limit on these activities
readiness assistance, but these limits are of job search and job readiness was designed to prevent clients from
set forth in the statute and we do not assistance for the six-week (or 12-week) being left to languish indefinitely in
have the legal authority to ignore hours limit based on the average number of unproductive job search, not to create
of participation reported under this hours required for an individual’s barriers to helping recipients move into
activity. We strongly encourage States to family to count in the overall work unsubsidized employment after
participation rate. For this purpose, one participating in other services.’’ Several
report hours of job search and job
week equals 20 hours for a work-eligible commenters suggested alternative
readiness assistance that they do not
individual who is a single custodial methods of counting job search and job
wish to count toward the participation
parent with a child under six years of readiness assistance. One commenter
rate (and thus count against the various age and equals 30 hours for all other recommended excluding ‘‘weeks in
limits that apply to that activity) under work-eligible individuals. Thus, six which less than half of the hours of
the category ‘‘Other Work Activities’’ on weeks of job search and job readiness countable participation are from job
their data reports, rather than to fail to assistance equates to 120 hours for the search and job readiness assistance.’’
report them at all because using the first group and 180 hours for all others. Some commenters used terms like
‘‘Other’’ category gives better For those months in which a State can ‘‘significant majority’’ to refer to the
information on the overall engagement count 12 weeks of this activity, these hours needed to constitute the primary
levels of individuals, even though those limits are 240 hours and 360 hours, activity.
hours do not contribute to State respectively. To ensure consistency Response: We understand the concern
achievement in the work participation with other provisions in this rule, we that an individual participating for one
rates. However, we do not consider have modified the requirements under hour in job search and job readiness
either using the category ‘‘Other Work § 261.34 to make these limits apply to assistance could use up an entire week
Activities’’ or failing to report such the preceding 12-month period, rather of this limited activity. By defining six
hours at all as a violation of the than each fiscal year. For example, the weeks as 120 hours for a single
requirement for complete and accurate statute allows States to disregard from custodial parent of a child under age six
data. the work participation rate calculation or 180 hours for all other work-eligible
individuals (and 12 weeks as 240 hours We encourage States to report hours of the rule permits for the total limitation
or 360 hours, respectively) States can participation that they do not wish to on job search and job readiness
now engage individuals for limited have counted against the durational assistance, a State could meet this limit
periods of time without using a entire limits under the category ‘‘Other Work while counting hours over the course of
week for purposes of the six-or 12-week Activities’’ on their TANF Data and multiple calendar weeks. However,
limit. This approach provides sufficient SSP-MOE Data Reports, which reflects because the four-week limit is
flexibility for States to structure their the hours of participation but does not specifically a ‘‘consecutive’’ week
job search and job readiness assistance apply them in determining the work restriction, we think an hourly
activities and obviates the need for participation rates. This would also conversion in this instance would not
alternative methods, such as excluding apply to hours that are beyond the meet the very clear bounds set by
weeks in which a minority of hours of TANF statutory requirements to count Congress. If we used an hourly accrual
participation come from job search and toward the participation rates. In fact, system here, it might take many
job readiness assistance activities. under the final rule, a State should calendar weeks to reach 80 or 120 hours
Moreover, States continue to have the report only those hours of job search and they would in no way be
flexibility to conserve these weeks by and job readiness assistance that are ‘‘consecutive.’’ Thus, we think it is
reporting sporadic hours under ‘‘Other needed to meet the work requirements, reasonable to use the more rigorous
Work Activities’’ on the TANF Data and because reporting ‘‘extra’’ hours would
definition of a week in this context to
SSP-MOE Data Reports (though these not help a State meet the rate and would
meet the legislative requirement but
hours would not count toward the draw down the time-limited hours for
incorporate overall flexibility in
participation rates) or to count such the six-week (or 12-week) limit. In
hours under our excused absence policy contrast, under the interim final rule, it counting job search and job readiness
as part of another countable activity. did not matter whether a State reported assistance hours.
Please refer to § 261.60 for more detail one hour or 40 hours for an individual— We would also like to address the
about excused absences. either would trigger a week toward the concern that the limit of counting no
durational limits. We have written the more than four consecutive weeks of
Flexibility in Counting Hours of
rule this way to give States the most participation in this activity would lead
Participation
flexibility possible while maintaining States to disrupt treatment regimens for
Comment: Several commenters the spirit of the law. individuals who need short periods of
suggested giving States the flexibility to We would also like to point out that substance abuse treatment, mental
count hours of participation in job States have the additional flexibility to health treatment, or rehabilitation
search and job readiness assistance as a count short absences from various activities each week. We stress that this
non-core activity without triggering any activities to participate in a job search limitation applies to what a State may
of the durational limitations on this activity under the excused absence count for participation purposes, not on
activity, if the individual meets the core policy (described in § 261.60(b) of this what an individual can or should do;
hours participation requirement through chapter). thus, the law does not require an
some other activity. The commenters individual to take a week’s break from
explained that this would not Defining Four Consecutive Weeks
an activity, but does constrain what the
undermine the core activity Comment: As with the six-week (or
State may report for that week. The
requirement, but would allow some 12-week) limit, some commenters
requirements and expectations for each
individuals to benefit from additional suggested converting the four-week
limit to an hourly equivalent. family should be set by the State taking
time spent in a job search and job
Response: In the final rule, we have into consideration the needs of the
readiness assistance activity. Also,
modified this definition. For the six- family, obligations under the ADA and
several commenters suggested that, if
week (or 12-week) limit on counting Section 504 of the Rehabilitation Act of
we use an hourly equivalent, then any
hours that exceed the 20 or 30 hours per participation in job search and job 1973, and program goals, as opposed to
week required to meet the participation readiness assistance, we define a week what counts for participation rate
rate should not count against the hourly as 20 hours for a work-eligible purposes. While we cannot remove this
limitation on this activity. individual who is a single custodial statutory limit, we suggest that States
Response: We do not have the parent of a child under six years of age have several options in how to treat
statutory authority to disregard hours of and as 30 hours for all other work- such situations. We urge States to
participation in job search and job eligible individuals. However, for the consider these options carefully to take
readiness assistance if the hours are limit of no more than four consecutive full advantage of the flexibility in the
counted toward the calculation of the weeks of job search and job readiness law and our final rule in this area. If an
work participation rate. Moreover, ‘‘core assistance we have retained the individual has sufficient hours from
activity’’ is simply a term we use to definition in the interim final rule: other activities or other weeks in the
indicate that hours of participation in seven consecutive days. In other words, month, the State will be able to count
that activity can count toward the first any hours of participation in job search that individual’s family in the
20 hours of participation; an activity and job readiness assistance during the participation rate without worrying
does not become ‘‘non-core’’ once an course of a seven-day period triggers a about the fifth consecutive week in
individual meets the core requirement week for the four-week limit. Once an treatment. A State could consider using
and durational limits do not cease to individual has four consecutive weeks the excused absence policy, which,
apply to them. Of course, once a family of participation, that individual’s under the final rule is also available as
meets the minimum hours required to participation in job search and job an hourly equivalent, to accommodate
count in the work participation rate, a readiness assistance may not count for short periods of treatment. In addition,
State may assign an individual to one week, i.e., seven consecutive days. given that the overall work participation
whatever activity it chooses, including In order to bring meaning to the rate is never more than 50 percent of the
job search and job readiness assistance. statutory language, we had to interpret caseload and likely less, we do not
However, any hours reported under this ‘‘four consecutive weeks’’ in this anticipate a significant impact on the
activity count toward the six-week limit. manner. Under the hourly conversion ability of States to meet the work
participation rate because of the four readiness assistance per fiscal year due employable than when he or she started
consecutive weeks limitation. to high unemployment or by qualifying in community service.
as a ‘‘needy State.’’ Several commenters We made a technical change to the
Three or Four Days as a Week of wording of the definition in the final
suggested that HHS clarify that a State
Participation rule to clarify that all work-eligible
that qualifies in one month qualifies for
Comment: Several commenters the extended counting of job search and individuals can count for participation
contended that the statute requires that job readiness assistance for the entire in this activity. The language in the
participation in job search and job year. interim final rule limited it to TANF
readiness assistance should not be Response: A State with an recipients only.
considered a week unless it is for more unemployment rate that is at least 50 Comment: The preamble of the
than four days in a seven-day period. percent greater than the national rate or interim final rule described the purpose
One commenter explained that section that qualifies as a ‘‘needy State’’ may of community service as improving the
407(c)(A)(2)(ii) allows a State to count, count up to 12 weeks of participation in employability ‘‘of recipients not
not more than once per individual, job search and job readiness assistance otherwise able to obtain employment.’’
participation in job search and job in the preceding 12-month period. Prior Several commenters asked whether this
readiness activities ‘‘for 3 or 4 days to publication of this final rule, the precluded a State from counting a
during a week’’ as having participated regulation applied the 6- or 12-week participant who combined paid
for the week. The commenter contended limit on a fiscal year basis, but under employment with community service.
that the ‘‘clear implication’’ of this was this final rule we now use the preceding Response: The preamble was not
that an individual would have to 12-month period as the basis for this meant to preclude States from using
participate for more than four days durational limit to make it more community service for those who are
during a seven-day period to count as a consistent with the treatment of other employed. We recognize that there may
week. work participation rate related be circumstances in which an
Response: There are several possible provisions. Program Instruction TANF– individual’s employment is not
interpretations of the statute’s reference ACF–PI–2006–04 explains the criteria to sufficient to count for participation and
to a week. In the interim final rule, we qualify for 12 weeks, how a State finds a State would need to place such an
defined a week as seven consecutive out if it does, and in which months it individual in another work activity to
days. We disagree with the commenter’s can count extended participation in job count the family for that month. In such
interpretation that the statute requires search and job readiness assistance. The a circumstance, community service
all other weeks of job search and job Program Instruction is available at: could be appropriate because sufficient
readiness to consist of more than four http://www.acf.hhs.gov/programs/ofa/ employment may not be available for
days of participation in the activity. pi-ofa/pi200604.htm. full-time work.
However, these comments led us to Comment: One commenter asked for Comment: One commenter asked us
reexamine the meaning of a week under clarification regarding whether a State to clarify that the term ‘‘program’’ does
the various limitations of this activity, actually had to access the Contingency not preclude self-initiated community
including the ‘‘3 or 4 day’’ provision. Fund before counting up to 12 weeks of service activities.
We have concluded that this provision participation in job search and job Response: Self-initiated community
allows a State to apply the average readiness assistance. service activities can count as long as
hours that an individual participates Response: No, a State does not have they are approved by the State,
during three or four days to the to receive contingency funds to count 12 described in the Work Verification Plan,
remaining days in the week. In this weeks of participation. If a State and meet the two key elements of the
context, we consider a week to be five qualifies to receive contingency funds definition, i.e., that they provide a direct
days rather than seven, because the for a month, it may also count 12 weeks benefit to the community and improve
standard work week is a five-day week. of job search and job readiness the employability of the participant.
We used a seven-day standard in other assistance for that month. Please refer to Comment: Several commenters
contexts to account for the fact that Program Instruction TANF–ACF–PI– recommended that we expand the
typical week includes five working days 2006–04 available at: http:// definition of community service to
and two weekend days. www.acf.hhs.gov/programs/ofa/pi-ofa/ include barrier removal activities such
To illustrate this policy, consider the pi200604.htm. as substance abuse treatment, mental
following example. If an individual health treatment, rehabilitation
Section 261.2(h) Community Service activities, and domestic violence
participated an average of five hours per
Programs counseling and related services.
day in job search and job readiness
assistance for three days in a week, a In the interim final rule, we defined Otherwise, they insisted, States will
State could assume that such individual community service programs as discontinue providing these services.
participated the same five hours the structured programs in which TANF These commenters contended that
remaining two days of that week and recipients perform work for the direct counting these activities under job
thus, a State could assume and count benefit of the community under the search and job readiness assistance is
total participation of 25 hours in this auspices of public or nonprofit too restrictive and does not permit
activity for that week. In our example, organizations. We limited community States to provide these services in a
this would also use up 25 hours of the service programs to projects that serve a meaningful way.
client’s hourly limitation under the six- useful community purpose and those Response: Community service
week limit for job search and job that are designed to improve the activities must meet the two key
readiness assistance. employability of recipients. These two elements of the activity’s definition, i.e.,
criteria were and continue to be that they provide a direct benefit to the
Qualifying for 12 Weeks important because we do not want community and improve the
Comment: Several commenters asked someone to reach the time limit and employability of the participant.
for clarification regarding how a State discover that the family is no longer Generally, they would not include
can qualify to count up to 12 weeks of eligible for a cash benefit under the activities that primarily benefit a family
participation in job search and job TANF program but the adult is no more or the individual participant, such as
substance abuse treatment, mental to the Wage and Hour Division of the requirement, but that is because the
health and rehabilitation activities, and U.S. Department of Labor at 1–866–4– primary purpose of the other activities
family violence counseling. While these USWAGE, TTY 1–877–889–5627 or the is to help individuals move toward self-
activities are important and beneficial, following Web site: http://www.dol.gov/ sufficiency. Although that is also an
they are not primarily directed to esa/whd/flsa/index.htm. objective of this activity, we give
benefiting the greater community. Comment: Several commenters meaning to the term ‘‘community
Moreover, we believe that States can maintained that ‘‘caring for a disabled service.’’ The DRA directed the
provide treatment services in family member’’ should be considered Secretary of Health and Human Services
meaningful ways under our rules. We community service, if it includes to define work activities, suggesting
refer readers to the preamble discussion activities designed to improve the that, while Congress did not have a
of the definition of job search and job employability of participants. They specific definition in mind, it deferred
readiness assistance. contended that, in some cases, caring for to the Department’s judgment.
Comment: One commenter a disabled family member could prepare Moreover, we believe all 12 TANF
recommended that we count a range of individuals for jobs or ‘‘home health activities should have structure and
non-traditional work activities as care certification or nursing credits supervision, regardless of whether the
community service in remote areas with through partnerships with community term ‘‘program’’ is used in the name of
high unemployment. This would colleges.’’ In such circumstances, the the activity.
include traditional subsistence hunting commenter recommended that we allow Comment: Several commenters
and fishing activities, as well as other States to count the individual in the questioned the need for community
culturally relevant activities. The numerator and the denominator. This, service to improve the employability of
commenter explained that hunting and they suggested, would make the policy participants. One commenter found that
fishing affect the community because, similar to the treatment of parents the interim final rule’s definitions of
they emphasize, ‘‘a significant element receiving Supplemental Security work experience and community service
of cultural and spiritual values that Income (SSI) benefits in our definition are substantially similar and violate the
emphasize collective efforts in of a work-eligible individual. Another principle of ‘‘mutually exclusive’’
harvesting and sharing of the harvest commenter added that counting parents activities. The commenter
throughout the community.’’ The caring for a disabled family member as recommended making a distinction
commenter also noted that these community service reduces public costs between these activities by removing the
activities ‘‘promote self-sufficiency by by keeping some individuals out of a requirement that community service be
reducing reliance on non-traditional nursing home. designed to promote employability.
foods that are imported at high cost. Response: Caring for a disabled family Response: Under our definitions, the
* * *’’ The commenter added that these member cannot count as a community principal distinction between work
and other activities ‘‘strengthen and service program, even if it improves the experience and community service
reinforce cultural and community employability of the caregiver, because programs is that the latter activity must
values that, in the long term, benefit the activity does not provide a direct serve a useful community purpose. We
individuals and families.’’ benefit to the community. However, to believe that participation in a
Response: Various non-traditional the extent that the activity is part of a community service program should
activities may count if they meet the certification or degree program, it could improve the employability of recipients
definition of one of TANF’s 12 likely count under another activity, to prevent an individual from reaching
activities. It is possible, for example, such as vocational educational training the time limit without becoming more
that some of the activities described or job skills training directly related to employable than when he or she started
would meet the definition of employment. We have no data on in that program. We have therefore
community service programs, if the whether counting caring for a disabled retained this feature of the definition in
items produced are shared by the family member as a community service the final rule.
community and collected as part of a activity would reduce some public Comment: One commenter objected to
structured and supervised activity. costs, but we note that the policy in the the ‘‘daily supervision’’ requirement for
Although we sympathize with the final rule allowing a State to exclude TANF work activities with respect to
commenter about difficulties presented families in which a parent is caring for community service, arguing that some
by high unemployment and remoteness, a disabled family member from the community service activities are
we do not have the authority to add new denominator of the work participation ‘‘intrinsically difficult to supervise,’’
activities. And, as we explained earlier rate calculation would likely have a such as Big Brother/Big Sister programs
in the preamble, the statute does not similar effect on public costs. or visiting the elderly.
make any allowance for such factors, Comment: One commenter questioned Response: In response to comments,
except that it limits the maximum the requirement that community service we have revised the regulatory language
overall work participation rate to 50 must involve work for the direct benefit relating to daily supervision in the final
percent. Whereas TANF’s predecessor of the community. The commenter rule. As described in the preamble to
program, AFDC, allowed States to added, ‘‘No other TANF activity has § 261.2, ‘‘Daily supervision means that a
exempt individuals living in remote such a requirement.’’ The commenter responsible party has daily
areas, the TANF law did not continue disagreed with our interpretation that responsibility for oversight of the
this exemption. the term ‘‘program’’ following the listing individual’s participation, not
Comment: Several commenters asked of community service in the statute necessarily daily, in-person contact with
us to clarify whether or not all meant that the activity should involve the participant.’’ Thus, many organized
community service activities are subject structure and supervision. community service programs could
to the FLSA. Response: We adopted what we meet this criterion. However, all
Response: The determination of believe is a common-sense definition community service programs must be
whether or not the FLSA applies to an that limits community service programs structured programs that provide a
activity is a decision for the Department to projects that serve a useful direct benefit to the community and
of Labor. We recommend that readers community purpose. We agree that no improve the employability of the
direct any questions regarding the FLSA other TANF activity has such a participant. It is unclear whether the
programs the commenter describes meet baccalaureate or advanced degree, educational training for any individual
all of these criteria. which the final rule permits. toward the work participation rate.
Comment: One commenter said, Baccalaureate Degrees Education leading to a baccalaureate or
‘‘Very few community service sites are Comment: Several commenters advanced degree also counts under job
equipped to handle either large numbers objected to the definition of vocational skills training directly related to
of volunteers for the 20 or 30 hours educational training because it employment (a non-core activity), as
required for a primary activity or in our specifically excluded education directed long as it is directly related to a specific
rural areas, to provide the supervision.’’ at receiving a baccalaureate or advanced job or occupation.
Response: Many community service degree. They recommended striking the Comment: Several commenters
providers have programs that meet our phrase ‘‘requiring training other than a thought that the preamble to the interim
definition of community service for the baccalaureate or advanced degree.’’ final rule was inaccurate when it stated,
number of hours required to satisfy the They explained that people with ‘‘the TANF program was not intended to
work participation requirements. If an baccalaureate degrees, on average, earn be a college scholarship program for
individual’s hours fall short of the significantly more than those with a postsecondary education.’’ The
minimum hours needed, a State should high school diploma. In addition, they commenters noted that TANF provided
be prepared to find time in another noted that the number of individuals broad flexibility in use of TANF funds,
activity to make up the shortfall. This is likely to be enrolled in such programs including funds for higher education.
not different from past TANF policy. would be small and States should Response: We agree that expenditures
therefore have the flexibility to for higher education are allowable uses
Section 261.2(i) Vocational
determine whether or not to count them. of funds, even under the interim final
Educational Training
Others suggested that we make an rule. In addition, under the final rule,
In the interim final rule, we defined exception to the restriction on counting participation in a baccalaureate or
vocational educational training (not to participation in a baccalaureate or advanced degree program can count
exceed 12 months with respect to any advanced degree program where the toward the work participation rate.
individual) as organized educational client is 12 months away from
programs that are directly related to the Remedial/ESL
completing such a degree because the
preparation of individuals for earnings gain from completing the Comment: Several commenters
employment in current or emerging degree would increase the chances of expressed support for the inclusion of
occupations requiring training other permanently leaving welfare. basic skills education as a component of
than a baccalaureate or advanced Response: We agree with the vocational educational training.
degree. commenters and have expanded the However, some expressed concern
definition of vocational educational because the preamble indicated that it
Postsecondary Education would count only if it were of ‘‘limited
training. In the interim final rule, we
Comment: Several commenters searched for other Federal definitions, duration.’’ These commenters noted that
recommended expanding the definition especially in the U.S. Department of participation in vocational educational
of vocational educational training to Education, of vocational education and training is, by definition, of limited
include postsecondary education. One related terms. In particular, we duration—12 months in a lifetime. They
commenter asked that we specify that examined the regulatory definition of also noted that some programs combine
an associate degree program is a vocational education governing the Carl basic skills education and vocational
countable vocational activity. D. Perkins Vocational and Applied training for the entire duration of the
Response: The definition of Technology Act (34 CFR 400.4(b)). That program. They recommended
vocational educational training in the definition provided for a range of eliminating the restriction related to the
interim final rule already permitted a educational and training programs duration of this component.
wide range of postsecondary preparing individuals for employment Response: We agree that there may be
educational activities, including ‘‘in current or emerging occupations circumstances in which some
programs that consist of both academic requiring other than a baccalaureate or individuals require basic skills
and vocational for-credit course work. advanced degree.’’ However, since the education as an ongoing and regular
Completion of these programs can publication of the interim final rule, this part of the vocational educational
provide an associate of arts (AA), terminology has changed. The Carl D. training activity. As a result of these
associate of science (AS), or associate of Perkins Career and Technical Education comments, we have reconsidered our
applied science (AAS) degree in fields Improvement Act of 2006 (Pub. L. 109– stance on the ‘‘limited duration’’
defined as vocational. Common fields of 270) was signed into law on August 12, requirement set forth in the preamble to
study include: business, computer and 2006. The new law changed the the interim final rule. Therefore, basic
information science, health-related definition of ‘‘vocational education,’’ skills education may count as vocational
professions, communication now called ‘‘career and technical educational training as long as it is a
technologies, personal services, education,’’ to eliminate the restriction necessary or regular part of the
protective services, construction, against participation in a baccalaureate, vocational educational training. Each
automotive technology, and master’s or doctoral degree program. State should describe in its Work
transportation. Associate degree In view of these changes and the Verification Plan how it integrates basic
programs can take two or more years to comments we received, we are skills education into its definition of
complete. Because they generally expanding the definition of vocational vocational educational training and how
combine coursework with actual work, educational training to include it will ensure that vocational training
some portion could count as vocational organized educational programs that remains the primary focus of the
educational training, while some could lead to a baccalaureate or advanced program.
count as on-the-job training (if paid) or degree. We continue to caution that, Comment: Some commenters asked
work experience (if unpaid). The only given the statutory 12-month limitation for clarification regarding whether ESL
type of postsecondary education that on participation in vocational could be integrated into vocational
was excluded in the interim final rule education, States can only count one educational training in the same way
was education directed at receiving a year of participation in vocational that ‘‘basic skills’’ training can be. They
explained that ESL may be a skills training directly related to triggering the 12-month lifetime limit on
prerequisite for employment and that it employment. participation in vocational educational
is especially important due to the Comment: Some commenters training. For older adults, pursuit of a
increase in the number of immigrants. suggested amending the definition of high school degree or GED would more
As with basic skills training, they vocational educational training to appropriately be classified as education
contended that there should be no limit include adult basic education and ESL directly related to employment.
on counting participation in this even if they do not prepare individuals Comment: Several commenters asked
activity, as long as the individual has for a specific job. They asserted that whether vocational rehabilitation
not exhausted the 12 months that this such basic skills are needed to compete activities were considered ‘‘vocational
activity can count in total. in the workplace and are crucial for educational training.’’
Response: As we noted in the making an individual more employable. Response: We would consider
response above with respect to basic For example, one commenter urged us vocational rehabilitation activities that
skills education, ESL can also be to count English language instruction as are organized educational programs
integrated within a vocational vocational educational training when an directly related to preparing individuals
educational training activity as long as individual needs such instruction to for employment in current or emerging
it is a necessary or regular part of the succeed in the workplace. Some occupations to be vocational
vocational educational training. The commenters indicated that this was educational training. Any vocational
State need not demonstrate that the especially important for refugees, noting rehabilitation activities that do not meet
training is of limited duration as long as that it is very difficult for refugees who these criteria might meet the definition
it integral to the vocational education, do not speak English to become for job search and job readiness
not a stand-alone program. Each State employed. assistance or job skills training directly
should describe in its Work Verification Response: We understand the related to employment and should
Plan how it integrates ESL or other commenters’ concerns, but we do not count under those activities, as
language instruction into its definition believe it would be appropriate to appropriate.
of vocational educational training and expand the definition of vocational
Other Training
how it will ensure that vocational educational training to allow these
training remains the primary focus of stand-alone activities. They may count In the preamble to the interim final
the program. For example, a vocational as either education directly related to rule, we asked for comments on how
educational training provider could employment or job skills training States currently implement their
provide a statement indicating that a directly related to employment. We vocational educational training
participant in an otherwise approved believe that Congress intended these programs and whether we should
vocational educational training activity activities to count as non-core activities. broaden the definition we used in the
requires such instruction to participate When Congress created TANF, it listed interim final rule. We noted that the
in the program and that such instruction 12 allowable work activities. Of these, current definition of vocational
is integrated into the activity. nine were what we refer to as ‘‘core educational training ‘‘could overlap
Comment: Some commenters activities’’ that count toward meeting with other TANF work activities that
suggested that we allow States to adopt the first 20 hours of a 30-hour average provide training, including on-the-job
a range of approaches to providing weekly requirement. The only training and job skills training.’’
vocational educational training educational activity among these was Comment: One commenter cautioned
programs, including programs that vocational educational training. Since us not to narrow the definition of
‘‘frontload’’ these activities for those neither Congress nor the U.S. vocational educational training just to
who are not ready for the vocationally- Department of Education included basic distinguish it from on-the-job training or
oriented training. They pointed out that education and ESL as part of its job skills training. The commenter
after a few months of intensive definition of vocational education, we pointed out, ‘‘it is easy to imagine the
instruction, participants can improve believe it is clear that these activities same training being provided under
their basic skills to take full advantage must be part of one of the three non-core vocational educational training as that
of a vocational educational training educational activities. provided by an employer through on-
program. Thus, they recommended that Comment: One commenter suggested the-job training or job skills training
we consider these activities to qualify if that we consider pursuit of a high directly related to employment,
they are part of a sequence of activities school diploma, such as GED testing, to particularly for lower-skilled TANF
leading to a vocational educational be vocational educational training. The participants.’’
training activity, even if the initial commenter noted that such Response: We agree and have not
period of participation involves no participation is consistent with the narrowed the definition. The allowable
vocationally-oriented training. definition of the activity in the interim overlap among various work activities
Response: We do not believe that a final rule, which defined this activity as can help States structure their programs
sequenced approach fits within a ‘‘organized educational programs that to maximize learning opportunities for
definition of vocational educational are directly related to the preparation of participants. In particular, many forms
training. Although basic skills education individuals for employment in current of vocational educational training may
and English language instruction may and emerging occupations * * *.’’ take two or more years to complete,
help prepare individuals for vocational Response: We do not agree that such beyond the 12-month lifetime limit
educational training, the programs must education should count as vocational under the program. By carefully
be provided in combination with educational training. Even when structuring participation, States can
vocational instruction. Otherwise, the vocational education is provided in high count participation under several of the
definition of this activity would school, minor parents attending high existing work activities. For example,
essentially permit any stand-alone school in a vocational education track obtaining a degree to become a licensed
educational activities to count in this count as participating in ‘‘satisfactory practical nurse usually takes about two
category. Stand-alone educational attendance in secondary school or in a years to complete and usually involves
activities may count as either education course of study leading to a certificate a combination of classroom instruction
directly related to employment or job of general equivalence.’’ This avoids and clinical activities. Clinical training
in a hospital or other setting could specific job, but rather to a broadly adapt to the changing demands of the
count as work experience or community defined job category. workplace. Job skills training can
service because if, in the course of their include customized training to meet the
12-Month Limit
training, individuals are providing a needs of a specific employer or it can be
service to the community through a Comment: One commenter suggested general training that prepares an
hospital or an elderly center, such that time spent in vocational individual for employment. This can
participation would meet the definition educational training should only count include literacy instruction or language
of those activities. If participants are against the 12-month limit ‘‘when hours instruction when such instruction is
paid, they might count under in this activity, either alone or in explicitly focused on skills needed for
unsubsidized employment or on-the-job combination with hours from other employment or combined in a unified
training. Once they have met the core activities, enable a recipient to meet the whole with job training.
activity requirement through these work rates. If an individual does not Comment: Several commenters
activities, additional classroom have the overall necessary hours to meet suggested that the interim final rule
instruction could be reported under job the rate, time spent in this activity defined this activity too narrowly by
skills training directly related to should not count against the 12-month excluding ‘‘barrier removal activities
employment. limit.’’ such as substance abuse counseling and
Response: The statute places a treatment, mental health services, and
Specific Occupation lifetime 12-month limit on participation other rehabilitative activities.’’ The
Comment: Several commenters did in vocational educational training. As commenters asserted that these
not believe we should limit the with durational limits for job search and activities should be considered like
definition of vocational educational job readiness assistance, we do not have other training activities because they are
training to ‘‘activities that give the statutory authority to disregard needed to prepare an individual for
individuals the knowledge and skills to hours of participation reported in this employment. One commenter
perform a specific occupation—as category from counting against the contended that because barrier removal
opposed to more generally preparing lifetime 12-month limit. We encourage activities were not explicitly excluded
them to become more employable in a States to include hours of work from the definition of job skills training
range of occupations.’’ The commenters participation in this category that do not directly related to employment, it is
contended that basic and remedial count toward the work participation within our authority to interpret this
education should count as vocational rates under the category ‘‘Other Work activity to include them.
educational training. Activities’’ on their TANF and SSP– Response: As we indicated in the
Response: Basic and remedial MOE Data Reports or to count such preamble to the interim final rule, we
education clearly fall under the category hours under our excused absence policy tried to look for appropriate categories
of education directly related to as part of another countable activity. for each activity. We explained that it
employment, and so cannot serve as a Please refer to § 261.60 for further would not be appropriate to include
stand-alone activity under vocational discussion of excused absences. barrier removal activities, such as
educational training. However, as we substance abuse counseling and
explained in the preamble to the interim Deeming treatment, mental health services, and
final rule, such education can count as Comment: Several commenters other rehabilitative activities under the
part of vocational educational training suggested that individuals who attend category of job skills training directly
as an embedded activity as long as it is vocational educational training related to employment. Under our
a necessary and regular part of the programs be ‘‘deemed’’ to meet the work definitions, barrier removal activities
program. rate as long as they are full-time are job readiness activities, not job skills
Comment: Several commenters students and are making satisfactory training directly related to employment.
contended that the description of progress. One commenter also suggested States continue to enjoy flexibility to
vocational educational training in the options for dealing with less than full- serve individuals, but in some cases are
preamble to the interim final rule time participation, including a limited in what they can count. We
unnecessarily limited it to specific proportional counting methodology. encourage States to work with
occupations. They maintained that this Response: The interim final rule made individuals with multiple barriers, but
was not good policy and that it was not explicit a long-standing ‘‘actual hours’’ they should keep in mind that the
consistent with the TANF statute, standard and we retain that policy in definition of job skills training focuses
noting that some activities in the statute the final rule. We do not deem full on education or training that is designed
included the phrase ‘‘directly related to participation simply because someone is specifically to help individuals move
employment,’’ but that vocational a full-time student and makes good or into employment.
educational training was not one of satisfactory progress. However, the final
them. They urged that, on this basis, we Section 261.2(k) Education Directly
rule allows States to count up to one
expand the definition to include Related to Employment, in the Case of
hour of unsupervised homework for
training and education activities that a Recipient Who Has Not Received a
each hour of classroom time. Thus, as a
were not related to a specific High School Diploma or a Certificate of
practical matter, many individuals who
occupation, but that improve High School Equivalency
attend school full-time would, in fact,
employability more generally. satisfy the work participation standards. In the interim final rule, we defined
Response: Our definition of education directly related to
vocational educational training was Section 261.2(j) Job Skills Training employment, in the case of a recipient
originally based on the Department of Directly Related to Employment who has not received a high school
Education’s description of the term. In the interim final rule, we defined diploma or a certificate of high school
This definition clearly related the term job skills training directly related to equivalency, as education related to a
to educational programs directly related employment as training or education for specific occupation, job, or job offer.
to employment in ‘‘current or emerging job skills required by an employer to This definition included courses
occupations.’’ However, this does not provide an individual with the ability to designed to provide the knowledge and
mean that the activity is limited to a obtain employment or to advance or skills for specific occupations or work
settings, but may also include adult only the verified and documented hours recipient of assistance could also
basic education and ESL. Where of classroom time. participate in this activity and have
required as a prerequisite for Response: States must report actual those hours count for participation rate
employment by employers or hours of participation. We have purposes.
occupations, this activity may also eliminated the requirement for ‘‘good or Comment: One commenter noted that
include education leading to a GED or satisfactory progress’’ as part of the with respect to ‘‘good or satisfactory
high school equivalency diploma. Federal definition of this work activity. progress’’ for this activity to count, the
We made a minor change to the We encourage States to monitor progress standard ‘‘must’’ include both a
wording of this definition in the final using both qualitative and quantitative qualitative and quantitative measure of
rule, adding the words ‘‘work-eligible’’ measures, but do not impose a specific progress.
before ‘‘individual.’’ We made this standard. Please refer to the cross- Response: We have eliminated the
change both for consistency with other cutting issues related to the definitions requirement for ‘‘good or satisfactory
definitions and to make clear that this at the beginning of this section of the progress’’ as part of the Federal
activity is allowable for any work- preamble for further discussion of this definition of this work activity. We
eligible individual. Although the issue. encourage States to monitor progress
statutory name of the activity refers to Comment: Several commenters using both qualitative and quantitative
a ‘‘recipient’’ who has not received a recommended allowing this activity to measures, but do not impose a specific
high school diploma or certificate of count for high school graduates or those standard. Please refer to the cross-
equivalency, we think that a work- with a certificate of high school cutting issues related to the definitions
eligible individual who is not a equivalency, but who score low on at the beginning of this section of the
recipient of assistance could also reading or math assessments. preamble for further discussion of this
participate in this activity and have Response: We do not have the issue.
those hours count for participation rate statutory authority to expand the scope
of this activity to include those with a Section 261.2(m) Providing Child Care
purposes. Services to an Individual Who Is
Comment: One commenter noted that high school degree or a certificate of
high school equivalency. Participating in a Community Service
the situation of immigrants and refugees
Program
who hold a high school diploma from Section 261.2(l) Satisfactory School
overseas but do not have an American In the interim final rule, we defined
Attendance at a Secondary School or in providing child care services to an
high school diploma or GED should a Course of Study Leading to a
warrant an exception to the requirement individual who is participating in a
Certificate of General Equivalence, in community service program as
that individuals not have these the Case of a Recipient Who Has Not
credentials as a prerequisite for providing child care to enable another
Completed Secondary School or
participating in the activity. The TANF recipient to participate in a
Received Such a Certificate
commenter explained, ‘‘These community service program. In the final
individuals may lack the skills and In the interim final rule, we defined rule, we have clarified that this is an
credentials employers require from this activity to mean regular attendance, unpaid activity and must be a structured
native high school graduates.’’ The in accordance with the requirements of program designed to improve the
commenter urged a clarification that the secondary school or course of study, employability of individuals who
such individuals could participate in at a secondary school or in a course of participate in it. Alternatively, if an
this activity and that such participation study leading to a certificate of general individual receives payment for
include English language instruction. equivalence, in the case of a recipient providing child care, the State should
Response: The statute limits who has not completed secondary report that individual’s hours as
participation in this activity to school or received such a certificate. unsubsidized employment.
individuals who have not received a The former is aimed primarily at minor Comment: One commenter
high school diploma or a certificate of parents still in high school, whereas the recommended counting providing child
high school equivalency. We recognize latter could apply to recipients of any care for a TANF recipient in community
that some individuals may have age. Unlike ‘‘education directly related service as extending to two-parent
received a high school diploma from to employment,’’ this activity is not families in which one parent stays home
other countries that may not be directly restricted to those for whom obtaining a with the children while the other
comparable with an American high GED is a prerequisite for employment. participates in community service. The
school diploma. Moreover, it would be However, it may not include other commenter stated that children that
difficult for TANF agencies to verify educational activities, such as adult have more time with their parents,
whether or not individuals have or have basic education or language instruction especially during their early years, have
not obtained degrees or credentials from unless they are linked to attending a better outcomes. This would also reduce
overseas. We therefore give States the secondary school or a GED program. public costs for child care and other
flexibility to determine on a case-by- As in education directly related to services.
case basis whether such individuals employment, we made a minor change Response: We agree that parental time
qualify for this activity. A State that to the wording of this definition in the with children is extremely important.
uses this option should describe in its final rule, replacing ‘‘recipient’’ with However, in a two-parent family, one
Work Verification Plan how it will make ‘‘work-eligible individual.’’ We made parent cannot count as participating by
such a determination. this change both for consistency with providing child care for his or her own
Comment: One commenter other definitions and to make clear that child while the other parent participates
recommended that we allow States to this activity is allowable for any work- in community service because the
deem individuals who make ‘‘good or eligible individual. Again, although the activity neither involves supervision nor
satisfactory progress’’ as having met statutory name of the activity refers to helps the parent providing child care
‘‘the minimum hours of independent a ‘‘recipient’’ who has not received a prepare for employment.
study recommended by the educational high school diploma or certificate of Comment: Several commenters noted
program.’’ Those with unsatisfactory general equivalence, we think that a that it would be difficult to apply a
performance would receive credit for work-eligible individual who is not a daily supervision standard for an
individual who is participating as a and others that apply more broadly to carefully as we developed the final rule.
child care provider for a TANF recipient the definition. We appreciate the concerns the
in community service. Some of the As under the interim final rule, a non- commenters raised, both about a State’s
commenters recommended counting recipient parent living with a child ability to engage certain groups of
this activity as self-employment and receiving assistance is not a work- individuals and about the
allowing States to develop methods for eligible individual if the parent is: A appropriateness of encouraging States to
projecting a typical number of hours per minor parent who is not a head-of- engage other individuals in work by
week. household; a non-citizen who is including them in the work
Response: We have clarified in the ineligible to receive assistance due to participation calculation. We address
final rule that this activity is both his or her immigration status; or, at these concerns below.
unpaid and structured to improve an State option on a case-by-case basis, a Comment: Some commenters asked us
individual’s employability. The degree recipient of Supplemental Security to clarify that non-parental caretakers in
of supervision and methods for Income (SSI) benefits. We deleted the child-only cases continue to be
reporting hours would depend on how phrase ‘‘or spouse of the head-of- excluded from the work participation
the State structures this activity. household’’ in the minor parent rate calculation. One commenter
Because it is an unpaid activity, exclusion of the interim final rule recommended excluding all non-
projecting hours would not be because such individuals are not parental caretakers, even those ‘‘who
appropriate. required to participate when they do were sufficiently needy that they
Comment: One commenter receive assistance. Thus, only a minor qualified for TANF.’’ The commenter
recommended expanding the definition parent who is the head of household is asserted that not excluding them could
of the activity to include providing required to be included in the discourage non-parental caretakers from
child care not only to a TANF recipient participation rate, whether she is taking custody of children.
in community service, but also to receiving assistance or is a non- Response: Child-only cases in which
someone in a MOE-funded program. recipient. We have also added a case-by- a parent does not reside with the child,
Response: We agree with the case exclusion for recipients of Aid to such as when a grandparent cares for
commenter that this activity should the Aged, Blind, or Disabled under Title the grandchildren, do not include work-
include providing child care for a XVI of the Social Security Act, which, eligible individuals. In such cases, the
recipient of TANF or SSP–MOE in the Territories of Puerto Rico, Guam, grandparents or other non-parental
assistance in community service. and the Virgin Islands, is analogous to caretakers are not recipients of
SSI. 42 U.S.C. 1381 note et seq. assistance themselves and thus do not
Section 261.2(n) Work-Eligible
More broadly, the definition excludes meet the first part of the work-eligible
Individual
a parent, whether or not a recipient of individual definition. Neither do they
The DRA required us to include assistance, who is caring for a disabled meet the second part of the definition
families receiving assistance under a family member living in the home. The because they are not non-recipient
separate State program (SSP) in the State must provide medical parents living with recipient children. If
work participation rates if the funding documentation to support the need for a grandparent or other caretaker does
for those programs is counted towards the parent to remain in the home to care receive assistance, then that adult
the State’s maintenance-of-effort (MOE) for the disabled family member. We would be a work-eligible individual; we
requirement, and to specify the have eliminated the interim final rule do not have the authority to exclude
circumstances under which a parent provision that permitted a parent to be non-parental caretaker relatives
living with a child receiving assistance excluded only if the disabled family receiving assistance from the work
should be included in the work member did not attend school on a full- participation rate calculation. The DRA
participation rates. time basis. We have also added a State limited our authority to determine
In the interim final rule, we used the option to exclude on a case-by-case whether a parent living with a child
new term work-eligible individual to basis a parent who is a recipient of receiving assistance should be included
describe anyone whose participation in Social Security Disability Insurance or excluded from the work participation
work activities is required in the (SSDI) benefits. As with a parent caring rate. Cases where a caretaker relative
calculation of the work participation for a child with a disability, the SSDI receives assistance have been included
rate. We drew the term from the heading exclusion applies regardless of whether in the work participation rate since the
to the statutory provision requiring us to the parent receives TANF or not. inception of TANF and continue to be
include families receiving assistance As in the interim final rule, we do not under the final rule.
under a SSP–MOE program and to consider an adult in a family served Comment: Some commenters wanted
specify the circumstances under which under an approved Tribal TANF us to exclude fugitive felons and parole
a parent residing with a child recipient program using State MOE funding to be violators from the definition of work-
of assistance should be included in the a work-eligible individual, unless the eligible individual; others contended
work participation rates. State includes the family in calculating that convicted drug felons and those
We have made modifications to the work participation rates, as permitted ineligible because of past fraud should
definition of a work-eligible individual, under § 261.25. not be work-eligible individuals. They
but we have not changed our general Unless excluded for one of the maintained that States are prohibited
approach to who is included in the final reasons outlined above, the term work- from using TANF dollars or counting
rule. We continue to define a work- eligible individual includes all non- State MOE dollars for serving these
eligible individual as either: (1) An recipient parents living with a child felons and thus it is unfair to require
adult (or minor child head-of- receiving assistance and all adult their inclusion in the work participation
household) receiving assistance under recipients of assistance. rate calculation.
TANF or a separate State program; or (2) We received many comments Response: Similar to a parent that
a non-recipient parent living with a suggesting that we exclude additional incurs a work sanction, a case in which
child receiving assistance. There groups of individuals from the a parent is a fugitive felon, parole
continue to be exclusions that apply definition of a work-eligible individual. violator, or a drug felon is subject to a
specifically to the non-recipient parents We considered each of these suggestions reduced grant by virtue of the behavior
of that parent. We think it would be low levels of literacy. The commenters does not wish to use a full-family
inappropriate to treat such cases explained that it may take time to sanction need not do so.
differently from parents who abide by improve their English proficiency to a We repeat that not all ‘‘work-eligible
the law. More importantly, we strongly level that enables them to participate individuals’’ are required to engage in
believe that it is in the best interest of fully in the labor market. work for a specified number of hours.
the children in such families if States Response: We have not excluded The State still determines what each
engage the parents in work activities, refugees from the definition of work- individual must do in accordance with
helping them off welfare and out of eligible individual. TANF recipients its laws and policies. The definition of
poverty. Thus, we have not made the who happen to be refugees should be a work-eligible individual defines the
suggested changes. treated like other TANF recipients. denominator, and is a guideline of who
We would also like to clarify a State’s States should determine the most should be engaged in work activities.
limitations and flexibility with regard to appropriate activities, which may be We believe that our definition creates
funding fugitive felons, drug felons, and English language skills or a combination reasonable expectations of States. But,
individuals convicted of fraudulently of language training and other services, Congress established an overall work
misrepresenting residence. Fugitive and then engage the clients in those participation rate of 50 percent. This
felons and parole violators may not, by activities to the greatest extent possible. leaves room for a State to decide if an
statute, receive federally funded We refer readers to the discussion of individual should be excused from work
‘‘assistance,’’ as defined at 45 CFR vocational educational training, which requirements, whether because of a
260.31. An individual who is convicted clarifies that we have modified the disability, lack of access to
of fraudulently misrepresenting his or definition of that activity to permit ESL transportation, the need for other
her place of residence in order to to count for the entire 12 months that services, or some other reason,
receive assistance simultaneously from the activity may count under the law, as regardless of whether they are in the
two or more States may not, by statute, long as the language training is a assistance unit or not.
receive federally funded ‘‘assistance’’ necessary or regular part of the Comment: Some commenters asserted
for ten years after his or her conviction. vocational educational training. specifically that adults whose needs are
That includes ‘‘assistance’’ paid with removed from the assistance unit due to
Comment: A few commenters urged
pure Federal funds or with commingled a sanction should not be considered
us to exclude from the definition of
State and Federal funds. That individual work-eligible individuals, because the
‘‘work-eligible’’ all parents who are not
may receive ‘‘assistance’’ using family’s grant has already been reduced
in the assistance unit. Some asserted
segregated State TANF funds or separate and it is difficult to get such adults to
that not doing so creates an incentive to
State program funds. He or she may also comply with the work requirements.
impose full-family sanctions and Response: To ensure consistent
receive non-assistance benefits, i.e.,
ignores the impact such policies have treatment, we believe it is appropriate to
benefits that are outside the regulatory
on children. include all of the sanctioned parents of
definition of ‘‘assistance,’’ such as non-
recurrent benefits that do not extend Response: We did not exclude all child-only cases in the definition of
beyond four months or supportive parents who are not in the assistance ‘‘work-eligible individual.’’ A State may
services for the employed. An unit because Congress specifically either reduce the grant by a fixed
individual convicted of a drug felony directed HHS to specify the percentage or fixed dollar amount or
may not, by statute, receive TANF- circumstances under which a parent remove the needs of the adult; only the
funded ‘‘assistance,’’ regardless of residing with a child who is a recipient latter approach results in a child-only
whether the funds are all Federal, of assistance should be included in the case. In the interim final rule, we
commingled Federal and State, or work participation rates. Since parents clarified specifically why we included
segregated State funds, unless the State who were themselves recipients of as work-eligible individuals sanctioned
opts out of or limits the duration of the assistance were already part of the rates cases in which the adult’s needs are
prohibition by passing a State law; (other than those subject to either of two removed from the case due to a work-
however, that individual may receive special statutory exclusions), it was related sanction, but the child continues
‘‘assistance’’ using separate State apparent that Congress intended us to to receive assistance. The effect on a
program MOE funds and may receive look at families in which the parent did family’s grant of removing a parent’s
TANF-funded non-assistance benefits. not receive TANF assistance but the needs from the assistance unit is similar
Thus, while restrictions apply, there are child did. In addition, as we explained to the effect of a fixed percentage or
opportunities to use TANF or certain in the preamble to the interim final rule, dollar amount sanction. Yet, under the
MOE funds to support the family and we considered in turn each type of original TANF rule, these cases without
engage the individuals in work. family in which a parent resides with a an adult were excluded from the
We remind readers that the law does child recipient of assistance to calculation of work participation rates
not prohibit spending Federal or State determine whether it was appropriate to as child-only cases. Cases in which the
funds on an individual who commits include that group of families in the grants were reduced by a fixed
‘‘an intentional program violation.’’ calculation of the work participation percentage or dollar amount due to a
States may choose to impose such rates. We believe that our definition work-related sanction were, by law,
penalties against individuals who appropriately focuses on those parents excluded for a maximum of only three
commit program fraud, or for other who can benefit from work activities months in a 12-month period. The final
reasons, but they are not prohibited and whose participation will help move rule treats all cases with a work-related
from spending Federal funds on these the family into employment and out of sanction in the same manner.
cases. poverty. Comment: Some commenters
Comment: A couple of commenters We appreciate the commenters’ recommended excluding the non-
urged us to exclude for a limited time concern about the well-being of families recipient parents of children who
period from the definition of work- in which the adult is subject to a continue receiving assistance after their
eligible individual refugees and certain sanction. We note that States have other parents have received 60 months of
other legal immigrants who cannot options when a family refuses to comply Federal assistance. One commenter
speak English, have little education, and with work requirements. A State that explained that States cannot require
such parents to participate and, as a citizens receiving SSP assistance so as exclude individuals who would qualify
result, including them would lower not to penalize a State for humanitarian for SSI or SSDI but for the durational
work participation rates. Another stated efforts. requirements of those programs, i.e.,
that, because the State can no longer Response: We appreciate the concerns that the physical or mental impairment
assist the parent with TANF funds, it is that the commenters expressed for State can be expected to result in death or has
unfair to impose a work requirement. flexibility in deciding which families to lasted or can be expected to last for a
Response: The final rule continues to assist through separate State programs. continuous period of at least 12 months.
include as work-eligible individuals However, we include these non- Response: We appreciate that
parents that are no longer included in qualified individuals because the individuals with disabilities may have
the assistance unit because they have participation rates are based on all limitations in their ability to work.
exhausted their time-limited benefits, adults who receive assistance, either in When the limitations are severe enough,
but for whom the State has chosen to the TANF program or in a SSP. Since an individual may qualify for and
extend benefits on behalf of their these non-qualified non-citizens receive receive SSI or SSDI. However, applying
children. We made this decision for assistance, they are included by the for either program is no guarantee that
several reasons. First and foremost, it statute. As with other non-recipient the Social Security Administration
provides an incentive for States to work parents included as work-eligible (SSA) will find that the applicant meets
with every case right from the individuals, we believe that the children its definition of disability and will
beginning. Then, clients can preserve as in such families will be better off if approve the application. In fact, the
much of their time-limited benefit as States engage the parents in work majority of initial applicants are denied
possible. Second, we are very concerned activities, helping them increase their benefits. The SSI and SSDI approval
about the negative consequences for incomes and move off welfare. process involves not just a simple
children living in families with reduced Comment: A number of commenters determination that an individual suffers
benefits for long periods. The adults in suggested we give States the option to from a disability on an approved list,
families whose needs have been exclude an individual served under but also a determination that the
removed from the grant are the most SSDI or under a State-funded disability individual cannot engage in any
likely to be ignored. They face long-term program from the definition of work- substantial gainful activity. We believe
poverty and other negative eligible individual. The commenters that a Federal standard of disability is
consequences because States are no reasoned that our rationale for including appropriate to ensure consistency in
longer helping them acquire work skills SSI recipients on a case-by-case basis excluding parents from the definition of
and find employment. Third, we do not applied equally well to non-recipient work-eligible individual. Since SSI and
believe the only alternative to including parents served by these other disability SSDI applicants have not yet met that
such families in the work participation programs. standard, the regulation does not
rate is to impose a full-family sanction Response: We agree with the exclude them from the definition of
and ignore the family completely. One arguments the commenters made with work-eligible individual. However, as
alternative for those who reached the respect to SSDI recipients. Unlike SSI we explain later, States may
Federal time limit is to use the law’s recipients, SSDI recipients often are also retroactively exclude adults in these
flexibility to provide Federal assistance TANF recipients; therefore, we have families from the TANF Data and SSP–
to up to 20 percent of the caseload via modified the rule to allow a State to MOE Data Reports once they are
a hardship extension. If a family still exclude on a case-by-case basis a parent approved for SSI or SSDI benefits and
needs help after 60 months, then the who is recipient of SSDI from the thus are no longer considered to be
hardship extension is the Federal safety definition of work-eligible individual. work-eligible individuals. This partly
net designed for that very purpose. We did not find the commenters’ addresses the concerns raised by the
Finally, we included parents that have arguments as persuasive with respect to commenters.
reached the time limit because we think State disability programs. Because State We do want to clarify the status of
it is the best way to make the disability determinations and eligibility TANF parents who ‘‘meet the SSI or
participation rates consistent across could vary so widely from one SSDI criteria for severity.’’ In some
States, one of our charges under the law. jurisdiction to the next, we think that cases, SSA makes a presumptive
We also remind readers that States making this exclusion would not meet disability determination for SSI or SSDI
have considerable flexibility in deciding our mandate to make the work benefits, based on the nature of an
which families to assist with Federal participation rates more consistent. applicant’s impairment and other
versus State funds, even when it comes Rather, we think it more appropriate to considerations. In such a case, SSA pays
to families reaching the 60-month time rely on a Federal standard of disability expedited benefits while the applicant
limit. The time limit applies only to for the purpose of excluding parents awaits a final decision. These
families receiving Federal or from the definition of work-eligible individuals are in fact receiving SSI or
commingled funds, not to all funds. A individual. SSDI benefits and thus the State would
State could use either segregated or Comment: Many commenters urged have the option to include or exclude
separate State funds to assist families us to exclude from the definition cases them from the definition of work-
that have received 60 months of Federal in which a parent’s SSI or SSDI eligible individual. If subsequently, SSA
assistance. application is pending a decision denies the application, the individual
Comment: A couple of commenters (including the appeal of an adverse would no longer be receiving SSI or
maintained that the definition of work- decision). Some suggested that we SSDI benefits and thus would qualify as
eligible individuals should not include should exclude applicants who meet the a work-eligible individual.
persons served in a separate State disability standard. They argue that Parents in TANF cases who do not
program funded with MOE dollars who parents whose disabilities are qualify for SSI or SSDI due to the
would not be eligible for TANF, sufficiently grave to qualify them for SSI durational requirements are not
including non-qualified non-citizens. or SSDI but do not yet receive it would excluded from the definition of work-
Some commenters suggested that States have as much difficulty working as eligible individual because they do not
should decide whether or not to include someone whose application has been receive benefits under those programs. It
as work-eligible individuals non- approved. Commenters also urged us to is not appropriate to exclude them, due
to the temporary nature of their work-eligible individual status due to SSI recipients was inequitable because
disabilities. For example, States should the lengthy approval process for it subjects individuals to the
prepare an individual who is recovering disability benefits. One commenter requirements of both TANF and SSI.
from an accident or heart attack for suggested that we give States until the The commenter maintained that by
work, examples several commenters point at which we finalize the including SSI recipients within the
cited as temporary disabilities. The participation rate calculations for a definition of a work-eligible individual
participation rate that Congress fiscal year. Another suggested March 31, and allowing States to exclude them on
established provides ample room for six months after the end of the fiscal a case-by-case basis we created an
States to exempt individuals with year, as an appropriate deadline. inequity. The commenter urged us to
temporary illnesses or incapacities from Response: While it is true that exclude all such individuals as a class
participating in work activities. Indeed, disability determinations can be and allow States to include them on a
under TANF’s predecessor program, lengthy, we have clarified that the case-by-case basis.
JOBS, States could exempt individuals deadline for retransmitting data is Response: We think the commenter
who were ill or temporarily December 31 because after that date, misunderstood the purpose of this
incapacitated, but the 1996 TANF law States are liable for data reporting provision. First, the definition of work-
did not include these exemptions. penalties. eligible individual only includes a SSI
Comment: Many commenters asked Comment: One commenter urged us recipient when a State opts to include
us to permit States to exclude applicants to exclude recipients of the programs such an individual. A State must make
for SSI or SSDI from the definition of offered by ‘‘209(b) States’’ from the a choice in each case and report data on
work-eligible individual retroactively definition of work-eligible individual in the case accordingly. Because there is a
back to the date of their applications the same way we do SSI recipients. The child receiving assistance, a TANF case
once those applications are approved. commenter contended that those exists and the State must report data on
They explained that the SSI/SSDI programs have criteria that are stricter that family, including information on
disability determination process can be than SSI and thus should also be the work status of the adult or adults in
lengthy and, once a determination is excluded. the family. No case is automatically
made, benefits are paid retroactively for Response: The designation ‘‘209(b)
included; the State reports the data to us
earlier months. State’’ refers to a mechanism by which
for each case. Second, the rule does not
Response: We agree with many of the the State determines eligibility for
subject individuals to the requirements
comments and, within limits, have Medicaid, not eligibility for SSI or any
of both SSI and TANF. Presumably, a
amended the rule to allow States to other disability program. Most States,
known as ‘‘1634 States,’’ provide State would not choose to include a SSI
revise work participation data—
automatic Medicaid coverage for recipient as a work-eligible individual
including information on which
recipients of SSI, but they have the unless that individual had sufficient
individuals are or are not work-
option of continuing to apply standards hours of work to allow the family to
eligible—after initially reporting it.
that predated the SSI program and are count in the numerator of the
Quarterly TANF and SSP–MOE Data
more restrictive than those of the SSI participation rate. Moreover, this option
Reports are due within 45 days of the
program. Those States are called ‘‘209(b) does not subject the SSI recipient to
end of the quarter. States are free to, and
often do, revise data relating to previous States,’’ a reference to a provision in the additional rules of the TANF program.
quarters within the fiscal year. Because 1972 law that created the SSI program. The family is already subject to the
a State is not liable for a reporting While such a State may have more applicable rules of TANF, because a
penalty until the end of the quarter after restrictive criteria for Medicaid, this child is receiving assistance. The SSI
the end of a fiscal year, a State may, provision does not affect eligibility for parent has no further work obligation
until December 31, submit its final data SSI in the State and thus has no bearing because the State chooses to use the
for the previous fiscal year. Thus, a on our definition of work-eligible hours that individual works in the
State that learns that a former work- individual. participation rate calculation.
eligible individual has been approved Comment: One commenter urged us Comment: Some commenters
for SSI or SSDI and for whom prior to clarify that supported work for recommended that we exclude from the
State TANF or SSP–MOE benefits are individuals with disabilities (as definition of work-eligible individual
reimbursed may revise its data for that discussed in the preamble concerning those ‘‘who are refugees, asylees, or
individual by December 31 for the subsidized employment) is a countable legal permanent residents who may
months in the preceding fiscal year in activity for work-eligible individuals qualify for TANF or MOE-funded
which the individual received benefits receiving SSI or SSDI whom the State assistance but are ineligible for SSI
under one of those programs. If the opts to include in the work participation based on their immigration status.’’
individual’s application for SSI or SSDI rate. Response: While some refugees and
predates the beginning of the previous Response: Any activity that can count asylees are in fact eligible to receive SSI
fiscal year, the State could not revise toward the work participation rate for under current law, we do not believe the
data back to the date of application other work-eligible individuals can also recommendation to exclude parents
because only data from the previous count for SSI and SSDI recipients whom ineligible for SSI due to their
fiscal year may be revised by December the State opts to include, including immigration status is practical. Because
31. Please refer to § 265.7(b) for further those participating in a supported work these parents are ineligible for SSI, the
discussion of the timing for revising program for individuals with Social Security Administration will not
work participation and caseload data disabilities. Except where the statute process their disability determinations.
and to §§ 265.4 and 265.8 for more explicitly imposes a restriction (e.g., for We, therefore, cannot ascertain whether
information on when quarterly reports certain educational activities), we do or not they would have met the
are due and when penalties apply. not limit countable activities to any appropriate disability standards and
Comment: Some commenters subset of work-eligible individuals. qualified for SSI.
recommended giving States longer than Comment: One commenter thought Comment: One commenter urged us
until December 31 to amend TANF and the way we structured the definition of to provide the same exclusion for
SSP–MOE Data Reports for determining work-eligible individual with respect to recipients of Title XVI benefits (Aid to
the Aged, Blind or Disabled in the single-parent family for determining child recipient of assistance (the second
Territories) as we do for SSI recipients. whether the parents are work-eligible part of the definition).
Response: We agree with the individuals. If both parents receive Comment: Many commenters took
commenter and have modified the rule either SSI or SSDI, then both would be issue with the fact that the exclusion
accordingly. excluded from the definition of a work- under the interim final rule for parents
Comment: A couple of commenters eligible individual. As we noted above, caring for a disabled family member
thought our approach to individuals within limits States may retroactively living in the home applied only when
with disabilities and the definition of a revise their data when individuals meet the family member with a disability did
work-eligible individual did not make SSI or SSDI criteria. not attend school full-time. Some said
sense. They pointed out that we exclude Comment: Several commenters that parents with children with
a parent caring for a disabled family recommended that we exclude parents disabilities in school should be treated
member living in the home but not the on TANF who are caregivers of family the same as other TANF participants
disabled family member that needs full members with disabilities, regardless of who must care for a disabled family
time care. whether the family member with a member not in school. They pointed out
Response: The exclusion for a parent disability lives in the same home as the that children with severe disabilities
caring for a disabled family member parent. The commenters explained that often cannot attend school regularly due
living in the home primarily affects the burden of providing care for family to medical care needs, even if they are
cases in which a parent cares for a members living elsewhere may be just enrolled full time. Others noted that
disabled child. Obviously, a disabled as great or greater. after-school care and care during school
child would not be subject to work Response: The purpose of the TANF holidays (especially the summer) is
requirements. While in some cases the program is to enable parents or relatives difficult to find for children with
disabled family member may be a to care for children ‘‘living in the home’’ disabilities, even if they attend school
second parent, we did not want to and to take necessary steps to become on a full-time basis. Some asked us to
broaden the exclusions from the work self-sufficient. While we appreciate the modify the exclusion so that a parent
participation rates beyond those that burden that having a family member would not be ‘‘work-eligible’’ if the
already exist in the statute. outside the home that needs care places child’s disability-related needs prevent
Comment: One commenter objected to on a family, the TANF program is not the parent from working. Another
the way the work-eligible individual designed to provide such care. Parents proposed that we give the State the
definition addressed two-parent families of TANF families face significant option to include the hours of such a
in which one parent has a disability. challenges to care for everyone in their parent in the work participation rate on
The commenter pointed out that if the immediate household, and to prepare a case-by-case basis, based on criteria it
State finds that a parent has a disability for or maintain employment that will set out in its Work Verification Plan.
but the individual does not yet receive allow them to provide for their family. Some asked for clarification regarding
SSI or SSDI, the family would not be Given these critical responsibilities and whether the exclusion applied to
part of the two-parent participation rate the time-limited nature of TANF children with disabilities who are full-
but would be included in the overall assistance, we do not agree that parents time students but must be tutored at
rate. If there is medical documentation should be excluded from the definition home or are home-schooled.
to support it, the parent without a of a work-eligible individual in order to Response: We appreciate the
disability will be exempted from the provide care for someone outside the difficulties of caring for a disabled
work-eligible category because she is home. family member, even when he or she is
needed in the home to care for a Comment: Some commenters also enrolled in school full time. The
disabled family member. However, the suggested that we exclude from the commenters raised many compelling
family would still be in the work definition of work-eligible individual arguments about the need for a parent’s
participation rate because the parent extended family members such as aunts, care even when a family member with
with a disability would still be a work- uncles, and grandparents who were both a disability goes to school full time.
eligible individual obligated to engage receiving assistance and caring for a Based on these comments, we have
in work for 30 hours per week to count disabled family member. expanded the exclusion to apply when
for participation. Response: We are sympathetic to the a family member’s disability requires
Response: We believe the final rule situation of non-parental relatives who care-giving that prevents the parent
addresses most of the commenter’s are both receiving assistance and caring from working, whether or not the family
concerns. This is a confusing area for a disabled family member. The member is enrolled or attending school.
because one provision relates to statute (section 407(i)(1)(A)(i)(IV) of the Please refer to § 261.2(n)(2)(i). Our
disability in general and is a State Act) only gives us the authority to intent had been to ensure that only
determination, and another relates determine ‘‘the circumstances under parents who would be unavailable
specifically to qualifying for SSI or which a parent who resides with a child during working hours because they were
SSDI, a Federal determination. If a State who is a recipient of assistance should caring for family members would be
finds that one parent in a two-parent be included in the work participation excluded from the definition. To that
family has a disability then, by statute, rates’’; thus, a non-parental relative who end, we have also revised the medical
the family comes out of the two-parent receives assistance must be a work- documentation requirement, which is
work participation rate. If the parent eligible individual. Since we do not now included in the regulation itself
that the State found to have a disability have the authority to exclude non- (also at § 261.2(n)(2)(i)). Medical
does not receive SSI or SSDI, then he or parents from the participation rate, this documentation must show that a parent
she would continue to be a work- provision only excludes parents caring caring for a disabled family member
eligible individual, just as a single for a disabled family member living in cannot engage in work because he or she
parent waiting for SSI or SSDI the home. A relative would only be a is needed in the home to provide that
determination would be, and the family work-eligible individual if he or she care. Thus, under the final rule, any
would continue to be part of the overall received TANF assistance (the first part parent caring for a disabled family
rate. In all other respects, the two-parent of the work-eligible individual member will not be considered ‘‘work-
family is treated the same way as the definition) or were a parent of another eligible’’ as long as there is
documentation to show that it is of 90 percent since FY 1999. A State work for the minimum average number
medically necessary for the parent to that fails to meet the required of hours in each full week that the
provide the care and, as a result, cannot participation rates is subject to a family receives assistance.
engage in work. We believe the policy monetary penalty. The Deficit We corrected one typographical error
in the final rule will be both simpler to Reduction Act of 2005 retained the 50- but made no other changes to the
administer and more equitable. percent participation requirement regulatory text of this section.
The rule does not permit parents who overall and the 90-percent requirement Comment: One commenter asked for
have such medical documentation to be for two-parent families, but included clarification regarding whether the
included in the participation rate families in separate State programs in addition of families in separate State
calculation on a case-by-case basis if the calculation of the respective work programs was effective in FY 2006 or FY
they are working. If a medical participation rates. 2007.
professional has documented that the In the interim final rule, we modified Response: Families receiving
parent needs to be in the home to care the provisions of this subpart to reflect assistance through a separate State
for a disabled family member, then we the new statutory requirements to program are added effective FY 2007.
believe it is inappropriate for these include separate State program families, While the interim final rule as a whole
parents to be working. Thus, there is no as well as the requirement to determine took effect with its publication on June
need for a case-by-case option. Clearly, when to include non-recipient parents 29, 2006, all the provisions relating to
if the medical status of the disabled residing with children who receive the work participation rate—including
family member or the living TANF assistance in the calculation of the revised caseload reduction credit,
arrangements of the family changes, the the work participation rates. We did so the new work definitions, and the
State should then report the parent as a using the new definition of ‘‘work- revisions to which cases are part of the
work-eligible individual and engage the eligible individual’’ discussed in detail calculation itself—take effect in FY 2007
parent in work. States should regularly in the preamble to § 261.2(n) of this (October 1, 2006), the first fiscal year
reassess the status of excluded parents part. that begins after the law and regulations
who are caring for disabled family came into existence.
members. Closely monitoring family Section 261.20 How will we hold a Comment: One commenter asked us
situations will enable parents, who are State accountable for achieving the to exclude families residing in Alaska
no longer needed in the home, to gain work objectives of TANF? Native villages from the work
the skills and work experience that Under the interim final rule, as under participation rate calculation, due to
leads to independence. the original TANF rule, this summary ‘‘the state’s unique circumstances and
We would like to stress that this section outlined how we held a State the challenges inherent in serving needy
exclusion for a parent caring for a accountable for meeting work families in Alaska’s most remote and
disabled family member does not requirements. We did not receive economically depressed communities.’’
absolve the State of its responsibility to comments on this section and have Response: The law does disregard
help TANF recipients find appropriate made no changes to it in the final rule. from the 60-month time limit on the
child care, including care for children receipt of Federal assistance any months
Section 261.21 What overall work rate that an adult receives assistance while
with disabilities. We recognize that the
must a State meet? living in Indian country or in an Alaska
special care that some children with
disabilities need may be less available This section of the interim final rule Native Village where at least 50 percent
and may be more expensive. States incorporated in regulatory text the of the adults are not employed. We do
should take these considerations into statutory requirement for a State to not have the authority under the statute
account as they develop and budget for achieve an overall work participation to make a similar exclusion from the
their child care programs. A State may rate of 50 percent, minus any caseload work participation rate calculation.
not exclude a child who has a disability reduction credit to which it is entitled. Comment: One commenter asked us
from available child care, if doing so We did not receive comments on this to exclude from the denominator
would prevent the parent from gaining section and have made no changes to it families ‘‘during their first 30 days of
needed skills, finding work, and moving in the final rule. eligibility.’’ The commenter noted that it
the family out of dependency. takes several weeks to process an
Section 261.22 How will we determine application, as well as additional time
Comment: One commenter a State’s overall work rate?
recommended that the definition of to learn program requirements and
work-eligible individual allow for the The Deficit Reduction Act of 2005 develop a work plan. ‘‘It is unrealistic
exclusion of individuals who are unable modified the work participation rate to expect that this process can be
to participate in activities for the calculation to include families with an completed quickly enough for new
required number of hours due to a adult or minor child head-of-household participants to engage in sufficient
disability. in SSP-MOE programs and required us hours of work activities during their
Response: The regulation does not to determine the circumstances under initial 30 days to meet the work
exclude such individuals from the which a family in which a parent participation rate.’’ Another commenter
definition of work-eligible. We refer residing with a child receiving TANF stated that the rule does not provide a
readers to the discussion of individuals should be included in the calculation. State option to count participation for
with disabilities in the cross-cutting The interim final rule modified the prior families that receive an initial partial
issues section that appears earlier in this language in this section to reflect the month of assistance.
preamble. new calculation and adopted the use of Response: As we noted in the
the term ‘‘work-eligible individual’’ for preamble to the original TANF final
Subpart B—What Are the Provisions that purpose. It also continued the rule, ‘‘* * * we cannot simply decide
Addressing State Accountability? policy established under prior rules of that some period of time for which an
PRWORA required States to meet two allowing a State to count a family that individual receives assistance—such as
separate work participation rates—the received assistance for only a partial time prior to assignment in a work
overall rate that has been 50 percent month in the work participation rate if activity or a partial month of
since FY 2002 and the two-parent rate a work-eligible individual is engaged in assistance—should not be considered a
period of assistance and therefore time, the family is at risk of a penalty cooperate with child support
exclude the individual’s family from the but not subject to it. We think this is the enforcement, then the case stays in the
participation rate for that month. On the most reasonable interpretation of the work participation rate.
contrary, if a family receives assistance statute. In the original TANF rule, we Comment: We received a comment
for any portion of a month, then we included the following language at concerning §§ 261.22(c)(1) and (c)(2).
must include the family in the § 261.22(b)(3): ‘‘If a family has been The first section provides a State with
denominator of the participation rate for sanctioned for more than three of the the option not to require a single
that month. * * *’’ (See 64 FR 17774.) last 12 months, we will not exclude it custodial parent of a child under age
However, §§ 261.22(d) and 261.24(d) do from the participation rate calculation.’’ one to engage in work and the second
provide the flexibility to count a partial (Emphasis added.) Further, in the allows it to disregard such a family from
month of assistance as a month of interim final rule, we reiterated this the work participation rate. The
participation if a work-eligible concept in § 261.22(b)(2) as well, commenter noted, ‘‘The preamble to the
individual is engaged in work for the specifying that ‘‘if a family with a work- final TANF regulations in the April 12,
minimum average number of hours in eligible individual has been penalized 1999 Federal Register indicates that
each full week that the family receives for refusal to participate in work these two provisions are not dependent
assistance in that month. activities for more than three of the last on each other, but rather, a state can
Comment: One commenter suggested 12 months, we will not exclude it from exclude such a case from the work
that, if a State opts to count in the work the participation rate calculation.’’ participation rate calculation without
participation rate a family in which a (Emphasis added.) In both instances, having to exclude it from engaging in
parent receives SSI (or SSDI), we should this language makes clear that the State work activities.’’ The commenter urged
allow the State to exclude the family must actually have imposed the penalty us to include the same clarification in
from the denominator of the rate, before we exclude the family from the this preamble to avoid any confusion.
counting it only in the numerator. participation rate calculation. Response: The commenter is correct
Response: We do not think we should We have applied this interpretation that the preamble to the original TANF
include any family in the numerator since the beginning of TANF because it rule clarified that point. We wrote,
that we do not also include in the encourages a State to take action to ‘‘Based on the comments and after
denominator. To do so would skew the resolve the problem that led to the reexamining the statutory provision, we
participation rate. The State has the sanction in the first place. If we were to agree that we need not link the State’s
flexibility to decide on a case-by-case consider a family ‘‘subject to a penalty’’ option not to require a single custodial
basis whether to include it or exclude it, when the State had merely notified the parent of a child under 1 to work to the
but any case that the State wants to family of the possibility that it would exclusion of such parents from the rate
count in the numerator must also be in reduce or terminate benefits, it could calculations. The State can make
the denominator. benefit from disregarding the family separate decisions about exempting and
Comment: A couple of commenters from the participation rate regardless of excluding a family from its rate. The
asked about the meaning of whether it provides services to address statute describes a certain individual,
§ 261.22(b)(2), which permits a State to barriers to employment or works to that is, ‘a single custodial parent caring
exclude from the work participation rate resolve a dispute. for a child who has not attained 12
calculation for up to three months in a With respect to the effect of our months of age’ and then separately
12-month period a case that is subject to interpretation of this provision on a indicates that ‘such an individual’ may
a penalty for refusing to work. State that chooses to impose a full- be disregarded in calculating the
Specifically, the commenters wanted family sanction instead of reducing the participation rates. We have rewritten
clarification on whether ‘‘subject to a family’s benefits, our interpretation the regulation to allow disregard of a
penalty’’ means the State has reduced or treats the period before actual family with such an individual, since
terminated a family’s grant or whether imposition of a sanction in the same the rates actually measure families and
it could refer to a family that the State way for all States, regardless of whether not individuals.’’ The overall framework
has notified of its intent to penalize but a State’s policy choice is for a full or of this provision did not change in this
whose benefits it has not yet reduced or partial sanction. If a State chooses a full- rule, including the distinct natures of
terminated. After notification, the family sanction, then the family is these two points.
commenters pointed out that due removed from the work participation
process or conciliation period calculation indefinitely and as a result Section 261.23 What two-parent work
requirements in the State often cause a benefits from an indefinitely smaller rate must a State meet?
lag of one or two months before the denominator. This section of the interim final rule
State actually reduces or terminates the Comment: One commenter asked for incorporated in regulatory text the
family’s grant. The commenters clarification on ‘‘whether the ‘other statutory requirement for a State to
explained that, if we use the former sanctioned’ individuals who now will achieve a two-parent work participation
interpretation, as we have when asked be considered work-eligible participants rate of 90 percent, minus any caseload
by States for policy clarification, then will have the same exclusion from the reduction credit to which it is entitled.
States that impose a full-family sanction count for three months out of twelve as We did not receive comments on this
‘‘receive little practical value from this those sanctioned for participation section and have made no changes to it
provision’’ compared to States that failure.’’ in the final rule.
impose a penalty by reducing a family’s Response: If the family of a work-
grant. eligible individual is subject to a Section 261.24 How will we determine
Response: This rule does not change penalty for refusing to work, the State a State’s two-parent work rate?
our long-standing interpretation of may exclude that family from the work This section of the rule is analogous
when a family is ‘‘subject to a penalty.’’ participation calculation for that month to § 261.22 but applies to the two-parent
During a conciliation or notice period, as long as the family has not been rather than the overall work
before the State actually reduces or penalized for more than three of the last participation rate. The interim final rule
terminates the family’s grant, a family is 12 months. If the family’s sanction is for modified the calculation of the two-
not ‘‘subject to a penalty.’’ Before that a different cause, such as failure to parent rate to include families served in
SSP–MOE programs. The Deficit families receiving assistance under a participation standards. If the Tribe’s
Reduction Act, as we noted before, Tribal TANF or Tribal Native program does not meet that standard,
required us to determine the Employment Works (NEW) program the State simply would not be able to
circumstances under which a family in from the denominator of the State TANF opt to include those families.
which a parent living with a child participation rates. But to count any Comment: One commenter pointed
receiving TANF should be included in family in the numerator of the State’s out that the Federal regulations
the work participation rates, which we participation rate for a month, the governing Tribal TANF and NEW
did in the definition of ‘‘work-eligible family must meet the standards for programs allow flexibility in defining
individual’’ in § 261.2(n). The interim counting a family in the State rate, both work activities and the hours of
final rule provided a minimum with respect to hours of participation participation. State TANF programs
definition of a two-parent family for the and countable activities. We went on to working with Tribal populations not
two-parent work participation rate stress that this was true regardless of covered by the Tribal TANF or NEW
calculation. whether the family received assistance programs do not have the same
We made no changes to this section under a State TANF program, a Tribal flexibility. The commenter thought this
in the final rule. TANF program, or a Tribal NEW was inequitable and urged us to grant
Comment: One commenter asked for program. States the same flexibility when
clarification regarding whether the This standard continues to apply providing services to American Indians
addition of two-parent families in under the final TANF rule. To count living on reservations.
separate State programs was effective in toward a State’s participation rate, the Response: We do not have the
FY 2006 or FY 2007. family must meet the standards of that authority to implement the commenter’s
Response: Two-parent families rate. Therefore, if a Tribe offers suggestion. The difference between
receiving assistance through a separate activities that meet the definition of State and Tribal TANF work
State program are added effective FY countable State work activities and participation requirements is statutory.
2007. While the interim final rule as a engages individuals for the requisite Section 412(c) of the Social Security Act
whole took effect with its publication on hours to meet the State rate, the State allows Tribal TANF programs to
June 29, 2006, all the provisions relating may choose on a case-by-case basis to negotiate work activities and hours of
to the work participation rate including include such families in the calculation participation, whereas section 407 of the
the revised caseload reduction credit, of the State’s participation rate. Act, which specifies State work
the new work definitions, and the However, if the Tribal program defines requirements, does not permit such
revisions to which cases are part of the and includes countable activities that do flexibility.
calculation itself take effect in FY 2007 not meet the work activity or work-
(October 1, 2006), the first fiscal year eligible individual definitions of this Subpart C—What Are the Work
that begins after the law and regulations final rule, such activities may not count Activities and How Do They Count?
came into existence. toward the State’s participation rate. Of
Comment: One commenter stated that course, any family that the State wishes The interim final rule did not change
when a two-parent family is included in to count in the numerator must also be the structure of this subpart but did
the overall participation rate it is included in the denominator. make some important additions to
counted as if it were two separate We received few comments on this §§ 261.31 and 261.32. In particular, the
households, rather than as a single section and have not changed the rule added provisions to allow States to
family or household and thought that regulatory text from the interim final ‘‘deem’’ participation in core hours
was unfair, because ‘‘all the benefits in rule. when the minimum wage laws of the
being a married or stable two-parent Comment: A couple of commenters Fair Labor Standards Act (FLSA)
family are lost.’’ took issue with the phrase ‘‘at State preclude an individual that works the
Response: The overall participation option’’ in this section of the rule, maximum allowed from participating
rate includes each family once. A two- arguing that the State cannot opt to for all of the required core hours. The
parent family counts in the overall rate include Tribal TANF families without final rule maintains this basic policy of
in the same way that any other family the consent of the Tribe. The the interim final rule but we have
does: based on the hours of commenters thought that the wording modified the regulatory text in response
participation of one work-eligible ignored Tribal sovereignty and they to comments.
individual. If the second parent has urged us to change it.
Response: This regulatory wording Section 261.31 How many hours must
hours of participation, those count only a work-eligible individual participate for
toward the two-parent participation comes from section 407(b)(4) of the Act
and remains unchanged from the the family to count in the numerator of
rate, which, by statute, can combine the the overall rate?
hours of both parents. original TANF rule. While the law and
regulations give States the option to We received many comments relating
Section 261.25 Do we count Tribal include Tribal TANF or Tribal NEW both directly and indirectly to this
families in calculating the work participants in the State work subpart of the regulations.
participation rate? participation rates, Tribal sovereignty is Dozens of readers offered comments
We would like to clarify existing not at issue because States will need to about individuals with disabilities,
policy with respect to counting Tribal confer with Tribes to know whether urging us to provide relief in the hours
families in the State TANF work individuals are participating in they must engage in work activities and
participation rate. During our listening activities and meeting standards that generally to structure the regulations to
tour sessions around the country, it comport with the requirements of the encourage States to work with the
came to our attention that some readers State’s work participation rate. This people with disabilities. We refer
may not fully understand the provision does not give States control readers to the cross-cutting issues
requirements of this section of the rule. over Tribal programs or governments. A section of this preamble for an
In the preamble to the original TANF State cannot opt to include families overarching discussion of how the
regulation, we explained that a State has unless they are already participating in regulations address the needs of
the option to include or exclude accordance with State TANF individuals with disabilities. We
respond to specific issues related to experience or community service include child care and transportation
hours of participation for people with program then automatically serves in subsidies, but might include other
disabilities in that cross-cutting section place of the food stamp workfare subsidies. We recommend that any
as well. We have grouped the comments program. questions regarding the FLSA should be
and our responses by topic for the ease Comment: Several commenters asked directed to Office of the Assistant
of the reader. about the preamble guidance that said Secretary for Policy, Office of
We received numerous comments the SFSP ‘‘must be structured to match Compliance Assistance Policy. Their
about the provisions in the interim final food stamp exemptions to those of the Web site is: http://www.dol.gov/
rule that permit a State to ‘‘deem’’ TANF program so that work compliance.
participation when an individual is requirements could be applied to as Comment: Some commenters objected
restricted by the minimum wage laws many work-eligible individuals as to the requirement to include food
from engaging in sufficient hours to possible.’’ One commenter suggested stamp benefits in the calculation of the
meet the core hours requirements of the that we ‘‘clarify that states do not need number of hours needed to satisfy the
participation rates. to make parents of young children work participation rate. They asserted
The interim final rule allowed States mandatory Food Stamp Employment that this undermined State flexibility
to ‘‘deem core hours’’ for TANF families and Training (FSET) participants in and created inequities because some
with a work-eligible individual order to include food stamp benefits in families would have to work off a food
participating in work experience or the calculation of countable hours and stamp grant, while others would not,
community service who works the qualify them for the deeming because of variations in circumstances,
maximum number of hours permitted provision.’’ The commenter noted that such as the receipt of child support and
under the minimum wage requirements the FSP exempts parents with children family size. Some contended that
of the Fair Labor Standards Act (FLSA), under six years of age from mandatory including food stamp benefits in the
but still falls short of the core hours participation and that changing the food requirement was punitive.
requirement. The final rule continues stamp exemptions to match those of the Response: We considered the
this general policy. As in the interim TANF program would require States to comments carefully but have retained
final rule, it limits deeming to States impose food stamp sanctions on such the requirement to include food stamp
that combine TANF (or SSP–MOE) and parents when they do not comply with benefits in order to deem core hours of
food stamp benefit amounts when TANF’s work requirements. participation. The main effect of the
calculating maximum hours. A State can Response: Since the publication of the
commenters’ recommendation would be
achieve this by adopting the mini- interim final rule, the FNS has
to reduce the number of hours that a
Simplified Food Stamp Program (mini- explained that a State can create a mini-
State could require an individual to
SFSP), an option that simply permits SFSP that will allow it to count the
States to count the value of food stamps value of food stamps toward this FLSA participate in work activities while still
in determining maximum hours. In calculation but that it does not need to counting in the work participation rate.
accordance with the FLSA and the conform the exemption for the age of We believe that participation in work
applicable regulations at 29 CFR youngest child between food stamps activities is crucial for families to move
531.29–531.32 and guidance issued by and TANF or expand the use of food from dependence on public support to
the Department of Labor (DOL) this can stamp sanctions. For additional increased self-sufficiency. Further
include facilities such as child care and information see the Food and Nutrition reducing the hours required is contrary
transportation subsidies but might Service’s Web site at: http:// to the goals of the TANF program. We
include other subsidies. We recommend www.fns.usda.gov/fsp/whats_new.htm. do not believe that the policy generates
that any questions regarding the FLSA Under the heading, ‘‘What’s New,’’ item inequities, because the number of hours
should be directed to Office of the 25 for Fiscal Year 2006 provides a that a family must participate to count
Assistant Secretary for Policy, Office of sample letter for States to request a in the work participation rate is directly
Compliance Assistance Policy. Their mini-SFSP and additional questions and based on the value of the combined
Web site is: http://www.dol.gov/ answers on implementing the mini- benefits, up to a maximum. If a family
compliance. SFSP. has a reduced work obligation because
Comment: Several commenters asked of deeming, it is because that family
Food Stamp Issues whether the SFSP is required. receives less support from the
Comment: Several commenters raised Response: Yes, a State must government than a family with a higher
questions about what is involved to implement at least a mini-SFSP in order work obligation—just as someone who
implement a food stamp workfare to combine food stamp and TANF (or works fewer hours in paid employment
program and questioned why it is SSP–MOE) benefits for the purpose of earns less than someone who works
necessary. calculating maximum hours. ACF more hours at the same wage.
Response: To ‘‘deem core hours,’’ the intended to allow States to qualify for The new policy is not intended to be
preamble of the TANF interim final rule deeming only if they combine food punitive. Rather, it gives States the
required States to adopt a food stamp stamp and TANF benefits. The State opportunity to count a family in the
workfare program and conform TANF should notify FNS of its desire to participation rate with fewer hours of
and Food Stamp Program (FSP) implement a mini-SFSP that replaces real participation than the State would
exemption policies under the SFSP. the FSP work obligation rules with otherwise need. We adopted the policy
Since then, we have been informed by TANF rules. A State that has not so that a State would not have to place
the Food and Nutrition Service (FNS) at implemented a mini-SFSP cannot deem an individual in another core activity
the U.S. Department of Agriculture that core hours for participation rate once that individual worked the
neither of these is necessary. A mini- purposes, but must still combine TANF maximum hours possible under the
SFSP alone allows a State to count the with allowable facilities, in accordance FLSA rules. This makes it more likely,
value of food stamps with the TANF (or with applicable DOL guidance and not less likely, that a person would meet
SSP–MOE) benefit in determining the regulations in order to maximize the the participation rates.
maximum number of hours permitted number of work hours permitted under Comment: Several commenters asked
under the FLSA. The TANF work the FLSA. Allowable facilities usually whether the SFSP provisions apply to
families receiving assistance through a service activity as much as permitted Response: The reference to the 30 or
separate State program. under the FLSA rules. Work experience 50 hours is not a mistake. Under the
Response: FNS does not distinguish and community service programs are statute, the core hours requirement for
between TANF and SSP–MOE often reserved for individuals who have the two-parent rate is 30 or 50 hours,
programs; therefore, the mini-SFSP difficulty participating in TANF’s other depending on whether or not the family
provisions can apply to a SSP. As long core work activities. In the absence of receives federally subsidized child care.
as a State combines a family’s SSP–MOE the deeming policy, work experience
grant with its food stamp allotment, we and community service participants Child Support Collections and the FLSA
will permit deeming in a SSP in the who were prevented by the FLSA from Minimum Wage
same way as we do TANF. meeting the core hours requirement and Comment: Several commenters
Fair Labor Standards Act (FLSA) Issues could not find paid employment would suggested that we remind States that the
have to participate in vocational TANF assistance benefit used in the
Comment: One commenter asked ACF educational training or job search and FLSA calculation must be the net
to approach the Department of Labor job readiness assistance to count them amount of assistance provided after
(DOL) to specify the benefits package a in the rate. But, oftentimes States are subtracting from the benefit the amount
State can use in the FLSA calculation reluctant to engage individuals in these of any current child support collection
and requested that the list of such activities when they need only a few retained by the State and Federal
benefits include child care and hours to count because they are subject governments to offset the cost of
transportation costs. Another to durational limits. We chose not to providing that assistance.
commenter recommended that we expand deeming to the required non- Response: We agree. In determining
include other Federal benefit programs, core hours because many of these the maximum number of hours of work
such as subsidized housing assistance participants can benefit from one of experience and/or community service
and Medicaid. TANF’s non-core activities, primarily
Response: The determination of that may be required of a recipient to
either job skills training directly related meet the minimum wage requirements
whether or not the FLSA applies to an to employment or education directly
activity and which benefits must be of the FLSA, States should calculate the
related to employment. A State would amount of assistance net of any child
used in the minimum wage calculation not have to engage a client in only 10
are matters that must be resolved by support collections received in the
hours per week of the non-core activity. month and retained to reimburse the
each State with the Department of If a program and an individual’s needs
Labor. The final rule does not require State or Federal government for the
call for more hours, the State could still current month’s assistance payment.
the inclusion of these benefits for the place the individual in that program.
purpose of deeming core hours. We Under the community work
We would also like to point out that
chose not to require States to include experience provisions of the former
allowing States to deem does not
these benefits because doing so would JOBS program, the portion of child
impose any new or additional logistical
further complicate the calculation of support collection, if any, used to
or transportation problems. On the
deemed core hours. We recommend that reimburse the amount of AFDC was
contrary, the new deeming policy
any broader questions regarding the provides additional flexibility and in explicitly excluded by law. Section
FLSA should be directed to the Office doing so significantly reduces logistical 482(f)(1)(B)(i) of the Social Security Act
of the Assistant Secretary for Policy, and transportation problems. For outlining the minimum wage formula
Office of Compliance Assistance Policy. example, a family with a 20-hour specified that ‘‘* * * (and the portion
Their Web site is: http://www.dol.gov/ requirement that the State deems under of a recipient’s aid for which the State
compliance. this provision will count with just one is reimbursed by a child support
activity. Under prior rules, the State collection shall not be taken into
FLSA Deeming Issues account in determining the number of
would have had to find that family
Comment: Several commenters another core activity. hours that such individual may be
recommended that we expand the Comment: One commenter asked required to work).’’
deeming policy from satisfying the core whether the deeming policy could apply This prior provision of law is no
work activity requirement to the entire in Puerto Rico because it does not longer in effect, but we believe that
work requirement. The commenters participate in the Food Stamp Program States should use the amount of
were concerned that even if some and thus cannot adopt a SFSP. assistance, net of the retained child
individuals were deemed to meet the Response: The final rule permits support collection so that they do not
20-hour requirement, they would not be deeming in States that have adopted the require a parent to ‘‘work off’’ assistance
able to find other activities to meet the SFSP. Puerto Rico operates the amounts that the non-custodial parent
remaining 10 hours needed to satisfy the Nutrition Assistance Program which is has repaid. We are not specifying the
average weekly participation funded by a block grant in lieu of the operational procedure that States must
requirements. Some commenters Food Stamp Program. This block grant follow to determine the benefit amount,
asserted that requiring additional provides sufficient flexibility so that the net of retained child support. Under the
participation in non-core activities value of food stamps, or their prior law, States generally used one of
would create logistical and equivalent, could count without the two approaches. Under retrospective
transportation problems for TANF need for the SFSP. Therefore, Puerto budgeting, States used the income less
administrators and families alike. They Rico may deem core hours, when child support collections received in the
also noted that it may be difficult to find necessary, as long as it counts the value budget month to determine the benefit
programs that offer additional activities of Nutritional Assistance Program amount used to calculate the work
for an average of just 10 hours per week. benefits in determining the individual’s experience obligation for the payment
Response: We adopted the deeming work obligation. month. Under prospective budgeting,
policy so that States would be able to Comment: One commenter asked if States used the ‘‘best estimate’’ of
count participants toward the core our reference to the 30 or 50 hours for income less child support collections
activity requirement if they participated two-parent families was a mistake in for the month, based on prior
in a work experience or community drafting the regulation. experience. This works better in wage
withholding cases where regular child with the treatment of families in work six-week (or 12-week) limit on
support collections may be predicted. experience or community service who participation in job search and job
The Deficit Reduction Act of 2005 were working ‘‘less than the minimum readiness assistance, we define one
created incentives to States to send number of hours to satisfy the week as 20 hours for a work-eligible
more child support collected on behalf participation rates.’’ The commenters individual who is a single custodial
of families on TANF to the families asserted that these options would parent with a child under six years of
themselves in both current and former encourage States to do more to engage age and as 30 hours for all other work-
assistance cases. Beginning October 1, these individuals. eligible individuals. Thus, six weeks of
2009, or as early as October 1, 2008, at Response: We extended the deeming job search and job readiness assistance
State option, a State may elect to pay the option to participants in work equates to 120 hours for the first group
family a portion of the assigned support experience and community service and 180 hours for all others. For those
obligation. The State will not be because the FLSA provisions may months in which a State can count 12
required to pay to the Federal actually prevent a State from meeting weeks of this activity, these limits are
Government the Federal share of the the ‘‘core’’ work requirement using 240 hours and 360 hours, respectively.
‘‘excepted portion’’ of such collections these two activities. We did not extend To make this section more consistent
if the State pays the excepted portion to the deeming option to other groups with other work participation rate
the family and disregards it in because we believe that Congress, in provisions, we modified the six-week
determining TANF assistance. The setting the maximum 50 percent (or 12-week) limit to apply to ‘‘the
‘‘excepted portion’’ may not exceed participation rate, recognized that some preceding 12-month period,’’ rather
$100 per month, or in the case of a families might not be able to work the than to a fiscal year. We also define
family that includes two or more full hours required. We encourage States ‘‘four consecutive weeks’’ and clarified
children, $200 per month. to continue to work with these families the provision that allows an individual
Under this new DRA provision, the to help move them to work and self- who participates in job search and job
State should not deduct the State and sufficiency. Our final rule does allow readiness assistance for ‘‘3 or 4 days
Federal portions of assigned support States to exclude recipients of Federal during a week’’ to count ‘‘as a week of
collections that it ‘‘passes-through’’ to disability programs and those caring for participation in the activity.’’
the family in calculating the ‘‘net’’ a disabled family member from the
payment to the family that can be definition of work-eligible individual. Subpart D—How Will We Determine
counted in determining the number of For more discussion of how the rules Caseload Reduction Credit for
hours an individual can be required to affect individuals with disabilities, Minimum Participation Rates?
work. For example, if a family with two readers should refer to the cross-cutting PRWORA created a caseload
children receives $500 in TANF and the issues section at the beginning of this reduction credit that reduces the
State collects assigned child support in preamble. required work participation rate that a
the amount of $250 and elects to ‘‘pass- State must meet for a fiscal year by the
through’’ $150 to the family, the ‘‘net’’ Section 261.32 How many hours must percentage that a State reduces its
payment that can be counted for FLSA a work-eligible individual participate for overall caseload in the prior fiscal year
purposes would be $400. See OCSE– the family to count in the numerator of compared to its caseload under the Title
AT–07–05 for further information the two-parent rate? IV-A State plan in effect in FY 1995.
concerning pass-through payments in We did not receive any comments that The calculation excludes reductions due
former as well as current assistance were directed strictly at this section of to Federal law or to State changes in
cases. The State could also, of course, the regulations; however, the comments eligibility criteria. The Deficit Reduction
claim its share of the pass-through that we addressed in the previous Act of 2005 recalibrates the credit by
toward its MOE requirement. section, § 261.31 of this subpart, often changing the base year to FY 2005.
Other ‘‘Deeming’’ Issues applied equally to this section. We refer We received only a handful of
readers to the discussion there and to comments relating to subpart D. We
Comment: Several commenters the preamble about the definition of made one change to the regulatory text
proposed expanding the ‘‘deeming’’ work-eligible individual in § 261.2 of in § 261.42 and we also clarified our
concept to work-eligible individuals this subpart for further discussion of policy with respect to excluding ‘‘excess
who work the maximum number of counting two-parent families toward the MOE’’ in § 261.43. We explain both of
hours allowed by a doctor to receive full two-parent participation rate. these below.
credit for their participation. Other
commenters recommended that we Section 261.34 Are there any Section 261.40 Is there a way for a
allow States to deem individuals who limitations in counting job search and State to reduce the work participation
are working ‘‘as many hours as their job readiness assistance toward the rates?
medically documented reasonable participation rates? Comment: A few commenters
accommodation plans allow as meeting In the interim final rule, we did not questioned the effective date of the
the federal work requirement.’’ Another make any changes to the various regulations governing the caseload
commenter suggested that States be limitations in counting job search and reduction credit with the recalibrated
‘‘allowed to count recipients who job readiness assistance. Indeed, we did base year. They asked us to clarify that
participate in work activities for the not include this section of the TANF the original base year of FY 1995 applies
number of hours required under an rules in the interim final rule at all. to the FY 2006 credits and that the new
employment plan that includes After reviewing the comments we base year of FY 2005 applies to the FY
accommodations for disabilities (or received, we have concluded that it is 2007 credits.
accommodations based on a recipient’s necessary to include this section in Response: The commenters are correct
need to care for a family member with order to clarify how States should apply that we will not use the new base year
a disability) as having met the federally the various limits on counting job of FY 2005 until we calculate the FY
required number of hours of search and job readiness assistance. 2007 caseload reduction credits. For
participation.’’ The commenter went on In the final rule, we define a week for that year’s credits, we will compare FY
to note that this approach is consistent each of the limits in this section. For the 2005 to FY 2006 to determine the
caseload reduction credit to which submitting a caseload reduction report change in the caseload. However, we
States are entitled. The FY 2005 base based on the two-parent caseload would have never allowed caseload increases
will apply from that point forward. have caseload data based on the old to do more than offset decreases, in
While the interim final rule as a whole definition for FY 2005 and the new one other words, to credit a State for greater
took effect with its publication on June for the comparison-year caseload. We caseload reduction than it actually
29, 2006, all the provisions relating to have changed the rule at § 261.40(d) to experienced. The interim final rule
the work participation rates—including provide for adjusting data in this kind incorporated that policy in
the revised caseload reduction credit, of situation. To correct such an § 261.42(a)(3) and the final rule retains
the new work definitions, and the inconsistency, a State may adjust its FY that provision.
revisions to which cases are part of the 2005 two-parent caseload data as part of
Section 261.43 What is the definition
calculation itself—take effect in FY 2007 its caseload reduction report. A State
of a ‘‘case receiving assistance’’ in
(beginning October 1, 2006), the first that wishes to make such an adjustment
calculating the caseload reduction
fiscal year that begins after the law and should explain in its report how it
credit?
regulations came into existence. arrived at the adjusted number. Please
Comment: One commenter suggested refer to the instructions to form ACF– When we published the interim final
that we allow the caseload reduction 202, the Caseload Reduction Report, for rule, this section remained largely
credit to apply in ‘‘real time,’’ as further information. unchanged from the original TANF
opposed to applying it ‘‘backward- rules. Subsection (a) explains that we
looking’’ as it currently does. The Section 261.42 Which reductions calculate the caseload reduction credit
commenter contended that rewarding a count in determining the caseload using cases that receive assistance,
State for ‘‘present reductions’’ would reduction credit? either TANF or SSP–MOE assistance. In
give it an incentive to keep working to Comment: A couple of commenters the final rule we have made minor
reduce the caseload rather than ‘‘resting noted that we deleted part of this wording changes to this subsection to
on past laurels.’’ section that listed types of eligibility remove extraneous language and
Response: The statute establishes the changes a State might make and for thereby improve the clarity and
structure of the caseload reduction which it cannot receive a caseload understanding of exactly which cases
credit and thus is beyond our authority reduction credit. One thought this are included in the calculation. We have
to change. We think that Congress chose deletion was inadvertent; another made no substantive change in the
to update the base year of the believed that the language remains definition of cases used in the
calculation for precisely the reason that relevant as States consider new program calculation.
the commenter noted, finding it no designs. All commenters urged us to Subsection (b) allows a State to
longer appropriate to reward a State in restore the language. exclude from the caseload reduction
its participation rate for caseload Response: We have restored the credit calculation cases on which the
declines it achieved many years earlier. language in the final rule. We had State has spent ‘‘excess MOE,’’ that is,
removed the text in the interim final MOE in excess of the amount it needs
Section 261.41 How will we determine rule because it was strictly illustrative to meet its MOE requirement. If a State
the caseload reduction credit? and we thought States had enough applies this provision, for the
This section of the interim final rule experience with the caseload reduction comparison-year caseload we would use
specified the method that we use for credit to know the types of changes in the sum of the State average monthly
calculating the caseload reduction eligibility criteria that they need to TANF and SSP–MOE assistance
credit. In the final rule, we corrected include on the caseload reduction caseloads, minus cases whose receipt of
two typographical errors in paragraph report. We also did not want to suggest assistance is attributable solely to MOE
(c) that erroneously referred to ‘‘the FY that the list in the original rule was funds in excess of the State’s 80- or 75-
2005 comparison-year’’ caseload when exhaustive; States must report all percent MOE requirement. Since the
they should have read ‘‘the FY 2005 changes in eligibility between the base publication of the interim final rule, this
base-year’’ caseload. year and the comparison year. However, ‘‘excess MOE’’ provision has drawn
Comment: One commenter requested since commenters found the language considerable attention. In our listening
clarification of the data a State should particularly useful, we restored the sessions across the country, it was a
report to establish the FY 2005 base-year language with the clarification that the topic of considerable discussion and
caseload for two-parent families in list is not comprehensive. also elicited formal comments on the
which one parent receives TANF and Comment: One commenter urged us interim final rule. Prior to issuing these
the other does not. The commenter to permit eligibility changes that rules, only one State had ever made use
stated, ‘‘The interim final rule defines a increase the caseload to count for credit of it since its inception in the original
non-recipient parent living with a child above and beyond offsetting the effect of TANF regulation.
receiving assistance as a work-eligible changes that decrease the caseload. The Because of this new interest in the
individual. Under this definition, commenter reasoned that, since we had excess MOE provision, we thought it
single-parent households with non- established the offset by regulation, would be helpful to specify the
recipient second parents will be rather than implementing a statutory methodology for calculating excess
included in the two-parent caseload.’’ provision, we have authority to expand MOE and have revised this subsection
The commenter suggested that the FY it in this way. Further, the commenter to incorporate the specifics of this
2005 baseline include these two-parent suggested that failing to do so would be calculation. If a State wishes to have us
cases to ensure caseloads are fundamentally unfair. take its excess MOE spending into
comparable when calculating caseload Response: It is our longstanding account in the caseload reduction credit
reduction credit. policy to permit caseload expansions calculation, it needs to follow this
Response: The commenter raises a from eligibility changes to offset methodology as part of its Caseload
valid point. Under this rule, the changes that decrease the caseload. We Reduction Report (form ACF–202).
minimum definition of a two-parent originally established this policy to One problem in calculating excess
family has changed. Since the old allow the caseload reduction credit to MOE is that a given dollar of MOE
definition applied to FY 2005, a State reflect a more accurate picture of the spending cannot track to a given case.
Since the caseload reduction credit the ACF–199 TANF Data Report and commenters urged us to retain the
considers only cases receiving ACF–209 SSP–MOE Data Report. provision in the final rule.
‘‘assistance’’ and not all cases, it is The following example illustrates our Response: The final rule does retain
nonetheless important to develop an methodology. In this example we are the provision allowing a State to receive
approach for determining the share of calculating a FY 2007 caseload caseload reduction credit for excess
State spending on assistance that is in reduction credit, which will reduce the MOE spending. During our listening
excess of its MOE requirement. Some State’s FY 2007 required participation tour for the interim final rule, we
methodologies would over-represent the rate, and thus the comparison year is FY expressed doubts about this provision
amount of spending on ‘‘assistance’’ that 2006. Assume that the State’s total MOE and suggested that we might not retain
was indeed excess MOE. For example, for FY 2006 equals $100 million and its it. Our concerns were and remain that:
a methodology that assumed that all Federal spending in FY 2006 equals (1) The provision has not proved
spending on two-parent families came $175 million for a combined total of effective in encouraging States to spend
from excess MOE would, in effect, $275 million. Of this amount, total additional MOE funds, as most States
artificially manipulate the credit, spending on assistance (combined spend only to the level required; and (2)
especially the two-parent credit. Federal and State) equals $110 million. the interaction between this provision
Therefore, we think that the only fair This means spending on assistance and the new flexibility in the DRA
and reasonable approach is to consider equals 40 percent of total spending concerning the types of expenditures
average costs per case when ($110 million divided by $275 million). that can count for MOE, particularly
determining how many cases were The State’s combined TANF and SSP– that a State can spend MOE on non-
funded with excess MOE and thus MOE average monthly caseload, as needy families, could result in large,
should be excluded from the caseload reported on the TANF Data and SSP– artificial caseload reduction credits.
reduction credit calculation. In fact, the MOE Data Reports for FY 2006, equals We do want to clarify that, if a State
only method we have approved prior to 20,000. Therefore, the average spending uses this provision and receives
this final rule used average costs per on assistance per case equals $5,500 caseload reduction credit for excess
case. ($110 million divided by 20,000). The MOE spending, it may not subsequently
State’s 80-percent MOE requirement revise its reported financial data to
Our method divides the total TANF
equals $80 million, so it spent $20 reduce the level of State MOE
(Federal and State) and SSP–MOE
million above that level. Of that ‘‘excess expenditures for which it received such
spending on assistance for the
MOE,’’ we attribute that $8 million, or credit and replace those expenditures
comparison year by the State’s average
40 percent, to assistance spending. with Federal ones. It would be
monthly assistance caseload (combined
Finally, we divide that $8 million by the inherently unfair to credit a State for
TANF and SSP–MOE) for the
average assistance spending of $5,500 expenditures of State funds that it later
comparison year to arrive at an average
per case to conclude that 1,455 of reports did not come from State funds.
annual assistance cost per case for the
fiscal year. The method then computes 20,000 average monthly cases were Section 261.44 When must a State
total spending on assistance as a funded with excess MOE and should be report the required data on the caseload
percentage of total spending. We use subtracted from the FY 2006 caseload in reduction credit?
total spending because spending with the caseload reduction credit Comment: One commenter asked us
Federal and State MOE funds on calculation. to put back language that the interim
assistance are largely interchangeable. If We require the use of 80 percent MOE final rule deleted stating that we would
we based the calculation solely on MOE rather than 75 percent because the issue the caseload reduction credits by
funds, the size of the credit would vary statutory requirement is for 80 percent March 31 of the fiscal year to which the
not based on the amount of excess State MOE spending unless a State meets the credit applied. The commenter stated,
MOE spending, but rather on the work participation requirements for the ‘‘We understand that negotiations
distribution of assistance spending year. If a State meets both participation sometimes result in the notification to
between State MOE and Federal funds. rates for the comparison year, and thus an individual state being delayed past
We then subtract the required 80 its required MOE drops to 75 percent, it this date, but think it is important that
percent of historic State expenditures may revise its caseload reduction credit states have the general expectation that
(80-percent MOE requirement) from the to reflect the lower required MOE level. the information be received by March
State’s actual MOE expenditures and It is possible that we will already have 31.’’
multiply the remaining ‘‘excess MOE’’ that information for the comparison Response: We did not make the
by the percentage of spending on when we calculate the caseload change in the final rule that the
assistance. Finally, we divide this reduction credit; if so and the State met commenter recommended. We deleted
excess MOE spending on assistance by both rates, we will use 75 percent at that the March 31 date that was part of the
the average annual assistance spending time. original TANF rule because, after many
per case to determine how many cases We have revised the Caseload years of experience with the caseload
were funded with excess MOE. If the Reduction Report (form ACF–202) to reduction credit, we did not find that it
excess MOE calculation is for a separate include a new worksheet and made served a useful purpose. Moreover,
two-parent caseload reduction credit, some other changes to the form to assist there is no statutory basis for this or any
we multiply the number of assistance a State in claiming excess MOE as part other specific issuance date.
cases funded with excess MOE by the of the caseload reduction credit. Nevertheless, we will continue to
average monthly percentage of two- Comment: Several commenters noted endeavor to issue the credits within the
parent cases in the State’s total (TANF that we retained the provision that fiscal year to which they apply.
plus SSP–MOE) average monthly allows a State that spends MOE funds
caseload. All financial figures in the in excess of its required level to report Subpart F—How Do We Ensure the
methodology must agree with data for the caseload reduction credit only Accuracy of Work Participation
reported on the State’s ACF–196 TANF the pro rata share of cases receiving Information?
Financial Report and all caseload data assistance that is required to meet the The Deficit Reduction Act of 2005
must agree with information reported on basic MOE requirements. The requires HHS to issue rules that ensure
the consistent measurement of work participation rates. We realized that we In keeping with this clarification, this
participation rates, including had not provided adequate guidance in section of the final rule incorporates the
information with respect to: (1) the regulation and that, as written in the provision permitting a State to report
Determining whether the activities of a interim final rule, the holidays policy projected hours of employment for up to
recipient of assistance may be treated as would not meet the spirit of our six months on the basis of current,
a work activity; (2) establishing uniform mandate to make work participation rate documented actual hours of work. In the
methods for reporting hours of work of calculations consistent across States. We interim final rule, this provision
a recipient of assistance; (3) identifying deliberated at length about the appeared in § 261.61. We have made no
the types of documentation needed by appropriate number, considering the change to the text of the provision but
the State to verify reported hours of number granted on average by private moved it to this section because it fit
work; and (4) specifying the companies, the average number of State better under the rubric of reporting
circumstances under which a parent paid holidays, and the number of hours than it did under documenting
who resides with a child who is a Federal holidays. Ultimately, we chose hours.
recipient of assistance should be to limit it to 10 to be consistent with the This section of the interim final rule
included in the work participation rates. number of Federal holidays. Each State also specified the hours that a State
We received many comments about must designate the days that it wishes could count for self-employed
this subpart. Several readers offered to count as holidays for those in unpaid individuals. The final rule does not
general comments about the increased activities in its Work Verification Plan. change this provision.
burden that the interim final rule placed It may designate no more than 10 such Finally, the interim final rule limited
on administrators and clients, days. The State is free to excuse an the counting of homework and study
particularly with respect to reporting individual on other days for religious or time for individuals participating in
actual hours and documenting other reasons, but it may not count other vocational educational training or any
participation in work activities. Others days for participation rate purposes as other educational work activity to
provided specific comments and holidays. It may also exercise the supervised settings. The final rule
suggestions, which we address below. additional excused absences policy. allows a State to count unsupervised
During our listening tour and in
Section 261.60 What hours of homework time, subject to certain
written comments many people
participation may a State report for a limitations.
expressed misgivings about the way we
work-eligible individual?
structured credit for additional excused Reporting Hours of Each Activity
The interim final rule made explicit absences. Many urged us to permit a Separately
in regulation our long-standing policy of State to implement an hourly equivalent
counting only actual hours of Comment: In conjunction with
to the 10 days, since individuals
participation and not scheduled hours. comments we received about our effort
sometimes need to be excused for only
It required that each State have in place to draft mutually exclusive definitions
a portion of a day. Others thought that
a system for determining whether the of work activities, a number of
the number of additional excused days
hours it reports for the participation commenters objected to the requirement
was insufficient and objected to the
rates correspond to hours in which restriction on counting no more than to report actual hours for each activity
work-eligible individuals actually two per month. separately. They maintained that
participate in work activities. The final In writing the final rule, we struck a separate tracking would discourage
rule continues this same actual hours balance between our responsibility to States from combining work activities
standard. ensure State accountability for the work and would impose an added
In conjunction with the actual hours participation rates in the law and giving administrative burden. They urged us to
policy, the interim final rule also States participation credit for occasional allow States to combine activities and
introduced to the regulations the absences due to circumstances beyond report all participation under one
concept of giving States credit for an individual’s control. We were activity. For example, one commenter
excused absences for TANF persuaded by the comments that suggested that we allow States to count
participation in unpaid activities. Under excused hours makes more sense than an individual’s hours from several
the interim final rule, a State could excused days because some situations activities in the activity that
define and count reasonable short-term, require an individual to be absent for ‘‘constitutes the majority of the hours of
excused absences for days missed due to only part of a day. The final rule permits participation.’’
holidays and a maximum of 10 a State to count up to 80 hours of Response: We strongly support State
additional days of excused absences in additional excused absences in a year programs that combine activities.
any 12-month period, no more than two for each work-eligible individual. It may Having States report hours for each
of which may occur in a month. To not report more than 16 of these hours work activity in the appropriate
count an excused absence as actual in any month. As in the interim final category will help ensure that the data
hours of participation, the individual rule, the State must describe its excused are comparable across States. Reporting
must have been scheduled to participate absence policy (including holidays) in participation by activity is required by
in a countable work activity for the its Work Verification Plan. section 411 of the Social Security Act
period of the absence that the State Readers should note that we have and does not prevent a State from
reports as participation. modified the title of this section for creating integrated programs. Moreover,
In the final rule, we have clarified the clarity of comprehension. We think it a policy that allows some activities to
holidays policy, limiting it to 10 days in should now be more readily apparent count within others based on standards
a year. Because we did not specify in that this section addresses the hours such as what constitutes a ‘‘significant
the interim final rule the number of that can count for participation, while majority’’ of hours would still require
holidays, States proposed counting § 261.61 speaks to documentation States to track the hours of each activity
widely varied holidays in their Work requirements to support hours of separately to determine which activity
Verification Plans, some proposing participation, and § 261.62 specifies is the primary activity. Thus, combining
impossibly long lists of the days they how States should verify the hours that the activities for purposes of reporting
would excuse and count toward the they report and document. hours of participation would not
achieve the suggested administrative ignore emergencies or fail to take further to excuse up to 10 holidays and
simplification. handicapped children to the doctor up to 80 additional hours of excused
The main effect of these during work hours when the doctor is absences in a year, not more than 16 of
recommendations would be to allow available so that the State can get credit which can be reported in a month.
States to bypass statutory limitations on for their participation in a work Equally important, we remind readers
counting participation in certain requirement.’’ Some recommended that there is a distinction between the
activities, most notably the six-week specific standards to replace the allowances a State or service provider
limit on job search and job readiness excused absence policy described in the may choose to make for an individual
assistance and the lifetime 12-month interim final rule (e.g., up to 120 hours and the participation allowances we are
limit on vocational educational training, per year, with a maximum of 30 hours granting to States in excused absences.
or to count educational activities during per month, or 2 days per month but 24 The State determines how many hours
core hours. days per year), while others suggested an individual must engage in work and
we allow unlimited excused absences as what it considers a good cause excuse
Actual Hours versus Scheduled Hours
long as States can ‘‘verify the reason for for missing those hours. The law and
Comment: Some commenters excused absence’’ and it is in their regulations determine what a State gets
recommended we allow States to report approved Work Verification Plans. credit for in the work participation rate.
scheduled hours. One commenter Some commenters argued that there We established the limits on excused
thought that we should allow school should be exceptions to the excused absences based on a reasonable standard
districts to count scheduled hours with absence policy for specified reasons. derived from common employment
excused absences for good cause They recommended that we grant practices. Nevertheless, those limits on
because it would ‘‘benefit the client and extensions for various reasons, such as counting for participation do not
these districts.’’ Another maintained job interviews, meetings required by preclude States from excusing
that requiring a State to develop a other governmental agencies (e.g., child additional absences without penalty to
‘‘system for reporting/counting of actual welfare, child support, schools, courts, the individual.
hours instead of scheduled hours is an or other assistance programs), and Comment: Some commenters thought
unfunded mandate.’’ Another illness, either of the participant or the that our excused absence policy
commenter wrote that it will ‘‘require a participant’s child. They suggested that conflicted with ‘‘the intent and spirit of
significant investment of program we count these absences toward the Family Violence Option (FVO) by
resources in activities and systems to participation without limit and not as punishing individuals who have
measure the number of actual hours of part of the regular excused absence experienced domestic violence.’’
participation.’’ allotment because such appointments Response: For the first time under
Response: Our current policy simply are beyond the control of the individual TANF, we have given States
extends the previous policy. Under and, in some cases, it is not possible to participation credit for allowing clients
TANF, States have always been required make up the hours for some activities to address emergencies. Rather than
to report actual hours and not scheduled because they do not fit a provider’s conflicting with the FVO, the excused
hours. Although the regulations did not schedule. A number of commenters absence policy provides another avenue,
explicitly state it, the instructions to the suggested that we use the providers’’ in addition to granting program waivers,
TANF Data Report (Form ACF–199, definition of holidays and other excused for States to respond to needs of victims
transmitted via Program Instruction absences for individuals in education of domestic violence.
TANF-ACF-PI–99–3, dated October 27, and training programs, as long as they Comment: Many commenters
1999) state, ‘‘For each work activity in make satisfactory progress. recommended that the regulations count
which an adult or minor child head-of- Response: The TANF work as excused absences hours missed due
household participates, States are to participation rate has always been based to the disability of an adult TANF
collect actual hours of participation for on actual hours. Congress did not recipient or due to caring for a family
each week in the report month. * * *’’ include an excused absence policy, in member with a disability. For example
Thus, States should already have had part because the hourly standard has one commenter stated, ‘‘Disabilities and
systems in place to capture and report always been well below the customary responsibility for caring for a disabled
actual hours of participation. 40-hour work week; it is 20 hours per person clearly result in an overall
week for a single-parent family with a greater frequency of absences from work
Holidays and Additional Excused activities than would otherwise be
child under six years of age. As a result,
Absences necessary.’’ One commenter noted that
most individuals already had a built-in
Comment: Some commenters thought excused absence policy of 10 to 20 the standard excused absence policy on
that 10 days per year (a maximum of hours per week. This gives States the which the interim final rule is based
two days per month) of excused flexibility to work around hours that a makes exceptions for disability-related
absences beyond holidays was not client misses and to allow the absences. The commenter explained
sufficient to accommodate the needs of individual to make them up where that ‘‘employers are actually required by
TANF recipients. One commenter feasible. Notably, it also means that the federal Family Medical Leave Act to
thought that our policy was ‘‘not a TANF clients have more time to address allow individuals to take up to three
commonly accepted or reasonable the kinds of issues the commenters months of leave if related to the
standard.’’ Commenters asserted that raised than many non-TANF, low- employee’s health or the employee’s
low-income, single parents often needed income, working parents. need to care for an ill family member.’’
extra time to deal with court or agency The interim final rule expanded this The commenter recommended that we
mandated appointments, school statutory flexibility by including allow States ‘‘to count all excused
appointments, meetings with child holidays and up to 10 additional days absences related to verified medical
protective caseworkers, and caring for per year (no more than two days per purposes.’’
sick children, as well as to attend to month) of excused absences to count as Response: We have addressed the
personal needs that arise. Several participation, a first in the history of the commenters’’ concerns about the need
commenters wrote that it is TANF program. Now, under the final for excused absences due to caring for
‘‘unreasonable to require caregivers to rule, we have expanded flexibility a child with a disability by excluding
such individuals from the definition of to participate in work activities before higher standard than those in unpaid
work-eligible individual. Please refer to or after required appointments because activities.
the preamble discussion of § 261.2(n) for such participation would not affect their Response: We considered extending
more detail about the definition of a countable hours of participation. Most the excused absence policy to give
work-eligible individual. commenters recommended converting States credit for individuals in paid
With respect to the Family and our 10-day excused absence policy for employment, but ultimately decided to
Medical Leave Act, States must comply purposes of the participation rate to 80 retain the policy in our interim final
with its mandate that ‘‘eligible hours of excused absences in any 12- rule. As a practical matter, the State
employees’’ are entitled to 12 weeks of month period, no more than 16 of which would already be getting credit for the
unpaid leave during any 12 month they could use in a month. One client’s hours of work, including
period for reasons of childbirth, commenter emphasized that a day excused absences, whether paid or not,
adoption, in order to care for an ailing should be ‘‘fixed at 8 hours, regardless because a State can project the hours of
family member, or a serious health of the number of hours a participant is participation for individuals in paid
condition that impedes the employee required to participate.’’ Otherwise, a employment for up to six months (based
from performing her job. 29 U.S.C. single day’s absence could consume on documented, actual hours).
§ 2612(a)(1). The term ‘‘eligible more than one day’s worth of excused Comment: One commenter asked for
employee’’ is defined at 29 U.S.C. absences. clarification regarding the activity under
§ 2611(2). The State’s responsibility to Response: We agree that excusing which it should count excused absences
comply with the FMLA does not expand hours rather than days gives greater it grants to allow an individual to search
the hours of excused absence for which flexibility and more closely for a job. The commenter asked whether
the State can get credit under the TANF approximates a work experience. As we such an excused absence should count
work participation rate. We anticipate noted above, we considered several as job search and job readiness
that a State would give a good cause approaches for converting days to hours. assistance or as part of the activity from
exception from any State work The final rule permits up to 80 hours of which the individual was excused.
requirement to an individual who is excused absences for a work-eligible Response: States should report hours
entitled to leave under the FMLA during individual in a 12-month period, no of excused absences as hours of
such a period of leave, but the family more than 16 of which may be reported participation in the activity from which
would still be included in the in a month. the individual was excused. For
calculation of the participation rate. For Comment: Some commenters objected example, if an individual were
further information regarding how to
to the two-day per month limit on participating in a community service
comply with the FMLA, we refer readers
counting excused absences. One program but needed to be excused for
to the Department of Labor and the
commenter argued that this did not two hours to go to a job interview, the
applicable statutes and regulations.
Comment: Several commenters stated reflect employment practices in the real State should report those excused hours
that our excused absence policy would world and that States should be allowed as hours of community service, not as
‘‘reduce State credit’’ toward meeting to count individuals for as many hours of job search and job readiness
the work participation rates. Another excused absences as needed in a given assistance.
asserted that our policy would ‘‘not only month, up to the total allowed for the Comment: Several commenters
hurt States’’ efforts to meet the work year. expressed concern over the fact that
rates, but will mean that the work Response: We realize that some some excused absences may not be
participation rates themselves give employers may permit employees to verified until after the State submits its
policymakers and the public an take more than two excused absence participation data. They recommended
inaccurate picture of the extent to which days (or the hourly equivalent) per allowing States to correct attendance
recipients are actively engaged in work month. However, most employers also records retroactively to reflect excused
activities.’’ require employees to accrue these days absences up until the date on which the
Response: We would like to stress (or hours). It may take a full year for an data report becomes final.
again that allowing States to count employee to earn the equivalent of 10 Response: Because a State is not liable
excused absences in the participation days of leave, so, as a practical matter, for a reporting penalty until the end of
rates does not hurt State efforts to meet the amount of leave many new the quarter after the end of a fiscal year,
the work participation rates or ‘‘reduce employees are entitled to is restricted as a State has until December 31 to submit
State credit’’; it does exactly the well. More important, however, is that its final data for the previous fiscal year.
opposite. This is a policy of expanded this policy applies only to what States
can count, not to what they can allow Projecting Hours of Employment
credit, where prior rules did not count
excused absences. We appreciate that for individual participants as a matter of Comment: One commenter
some readers think we should have policy. Also, since most TANF recommended allowing States to project
expanded credit even further, but we recipients face participation hours in certain non-employment
crafted an excused absence policy we requirements of either 20 or 30 hours activities for up to three months ‘‘based
think is reasonable and derived from per week, there is room to make up the on a history of successful participation.’’
common employment practices. missed hours, which would not be so The commenter stated that this would
Comment: Many commenters easy for someone working full-time. reduce stigma and the burden of
recommended changing the standard Comment: Several commenters attendance sheets.
from a daily one to an hourly one. They suggested that we extend the excused Response: We have allowed projected
argued that this would more closely absence policy to individuals reporting of actual hours of
approximate typical employment participating in paid as well as unpaid participation in paid work activities
policies where those who miss work activities. They noted that many low- because an employer has both a fiscal
typically take off some number of hours income workers do not receive paid interest and a stewardship
rather than a full day. They thought that leave for holidays or other absences. In responsibility to ensure that employees
a policy of daily excused absences addition, they argued that this holds work for the hours of pay. A similar
would reduce incentives for individuals many of those who are working to a situation does not exist in the other
activities; therefore, we have not reasonable approach and minimizes proposed a wide range of ratios of class
adopted this suggestion. administrative burdens. time to homework time, generally
Comment: One commenter suggested ranging from a half hour to two hours
Self-Employment Hours that the calculation of hours for self- of homework time for every hour of
Comment: Several commenters employment be based on the higher of class time.
proposed allowing States to project the applicable Federal or State Some commenters expressed concern
employment hours for up to six months minimum wage. that the daily supervision requirement
for individuals who are self-employed. Response: The final rule retains the for unpaid work activities would mean
They argued that these approaches calculation based on the Federal that program administrators or some
recognize the inherent challenges of minimum wage. We consciously chose other responsible third-party would
verifying the hours of self-employment. the Federal minimum wage because it have to monitor homework on a daily
Response: The option to project hours allows States with higher State basis.
of participation for a maximum of six minimum wages to count more hours of Response: We agree with many of
months does apply to self-employment. employment than if the calculation were these comments. In § 261.60(e) of the
Self-employment is a form of based on the higher of the two. This also final rule, we have expanded State
unsubsidized employment and therefore provides consistency in the treatment of flexibility in counting homework time.
may be projected for up to six months self-employment hours across States. The rule now permits a State to count
based on prior, documented hours of supervised homework time and up to
actual employment. Homework Time
one hour of unsupervised homework
Comment: Some commenters Comment: Several commenters time for each hour of class time. Total
expressed concern because the suggested that limiting homework or homework time counted for
regulations limit the hours a State can study time to supervised settings does participation cannot exceed the hours
count for self-employed recipients to the not reflect the way educational required or advised by a particular
number derived by dividing the programs work. They noted that most educational program. It was never our
individual’s self-employment income adult education and training programs intent in the interim final rule to have
(gross income less business expenses) require significant out-of-class an individual participate in more hours
by the Federal minimum wage. They homework and study time, but, unlike of supervised homework than the
explained that some types of self- secondary school where supervised program actually requires, but the rule
employment take time before income is ‘‘study halls’’ are common, many was not explicit on this point. Where
generated. Another commenter noted postsecondary programs do not have the State opts to count homework time,
that some types of self-employment are supervised study settings. They it must document what the homework
affected by seasonal factors, so that explained that students who do not or study expectations of the program are
income is only generated in some finish their homework cannot make to ensure it does not exceed those hours.
months, even though the work is satisfactory progress and successfully
ongoing. They recommended various complete their courses of study; thus, Section 261.61 How must a State
approaches that would take into account they maintained, a supervised document a work-eligible individual’s
hours needed to prepare for homework policy is not necessary. In hours of participation?
employment and sporadic work addition, they thought that requiring This section of the interim final rule
schedules, including criteria based on formal study periods creates described the documentation standards
self-attestation, earnings, and administrative burdens on educational that a State must meet for its work
preparation time. institutions and increases program costs participation data. In particular, it
Response: We think the best approach related to providing supervision and included an explicit requirement that a
for calculating hours of self-employment child care for parents who must stay State verify through documentation in
is to rely on the net income (gross longer in study sessions rather than the case file all hours of participation
income minus business expenses) of the completing the work at home. Finally, that it reports. It also specified the types
individual. We adopted this method commenters contended that singling of documentation we expected a State to
because States already calculate net TANF recipients out for special study require for each activity. The preamble
income when determining the eligibility sessions might increase stigma by to the interim final rule stated that a
of the self-employed for TANF benefits identifying them as welfare recipients. State may not report data to us on the
and thus our approach minimizes the Some commenters did not like the basis of ‘‘exception reporting’’ where it
administrative burden on States. We do implication of the preamble language, assumes that clients participate in all
not believe it is necessary to modify the saying that it suggested that TANF scheduled hours unless it receives a
rule to address these suggestions. The participants in educational activities report to the contrary from a service
regulation allows a State to ‘‘propose an cannot be trusted to complete provider.
alternative method of determining self- homework assignments and to study the The interim final rule also permitted
employment in its Work Verification material as needed to succeed in the States to report projected actual hours of
Plan.’’ This description should indicate training or educational program. unsubsidized or subsidized employment
how the State plans to monitor and Several commenters emphasized the or OJT for up to six months at a time
supervise this activity to ensure that it administrative value of having an easy on the basis of prior, documented actual
reports actual hours and that the self- way to determine the number of hours hours of work. Although this section did
employment progresses to the point of participation that can count for not address the frequency of
where the individual can effectively homework. They noted that most documentation for other activities, the
earn more than the minimum wage. We educational programs have a ‘‘rule of preamble to § 261.62 of this subpart
will not approve alternative plans that thumb’’ for the number of homework explained that we expected a State’s
provide for an individual’s self- hours associated with each class hour Work Verification Plan to describe the
reporting of participation without and suggested that State education documentation it uses to monitor
additional verification. We believe the agencies can assist TANF programs in participation and ensure that it reports
rule’s provision for approximating hours assessing the appropriate number of actual hours of participation. We
using the Federal minimum wage is a homework or study hours. Commenters explained that we were establishing a
range of documentation guidelines that prohibited their use on the basis of participation and protect the State in the
vary by type of activity. We expected job concerns raised by single audits. event of an audit.
search and job readiness assistance to be Without an adequate system of Comment: Many commenters opposed
documented daily and other unpaid recordkeeping or documentation, it is the daily and two-week documentation
work activities to be documented no impossible to determine whether reports requirements. They noted that the
less than every two weeks. are appropriately filed when a client statute requires States to report
In the final rule we have reiterated fails to show up or meet the day’s information on a monthly basis and
our position that all hours of participation requirements. recommended that documentation
participation must be reported requirements conform to the same
affirmatively and supported by Documenting Paid Employment monthly time frame. They suggested
documentation in the case file, but we Comment: Most commenters that the standards of documenting
no longer require daily documentation supported the interim final rule’s participation ‘‘daily’’ and ‘‘every two
of job search and job readiness provision allowing States to project weeks’’ in the interim final rule were
assistance or biweekly documentation of actual hours of employment for up to ‘‘too prescriptive and will be onerous
other unpaid work activities. All paid six months based on current, for activity providers and local TANF
activities must include written documented actual hours of program administrators.’’ They
documentation of hours of employment. unsubsidized employment, subsidized observed, ‘‘Increasing reporting
Wage stubs and other employer- employment, and OJT. Most requirements will force providers to
produced documents are the best commenters appreciated that this dedicate additional resources to data
sources of verifiable documentation of significantly reduced the burden on tracking, often at the risk of depleting
paid hours. All unpaid activities should employers and recipients and was less resources from another program
rely on written, signed documents to stigmatizing for recipients. One function such as case management. The
support hours of participation. commenter noted that the description of more time staff must spend compiling
Generally, documents verifying actual this provision at § 261.61(b) seemed to data, the less time they have to assist
hours of participation should include: limit this policy to ‘‘unsubsidized clients.’’ In addition, several
the participant’s name; actual hours of employment,’’ rather than all forms of commenters asked for clarification
participation; the name of the work site paid employment. regarding the specifics of what must be
supervisor, educational provider, or Response: We have retained this in the case file, including whether each
other service provider; and the name provision in the final rule and clarified
file must include a hard copy of all
and phone number of the person individual attendance records. The
that the documentation requirements
verifying hours. commenters recommended allowing
described apply to all forms of paid
We also moved the provision States to ‘‘create a central or electronic
permitting projection of hours that was employment, whether unsubsidized or
file that would meet the purpose of
formerly at § 261.61(c) to § 261.60(c) not.
documenting attendance.’’
because it fit better under the rubric of Documenting Unpaid Activities Response: We agree with the
reporting hours than it did under commenters and have changed our
documenting hours. However, we have Comment: Some commenters said that policy accordingly. The documentation
incorporated in this section a provision the rules impose rigid monitoring and must be available in the case file to
specifying the documentation standards burdensome reporting requirements for support all the actual hours of
when a State projects hours of individuals in unpaid activities. One participation it claims in the monthly
employment. We have also explained commenter asserted, ‘‘Frequent work participation data it reports. A
that the documentation for homework demands for proof of participation State should describe in its Work
must include a statement about the subject families to loss of assistance.’’ Verification Plan the documentation it
amount of homework or study time Another commenter explained, ‘‘The uses to monitor participation and ensure
advised by the particular educational goal of these requirements is to ensure that it reports actual hours of
program. Finally, we reorganized the that the data reported about work participation. This may include
section for clarity. participation is accurate, not to create electronic records.
administrative burdens on recipients Comment: One commenter asked us
Documenting All Hours of Participation that create barriers to participation and to ‘‘clarify that, while job search and job
Comment: Several commenters aid receipt for families.’’ readiness participation must be
objected to the interim final rule’s Response: We believe the final rule supervised and recorded daily, the
prohibition on the use of ‘‘exception provides a reasonable balance between documentation of participation does not
reporting.’’ They explained that this is the need for accurate information and need to be submitted to the State agency
not the same as reporting scheduled the burden inherent in documenting more frequently than monthly.’’
hours and noted that many States have hours of participation. For example, Response: We agree with this
contracts with providers that include under the final rule, we allow States to comment. While supervision of
exception reporting and that such count an hour of unsupervised participation must occur on a daily
reporting ‘‘reduces the administrative homework time for each hour of class basis, States report monthly
burden of reporting while maintaining time, thereby reducing the reporting and participation data for job search and job
accountability.’’ monitoring requirements for those readiness assistance with all other
Response: We continue to believe that individuals in various educational participation data and the
a State should affirmatively determine activities. Moreover, while the rule does documentation in the case file must
that an individual participates in an require States to document participation support what the State reports.
activity in order to count such through methods beyond client self- Comment: Several commenters asked
participation toward the work reporting, these have been requirements us to clarify the types of documentation
participation rates. Exception reporting all along. We appreciate that such needed to substantiate homework time.
systems may operate effectively in procedures may pose challenges in Response: The final rule allows a
automated or well-documented some situations, but they serve to State to count up to one hour of
reporting situations; however, we substantiate actual hours of unsupervised homework for each hour
of class time, if the educational program report. The Work Verification Plan documentation, verification, or internal
calls for such homework time. The only requirements reflect the Congressional controls until FY 2008.
documentation that is required for mandate in the DRA that States report Comment: Several commenters
unsupervised homework time is a to us in a Work Verification Plan what suggested that States use information
statement from the educational program those procedures are. This should not contained in the National Directory of
indicating the amount of homework represent an undue burden for States. New Hires (NDNH) not only for the
required. For supervised homework, we Comment: One commenter purpose of tracking work participation
require this same documentation along recommended that we avoid recreating rates, but also for additional purposes.
with a time sheet or record of a quality control system as we ensure For example, one commenter suggested
attendance signed by the individual State compliance with the work that we require States to use NDNH
supervising the activity. verification requirements of the DRA. information to identify circumstances in
Comment: One commenter urged us The commenter expressed concern that which actual hours of work change.
to use the same verification standards such a system could focus State efforts Another commenter recommended that
for self-employment as we allow for more on reducing documentation errors we make each State’s NDNH match
other forms of employment. Another than on helping recipients enter the results available to all States for
commenter noted that States have workforce. comparison purposes.
developed a variety of mechanisms for Response: One goal of TANF is to Response: While we appreciate these
monitoring self-employment and that enable recipients to prepare for and recommendations, the uses of the
‘‘all or nearly all of these mechanisms enter employment leading to self- NDNH are restricted by law. The law
rely on various types of self-reporting by sufficiency. Documentation and prohibits the use or disclosure of
the participant.’’ The commenter verification requirements should never information in the NDNH, as well as
asserted that ‘‘the issue is not self- detract from that goal. However, information resulting from NDNH
reporting, but rather the type of self- accurate documentation is key to comparisons, except as expressly
reporting documentation and level of determining whether States are meeting provided. The use of NDNH information
detailed required,’’ expressing concern this goal. We think we have structured for verification of work participation
that additional verification requirements a rule that minimizes the burden of purposes is a permissible use, as it is a
would impose a significant documentation while meeting our program responsibility of the State
administrative burden on States. responsibility to be good stewards of TANF agency. Matches for this purpose
Response: We believe a different Federal funds and programs. may occur only to the extent and with
standard is warranted because self- Comment: One commenter urged us the frequency that the Secretary of HHS
employment is not analogous to other to correct regulatory language that determines to be effective in assisting
forms of employment. With self- requires States to describe how they States to carry out their responsibilities
employment, there is no pay stub, no determine the number of countable under the TANF program. Access to
supervisor, and no employer whose hours of self-employment under each confidential information in the NDNH is
interests are distinct from the employee. countable work activity. The commenter restricted to authorized persons and the
It is because self-employment differs so noted that this appeared to be a drafting use of such information is limited to
dramatically from other forms of error, since self-employment cannot authorized purposes. Any misuse of
employment that we required States to count under all the activities. NDNH information is subject to penalty.
explain in their Work Verification Plans Response: The commenter is correct Comment: One commenter questioned
how they will document hours of work and we have modified the rule the benefit of using NDNH data to
and preclude the use of self-reporting. accordingly. States must only describe calculate work participation rates. The
how they determine self-employment commenter stated that a pilot in two
Section 261.62 What must a State do hours under unsubsidized employment. urban counties of one State indicated
to verify the accuracy of its work Nevertheless, the Work Verification that NDNH data were not useful for the
participation information? Plan must describe how the State intended purpose, because not all
The interim final rule described the determines countable hours for each employers provided NDNH data and the
requirements for a Work Verification activity. data pertain to new employees only, not
Plan. Although some commenters Comment: One commenter noted ongoing employment. The commenter
expressed concern about the burden there was ‘‘Insufficient time for states to urged us to acknowledge that the NDNH
associated with meeting these retool and meet new requirements by is not a panacea.
requirements and the timeframe for October 1, 2006. New documentation, Response: We agree that the NDNH
doing so, we did not change the final monitoring, and reporting requirements has limitations in contributing to work
rule. We explained that States should place heavy burdens on caseworkers, participation data, particularly because
already have verification, providers, and our state’s computer it does not collect the number of hours
documentation, and internal control tracking system. States were informed of of employment. However, we would
procedures in place to support the work the interim rules and new requirements like to note that the NDNH does contain
participation data they report and that on June 29, 2006.’’ quarterly wage data about individuals
the new requirements should not pose Response: For many States, the Work engaged in ongoing employment, as
a significant administrative burden. Verification Plan that was due on well as information about newly hired
Comment: We received several October 1, 2006, was a description of employees, which the State may not be
comments concerning the burden the longstanding documentation, able to obtain as quickly and efficiently
Work Verification Plan and the verification, and internal control from any other source. The Federal
underlying documentation and systems and did not require new Office of Child Support Enforcement,
verification requirements placed on procedures. We do not have the which manages the NDNH, is
States. authority to modify the statutory committed to working closely with State
Response: States should already have deadline for States to submit the Work TANF agencies to help agencies
verification, documentation, and Verification Plan; however, we have understand the NDNH and how the data
internal control procedures in place to delayed imposition of a penalty for may be used for optimal results. To
support the work participation data they failure to maintain adequate conduct a data match between its data
and NDNH data, for purposes of We will use the single audit under compliance plan to correct the
verifying work participation, a State OMB Circular A–133 in conjunction deficiency.
TANF agency must enter into a written with other reviews, audits, and data to Comment: One commenter expressed
Memorandum of Understanding (MOU) determine whether the State’s controls concern that a State that submits
with the Federal Office of Child Support and procedures result in accurate data. participation data for the universe of
Enforcement. The MOU addresses the A State must maintain case cases would be at a disadvantage in an
terms and conditions governing the data documentation and pertinent findings of audit or review compared to a State that
match and the security measures its verification process for use by the submits sample data. The commenter
required for safeguarding NDNH match single audit or other reviews. suggested that ‘‘States reporting on all
results. NDNH data may only be used Readers should note that we revised participants be allowed to pull their
for certain narrowly defined purposes, the title of this section and of § 261.65 own samples for audit based on general
including assisting States in carrying of this part to be more concise. ACF guidelines.’’
out their responsibility under the Comment: We received a couple of Response: Auditors must follow
federally-funded TANF program to comments that expressed concern over prescribed procedures for conducting
establish and maintain work the burden imposed by maintaining case audits regardless of whether the State
participation procedures. NDNH data file documentation and findings until a submits universe or sample data. They
may not be used to determine eligibility single audit is resolved. use the sample standards of the
in State MOE or solely State-funded Response: The DRA and our interim American Institute of Certified Public
programs. final rule did not change the record Accountants (AICPA) and the GAO
retention and record access rules that auditing standards. In addition, we
Section 261.63 When is the State’s apply to TANF. These separate rules are provide them with a compliance
work verification plan due? in 45 CFR 92.42. These requirements supplement to guide their review of our
In accordance with the Deficit apply to all financial and programmatic programs.
Reduction Act of 2005, our interim final records, supporting documents,
statistical records, and other records of Section 261.65 Under what
rule required each State to submit an
grantees or sub-grantees. Records must circumstances will we impose a work
interim Work Verification Plan that
be retained for three years, or longer, if verification penalty?
included procedures for validating
reported work activities to the Secretary any litigation, claim, negotiation, audit, Under our interim final rule, the
no later than September 30, 2006. A or other action involving the records has penalty amount is based on the State’s
State must submit revisions requested been started before the expiration of the degree of noncompliance and is equal to
by the Department within 60 days of three-year period. If extended, records an amount of not less than one percent
receipt of our request, and must submit must be retained until all issues have and not more than five percent of the
and operate under an approved Work been resolved. We issued Program State’s adjusted SFAG. We will impose
Verification Plan no later than Instruction TANF–ACF–PI–2003–1, the maximum penalty of five percent if
September 30, 2007. If a State modifies dated January 28, 2003, to clarify the a State fails to submit its interim Work
its verification procedures for TANF or start date of the three-year record Verification Plan by the due date of
SSP–MOE work activities or internal retention period for Federal TANF September 30, 2006, or if it fails to
controls for ensuring a consistent funds and State MOE expenditures. For revise its procedures based on Federal
measurement of the work participation Federal TANF awards, the record guidance and submit the complete plan
rate, then the State must submit for retention period starts on the day the by September 30, 2007. This is because
approval an amended Work Verification grantee submits its final expenditure the State will not have complied with
Plan by the end of the quarter in which report showing that all the funds the fundamental requirement to
the State modifies the procedures or awarded in the particular Federal fiscal establish a Work Verification Plan. But,
internal controls. We have retained year have been expended. For State States must also implement the
these provisions in the final rule. MOE expenditures, the record retention procedures. If we determine that a State
We received no comments on this period starts on the day the State fails to maintain adequate
section, so we have not made any submits its final expenditure report for documentation, verification, and
substantive changes to the provision. a Federal fiscal year. internal control procedures, we will
Comment: One commenter asked impose a penalty based on the number
Section 261.64 How will we determine whether HHS or the single audits will of years of noncompliance, i.e., one
whether a State’s work verification use a threshold or a specified percentage percent of the adjusted SFAG for the
procedures ensure an accurate work to determine whether the State had first year, two percent for the second
participation measurement? inadequate controls and procedures for year, three percent for the third year
The DRA added a new penalty to accurate work participation data. until a maximum of five percent is
section 409(a)(15) of the Social Security Response: As under the original rule, reached. If, after any failure, a State
Act for a State that fails to establish or we will not impose a penalty based on demonstrates effective work verification
maintain adequate work participation isolated failures to document and verify procedures for two consecutive years,
verification procedures. The interim work participation information reported then we will consider any future failure
final rule outlined the two-part penalty. to HHS. We will impose a penalty if the to be the first occurrence.
First, a State will be liable for a penalty audit or review identifies a systemic Readers should note that we revised
if it fails to submit an interim Work problem or weakness. To ensure that the title of this section and of § 261.64
Verification Plan by September 30, our conclusion is not based on incorrect of this part to be more concise.
2006, and a plan that we have approved information, it is critically important for We only received a few comments on
by September 30, 2007. Second, States to dispute ‘‘questioned’’ audit this section of the interim final rule. The
effective October 1, 2007, States must findings and refute the allegation with comments mainly concerned the
maintain adequate internal controls and appropriate documentation. States also distinction between this penalty and the
verification procedures to ensure that have the opportunity to dispute our penalty for failing the work
reported work participation data is penalty finding, to claim reasonable participation rate(s) and the criteria that
accurate. cause, and to submit a corrective a State must meet to comply with the
work verification requirements for any findings, and any other reports, audits, penalty, we will reduce the SFAG
given year. and data sources, as appropriate. We payable for the immediately succeeding
Comment: One commenter asked will also consider the controls the State fiscal year.
whether the work verification penalty has in place and actions the State takes
applies if a State operates its work to review and to address any problems Section 262.1 What penalties apply to
participation verification system poorly. so that the State’s work verification States?
Response: If we determine that any of procedures and internal controls are We received no comments on this
the State’s procedures is inadequate, a working properly. We will not impose a section, so we have made no changes to
penalty could result. Once a State has penalty based on non-systemic errors. the provision.
an approved Work Verification Plan, the Comment: Some commenters
penalty is based on whether the internal suggested alternative penalty structures, Section 262.2 When do the TANF
controls and verification procedures finding the structure in the interim final penalty provisions apply?
ensure consistent and accurate work rule to be too severe. For example, one
participation rates. A State’s system of commenter suggested that ‘‘ACF apply a The penalty for failing to establish
internal controls and verification 2nd or subsequent year penalty only for and submit a Work Verification Plan
procedures includes a whole array of the repetition of an error penalized in takes effect on October 1, 2006. The
activities, such as: ensuring that it the 1st year. In other words, if ACF penalty for failing the ongoing
counts only work activities that are determined that a state’s internal control requirement to maintain adequate work
consistent with the Federal definitions; procedures were inadequate and verification procedures takes effect on
verifying and monitoring actual hours of imposed a 1% penalty in the 1st year, October 1, 2007.
participation; identifying work-eligible and then found that the state did not Comment: Several commenters noted
individuals; and validating the accuracy maintain adequate documentation in the that many States will not have time to
of the data reported. All of these factors 2nd year, the 2nd year penalty would legislate the changes needed to comply
contribute to an effective internal again be 1% since it involved a separate with the new rules by October 1, 2006,
control system. error. Any penalty should be lifted after and urged ACF to withhold penalties
Comment: Some commenters asked us the state has complied with the work until States have a reasonable amount of
to clarify the distinction between the verification procedures for one full year, time to pass legislation. For example,
penalty for failure to meet the work not two.’’ one commenter noted that, in order for
participation rate and the work Response: While we understand the the State to comply fully with the
verification penalty. commenter’s concern, the work requirements may take both legislative
Response: These are two completely verification requirements were imposed and automation changes. Since that
separate penalties established by the by Congress to ensure that States State’s legislature does not meet until
statute. A State could meet its required implement procedures to ensure January 2007, the commenter
work participation rates and still risk accurate and consistent work encouraged ACF to take these factors
imposition of the work verification participation data. We also note that the into consideration.
penalty as a result of inadequate work requirement to document and verify
verification procedures and/or internal work participation information is not Response: We are sensitive to the fact
control procedures. Similarly, a State new. States were always required to that some States must make both
could fail a work participation rate but comport with the accurate and complete legislative and automation changes to
meet the work verification data standard at § 265.7 under the implement the new DRA requirements.
requirements. We expect States to existing regulations. Our penalty There are several recourses available to
review and monitor their processes and structure represents a reasonable, States to avoid or mitigate financial
procedures regularly to ensure the graduated approach, increasing only by penalties. Under this rule, we have
accuracy of the data used in calculating the number of years of failure (degree of delayed the imposition of a penalty for
the work participation rates. noncompliance). We do not believe it inadequate work verification procedures
Comment: Several commenters asked would be appropriate to treat a until FY 2008 as one way to address this
about the criteria that a State must meet subsequent year of failure for another concern. Under prior, continuing law
to be found in compliance with the reason as if the prior failure had not and regulations, there are a number of
work verification requirements for any occurred. Therefore, we have not remedies available to a State that is
given year. For example, one commenter accepted this recommendation. potentially liable for a penalty. If we
inquired whether a State must be error- issue a penalty notice to a State, the
free or, alternatively, required to stay V. Part 262—Accountability State may submit a reasonable cause
below a specific threshold. The Provisions—General argument outlining the specific
commenter also asked whether a State The DRA added an additional penalty legislative provisions that it needed and
that responded to errors appropriately at section 409(a)(15) of the Social the impact of the delay in getting such
and timely in an agreed-upon manner Security Act for States that fail to provisions through the legislative
would be considered to be in establish or comply with work process. We will consider granting a
compliance. participation verification procedures. reasonable cause exception if a State can
Response: States must maintain The interim final rule clarified that if a demonstrate that it was impossible to
adequate documentation, verification, State failed to comply, we would reduce meet the requirements absent such
and internal control procedures to the adjusted SFAG payable for the legislation. Also, the State may submit
ensure the accuracy of the data used in immediately succeeding fiscal year by a corrective compliance plan to meet the
calculating the work participation rates. not less than one percent and not more requirements at a future time. This will
We will determine through audits or than five percent. A State that fails to allow States additional implementation
other reviews whether the State has meet the work verification requirements time. We look forward to working
adequate controls. Our penalty may claim reasonable cause or submit a cooperatively with States to help them
determinations will be made only after corrective compliance plan under the operate effective programs, ensuring
fully considering the auditor’s findings, procedures described in §§ 262.4–262.7 that they can submit timely, accurate
the State’s reply, if any, to the auditor’s of this chapter. If we impose the data and avoid financial penalties.
Section 262.3 How will we determine if VI. Part 263—Expenditures of State and regardless of the TANF purpose. We
a State is subject to a penalty? Federal TANF Funds remind readers that Federal TANF
In the interim final rule, we explained assistance is also limited to eligible
Subpart A—What Rules Apply to a
that we would use the single audit families, regardless of the TANF
State’s Maintenance of Effort?
under OMB Circular A–133 in purpose.
Section 263.2 What kinds of State Congress also created new TANF
conjunction with other reviews, audits,
expenditures count toward meeting a discretionary funding streams (Grants
and data sources to assess whether the
State’s basic MOE expenditure for Healthy Marriage Promotion and
State maintained adequate controls and
requirement? Responsible Fatherhood) in the DRA.
procedures to ensure accurate data are
These funds are in Title IV–A, sections
reported to calculate work participation The Deficit Reduction Act of 2005
403(a)(2)(A)(iii) and 403(a)(2)(C)(ii) of
rates. retained the same MOE spending levels
the Social Security Act. Under MOE,
We received no comments on this required in PRWORA; however, it also
States may count qualified expenditures
section, so we have made no changes to added a new provision, ‘‘Counting of
that are made as a condition of receiving
the provision. Spending on Certain Pro-Family
Federal funds under Title IV–A toward
Activities’’ at section 409(a)(7)(B)(I)(V) their MOE requirement. For FY 2006,
Section 262.6 What happens if a State
of the Social Security Act. We included Healthy Marriage Promotion and
does not demonstrate reasonable cause?
this provision in § 263.2(a)(4) of the Responsible Fatherhood grantees had to
Comment: A significant number of interim final rule to allow States to contribute a matching share of the total
commenters proposed that we grant count non-assistance expenditures on approved costs of a project as a
reasonable cause exemptions to States pro-family activities if the expenditure condition of receiving any of the Federal
that have not completed a legislative is reasonably calculated to prevent and discretionary funds. Thus, a State may
session since the publication of the reduce the incidence of out-of-wedlock count these State expenditures, when
interim final TANF regulations on June pregnancies (TANF purpose three), or to made on allowable activities under the
29, 2006, both for failure to meet the encourage the formation and Healthy Marriage Promotion and
work participation rates and failure to maintenance of two-parent families Promoting Responsible Fatherhood
maintain adequate work verification (TANF purpose four). Under this programs, toward its MOE requirement,
procedures. One commenter contended provision, non-assistance, pro-family unless a limitation, restriction, or
that elements of the Work Verification expenditures for benefits and services prohibition under this subpart applies.
Plan will require more staff, resources, were not limited to ‘‘eligible’’ families This provision is outlined in § 263.2(g).
and additional system support than are (as defined in § 263.2(b)), which under The regulations at 45 CFR part 92 on
currently funded within the State’s prior rules, was a limitation on all MOE matching or cost-sharing requirements
existing budget. Others suggested that spending. Instead, States could claim permit States to count toward their MOE
the rule should provide ‘‘phase-in time’’ qualified pro-family expenditures for requirement qualified, non-Federal,
to comply with the new requirements or non-assistance benefits and services cash or in-kind expenditures by a third
to respond to delays in adjusting the provided to or on behalf of an party. For example, this may include
participation requirements or adding individual or family, regardless of Healthy Marriage and Responsible
parents to the requirements. financial need or family composition. Fatherhood providers in a State. As set
Response: We do not have the In developing the final rule, based on forth in the policy announcement,
authority to adjust or modify the comments we received, we reconsidered TANF–ACF–PA–2004–01, dated
statutory participation requirements or the scope of the pro-family claiming December 1, 2004, and repeated in the
rates. While we recognize that this rule provision. We have concluded that interim final rule at § 263.2(e), we
may impose new requirements on ‘‘Counting of Spending on Certain Pro- require an agreement in writing between
States, few of them require actual Family Activities’’ within TANF the State and any third party allowing
legislative action. With respect to work purposes three or four means counting the State to count such expenditures
verification requirements, our rule of non-assistance expenditures on only toward its MOE requirement. This
permits the Work Verification Plan to be the activities enumerated in the healthy policy was initially explained in a
phased-in over time and to be revised in marriage promotion and responsible policy announcement, TANF–ACF–PA–
future months. But, to give meaning to fatherhood section of the DRA (sections 2004–01, dated December 1, 2004 and
the participation rate requirements, the 403(a)(2)(A)(iii) and 403(a)(2)(C)(ii) of repeated the policy in the interim final
State must have adequate procedures the Act)—unless a limitation, restriction rule at § 263.2(e).
and internal controls in place by or prohibition under this subpart Comment: We received several
October 1, 2007. The State may amend applies. For other allowable comments of concurrence and
its Work Verification Plan at any time expenditures within TANF purposes appreciation for clarifying these
during the course of the fiscal year in three or four, States may only claim provisions. One commenter asked us to
accordance with § 261.63(c) of this toward their MOE requirement the clarify whether ‘‘pro-family’’
chapter. While we have not created an portion expended for or on behalf of expenditures are limited to TANF
automatic reasonable cause exemption, eligible families. We have amended the eligible families, or whether it is broader
any State that fails the work pro-family claiming provision at and may include other low-income
participation requirements or work § 263.2(a)(4) to specify which non- families. Other commenters wondered
verification requirements may avail assistance, pro-family expenditures whether countable expenditures for
itself of the penalty resolution process within TANF purposes 3 or 4 are not activities like pre-K or after-school
described in §§ 262.4–262.7 of this limited to eligible families. programs fall under the new pro-family
chapter. This allows a State to outline With the exception of the pro-family claiming provision.
the basis of its request for a reasonable claiming provision discussed above, Response: When Congress created the
cause exception for failing to meet a States must continue to limit the expanded pro-family spending
requirement, including the argument provision of all other MOE-funded provision, it limited the provision to
that lack of timely State legislation assistance and non-assistance benefits to ‘‘certain pro-family activities.’’
caused it to fail to meet the requirement. eligible families as defined at § 263.2(b), Moreover, it created this new provision
as part of the section of the DRA titled expended in such programs during FY programs in sections 403(a)(2)(A)(iii) or
‘‘Grants for Healthy Marriage Promotion 1995. The original TANF rule provides 403(a)(2)(C)(ii) of the Act, unless a
and Responsible Fatherhood.’’ In that the new spending amount is limitation, restriction or prohibition
reevaluating our rule to respond to these determined by comparing total FY 1995 under this subpart applies.
comments, we have concluded that this expenditures in the pre-existing We received no comments on this
placement signaled Congressional intent program with total qualified section; thus, it has been retained
that ‘‘certain’’ pro-family activities expenditures for or on behalf of eligible without change in the final rule.
means the healthy marriage promotion families during the current fiscal year. VII. Part 265—Data Collection and
and responsible fatherhood activities it The State may claim the excess, if any, Reporting Requirements
described in this section of the DRA. toward its MOE requirement. This new
Thus, the final rule limits pro-family spending limitation does not apply to Section 411(a) of the Social Security
activities for the purposes of this new expenditures under State or local Act imposes specific data reporting
provision to the healthy marriage programs that had been previously requirements on States to provide
activities listed in section authorized and allowable under the information about program effectiveness
403(a)(2)(A)(iii) of the Act and the State’s former title IV–A programs in and to assure State accountability for
responsible fatherhood activities listed effect as of August 21, 1996. key requirements, including work
in section 403(a)(2)(C)(ii) of the Act, Comment: A commenter noted an participation. Section 411(a)(7) permits
unless a limitation, restriction, or inconsistency between § 263.2 of the the Secretary to prescribe such
prohibition under this subpart applies interim final regulations and this ‘‘new regulations as may be necessary to
to any such activity. These are the only spending’’ section. One allows States to define the data elements required in the
expenditures within TANF purposes claim as MOE, expenditures for pro- reports mandated by section 411(a). The
three or four that are not limited to family activities, regardless of whether a Deficit Reduction Act of 2005 added
eligible families. family is financially ‘‘eligible’’ or not, these same data collection requirements
We recognize that this additional but, the ‘‘new spending’’ test still refers for cases receiving assistance in separate
claiming provision became effective on only to ‘‘eligible’’ families. The State programs.
October 1, 2005 (FY 2006). We further commenter suggested that the new Section 265.1 What does this part
recognize that, since publication of the spending calculation needed to be cover?
interim final rule, States may have been changed to count qualified, pro-family,
claiming toward their MOE requirement non-assistance expenditures within We received no comments on this
a whole array of non-assistance TANF purposes three or four. section and made no changes to it in the
expenditures—e.g., after-school Response: We agree with the final rule.
programs, pre-K programs, college commenter. This was an oversight. We Section 265.2 What definitions apply
scholarship programs—as a result of this have amended the new spending to this part?
new provision. This is because we provision at § 263.5(b). The amount of
expenditures that may be claimed for We received no comments on this
presented this new claiming provision
MOE purposes is limited to the amount section and made no changes to it in the
in the interim final rule in a general
by which total current fiscal year final rule.
way. As a result, we have advised States
that, until we publish the final rule, expenditures for certain non-assistance, Section 265.3 What reports must the
they may draw their own reasonable pro-family activities within TANF State file on a quarterly basis?
conclusions as to the sort of pro-family purposes three or four exceed total State
Section 265.3(b) TANF Data Report
expenditure within TANF purpose three expenditures in the program during FY
or four to claim under this new 1995. Readers should refer to the We have made some changes to the
provision. Therefore, this amended discussion of § 263.2 for more detail on TANF Data Report—Section one. In
provision will be effective with the counting these pro-family expenditures. order to implement the policy on
effective date of this final rule. deeming core hours for the overall work
Section 263.6 What kinds of participation rate and the two-parent
In summary, with the exception of the
expenditures do not count? work participation rate, we are adding
pro-family, non-assistance expenditures
described above, States may only claim As we stated in the preamble of the two data elements to the TANF Data
toward their MOE requirement interim final regulations, the Deficit Report—Section one. The new data
expenditures for or on behalf of eligible Reduction Act of 2005 did not change elements are: (1) ‘‘Number of Deemed
families. We remind readers that an the prohibition at section Core Hours for the Overall Rate’’; and
eligible family is a financially needy 409(a)(7)(B)(iv)(IV) of the Social (2) ‘‘Number of Deemed Core Hours for
family that consists of, at a minimum, Security Act. This provision prohibits the Two-Parent Rate.’’ Tennessee is the
a child living with a caretaker relative States from counting expenditures made only State with an ongoing 1115 welfare
or consists of a pregnant woman. Please ‘‘as a condition of receiving Federal reform waiver and the waiver ends on
see § 263.2(b) for further information on funds ‘‘other than under this part’’ June 30, 2007. Thus, we are removing
eligible families. toward its TANF MOE requirement. two data elements from the TANF Data
Because paragraph (c) of our original Report—Section One that we no longer
Section 263.5 When do expenditures rule did not accurately reflect this need. The data elements are: (1)
in State-funded programs count? prohibition, we corrected it to say that ‘‘Additional Work Activities Permitted
Due to an oversight on our part, we the prohibition only applies to Under Waiver Demonstration’’; and (2)
did not include this section in the expenditures that a State makes as a ‘‘Required Hours of Work Under Waiver
interim final rule. It addresses the MOE condition of receiving Federal funds Demonstration.’’
‘‘new spending’’ limitation in section under another program that is not in Comment: One commenter stated that
409(a)(7)(B)(i)(II) of the Social Security Part IV–A of the Act. States may count we require extensive and detailed
Act, which continues to apply. States the non-Federal share of expenditures disaggregated data in the TANF Data
may only count, for MOE purposes, on allowable activities under the Report—Section One, including
expenditures in pre-existing State or healthy marriage promotion or individual social security numbers, and
local programs that exceed the amount promoting responsible fatherhood commented that collecting social
security numbers does not serve any Employment result in 85 monthly this action for two reasons. First, we
useful research purpose. The hours, or 19.6 total average weekly want States to provide us with complete
commenter expressed concern for the hours. That rounds to 20 average weekly and accurate data and we recognize that
privacy of individuals and further hours. That is successful participation States often receive data from a variety
suggested that we should be collecting for a single parent with a child less than of sources that require correction of
data on the well-being of children. age 6. This case should be in the submitted quarterly data. Second, we
Response: Collecting social security numerator and denominator of the define a ‘‘work-eligible individual’’
numbers is an existing requirement. We overall work participation rate. under rule at § 261.2(n)(iii) to exclude at
have been collecting the social security However, under current reporting State option a recipient of Supplemental
numbers for TANF family members protocol, this case is not included in the Security Income (SSI) or Social Security
since October 1999. This information is numerator because the sum of the Disability Insurance (SSDI). States have
protected by the safeguards under the individual activities is only 19.’’ informed us that the SSI/SSDI
Privacy Act. The TANF recipient social Response: If we use more significant application approval process is lengthy.
security numbers are encrypted during digits to collect the data, there would be We have advised States that they can
data transmission, maintained in a no need to round the final result to the remove retroactively work-eligible
secure location and use and access to nearest whole number. The commenter individuals that they included in the
them is limited. We have found them is using the 4.33 weeks per month. The quarterly data submittal for a fiscal year
very useful in our research, especially as 2 hours converts to 0.4618 hours per who subsequently are approved for SSI
it relates to the use of the National week and the 83 hours converts to or SSDI, so long as the data correction
Directory of New Hires database to 19.1686 hours per week. If we had occurs by the end of the reporting for
assess the impact of welfare reform on collected the data with two digits after the fiscal year, i.e., December 31.
TANF recipients using such measures as the decimal place, the State would have
job entry, job retention, and earnings Section 265.8 Under what
reported 0.46 and 19.17 hours per week. circumstances will we take action to
gain. We do not have statutory authority The sum would be 19.63 hours per
to collect additional data on the well- impose a reporting penalty for failure to
week, which is less than the 20 hours submit quarterly and annual reports?
being of children; the statute limits the per week required. Requiring States to
data that the Department can collect. report the average hours per week of We received no comments on this
Comment: One commenter requested participation with more digits would section, so we have made no changes to
that we make the new data file layouts increase reporting burden and not the provision in the final rule.
and caseload reduction forms available provide us with an additional benefit.
as quickly as possible due to the VIII. Paperwork Reduction Act of 1995
reprogramming needs of our State Section 265.3(d) SSP–MOE Data This final rule contains information
reporting. The commenter further Report collection requirements that have been
requested that, following the sorting of We received no comments on this submitted to the Office of Management
participation reports, we give States a subsection of the regulation. and Budget (OMB) under the Paperwork
spreadsheet showing which participants Reduction Act of 1995. Under this Act,
did not meet the participation rates so Section 265.4 When are quarterly no persons are required to respond to a
that they can better manage reports due? collection of information unless it
participation and address particular We received no comments on this displays a valid OMB control number. If
areas of need. section, so we have made no changes to you have any comments on these
Response: We already have made the the provision in the final rule. information collection requirements,
data file layouts and caseload reduction please submit them to OMB within 30
credit forms, based on the interim final Section 265.7 How will we determine if
days. The address is: Office of
rule, available to the States in a timely the State is meeting the quarterly
Management and Budget, Paperwork
manner. We will also make available to reporting requirements?
Reduction Project, 725 17th Street, NW.,
States any changes to these forms based Although the interim final rule did Washington, DC 20503, Attn: ACF/HHS
on the final rule as quickly as possible. not include this section of the TANF Desk officer.
We have in the past made available and regulations, we have added it to this This final rule incorporates our
will continue to make available in the final rule in order to respond to requests response to comments regarding the
future a file showing on a case-by-case we received as part of the comment reporting burden that we received in
basis which families are counted as period to clarify the period of time response to the interim final rule and
participating and which ones are not, during which States may revise work Paperwork Notice we published on June
upon request from a State. participation and caseload data. 29, 2006. The rule requires States to
Comment: One commenter noted that The original TANF regulations at submit a TANF Data Report, SSP–MOE
the adult work participation activities § 265.7(b) defined the ‘‘complete and Data Report, Work Verification Plan,
fields in Section 1 of the TANF Data accurate’’ standard for reporting and, if a State wants to request a
Report did not have enough significant disaggregated data for the TANF Data caseload reduction credit, a Caseload
digits to determine whether someone Report. In describing this standard in Reduction Report. In addition, States
meets the work participation the preamble to that April 12, 1999 final must provide documentation in support
requirements. The commenter wrote, ‘‘If rule, we recognized the necessity for of the caseload reduction credit, work
a person participates for 1 or 2 hours a States to revise their quarterly data verification, and the reasonable cause/
month in an activity, the field for that submissions occasionally. In practice, a corrective compliance documentation
activity will contain average weekly number of States submit revised data processes.
hours of 0. Those 1 or 2 monthly hours, after each quarterly submittal up to the We considered comments by the
in combination with other countable due date for the final data submittal for public on these collections of
activities may result in successful the fourth quarter data for a fiscal year, information in:
participation. For example, 2 monthly i.e., December 31. We have decided to • Evaluating whether the collections
hours in Work Experience plus 83 amend these final DRA regulations to are necessary for the proper
monthly hours in Unsubsidized recognize this practice. We are taking performance of our functions, including
whether the information will have work verification requirements. In other reviews. Our burden estimates in
practical utility; calculating the additional burden the interim final rule took this into
• Evaluating the accuracy of our associated with the preparation and consideration.
estimate of the burden of the collections submission of State data verification In addition to considering the
of information, including the validity of procedures, we considered that States comments, we also made some changes
methodology and assumptions used, already had procedures in place to to the TANF Data Report based on the
and the frequency of collection; comport with the complete and accurate need to implement the deeming of core
• Enhancing the quality, usefulness, requirements under § 265.7 of the hours in the final rule. As discussed in
and clarity of the information to be regulations. § 265.3, we are adding only two new
collected; and The commenter also thought that we data elements. Some burden hours will
• Minimizing the burden of the were requiring an unnecessary paper be required for programming of the State
collection of information on those who burden when electronic reporting would systems, but actual additional reporting
are to respond, including through the suffice. The commenter stated that burden hours should be minimal. In
use of appropriate automated, § 261.61(a) of the interim final rule addition, total burden will be slightly
electronic, mechanical, or other would, for example, require for 50 job offset by elimination of two data
technology, e.g., the electronic search participants the copying and elements related to waivers. We
submission of responses. filing of 50 separate daily attendance estimate that the net additional burden
We received only two comments from sheets into individual case files, while averaged out over a period of a year will
one individual specifically addressing a central or electronic file would meet result in a net increase of eight hour per
the hour burden stated in the interim the purpose of documenting attendance. quarter per respondent for each of the
final rule. The commenter believed that We did not intend to preclude the use two data reports. We show the
we understated the burden associated of a central or electronic file. States may adjustment in the following table.
with these new data reporting use these kinds of files as long as they The estimated burden hours for these
requirements, especially with respect to are available for the single audit and information collections are:
Average Final rule total Interim rule

Number of Yearly
Instrument or requirement burden hours annual burden total annual
respondents submittals per response hours burden hours
Preparation and Submission of Data Verification Proce-

dures—§§ 261.60—261.63 ............................................... 54 1 640 34,560 34,560
Caseload Reduction Documentation Process, ACF–202—
§§ 262.4, 262.6, & 262.7; § 261.51 .................................. 54 1 120 6,480 6,480
Reasonable Cause/Corrective Compliance Documentation
Process—§§ 262.4, 262.6, & 262.7; § 261.51 .................. 54 2 240 25,920 25,920
TANF Data Report—Part 265 .............................................. 54 4 2,201 475,416 473,688
SSP–MOE Data Report—Part 265 ...................................... 29 4 714 82,824 82,824
Estimated total burden hours: will not have a significant impact on achieves the objectives of the rule
625,200. small entities. consistent with the statutory
Copies of an information collection requirements. Section 203 requires a
X. Regulatory Impact Analysis
may be obtained by e-mailing the ACF plan for informing and advising any
Executive Order 12866 requires that small government that may be
Reports Clearance Officer at regulations be reviewed to ensure that
robert.sargis@acf.hhs.gov or by writing significantly or uniquely impacted.
they are consistent with the priorities
to the Administration for Children and and principles set forth in the Executive The Department has determined that
Families, Office of Administration, Order. The Department has determined this final rule, in implementing the new
Office of Information Services, 370 that this final rule is consistent with statutory requirements, would not
L’Enfant Promenade, SW., Washington, these priorities and principles. These impose a mandate that will result in the
DC 20447, Attn: ACF Reports Clearance regulations primarily implement expenditure by State, local, and Tribal
Officer. All requests should be statutory changes to TANF included in governments, in the aggregate, or by the
identified by the title of the information the Deficit Reduction Act of 2005. private sector, of more than $100
collection. million in any one year. The DRA
XI. Unfunded Mandates Reform Act of maintains the basic funding structure
IX. Regulatory Flexibility Analysis 1995 and flexibility of the TANF program.
Section 202 of the Unfunded For the next five years, the TANF block
The Regulatory Flexibility Act (5 grant provides States with $16.5 billion
Mandates Reform Act of 1995 requires
U.S.C. 605(b)) requires the Federal that a covered agency prepare a in Federal funds and requires States to
government to anticipate and reduce the budgetary impact statement before expend around $11 billion a year in
impact of rules and paperwork promulgating a rule that includes any State Maintenance of Effort (MOE)
requirements on small businesses and Federal mandate that may result in the funds. Along with available,
other small entities. Small entities are expenditure by State, local, and Tribal unobligated TANF balances, we believe
defined in the Act to include small governments, in the aggregate, or by the States have adequate resources to
businesses, small non-profit private sector, of $100 million or more achieve the DRA requirements. Fixed
organizations, and small governmental in any one year. funding for States is based on welfare
entities. This rule will affect primarily If an agency must prepare a budgetary spending at the time of historic high
the 50 States, the District of Columbia, impact statement, section 205 requires caseloads, which have been reduced by
and certain Territories. Therefore, the that it select the most cost-effective and half. States retain wide latitude to
Secretary certifies that this final rule least burdensome alternative that design their programs, to establish
eligibility criteria, benefit levels and the questions and to submit comments wages and costs of employing an
type of services and benefits to provide which were recorded and considered in individual.
to TANF clients. the final rule. (d) Subsidized public sector
The Department estimates that We seriously considered all employment means employment in the
between FYs 2008 and 2012, States will comments in developing the final rule. public sector for which the employer
incur penalties of $62 million due to We considered and carefully assessed receives a subsidy from TANF or other
failure to meet work requirements. Our each of the options and suggestions of public funds to offset some or all of the
estimate assumes that most States will commenters. In the end, we adopted wages and costs of employing an
meet the work participation rates those suggestions that we believe individual.
through a renewed focus on work and promote effective programs leading to (e) Work experience (including work
internal control systems. We do not self-sufficiency, while also reducing associated with the refurbishing of
anticipate assessing penalties under inconsistency in work measures. At the publicly assisted housing) if sufficient
new requirements until FY 2009. States same time, the policies reflected in the private sector employment is not
may also claim reasonable cause or final rule provide enough flexibility to available means a work activity,
enter into a corrective compliance States to address the varying needs and performed in return for welfare, that
process to eliminate or reduce the characteristics of TANF clients, provides an individual with an
penalty amount. We estimate issuing including those with disabilities. To opportunity to acquire the general skills,
penalties amounting to $0 in FY 2008, count and verify allowable work knowledge, and work habits necessary
$20 million in FY 2009, $19 million in activities, States are offered guidelines to obtain employment. The purpose of
FY 2010, $19 million in FY 2011, and that permit different types of work experience is to improve the
$4 million in FY 2012. Accordingly, we documentation based on the type of employability of those who cannot find
have not prepared a budgetary impact work activity. unsubsidized full-time employment.
statement or prepared a plan for This activity must be supervised by an
informing impacted small governments. List of Subjects in 45 CFR Parts 261, employer, work site sponsor, or other
262, 263, and 265 responsible party on an ongoing basis
XII. Congressional Review no less frequently than once in each day
Administrative practice and
This regulation is not a major rule as procedure, Day care, Employment, in which the individual is scheduled to
defined in 5 U.S.C. Chapter 8. Grant programs—social programs, Loan participate.
programs—social programs, Penalties, (f) On-the-job training means training
XIII. Assessment of Federal Regulations in the public or private sector that is
and Policies on Families Public assistance programs, Reporting
and recordkeeping requirements, given to a paid employee while he or
Section 654 of the Treasury and she is engaged in productive work and
Vocational education.
General Government Appropriations that provides knowledge and skills
Act of 1999 requires Federal agencies to Dated: January 29, 2008. essential to the full and adequate
determine whether a proposed policy or Daniel C. Schneider, performance of the job.
regulation may negatively affect family Acting Assistant Secretary for Children and (g) Job search and job readiness
well being. The Department has Families. assistance means the act of seeking or
conducted this assessment and Approved: January 29, 2008. obtaining employment, preparation to
concluded that these final rules will not Michael O. Leavitt,
seek or obtain employment, including
have a negative impact on family well life skills training, and substance abuse
Secretary of Health and Human Services.
being. This final rule promotes activities treatment, mental health treatment, or
leading to work and self-sufficiency for ■ For the reasons stated in the preamble, rehabilitation activities. Such treatment
low-income families and will thus have the interim final rule amending 45 CFR or therapy must be determined to be
a positive impact on family well being. chapter II published on June 29, 2006, necessary and documented by a
(71 FR 37454) is confirmed as final with qualified medical, substance abuse, or
XIV. Executive Order 13132 the following changes: mental health professional. Job search
Executive Order 13132, Federalism, and job readiness assistance activities
requires that Federal agencies consult PART 261—ENSURING THAT must be supervised by the TANF agency
with State and local government RECIPIENTS WORK or other responsible party on an ongoing
officials in the development of ■ 1. The authority citation for part 261 basis no less frequently than once each
regulatory policies with federalism continues to read as follows: day in which the individual is
implications. Consistent with Executive scheduled to participate.
Order 13132, we specifically solicited Authority: 42 U.S.C. 601, 602, 607 and 609. (h) Community service programs
comment from State and local ■ 2. Revise § 261.2 to read as follows: mean structured programs and
government officials in the interim final embedded activities in which
rule. In addition, in concert with the § 261.2 What definitions apply to this part? individuals perform work for the direct
National Governors Association (NGA), (a) The general TANF definitions at benefit of the community under the
the American Public Human Services §§ 260.30 through 260.33 of this chapter auspices of public or nonprofit
Association (APHSA), the National apply to this part. organizations. Community service
Conference of State Legislators (NCSL), (b) Unsubsidized employment means programs must be limited to projects
and the National Association of full-or part-time employment in the that serve a useful community purpose
Counties (NACo), we held five public or private sector that is not in fields such as health, social service,
‘‘listening sessions’’ across the country subsidized by TANF or any other public environmental protection, education,
to which State and local executive and program. urban and rural redevelopment, welfare,
legislative officials were invited. During (c) Subsidized private sector recreation, public facilities, public
the ‘‘listening sessions,’’ ACF outlined employment means employment in the safety, and child care. Community
the statutory and regulatory provisions private sector for which the employer service programs are designed to
associated with the DRA and offered the receives a subsidy from TANF or other improve the employability of
opportunity for attendees to ask public funds to offset some or all of the individuals not otherwise able to obtain
unsubsidized full-time employment, an unpaid activity and must be a helping work-eligible individuals in
and must be supervised on an ongoing structured program designed to improve two-parent families find work activities
basis no less frequently than once each the employability of individuals who described at § 261.30, the other—the
day in which the individual is participate in this activity. This activity overall rate based on how well it
scheduled to participate. A State agency must be supervised on an ongoing basis succeeds in finding those activities for
shall take into account, to the extent no less frequently than once each day in work-eligible individuals in all the
possible, the prior training, experience, which the individual is scheduled to families that it serves.
and skills of a recipient in making participate. (b) Each State must submit data, as
appropriate community service (n)(1) Work-eligible individual means specified at § 265.3 of this chapter, that
assignments. an adult (or minor child head-of- allows us to measure its success in
(i) Vocational educational training household) receiving assistance under requiring work-eligible individuals to
(not to exceed 12 months with respect TANF or a separate State program or a participate in work activities.
to any individual) means organized non-recipient parent living with a child (c) If the data show that a State met
educational programs that are directly receiving such assistance unless the both participation rates in a fiscal year,
related to the preparation of individuals parent is: then the percentage of historic State
for employment in current or emerging (i) A minor parent and not the head- expenditures that it must expend under
occupations. Vocational educational of-household; TANF, pursuant to § 263.1 of this
training must be supervised on an (ii) A non-citizen who is ineligible to chapter, decreases from 80 percent to 75
ongoing basis no less frequently than receive assistance due to his or her percent for that fiscal year. This is also
once each day in which the individual immigration status; or known as the State’s TANF
is scheduled to participate. (iii) At State option on a case-by-case ‘‘maintenance-of-effort’’ (MOE)
(j) Job skills training directly related to basis, a recipient of Supplemental requirement.
employment means training or Security Income (SSI) benefits or Aid to (d) If the data show that a State did
education for job skills required by an the Aged, Blind or Disabled in the not meet a minimum work participation
employer to provide an individual with Territories. rate for a fiscal year, a State could be
the ability to obtain employment or to (2) The term also excludes: subject to a financial penalty.
advance or adapt to the changing (i) A parent providing care for a (e) Before we impose a penalty, a
demands of the workplace. Job skills disabled family member living in the State will have the opportunity to claim
training directly related to employment home, provided that there is medical reasonable cause or enter into a
must be supervised on an ongoing basis documentation to support the need for corrective compliance plan, pursuant to
no less frequently than once each day in the parent to remain in the home to care §§ 262.5 and 262.6 of this chapter.
which the individual is scheduled to for the disabled family member;
participate. (ii) At State option on a case-by-case § 261.21 What overall work rate must a
(k) Education directly related to basis, a parent who is a recipient of State meet?
employment, in the case of a recipient Social Security Disability Insurance Each State must achieve a 50 percent
who has not received a high school (SSDI) benefits; and minimum overall participation rate in
diploma or a certificate of high school (iii) An individual in a family FY 2006 and thereafter, minus any
equivalency means education related to receiving MOE-funded assistance under caseload reduction credit to which it is
a specific occupation, job, or job offer. an approved Tribal TANF program, entitled as provided in subpart D of this
Education directly related to unless the State includes the Tribal part.
employment must be supervised on an family in calculating work participation
ongoing basis no less frequently than rates, as permitted under § 261.25. § 261.22 How will we determine a State’s
once each day in which the work- overall work rate?
■ 3. Revise subpart B to part 261 to read
eligible individual is scheduled to as follows: (a)(1) The overall participation rate for
participate. a fiscal year is the average of the State’s
(l) Satisfactory attendance at Subpart B—What Are the Provisions overall participation rates for each
secondary school or in a course of study Addressing State Accountability? month in the fiscal year.
leading to a certificate of general (2) The rate applies to families with
equivalence, in the case of a recipient Sec. a work-eligible individual.
who has not completed secondary 261.20 How will we hold a State (b) We determine a State’s overall
accountable for achieving the work participation rate for a month as
school or received such a certificate
objectives of TANF?
means regular attendance, in accordance 261.21 What overall work rate must a State
follows:
with the requirements of the secondary meet? (1) The number of TANF and SSP-
school or course of study, at a secondary 261.22 How will we determine a State’s MOE families that include a work-
school or in a course of study leading overall work rate? eligible individual who meets the
to a certificate of general equivalence, in 261.23 What two-parent work rate must a requirements set forth in § 261.31 for the
the case of a work-eligible individual State meet? month (i.e., the numerator), divided by,
who has not completed secondary 261.24 How will we determine a State’s (2) The number of TANF and SSP–
school or received such a certificate. two-parent work rate? MOE families that include a work-
261.25 Does a State include Tribal families eligible individual, minus the number of
This activity must be supervised on an
in calculating the work participation
ongoing basis no less frequently than such families that are subject to a
rate?
once each day in which the individual penalty for refusing to work in that
is scheduled to participate. § 261.20 How will we hold a State month (i.e., the denominator). However,
(m) Providing child care services to an accountable for achieving the work if a family with a work-eligible
individual who is participating in a objectives of TANF? individual has been penalized for
community service program means (a) Each State must meet two separate refusal to participate in work activities
providing child care to enable another work participation rates in FY 2006 and for more than three of the last 12
TANF or SSP recipient to participate in thereafter, one—the two-parent rate months, we will not exclude it from the
a community service program. This is based on how well it succeeds in participation rate calculation.
(3) At State option, we will include in has been penalized for more than three programs; vocational educational
the participation rate calculation months of the last 12 months, we will training; and providing child care
families with a work-eligible individual not exclude it from the participation services to an individual who is
that have been penalized for refusing to rate calculation. participating in a community service
work no more than three of the last 12 (3) At State option, we will include in program.
months. the participation rate calculation (c) Above 20 hours per week, the
(c)(1) A State has the option of not families with a work-eligible individual following three activities may also count
requiring a single custodial parent that have been penalized for refusing to as participation: job skills training
caring for a child under age one to work no more than three of the last 12 directly related to employment;
engage in work. months. education directly related to
(2) At State option, we will disregard (c) For purposes of the calculation in employment; and satisfactory
a family with such a parent from the paragraph (b) of this section, a two- attendance at secondary school or in a
participation rate calculation for a parent family includes, at a minimum, course of study leading to a certificate
maximum of 12 months. all families with two natural or adoptive of general equivalence.
(d)(1) If a family receives assistance parents (of the same minor child) who (d)(1) We will deem a work-eligible
for only part of a month, we will count are work-eligible individuals and living individual who participates in a work
it as a month of participation if a work- in the home, unless both are minors and experience or community service
eligible individual is engaged in work neither is a head-of-household. program for the maximum number of
for the minimum average number of (d)(1) If the family receives assistance hours per month that a State may
hours in each full week that the family for only part of a month, we will count require by dividing the combined
receives assistance in that month. it as a month of participation if a work- monthly TANF or SSP–MOE grant and
(2) If a State pays benefits eligible individual in the family (or both food stamp allotment by the higher of
retroactively (i.e., for the period work-eligible individuals, if they are the Federal or State minimum wage to
between application and approval of both required to work) is engaged in have participated for an average of 20
benefits), it has the option to consider work for the minimum average number hours per week for the month in that
the family to be receiving assistance of hours in each full week that the activity.
during the period of retroactivity. family receives assistance in that month. (2) This policy is limited to States that
(2) If a State pays benefits have adopted a Simplified Food Stamp
§ 261.23 What two-parent work rate must a retroactively (i.e., for the period
State meet? Program option that permits a State to
between application and approval of count the value of food stamps in
Each State must achieve a 90 percent benefits), it has the option to consider
minimum two-parent participation rate determining the maximum core hours of
the family to be receiving assistance participation permitted by the FLSA.
in FY 2006 and thereafter, minus any during the period of retroactivity.
caseload reduction credit to which it is (3) In order for Puerto Rico, which
entitled as provided in subpart D of this § 261.25 Do we count Tribal families in does not have a traditional Food Stamp
part. calculating the work participation rate? Program, to deem core hours, it must
At State option, we will include include the value of food assistance
§ 261.24 How will we determine a State’s families with a work-eligible individual benefits provided through the Nutrition
two-parent work rate? Assistance Program in the same manner
that are receiving assistance under an
(a)(1) The two-parent participation approved Tribal family assistance plan as a State must include food stamp
rate for a fiscal year is the average of the or under a Tribal work program in benefits under subsection (d)(1).
State’s two-parent participation rates for calculating the State’s participation ■ 5. Revise § 261.32 to read as follows:
each month in the fiscal year. rates under §§ 261.22 and 261.24.
(2) The rate applies to two-parent § 261.32 How many hours must work-
■ 4. Revise § 261.31 to read as follows: eligible individuals participate for the family
families with two work-eligible
individuals. However, if one of the to count in the numerator of the two-parent
§ 261.31 How many hours must a work-
rate?
parents is a work-eligible individual eligible individual participate for the family
with a disability, we will not consider to count in the numerator of the overall (a) Subject to paragraph (d) of this
the family to be a two-parent family; i.e., rate? section, a family with two work-eligible
we will not include such a family in (a) Subject to paragraph (d) of this parents counts as engaged in work for
either the numerator or denominator of section, a family with a work-eligible the month for the two-parent rate if:
the two-parent rate. individual counts as engaged in work (1) Work-eligible parents in the family
(b) We determine a State’s two-parent for a month for the overall rate if: are participating in work activities for a
participation rate for the month as (1) He or she participates in work combined average of at least 35 hours
follows: activities during the month for at least per week during the month, and
(1) The number of two-parent TANF a minimum average of 30 hours per (2) At least 30 of the 35 hours per
and SSP–MOE families in which both week; and week come from participation in the
parents are work-eligible individuals (2) At least 20 of the above hours per activities listed in paragraph (b) of this
and together they meet the requirements week come from participation in the section.
set forth in § 261.32 for the month (i.e., activities listed in paragraph (b) of this (b) The following nine activities count
the numerator), divided by, section. for the first 30 hours of participation:
(2) The number of two-parent TANF (b) The following nine activities count unsubsidized employment; subsidized
and SSP–MOE families in which both toward the first 20 hours of private-sector employment; subsidized
parents are work-eligible individuals participation: unsubsidized public-sector employment; work
during the month, minus the number of employment; subsidized private-sector experience; on-the-job training; job
such two-parent families that are subject employment; subsidized public-sector search and job readiness assistance;
to a penalty for refusing to work in that employment; work experience; on-the- community service programs; vocational
month (the denominator). However, if a job training; job search and job educational training; and providing
family with a work-eligible individual readiness assistance; community service child care services to an individual who
is participating in a community service (2) This policy is limited to States that hours permitted under the limitation in
program. have adopted a Simplified Food Stamp this section.
(c) Above 30 hours per week, the Program option that permits a State to ■ 7. Revise subpart D to part 261 to read
following three activities may also count count the value of food stamps in as follows:
for participation: job skills training determining the maximum core hours of
directly related to employment; participation permitted by the FLSA. Subpart D—How Will We Determine
education directly related to (3) In order for Puerto Rico, which Caseload Reduction Credit for
employment; and satisfactory does not have a traditional Food Stamp Minimum Participation Rates?
attendance at secondary school or in a Program, to deem core hours, it must
course of study leading to a certificate Sec.
include the value of food assistance 261.40 Is there a way for a State to reduce
of general equivalence. benefits provided through the Nutrition the work participation rates?
(d)(1) We will deem a family with two Assistance Program in the same manner 261.41 How will we determine the caseload
work-eligible parents in which one or as a State must include food stamp reduction credit?
both participates in a work experience benefits under paragraph (d)(1) of this 261.42 Which reductions count in
or community service program for the section. determining the caseload reduction
maximum number of hours per month ■ 6. Revise § 261.34 to read as follows:
credit?
that a State may require by dividing the 261.43 What is the definition of a ‘‘case
combined monthly TANF or SSP–MOE § 261.34 Are there any limitations in receiving assistance’’ in calculating the
grant and food stamp allotment by the counting job search and job readiness caseload reduction credit?
assistance toward the participation rates? 261.44 When must a State report the
higher of the Federal or State minimum required data on the caseload reduction
wage to have participated for an average Yes. There are four limitations credit?
of 30 hours per week for the month in concerning job search and job readiness
that activity. assistance. § 261.40 Is there a way for a State to
(2) This policy is limited to States that (a) Except as provided in paragraph reduce the work participation rates?
have adopted a Simplified Food Stamp (b) of this section, an individual’s (a)(1) If the average monthly number
Program option that permits a State to participation in job search and job of cases receiving assistance, including
count the value of food stamps in readiness assistance counts for a assistance under a separate State
determining the maximum core hours of maximum of six weeks in the preceding program (as provided at § 261.42(b)), in
participation permitted by the FLSA. 12-month period. a State in the preceding fiscal year was
(3) In order for Puerto Rico, which (b) If the State’s total unemployment lower than the average monthly number
does not have a traditional Food Stamp rate is at least 50 percent greater than of cases that received assistance,
Program, to deem core hours, it must the United States’ total unemployment including assistance under a separate
include the value of food assistance rate or if the State meets the definition State program in that State in FY 2005,
benefits provided through the Nutrition of a ‘‘needy State’’, specified at § 260.30 the minimum overall participation rate
Assistance Program in the same manner of this chapter, then an individual’s the State must meet for the fiscal year
as a State must include food stamp participation in job search and job (as provided at § 261.21) decreases by
benefits under paragraph (d)(1) of this readiness assistance counts for a the number of percentage points the
section. maximum of 12 weeks in that 12-month prior-year caseload fell in comparison to
(e)(1) Subject to paragraph (f) of this period. the FY 2005 caseload.
section, if the family receives federally (c) For purposes of paragraphs (a) and (2) The minimum two-parent
funded child care assistance and an (b) of this section, a week equals 20 participation rate the State must meet
adult in the family does not have a hours for a work-eligible individual who for the fiscal year (as provided at
disability or is not caring for a child is a single custodial parent with a child § 261.23) decreases, at State option, by
with a disability, then the work-eligible under six years of age and equals 30 either:
individuals must be participating in hours for all other work-eligible (i) The number of percentage points
work activities for an average of at least individuals. the prior-year two-parent caseload,
55 hours per week to count as a two- (d) An individual’s participation in including two-parent cases receiving
parent family engaged in work for the job search and job readiness assistance assistance under a separate State
month. does not count for a week that program (as provided at § 261.42(b)), fell
(2) At least 50 of the 55 hours per immediately follows four consecutive in comparison to the FY 2005 two-
week must come from participation in weeks in which the State reports any parent caseload, including two-parent
the activities listed in paragraph (b) of hours of such participation in the cases receiving assistance under a
this section. preceding 12-month period. For separate State program; or
(3) Above 50 hours per week, the purposes of this paragraph a week (ii) The number of percentage points
three activities listed in paragraph (c) of means seven consecutive days. the prior-year overall caseload,
this section may also count as (e) Not more than once for any including assistance under a separate
participation. individual in the preceding 12-month State program (as provided at
(f)(1) We will deem a family with two period, a State may count three or four § 261.42(b)), fell in comparison to the
work-eligible parents in which one or days of job search and job readiness FY 2005 overall caseload, including
both participates in a work experience assistance during a week as a full week cases receiving assistance under a
or community service program for the of participation. We calculate a full separate State program.
maximum number of hours per month week of participation based on the (3) For the credit calculation, we will
that a State may require by dividing the average daily hours of participation for refer to the fiscal year that precedes the
combined monthly TANF or SSP–MOE three or four days and will prorate fiscal year to which the credit applies as
grant and food stamp allotment by the participation at that level for the the ‘‘comparison year.’’
higher of the Federal or State minimum remaining one or two days to determine (b)(1) The calculations in paragraph
wage to have participated for an average the total hours for a five-day week. Any (a) of this section must disregard
of 50 hours per week for the month in prorated hours of participation must be caseload reductions due to requirements
that activity. included in the calculation of total of Federal law and to changes that a
State has made in its eligibility criteria of each eligibility change (based, as credit, it may appeal the decision as an
in comparison to its criteria in effect in appropriate, on application denials, case adverse action in accordance with
FY 2005. closures or other analyses); § 262.7 of this chapter.
(2) At State option, the calculation (3) An overall estimate of the total net
may offset the disregard of caseload positive or negative impact on the § 261.42 Which reductions count in
determining the caseload reduction credit?
reductions in paragraph (b)(1) of this applicable caseload as a result of all
section by changes in eligibility criteria such eligibility changes; (a)(1) A State’s caseload reduction
that increase caseloads. (4) An estimate of the State’s caseload credit must not include caseload
(c)(1) To establish the caseload base reduction credit; decreases due to Federal requirements
for FY 2005 and to determine the (5) A description of the methodology or State changes in eligibility rules since
comparison-year caseload, we will use and the supporting data that a State FY 2005 that directly affect a family’s
the combined TANF and Separate State used to calculate its caseload reduction eligibility for assistance. These include,
Program caseload figures reported on estimates; and but are not limited to, more stringent
the Form ACF–199, TANF Data Report, (6) A certification that it has provided income and resource limitations, time
and Form ACF–209, SSP–MOE Data the public an appropriate opportunity to limits, full family sanctions, and other
Report, respectively. comment on the estimates and new requirements that deny families
(2) To qualify for a caseload methodology, considered their assistance when an individual does not
reduction, a State must have reported comments, and incorporated all net comply with work requirements,
monthly caseload information, reductions resulting from Federal and cooperate with child support, or fulfill
including cases in separate State State eligibility changes. other behavioral requirements.
programs, for FY 2005 and the (c)(1) A State requesting a caseload (2) At State option, a State’s caseload
comparison year for cases receiving reduction credit for the overall reduction credit may include caseload
assistance as defined at § 261.43. participation rate must base its increases due to Federal requirements or
(d)(1) A State may correct erroneous estimates of the impact of eligibility State changes in eligibility rules since
data or submit accurate data to adjust changes on decreases in its comparison- FY 2005 if used to offset caseload
program data or to include unduplicated year overall caseload compared to the decreases in paragraph (a)(1) of this
cases within the fiscal year. FY 2005 overall caseload baseline section.
(2) We will adjust both the FY 2005 established in accordance with (3) A State may not receive a caseload
baseline and the comparison-year § 261.40(d). reduction credit that exceeds the actual
caseload information, as appropriate, (2) A State requesting a caseload caseload decline between FY 2005 and
based on these State submissions. reduction credit for its two-parent rate the comparison year.
(e) We refer to the number of must base its estimates of the impact of (4) A State may count the reductions
percentage points by which a caseload eligibility changes on decreases in attributable to enforcement mechanisms
falls, disregarding the cases described in either: or procedural requirements that are
paragraph (b) of this section, as a (i) Its two-parent caseload compared used to enforce existing eligibility
caseload reduction credit. to the FY 2005 base-year two-parent criteria (e.g., fingerprinting or other
caseload baseline established in verification techniques) to the extent
§ 261.41 How will we determine the accordance with § 261.40(d); or that such mechanisms or requirements
caseload reduction credit? (ii) Its overall caseload compared to identify or deter families otherwise
(a)(1) We will determine the overall the FY 2005 base-year overall caseload ineligible under existing rules.
and two-parent caseload reduction baseline established in accordance with (b) A State must include cases
credits that apply to each State based on § 261.40(d). receiving assistance in separate State
the information and estimates reported (d)(1) For each State, we will assess programs as part of its FY 2005 caseload
to us by the State on eligibility policy the adequacy of information and and comparison-year caseload.
changes using application denials, case estimates using the following criteria: Its However, if a State provides
closures, or other administrative data methodology; Its estimates of impact documentation that separate State
sources and analyses. compared to other States; the quality of program cases overlap with or duplicate
(2) We will accept the information its data; and the completeness and cases in the TANF caseload, we will
and estimates provided by a State, adequacy of its documentation. exclude them from the caseload count.
unless they are implausible based on the (2) If we request additional
criteria listed in paragraph (d) of this information to develop or validate § 261.43 What is the definition of a ‘‘case
section. estimates, the State may negotiate an receiving assistance’’ in calculating the
(3) We may conduct on-site reviews appropriate deadline or provide the caseload reduction credit?
and inspect administrative records on information within 30 days of the date (a) The caseload reduction credit is
applications, case closures, or other of our request. based on decreases in caseloads
administrative data sources to validate (3) The State must provide sufficient receiving TANF- or SSP-MOE-funded
the accuracy of the State estimates. data to document the information assistance (other than those excluded
(b) In order to receive a caseload submitted under paragraph (b) of this pursuant to § 261.42).
reduction credit, a State must submit a section. (b)(1) A State that is investing State
Caseload Reduction Report to us (e) We will not calculate a caseload MOE funds in excess of the required 80
containing the following information: reduction credit unless the State reports percent or 75 percent basic MOE
(1) A listing of, and implementation case-record data on individuals and amount need only include the pro rata
dates for, all State and Federal eligibility families served by any separate State share of caseloads receiving assistance
changes, as defined at § 261.42, made by program, as required under § 265.3(d) of that is required to meet basic MOE
the State since the beginning of FY this chapter. requirements.

2006; (f) A State may only apply to the (2) For purposes of paragraph (b)(1) of
(2) A numerical estimate of the participation rate a caseload reduction this section, a State may exclude from
positive or negative average monthly credit that we have calculated. If a State the overall caseload reduction credit
impact on the comparison-year caseload disagrees with the caseload reduction calculation the number of cases funded
with excess MOE. This number is 261.64 How will we determine whether a unsupervised homework time for each
calculated by dividing annual excess State’s work verification procedures hour of class time. Total homework time
MOE expenditures on assistance by the ensure an accurate work participation counted for participation cannot exceed
measurement?
average monthly expenditures on the hours required or advised by a
261.65 Under what circumstances will we
assistance per case for the fiscal year, impose a work verification penalty? particular educational program.
(i) Where annual excess MOE
§ 261.60 What hours of participation may a § 261.61 How must a State document a
expenditures on assistance equal total work-eligible individual’s hours of
annual MOE expenditures minus the State report for a work-eligible individual?
participation?
percentage of historic State (a) A State must report the actual
hours that an individual participates in (a) A State must support each
expenditures specified in paragraph (v) individual’s hours of participation
of this section, multiplied by the an activity, subject to the qualifications
in paragraphs (b) and (c) of this section through documentation in the case file.
percentage that annual expenditures on In accordance with § 261.62, a State
assistance (both Federal and State) and § 261.61(c). It is not sufficient to
report the hours an individual is must describe in its Work Verification
represent of all annual expenditures, Plan the documentation it uses to verify
and scheduled to participate in an activity.
(b) For the purposes of calculating the hours of participation in each activity.
(ii) Where the average monthly (b) For an employed individual, the
assistance expenditures per case for the work participation rates for a month,
actual hours may include the hours for documentation may consist of, but is
fiscal year equal the sum of annual not limited to pay stubs, employer
TANF and SSP–MOE assistance which an individual was paid,
including paid holidays and sick leave. reports, or time and attendance records
expenditures (both Federal and State) substantiating hours of participation. A
divided by the average monthly sum of For participation in unpaid work
activities, it may include excused State may presume that an employed
TANF and SSP–MOE caseloads for the individual participated for the total
fiscal year. absences for hours missed due to a
maximum of 10 holidays in the number of hours for which that
(iii) If the excess MOE calculation is individual was paid.
for a separate two-parent caseload preceding 12-month period and up to 80
(c) The State must document all hours
reduction credit, we multiply the hours of additional excused absences in
of participation in an activity; however,
number of cases funded with excess the preceding 12-month period, no more
if a State is reporting projected hours of
MOE by the average monthly percentage than 16 of which may occur in a month,
for each work-eligible individual. Each actual employment in accordance with
of two-parent cases in the State’s total § 261.60(c), it need only document the
(TANF plus SSP–MOE) average monthly State must designate the days that it
wishes to count as holidays for those in hours on which it bases the projection.
caseload. (d) For an individual who is self-
unpaid activities in its Work
(iv) All financial data must agree with employed, the documentation must
Verification Plan. It may designate no
data reported on the TANF Financial comport with standards set forth in the
more than 10 such days. In order to
Report (form ACF–196) and all caseload State’s approved Work Verification
count an excused absence as actual
data must agree with data reported on Plan. Self-reporting by a participant
hours of participation, the individual
the TANF Data and SSP–MOE Data without additional verification is not
must have been scheduled to participate
Reports (forms ACF–199 and ACF–209). sufficient documentation.
in a countable work activity for the
(v) The State must use 80 percent of (e) For an individual who is not
period of the absence that the State
historic expenditures when calculating employed, the documentation for
reports as participation. A State must
excess MOE; however if it has met the substantiating hours of participation
describe its excused absence policies
work participation requirements for the may consist of, but is not limited to,
and definitions as part of its Work
year, it may use 75 percent of historic time sheets, service provider attendance
Verification Plan, specified at § 261.62.
expenditures. (c) For unsubsidized employment, records, or school attendance records.
subsidized employment, and OJT, a For homework time, the State must also
§ 261.44 When must a State report the document the homework or study
required data on the caseload reduction State may report projected actual hours
of employment participation for up to expectations of the educational
credit?
six months based on current, program.
A State must report the necessary
documentation on caseload reductions documented actual hours of work. Any § 261.62 What must a State do to verify the
for the preceding fiscal year by time a State receives information that accuracy of its work participation
December 31. the client’s actual hours of work have information?
changed, or no later than the end of any (a) To ensure accuracy in the
■ 8. Revise subpart F to part 261 to read
six-month period, the State must re- reporting of work activities by work-
as follows:
verify the client’s current actual average eligible individuals on the TANF Data
Subpart F—How Do We Ensure the hours of work, and may report these Report and, if applicable, the SSP–MOE
Accuracy of Work Participation projected actual hours of participation Data Report, each State must:
Information? for another six-month period. (1) Establish and employ procedures
(d) A State may not count more hours for determining whether its work
Sec. toward the participation rate for a self- activities may count for participation
261.60 What hours of participation may a employed individual than the number rate purposes;
State report for a work-eligible derived by dividing the individual’s (2) Establish and employ procedures
individual? self-employment income (gross income for determining how to count and verify
261.61 How must a State document a work- less business expenses) by the Federal
eligible individual’s hours of
reported hours of work;
minimum wage. A State may propose an (3) Establish and employ procedures
participation?
261.62 What must a State do to verify the alternative method of determining self- for identifying who is a work-eligible
accuracy of its work participation employment hours as part of its Work individual;
information? Verification Plan. (4) Establish and employ internal
261.63 When is the State’s Work (e) A State may count supervised controls to ensure compliance with the
Verification Plan due? homework time and up to one hour of procedures; and
(5) Submit to the Secretary for activities or its internal controls for (d) If a State complies with the
approval the State’s Work Verification ensuring a consistent measurement of requirements in this subpart for two
Plan in accordance with paragraph (b) of the work participation rate, the State consecutive years, then any penalty
this section. must submit for approval an amended imposed for subsequent failures will
(b) A State’s Work Verification Plan Work Verification Plan by the end of the begin anew, as described in paragraph
must include the following: quarter in which the State modifies the (c) of this section.
(1) For each countable work activity: procedures or internal controls. (e) If we take action to impose a
(i) A description demonstrating how penalty under §§ 261.64(b) or (c), we
the activity meets the relevant definition § 261.64 How will we determine whether a will reduce the SFAG payable for the
at § 261.2; State’s work verification procedures ensure
immediately succeeding fiscal year.
an accurate work participation
(ii) A description of how the State measurement?
determines the number of countable PART 263—EXPENDITURES OF STATE
hours of participation; and (a) We will determine that a State has AND FEDERAL TANF FUNDS
(iii) A description of the met the requirement to establish work
documentation it uses to monitor verification procedures if it submitted ■ 9. The authority citation for part 263
participation and ensure that the actual an interim Work Verification Plan by continues to read as follows:
hours of participation are reported; September 30, 2006 and a complete Authority: 42 U.S.C. 604, 607, 609, and
(2) A description of the State’s Work Verification Plan that we 862a.
procedures for identifying all work- approved by September 30, 2007.
(b) A ‘‘complete’’ Work Verification ■ 10. Revise § 263.2 to read as follows:
eligible individuals, as defined at
§ 261.2; Plan means that: § 263.2 What kinds of State expenditures
(3) A description of how the State (1) The plan includes all the count toward meeting a State’s basic MOE
ensures that, for each work-eligible information required by § 261.62(b); and expenditure requirement?
individual, it: (2) The State certifies that the plan (a) Expenditures of State funds in
(i) Accurately inputs data into the includes all the information required by TANF or separate State programs may
State’s automated data processing § 261.62(b) and that it accurately reflects count if they are made for the following
system; the procedures under which the State is types of benefits or services:
(ii) Properly tracks the hours though operating. (1) Cash assistance, including the
the automated data processing system; (c) For conduct occurring after State’s share of the assigned child
and October 1, 2007, we will use the single support collection that is distributed to
(iii) Accurately reports the hours to audit under OMB Circular A–133 in the family, and disregarded in
the Department; conjunction with other reviews, audits, determining eligibility for, and amount
(4) A description of the procedures for and data sources, as appropriate, to of the TANF assistance payment;
ensuring it does not transmit to the assess the accuracy of the data filed by (2) Child care assistance (see § 263.3);
Department a work-eligible individual’s States for use in calculating the work (3) Education activities designed to
hours of participation in an activity that participation rates. increase self-sufficiency, job training,
does not meet a Federal definition of a and work (see § 263.4);
§ 261.65 Under what circumstances will we (4) Any other use of funds allowable
countable work activity; and impose a work verification penalty?
(5) A description of the internal under section 404(a)(1) of the Act
controls that the State has implemented (a) We will take action to impose a including:
to ensure a consistent measurement of penalty under § 262.1(a)(15) of this (i) Nonmedical treatment services for
the work participation rates, including chapter if: alcohol and drug abuse and some
the quality assurance processes and (1) The requirements under medical treatment services (provided
sampling specifications it uses to §§ 261.64(a) and (b) have not been met; that the State has not commingled its
monitor adherence to the established or MOE funds with Federal TANF funds to
work verification procedures by State (2) We determine that the State has pay for the services), if consistent with
staff, local staff, and contractors. not maintained adequate the goals at § 260.20 of this chapter; and
(c) We will review a State’s Work documentation, verification, or internal (ii) Pro-family healthy marriage and
Verification Plan for completeness and control procedures to ensure the responsible fatherhood activities
approve it if we believe that it will accuracy of the data used in calculating enumerated in part IV–A of the Act,
result in accurate reporting of work the work participation rates. sections 403(a)(2)(A)(iii) and
participation information. (b) If a State fails to submit an interim 403(a)(2)(C)(ii) that are consistent with
or complete Work Verification Plan by the goals at §§ 260.20(c) or (d) of this
§ 261.63 When is a State’s Work the due dates in § 261.64(a), we will chapter, but do not constitute
Verification Plan Due? reduce the SFAG payable for the ‘‘assistance’’ as defined in § 260.31(a) of
(a) Each State must submit its interim immediately succeeding fiscal year by this chapter; and
Work Verification Plan for validating five percent of the adjusted SFAG. (5)(i) Administrative costs for
work activities reported in the TANF (c) If a State fails to maintain adequate activities listed in paragraphs (a)(1)
Data Report and, if applicable, the SSP– internal controls to ensure a consistent through (a)(4) of this section, not to
MOE Data Report no later than measurement of work participation, we exceed 15 percent of the total amount of
September 30, 2006. will reduce the adjusted SFAG by the countable expenditures for the fiscal
(b) If HHS requires changes, a State following percentages for a fiscal year: year.
must submit them within 60 days of (1) One percent for the first year; (ii) Costs for information technology
receipt of our notice and include all (2) Two percent for second year; and computerization needed for
necessary changes as part of a final (3) Three percent for the third year; tracking or monitoring required by or
approved Work Verification Plan no (4) Four percent for the fourth year; under part IV–A of the Act do not count
later than September 30, 2007. and, towards the limit in paragraph (5)(i) of
(c) If a State modifies its verification (5) Five percent for the fifth and this section, even if they fall within the
procedures for TANF or SSP–MOE work subsequent years. definition of ‘‘administrative costs.’’
(A) This exclusion covers the costs for (e) Expenditures for benefits or (2) The amount by which total current
salaries and benefits of staff who services listed under paragraph (a) of fiscal year expenditures for pro-family
develop, maintain, support, or operate this section may include allowable costs activities under § 263.2(a)(4)(ii) exceed
the portions of information technology borne by others in the State (e.g., local total State expenditures in this program
or computer systems used for tracking government), including cash donations during FY 1995.
and monitoring. from non-Federal third parties (e.g., a
(B) It also covers the costs of contracts non-profit organization) and the value of PART 265—DATA COLLECTION AND
for the development, maintenance, third party in-kind contributions if: REPORTING REQUIREMENTS
support, or operation of those portions (1) The expenditure is verifiable and
of information technology or computer meets all applicable requirements in 45 ■ 12. The authority citation for part 265
systems used for tracking or monitoring. CFR 92.3 and 92.24; continues to read as follows:
(b) With the exception of paragraph (2) There is an agreement between the
(a)(4)(ii) of this section, the benefits or Authority: 42 U.S.C. 603, 605, 607, 609,
State and the other party allowing the 611, and 613.
services listed under paragraph (a) of State to count the expenditure toward
this section count only if they have been its MOE requirement; and, ■ 13. Amend § 265.7 by revising
provided to or on behalf of eligible paragraph (b) to read as follows:
(3) The State counts a cash donation
families. An ‘‘eligible family’’ as defined
only when it is actually spent.
by the State, must: § 265.7 How will we determine if the State
(1) Be comprised of citizens or non- (f)(1) The expenditures for benefits or is meeting the quarterly reporting
citizens who: services in State-funded programs listed requirements?
(i) Are eligible for TANF assistance; under paragraph (a) of this section count * * * * *
(ii) Would be eligible for TANF only if they also meet the requirements
(b) For a disaggregated data report, ‘‘a
assistance, but for the time limit on the of § 263.5.
complete and accurate report’’ means
receipt of federally funded assistance; or (2) Expenditures that fall within the that:
(iii) Are lawfully present in the prohibitions in § 263.6 do not count.
(1) The reported data accurately
United States and would be eligible for (g) State funds used to meet the
reflect information available to the State
assistance, but for the application of Healthy Marriage Promotion and
in case records, financial records, and
title IV of PRWORA; Responsible Fatherhood Grant match
(2) Include a child living with a automated data systems, and include
requirement may count to meet the
custodial parent or other adult caretaker correction of the quarterly data by the
MOE requirement in § 263.1, provided
relative (or consist of a pregnant end of the fiscal year reporting period;
the expenditure also meets all the other
individual); and MOE requirements in this subpart. (2) The data are free from
(3) Be financially eligible according to computational errors and are internally
the appropriate income and resource ■ 11. Amend § 263.5 by revising consistent (e.g., items that should add to
(when applicable) standards established paragraph (b) to read as follows: totals do so);
by the State and contained in its TANF (3) The State reports data for all
§ 263.5 When do expenditures in State-
plan. funded programs count?
required elements (i.e., no data are
(c) Benefits or services listed under missing);
paragraph (a) of this section provided to * * * * *
(4)(i) The State provides data on all
a family that meets the criteria under (b) If a current State or local program families; or
paragraphs (b)(1) through (b)(3) of this also operated in FY 1995, and
(ii) If the State opts to use sampling,
section, but who became ineligible expenditures in this program would not
the State reports data on all families
solely due to the time limitation given have been previously authorized and
selected in a sample that meets the
under § 264.1 of this chapter, may also allowable under the former AFDC,
specification and procedures in the
count. JOBS, Emergency Assistance, Child Care
TANF Sampling Manual (except for
(d) Expenditures for the benefits or for AFDC recipients, At-Risk Child Care,
families listed in error); and
services listed under paragraph (a) of or Transitional Child care programs,
this section count whether or not the then countable expenditures are limited (5) Where estimates are necessary
benefit or service meets the definition of to: (e.g., some types of assistance may
assistance under § 260.31 of this (1) The amount by which total current require cost estimates), the State uses
chapter. Further, families that meet the fiscal year expenditures for or on behalf reasonable methods to develop these
criteria in paragraphs (b)(2) and (b)(3) of of eligible families, as defined in estimates.
this section are considered to be eligible § 263.2(b), exceed total State * * * * *
for TANF assistance for the purposes of expenditures in this program during FY [FR Doc. 08–455 Filed 1–29–08; 4:40 pm]
paragraph (b)(1)(i) of this section. 1995; or, if applicable, BILLING CODE 4184–01–P

Rule: Reauthorization of The Temporary Assistance For Needy Families (TANF) Program

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Rule: Reauthorization of The Temporary Assistance For Needy Families (TANF) Program

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Tuesday,

45 CFR Parts 261, 262, 263, and 265

Average Final rule total Interim rule

Preparation and Submission of Data Verification Proce-

the State since the beginning of FY this chapter. requirements.

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