[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Rules and Regulations]
[Page 6771-6828]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-18]
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Part II
Department of Health and Human Services
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Administration for Children and Families
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45 CFR Parts 261, 262, 263, and 265
Reauthorization of the Temporary Assistance for Needy Families (TANF)
Program; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Parts 261, 262, 263, and 265
RIN 0970-AC27
Reauthorization of the Temporary Assistance for Needy Families
(TANF) Program
AGENCY: Administration for Children and Families (ACF), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule implements changes to the Temporary Assistance
for Needy Families (TANF) program required by the Deficit Reduction Act
of 2005 (DRA) (Pub. L. 109-171). The DRA reauthorized the TANF program
through fiscal year (FY) 2010 with a renewed focus on work, program
integrity, and strengthening families through healthy marriage
promotion and responsible fatherhood. On June 29, 2006, ACF published
an interim final rule implementing the required statutory changes with
a 60-day comment period that ended on August 28, 2006. We have
considered all comments received during this period and made necessary
changes as reflected in this final rule.
EFFECTIVE DATE: October 1, 2008.
FOR FURTHER INFORMATION CONTACT: Robert Shelbourne, Director, Division
of State TANF Policy, Office of Family Assistance, ACF, at (202) 401-
5150.
SUPPLEMENTARY INFORMATION: On June 29, 2006, the Administration for
Children and Families published an interim final rule implementing key
provisions of the Deficit Reduction Act of 2005. The DRA required
States to implement certain work requirements effective October 1,
2006, among which were including families with an adult receiving
assistance in a separate State program funded with qualified State
maintenance-of-effort expenditures (SSP-MOE) in the work participation
rates and revising the base year of the caseload reduction credit from
FY 1995 to FY 2005. The law also directed us to issue regulations to
ensure consistent measurement of work participation rates, including
defining work activities, determining the circumstances under which a
parent who resides with a child who is a recipient of assistance should
be required to participate in work activities, and requiring States to
establish and maintain work participation verification procedures.
Congress also explicitly permitted HHS to issue an interim final rule,
implicitly recognizing that States may have to revise practices once
final regulations were published. Under the interim final rule, States
were able to begin planning and implementing necessary changes to their
TANF programs and procedures under the new requirements. Under this
final rule States are accountable for moving more families to self-
sufficiency and independence.
Comment Overview
We provided a 60-day comment period, during which interested
parties could submit comments in writing by mail or electronically.
During this period, we also held five listening sessions across the
country in which State and local officials, legislators and key
associations representing them could provide oral comments that were
officially recorded and considered in developing this final rule.
We received 470 letters of comment on the interim final rule,
representing State human service agencies, State legislators, national
associations, advocacy and disability groups, community and faith-based
organizations, Indian Tribes and Tribal organizations, educators, and
the general public. Most commenters addressed several provisions of the
interim final rule. Some comments favored the rule, for example:
``Overall the regulations are very positive and set the correct tone
that countable activities need to meet the new federal definitions and
be verified.'' But, in general, most commenters had mixed views,
supporting some provisions and opposing others. A significant number of
commenters expressed concerns about statutory provisions of the DRA or
of existing law, over which we have no regulatory discretion. Others
expressed concerns about the policies reflected in the rule. In
response to these comments, ACF is committed to working with states,
particularly with regard to TANF adult recipients living with
disabilities, to explore additional approaches and innovative efforts
to promote and support their employment.
As discussed in more detail throughout this preamble, the final
rule includes a number of important changes to address these policy
concerns. These include: Allowing time spent in a bachelor's degree
program to count as vocational educational training; allowing up to an
hour of unsupervised homework time for each hour of class time in all
educational activities; expanding State flexibility by converting the
six-week limit on job search and job readiness assistance to an hourly
equivalent; adding the flexibility for a State to exclude a parent who
is a recipient of Social Security Disability Insurance (SSDI) benefits
from the definition of a work-eligible individual, as is the case with
a recipient of Supplemental Security Income (SSI); clarifying that
excused holidays are limited to 10 days in a year; and enhancing State
flexibility by allowing a State to account for ``excused hours'' rather
than an ``excused day.'' We have summarized the public comments and our
response to them throughout sections III through VIII of this final
rule.
Table of Contents
I. The Statutory Framework: TANF and the Deficit Reduction Act of
2005
II. Regulatory Principles and Provisions
III. Cross-Cutting Issues
A. Individuals With Disabilities
B. Domestic Violence
C. General Topics
D. Tribal TANF
IV. Part 261--Ensuring That Recipients Work
V. Part 262--Accountability Provisions--General
VI. Part 263--Expenditures of State and Federal TANF Funds
VII. Part 265--Data Collection and Reporting Requirements
VIII. Paperwork Reduction Act of 1995
IX. Regulatory Flexibility Analysis
X. Regulatory Impact Analysis
XI. Unfunded Mandates Reform Act of 1995
XII. Congressional Review
XIII. Assessment of Federal Regulations and Policies on Families
XIV. Executive Order 13132
I. The Statutory Framework: TANF and the Deficit Reduction Act of 2005
Enacted as part of the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) of 1996 (Pub. L. 104-193), the TANF program
is a Federal block grant to States designed to provide temporary
assistance while moving recipients into work and self-sufficiency.
States must help recipients find work and meet work participation rates
and other critical program requirements to avoid financial penalties.
States have broad flexibility to design and operate their TANF programs
and to determine eligibility criteria and the benefits and services
that families receive to achieve the four program purposes:
(1) To provide assistance to needy families so that children may be
cared for in their own homes or in the homes of relatives;
(2) To end the dependence of needy parents on government benefits
by promoting job preparation, work, and marriage;
(3) To prevent and reduce the incidence of out-of-wedlock
pregnancies and establish annual numerical goals for
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preventing and reducing the incidence of these pregnancies; and
(4) To encourage the formation and maintenance of two-parent
families.
PRWORA initially authorized TANF through September 30, 2002.
Congress then funded TANF through a series of short-term extensions
until the Deficit Reduction Act of 2005 reauthorized the program
through FY 2010 with a renewed focus on work, program integrity, and
strengthening families through marriage promotion and responsible
fatherhood. Signed into law by President Bush on February 8, 2006, the
DRA maintained State flexibility and many provisions of PRWORA, but
included important changes to improve the effectiveness of the TANF
program.
Some comments on the interim final rule reflected a
misunderstanding of the Deficit Reduction Act confusion over which
original provisions of TANF Congress retained, which ones it changed,
what Congress directed the Department to do by regulation, and how HHS
exercised this regulatory authority in the interim final rule. This
section explains these distinctions.
The Deficit Reduction Act retained nearly all of the TANF
provisions enacted in the original welfare reform law. For example, the
law retained the requirement that 50 percent of all families with an
adult participate in the 12 allowable work activities for specified
hours each week and that 90 percent of two-parent families similarly
participate for certain, specified hours. The hourly work participation
requirements that adults must achieve to count in the State's work
participation rates also did not change. This requires a single
custodial parent with a child younger than six to participate for at
least an average of 20 hours a week and for all others to participate
for at least an average of 30 hours a week to count in the overall
participation rate. Similarly, two-parent families must participate for
at least an average of 35 hours a week (or an average of 55 hours a
week if federally-funded child care is provided) to count in the two-
parent participation rate.
The DRA maintained the penalty associated with failing to meet
these work requirements. As a result, we made no changes to the
regulatory process associated with a State's failure to meet the work
participation rate requirement in the interim final or final rule.
Further, the Deficit Reduction Act maintained provisions related to
the TANF purposes, State plan requirements, use of grants,
administrative provisions, prohibitions, appeals of adverse decisions,
Tribal TANF, waivers, charitable choice, application of relevant
Federal civil rights laws, and the limitation on Federal authority. Our
charge from Congress was to regulate in accordance with the changes
made by the Deficit Reduction Act, via an interim final rule if
appropriate. Since none of these provisions changed in the statute, the
associated regulatory provisions did not change in either the interim
final or this final rule.
Congress also made few changes in reauthorizing TANF funding. The
law retained the $16.5 billion per year capped entitlement for State
Family Assistance Grants and funding for the Contingency Fund. It
extended the Supplemental grants for the 17 States with historic low
grants per poor person and/or high population growth in the amount of
$319 million through FY 2008. Mandatory child care funding was
increased by $1 billion over five years. The law eliminated provisions
for Federal loans, the High Performance Bonus and the Illegitimacy
Reduction Bonus and replaced them with a $150 million-a-year research,
demonstration, and technical assistance fund for competitive grants to
strengthen family formation, promote healthy marriages, and support
responsible fatherhood. The Deficit Reduction Act also expanded a
State's ability to meet its maintenance-of-effort (MOE) requirement. A
State may now count expenditures that provide certain non-assistance,
pro-family activities to anyone, without regard to financial need or
family composition, if the expenditure is reasonably calculated to
prevent and reduce the incidence of out-of-wedlock births (TANF purpose
three) or encourage the formation and maintenance of two-parent
families (TANF purpose four).
The new law did make several key statutory changes and also
required HHS to promulgate rules in several areas. The statute added
separate State program cases receiving assistance funded with qualified
State maintenance-of-effort expenditures (SSP-MOE) to the calculation
of the work participation rates. This is a new requirement of law, not
within the discretion of our regulatory authority. Thus, regardless of
how commenters viewed this statutory provision, we could not change it
by regulation. The DRA continues to exclude any solely-State-funded
(SSF) program, that is, one for which it does not claim the State
expenditures as MOE under the TANF program. If a State established a
SSF, such cases would not be included in the calculation of a State's
work participation rates or subject to other program requirements.
The Deficit Reduction Act also changed the base year of the
calculation of the caseload reduction credit from FY 1995 to FY 2005.
While the statutory work participation rates did not change,
recalibrating the caseload reduction credit has the effect of
increasing the work participation requirements. For most States, we
estimate that in FY 2007 the overall work participation requirement
will be between 40 and 50 percent, depending upon the amount of
caseload reduction they had over the course of FY 2006 compared to the
new baseline of FY 2005.
Congress required HHS to do a number of things through regulation:
To define the meaning of each of the 12 countable work
activities specified in PRWORA, primarily because a U.S. Government
Accountability Office (GAO) study (GAO-05-821) reported that there was
great variation in State definitions of work activities. As a result,
State participation rates were not comparable. Of the activities, the
underlying statute also specified which nine activities count toward
meeting the first 20 hours of a 30-hour average weekly requirement; we
refer to them as ``core activities.'' Any additional hours needed to
meet the requirement can come from any of three ``non-core activities''
or from core activities. Under the statute, non-core activities may not
count as core activities.
To clarify who is a work-eligible individual. In addition
to families with an adult receiving TANF assistance, who were already a
part of the work participation rates, the DRA required us to include
such families receiving assistance under a separate State program and
to specify the circumstances under which a parent who resides with a
child who is a recipient of assistance should be included in the work
participation rates.
To ensure that State internal control procedures result in
accurate and consistent work participation information. Each State must
establish and maintain work participation verification procedures that
are based on regulations promulgated by the Secretary.
To establish a process for a new penalty in the event that
a State fails to establish and maintain adequate procedures to verify
reported work participation data.
II. Regulatory Principles and Provisions
To address these new statutory provisions and requirements of the
Deficit Reduction Act, the final rule:
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1. Defines each of the 12 countable work activities. Defining work
activities is necessary for consistent measurement and will ensure an
equitable and level playing field for the States. Because the statute
provides 12 distinct activities, we have tried to define them as
mutually exclusive, while still leaving flexibility for States to
address the critical needs of families.
2. Defines the term ``work-eligible individual.'' Generally a
``work-eligible individual'' is: (1) An adult (or minor child head-of-
household) receiving assistance under TANF or a separate State program;
or (2) a non-recipient parent living with a child receiving assistance.
The definition excludes the following non-recipient parents: a minor
parent who is not the head-of-household, a non-citizen who is
ineligible to receive assistance due to his or her immigration status,
or, at State option on a case-by-case basis, a recipient of
Supplemental Security Income (SSI) benefits. In addition, the term
excludes some parents, whether they are recipients or not: a parent
providing care for a disabled family member living in the home, if
there is medical documentation to support the need for the parent to
remain in the home to provide that care; and, at State option on a
case-by-case basis, a parent who is a recipient of Social Security
Disability Insurance (SSDI) benefits. We exclude these parents because
they either cannot work legally or we believe it would be inappropriate
to require them to work.
3. Clarifies that a State may count only actual hours of
participation. Under the original TANF rule, some States reported
scheduled hours of participation, which created an inconsistency among
States and reduced incentives to ensure that individuals actually
participated for assigned hours. Under the final rule, we clarify that
each State must report only actual hours of participation;
nevertheless, for individuals in unpaid work activities, we permit
States to count up to 10 days of holidays and an additional 80 hours
excused absences. To reduce the documentation burden on both employers
and workers, we also permit States to report projected hours of
employment on the basis of prior, documented actual hours of work.
Similarly, to reduce the documentation burden on both educational
providers and participants in an educational activity, we also allow
States to count up to one hour of unsupervised homework time for each
hour of class time.
4. Recalibrates the caseload reduction credit by updating the base
year from FY 1995 to FY 2005. As under PRWORA, the credit excludes
caseload changes due to changes in Federal law or State eligibility
criteria since the base year.
5. Requires each State to establish and maintain work participation
verification procedures through a Work Verification Plan. Each State
must: (1) Determine which work activities may count for participation
rate purposes; (2) determine how to count and verify reported hours of
work; and (3) identify who is a work-eligible individual. The State
must also develop and use internal controls to ensure compliance with
its procedures and submit them in a complete Work Verification Plan to
the Secretary for approval.
6. Establishes a new penalty for failure to comply with work
verification procedures. The final rule specifies that if a State fails
to establish or comply with its work participation verification
procedures and fails to correct the compliance deficiency, we will
impose a penalty of between one and five percent of the State Family
Assistance Grant (SFAG). The rule outlines the criteria under which we
will impose this penalty and explains how a State may claim reasonable
cause or submit a corrective compliance plan to correct the violation
and avoid the penalty.
7. Allows additional pro-family expenditures to count toward a
State's maintenance-of-effort (MOE) requirement. The final rule allows
a State to count expenditures on certain pro-family activities without
regard to financial need or family composition, if the expenditure is
reasonably calculated to prevent and reduce the incidence of out-of-
wedlock births (TANF purpose three), or encourage the formation and
maintenance of two-parent families (TANF purpose four), as long as they
meet all applicable MOE requirements and limitations. States receiving
Healthy Marriage or Responsible Fatherhood grants may count State
expenditures for any required match toward the State's TANF MOE
requirement, provided the expenditure also meets all applicable MOE
requirements and limitations.
Based on the consideration of all timely comments, this final rule
reflects adopted changes to 45 CFR Parts 261, 262, 263, and 265 of the
interim final rule of June 29, 2006. The comments and changes are
discussed in the preamble. Changes to these parts appear in sections IV
to VII of this document.
As in the interim final rule, the term ``we'' is used throughout
the regulatory text and preamble to mean the Secretary of the
Department of Health and Human Services (HHS) or the following
individuals or agencies acting on his behalf: the Assistant Secretary
for Children and Families, the Regional Administrators for Children and
Families, the Department of Health and Human Services, and the
Administration for Children and Families. The term ``Act'' refers to
the Social Security Act. We use the terms ``Deficit Reduction Act of
2005,'' ``Deficit Reduction Act,'' ``DRA,'' or ``Pub. L. 109-171'' when
we refer to the new law. States, the Territories, and the District of
Columbia are all subject to the TANF requirements, but a reference to
States means this entire group. Except as otherwise noted, we use the
term ``TANF'' to refer to TANF and any SSP-MOE programs in a State.
III. Cross-Cutting Issues
Many commenters raised general or cross-cutting issues about the
overall impact of the interim final rule or the impact on specific
populations. We address these issues in this section, followed by
comments on each section of the interim final rule.
A. Individuals With Disabilities
Comment: Many commenters maintained that the interim final rule
would hamper State efforts to design programs appropriate for people
with disabilities and discourage them from addressing their needs.
Commenters expressed concern that States would be much less likely to
invest the resources needed to provide the services that families with
disabilities need if they are not able to count those families toward
the work participation rates.
Some commenters recommended that we broaden work activity
definitions to accommodate the participation of people with
disabilities. Others urged us to permit lower hourly standards as an
accommodation. Otherwise, they recommended that we exclude clients with
disabilities from the definition of a work-eligible individual.
Response: We recognize that many individuals with disabilities are
capable of participating in productive work activities and encourage
States to explore these capabilities, rather than focusing on their
limitations. In fact, in the preamble to the interim final rule, we
encouraged States to provide self-sufficiency opportunities to
individuals with disabilities and to engage them in appropriate work
activities. We offered concrete examples, such as specialized work
experience sites, that would provide and demonstrate the skills and
experience needed to obtain employment. However, given the concern
expressed by commenters on this critical issue, we intend to expand our
technical assistance efforts in
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identifying and sharing effective models that have been developed by
vocational rehabilitation agencies and the entire disability community.
Under the TANF statute, the work participation rate calculations
generally include all families with an adult receiving assistance. When
Congress replaced the Aid to Families with Dependent Children (AFDC)
program with TANF, it eliminated a number of statutory exemptions
related to incapacity, temporary illness, and age. There was no
suggestion in PRWORA that the activities or hours that count toward the
work participation rate should vary for clients with disabilities. By
limiting the maximum participation rate to 50 percent, Congress
recognized that some individuals would not be able to satisfy the full
requirements. However, we believe States should work with and provide
services to individuals, whether they can participate for enough hours
to count toward the work participation rates or not. Because families
with adults receiving Federal assistance are subject to time limits, it
is important for States to serve the entire caseload so that all
recipients progress toward self-sufficiency. States should also provide
needed accommodations that can help all individuals reach their full
potential.
We believe the regulation provides States with increased
flexibility and incentives to work with people with disabilities. In
the definition of ``work-eligible individual'' in Sec. 261.2, we give
States the option of either including or excluding parents who receive
SSI or SSDI benefits and whose children are TANF recipients. If the
parent works enough to count in the rate, the State can include the
family, but it is not disadvantaged if the parent receiving SSI or SSDI
cannot work. In the final rule, we allow States to adjust prior
reported data and to back out of the participation denominator any
appropriate family with a work-eligible individual whose application
for SSI or SSDI was approved retroactively, as long as the adjustment
is within the allowable reporting time frame for the fiscal year. Also,
we have reaffirmed in the final rule that a parent needed in the home
to care for a disabled family member is also excluded from the
participation rate.
Comment: Many commenters suggested that the interim final rule
makes it difficult for States to meet the work requirements and to
comply with the Americans with Disabilities Act (ADA) of 1990 and
Section 504 of the Rehabilitation Act of 1973.
Response: We recognize and underscore that States must continue to
comply with relevant civil rights laws, including the ADA and Section
504 of the Rehabilitation Act of 1973 (Section 504). We believe that
this final rule gives States several ways to count activities that they
would be legally required to provide under the ADA and Section 504. It
is also important to note that a State may be legally obligated to
provide a reasonable accommodation/modification under the ADA and
Section 504 even if it will not receive credit toward its Federal work
activity requirements for the accommodation/modification. As identified
in the preamble of the interim final rule, HHS developed and will
develop additional technical assistance related to the application of
civil rights laws in the TANF context. Existing tools may be found at
the HHS Office for Civil Rights (OCR) Web site at http://www.hhs.gov/ocr/tanf.
Among other help, the webpage includes guidance entitled
``Prohibition Against Discrimination on the Basis of Disability in the
Administration of TANF,'' which addresses the application of the ADA
and Section 504 in the TANF context, the legal requirements of ensuring
equal access, reasonable accommodations/modifications,
nondiscriminatory operational methods, and includes a discussion of
promising practices. Complaints alleging violations of these
requirements are not infrequent. OCR currently has open TANF
complaints, many of which allege that States are denying TANF
applicants and beneficiaries with disabilities equal access and/or not
providing reasonable accommodations/modifications. Such complaints are
often resolved by a State agreeing to implement effective and
comprehensive screening and assessment of TANF applicants and
beneficiaries.
We were also trying to make one other key point. It is
discriminatory to deny a person with a disability the right to
participate in or benefit from the aid, benefit, or service provided by
a public entity. The benefits and services provided must be equal to
those provided to others, and as effective in affording equal
opportunity to obtain the same result, to gain the same benefit, or to
reach the same level of achievement as those provided to others.
Services, programs, and activities must be administered in the most
integrated setting appropriate to the needs of qualified individuals
with disabilities. Separate or different aids, benefits, or services
are permitted, but only when necessary to ensure that they are as
effective as those provided to others. Persons with disabilities must
also have the option of declining to accept a particular accommodation.
Thus, State agencies must offer people with disabilities an equal right
to participate in programs instead of automatically exempting them from
participation requirements.
The Supreme Court, in School Board of Nassau County v. Arline
noted, ``* * * society's accumulated myths and fears about disability
and disease are as handicapping as are the physical limitations that
flow from actual impairment.'' 480 U.S. 273, 284 (1987).
Provisions of the ADA and the Rehabilitation Act prohibit exclusion
and segregation of individuals with disabilities and the denial of
equal opportunities enjoyed by others, based on, among other things,
assumptions, patronizing attitudes, fears, and stereotypes about
individuals with disabilities. Public agencies are required to ensure
that their actions are based on facts applicable to individuals and not
on assumptions as to what a class of individuals with disabilities can
or cannot do.
The ADA covers individuals who vary widely in the severity of their
disability, degree of disadvantage, capabilities, and skills, and their
appropriate path to self-sufficiency and independence must be assessed
on an individual basis, just like everyone else. It is exactly for
these reasons that Congress chose not to exclude individuals with
disabilities from the participation requirements and the benefits and
results that accrue to working individuals and families. We believe
that potential danger lies in altered expectations and opportunities,
in automatic exemptions, and in exclusions from integrated requirements
and services designed to lead to self-sufficiency and independence.
TANF agencies must provide programs in the most integrated setting
appropriate to the needs of people with disabilities. Agencies should
take steps to ensure that individuals with disabilities can participate
in all programs and services for TANF clients, not just those programs
and services that are designed solely for people with disabilities. In
addition, TANF agencies must ensure equal access to programs and
services for TANF clients. In ensuring equal access, it is critical
that TANF agencies have comprehensive and effective screening and
assessment tools in place.
Clearly, a State must provide appropriate accommodations and
services when necessary to afford an individual with a disability an
equal opportunity to participate in, and enjoy the benefits of, the
service, program, or activity, and the opportunity to request such
accommodations and services.
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States can and must make necessary accommodations in the number of
hours and types of activities they require, if needed. But,
accommodations that enable clients to work are clearly just as
critical. States must ensure that individuals with disabilities are not
excluded from services, programs and activities because buildings are
inaccessible, and these include the buildings of contractors and
providers. Agencies must also provide accommodations to individuals
with disabilities, at no additional cost, where necessary to ensure
effective communication with individuals with hearing, vision, or
speech impairments. (Accommodations include but are not limited to such
services or devices as qualified interpreters, assistive listening
headsets, television captioning and decoders, telecommunications
devices for the deaf [TDDs], videotext displays, readers, taped texts,
materials in Braille, and large print materials.)
Comment: One commenter suggested, ``Employment of individuals with
mental illness should be a top priority for policy makers at all levels
of government. Unfortunately, due to stigma, organizational, financial
and other barriers, employment is often a low priority, if it is a
priority at all. It's doubtful that the Interim Final Rules, as
currently drafted, will result in greater work opportunities for people
with psychiatric disabilities.''
Response: We agree that employment of individuals with disabilities
should be a priority, and this Administration has made it a priority
for all executive agencies. President Bush, in announcing his ``New
Freedom Initiative'' in 2001, stated, ``Every American should have the
opportunity to participate fully in society and engage in productive
work. Unfortunately, millions of Americans with disabilities are locked
out of the workplace because they are denied the tools and access
necessary for success.'' The number of recipients with disabilities who
are currently working significantly understates both the capability and
desire of people with disabilities to work. Under significant work
participation requirements, States will need to expand preparatory and
employment options for individuals with disabilities. We will continue
to work closely with our colleagues in the Substance Abuse and Mental
Health Services Administration, the Social Security Administration, and
the disability community to enhance services to all people with
disabilities.
Comment: One commenter noted that the preamble to the interim final
rule often encouraged States to engage individuals with disabilities
but that the rule did not offer practical ways to assist States in
doing so. The commenter urged us to ensure that the final rule includes
better mechanisms to allow all TANF recipients with disabilities to
meet work participation requirements.
Response: We agree that TANF agencies need to find more effective
ways to engage people with disabilities in their caseloads than many
have used in the past. Increased efforts should be pursued in a number
of areas. For some States, TANF agencies need to re-engage with State
rehabilitation agencies to use their proven knowledge and expertise to
address the barriers individuals with disabilities face and to help
them enter the workplace. Much needs to be done to overcome negative
stereotypes and misperceptions among the public. Job developers need to
educate employers, since research shows that working individuals with
disabilities are very effective employees. Agencies need to improve
their marketing of the advantages and benefits of work to individuals
with disabilities, while ensuring that benefits, such as medical
coverage, are sustained.
In the first 10 years of the TANF program, there has been
inadequate attention to engaging individuals with disabilities in work;
however, few States raised concerns to us about their ability to serve
people with disabilities during this period. Oftentimes, individuals
with disabilities face challenges in entering the workforce and pose
challenges to State agencies trying to help them enter the workforce.
Sometimes, a disability is debilitating enough that a person cannot
work. Federal programs such as SSI and SSDI serve such people. But for
many others, a disabling condition does not preclude the possibility
and the rewards of work, even if it creates challenges.
It is precisely for this reason that we have not categorically
removed individuals with disabilities from the definition of work-
eligible individual. Individuals who happen to have disabilities should
be afforded the same opportunities to engage in work--to find work-
related training, work experience, and employment--as those who do not
have a disability. By keeping such individuals in the work
participation rate, as they have been since the inception of TANF,
States have an added incentive to address the needs of people with
disabilities.
We look forward to working with States in this area through our
technical assistance efforts and anticipate disseminating information
about promising approaches to helping individuals with disabilities and
establishing linkages between organizations serving the needs of
individuals with disabilities. ACF will use its Welfare Peer Technical
Assistance Network to disseminate information on promising practices
for serving individuals with disabilities. In addition, ACF will work
with States to explore additional approaches and innovative efforts to
promote and support the employment of TANF adult recipients living with
mental, intellectual and physical disabilities.
Comment: Many commenters urged us to permit ``deeming'' for
individuals with disabilities. They recommended that we allow States to
count recipients who participate in accordance with an employment plan
that includes accommodations for disabilities as having met required
hours to count in the participation rate. They stressed that this would
give States an incentive to engage such individuals to their greatest
ability. Similarly, they urged us to let States count recipients who
miss scheduled hours of work participation because they were caring for
a family member with a disability. They suggested that, in the same way
that we permit ``deeming'' to respond to the requirements of the Fair
Labor Standards Act, we should allow lesser hours of participation to
count for the full required number of hours when needed to make
accommodations required under the ADA.
Response: We agree with the commenters' concerns that individuals
with disabilities should have appropriate accommodations in their work
assignments and believe this regulation provides States with more
flexibility and incentives to work with people with disabilities than
they have ever had previously. As we noted in response to earlier
comments, the TANF work participation rates have always included people
with disabilities. States can and must make necessary accommodations in
the number of hours and types of activities they require of individuals
with disabilities.
As noted earlier, ACF is committed to working with States to
explore additional approaches and innovative efforts to promote and
support the employment of TANF recipients living with disabilities. As
we work with States, we will begin to get a better understanding of the
potential promises and logistical challenges of all such approaches.
With respect to individuals caring for people with disabilities,
the regulation makes two accommodations. First, the definition of a
work-eligible individual excludes a parent caring for a disabled family
member living in the home, as long as there is medical documentation
[[Page 6777]]
to support the need for that parent to remain in the home to care for
the disabled family member. Second, the regulation gives States credit
for excused absences for all work-eligible individuals in unpaid work
activities. Thus, if a State excuses an individual who misses time
because she must care for a disabled family member, the State could
count those missed hours as actual participation, within the limits the
regulation sets out. Please refer to Sec. 261.60 for further
discussion of excused absences.
B. Domestic Violence
Comment: Some commenters asserted that the interim final rule
conflicted with the Family Violence Option (FVO). One commenter noted,
``The regulations are also silent on how domestic violence services are
allowed and how domestic violence cases are treated.'' Another
commenter asserted, ``Women need time to effectively remove the
barriers that have prevented them from obtaining quality employment.''
Another suggested that ``the limited time allowed in job search and job
readiness for barrier removal activities is inflexible and should not
apply to family violence victims.''
Response: Existing provisions in the law address work participation
rate issues for States dealing with victims of domestic violence. A
State that elects the Family Violence Option under Section 402(a)(7) of
the Social Security Act must screen and identify victims of domestic
violence, refer such individuals to services and, if needed, waive
participation and other program requirements for as long as necessary
to escape domestic violence. The rules at Part 260, Subpart B allow
States to grant good cause domestic violence waivers to victims of
domestic violence that waive various program requirements, including
work requirements. States have broad flexibility in determining which
program requirements to waive and for how long. Although these
recipients remain in the work participation rate calculation, there may
be some activities that meet one of the work activity definitions that
would make them countable toward the participation rate. If a State
fails to meet a work participation rate, we will determine that it had
reasonable cause if the State can demonstrate that it failed to meet
the rate due to granting federally recognized good cause domestic
violence waivers. In this circumstance, we would recalculate the work
participation rate taking out any families in which individuals
received a federally recognized good cause domestic violence waiver of
work participation requirements.
We believe the 1999 TANF final rule regarding the treatment of
victims of domestic violence ensures services and waivers for victims
and provides adequate ``reasonable cause'' reduction or elimination of
penalties for States. Consequently, we did not propose revision to Part
260, Subpart B in the interim final rule; therefore, general concerns
related to rules on victims of domestic violence are outside the scope
of this rulemaking.
C. General Topics
Alternative Measures of Performance
Comment: Several commenters suggested shifting the focus of
participation from process to outcome measures. One commenter found
that the existing participation rates were too limited for purposes of
assessing State performance measuring comparability across States. The
commenter suggested that we use alternative measures of program
success, including measures related to poverty, the employment rates of
current and former recipients, and the completion rates for applicants
and recipients enrolled in education and training programs. One
commenter recommended continuing the High Performance Bonus outcome
measures, even though bonuses are no longer available under the DRA.
Another commenter urged work participation credit for those families
who get jobs and work their way off welfare.
Response: We do not have the regulatory discretion to replace the
existing work participation rate requirements with alternative,
performance-based measures. Nevertheless, we do continue to track
several of the outcome measures from the high performance bonus.
Negative Consequences and Challenging Standards of
Participation
Comment: Several commenters suggested that the interim final rule
makes it more difficult for States to design effective programs to move
families from welfare to work. Some commenters predicted that States
may adopt punitive approaches to reduce the denominator for the work
participation rate.
Some commenters suggested that we do not appreciate the need for
flexibility and the difficulty of meeting a 50-percent overall
participation rate. As an example, one commenter thought that we failed
to recognize ``the reality that reaching a 50 percent participation
rate is difficult in large part because of the many legitimate reasons
why a recipient may not meet the full hourly participation requirements
in any particular month, including illness, temporary gaps between work
components, and family emergencies such as trying to forestall an
eviction, the need to find new housing, the need to care for an ill
relative who may not live with the recipient, or the need to attend to
a domestic violence issue.'' One commenter said that the rules ``would
steadily diminish state flexibility through the imposition of rigid
federal mandates.'' Another stated, ``The new regulations have
eliminated the states' ability to be flexible in determining what they
may assess for countable work activities when in reality the needs of
the particular participants and states vary vastly.''
Response: We do appreciate the difficulty in engaging a large and
varied client population in countable work activities for enough hours
to meet the work participation rate. Instilling the work habits and
providing the supports that different families need to engage in work
is a challenge that all States must strive to achieve. We have given
serious consideration to the commenters' concerns and would like to
point out certain aspects of statute as well as others of the TANF rule
that help States achieve the work participation rate. There are several
categories of individuals that continue to be excluded from the
calculation of the work participation rate under the new law. One of
the largest is the State option to disregard, on a case-by-case basis,
single-custodial-parent families caring for a child under the age of
one year. A State may also disregard a family subject to a work-related
sanction for up to three months in the preceding 12 months. In
addition, the interim final rule allowed States to exclude from the
definition of ``work-eligible individual'' parents caring for a
disabled family member living in the home. Our excused absence policy
addresses concerns related to hours missed due to short-term illnesses
or emergencies. Finally, States have a special reasonable cause
provision if they miss the work participation rate because they serve a
large number of families dealing with domestic violence issues.
Also, we would like to emphasize that when States cannot count the
participation of some individuals in certain activities because they do
not meet one of the work activity definitions or because the hours of
participation are not sufficient, the States should still serve these
individuals. The requirements and expectations for each family should
be set by the State taking into consideration the needs of the family,
obligations under the ADA and
[[Page 6778]]
Section 504 of the Rehabilitation Act of 1973, and program goals. Thus,
in any individual case, a State may require fewer hours of an adult
than needed to count toward the Federal participation rate and that
family will not help the State meet its work participation rate.
Similarly, a State may, and many do, require more hours of an adult
than needed to count the family in the participation rate. Moreover,
States continue to have the flexibility to allow families to engage in
broader and different activities from those that count for the Federal
participation rate.
We are convinced that States can and will meet these challenges,
thus dramatically improving the lives of families. We also believe that
the standards must be challenging to ensure that the maximum number of
recipients move toward self-sufficiency. This conviction is based on
the well-documented results and achievements made by States in response
to PRWORA. We believe the DRA provides the appropriate steps and
direction for the next phase of welfare reform.
We are confident that, under the new rule, States that operate
effective and efficient welfare-to-work programs will be able to
satisfy their work participation rate standards and enhance the
services to clients at the same time.
Partial Credit
Comment: Several commenters suggested that we should give States
partial or pro rata credit for individuals who are engaged in work
activities for some hours, but not enough to be included in the work
participation rate calculation. One commenter pointed out that this
would avoid the current ``all-or-nothing'' standard and would permit
some individuals who have limitations to be credited with
participating. Another maintained that partial credit is not
prohibited, even if the rules do not specifically allow it.
Response: Neither PRWORA nor the DRA provided for counting partial
participation of a case in meeting the work participation rates; either
the adult meets the requirements for being ``engaged in work'' and the
family counts in the rate or the adult does not meet the hours
requirement and the State does not get credit for that family in the
participation rate. We remind readers that the regulations at
Sec. Sec. 261.22(d)(1) and 261.24(d)(1) do provide the flexibility of
counting a partial month of assistance as a month of participation if a
work-eligible individual is engaged in work for the minimum average
number of hours in each full week that the family receives assistance
in that month. Please refer to the regulatory text of those sections
and to the preamble discussion in the original TANF rule at 64 FR
17771. In addition, the excused absence policy described in Sec.
261.60(b) allows a State to receive credit for short-term excused
absences and allows some families that would otherwise fall short of
the minimum hourly requirements to count in the participation rate.
Increased Costs
Comment: Some commenters suggested that the new regulations would
require States to increase participation in work activities, which
would raise program costs. This, in turn, they thought, would force
States to curtail services because TANF is a fixed block grant.
Response: The dramatic decline in welfare caseloads since the 1996
welfare reform has produced savings that far exceed any additional
costs from new work requirements. More specifically, TANF funding,
measured on a per TANF family basis, was $9,100 in 1996 (inflation-
adjusted) compared to $15,977 in 2007 (projected), an increase of
$6,877 per family, or 76 percent. While we recognize that States have
dramatically extended work services and support benefits to low-income
working families, and pre-kindergarten care and education to children
that are not receiving ``assistance,'' we believe that States have
sufficient resources to allocate among priority programs while
implementing these new requirements.
Child Care Needs
Comment: Some commenters thought that there was not enough child
care funding to pay for the added costs associated with implementing
the work requirements under the Deficit Reduction Act of 2005,
particularly for child care for non-recipient parents.
Response: Since 1996, Federal child care funding through the Child
Care and Development Fund (CCDF) has more than doubled--from $2.2
billion in FY 1996 to $4.8 billion in FY 2005. HHS data on Federal and
State child care spending in just three programs--TANF, CCDF, and the
Social Services Block Grant (SSBG)--show that spending increased by
nearly 225 percent between FY 1996 and FY 2005, from $3.6 billion to
$11.5 billion. The Deficit Reduction Act increases Federal child care
funding in the CCDF from $4.8 billion to $5 billion, effective FY 2006.
In addition to increasing child care funding, the Deficit Reduction Act
fully funds TANF at $16.5 billion per year for five years. With
significantly lower caseloads than in 1996, we believe that States
should have adequate funding to provide needed child care under the
Deficit Reduction Act requirements.
Monitoring
Comment: Several commenters suggested that the rule imposes rigid
monitoring and reporting requirements. Some expressed concern that
frequent demands for proof of participation could overburden providers
or cause families to lose assistance.
Response: We believe that the rule simply clarifies what has always
been the expectation of law, of the original TANF rule, and of the
requirements of 45 CFR part 92: That a State should report only actual
participation that it has adequately documented and verified. As a
result of numerous single audit findings questioning the validity of
participation rates, we decided to clarify this expectation in the rule
so that States may avoid potential penalties. In addition, for the four
activities involving paid employment, which historically have
represented the bulk of State work participation, we have substantially
reduced the burden on clients, employers, and States by allowing the
reporting of projected actual hours of participation for up to six
months based on current, documented hours of work.
Consultation
Comment: One commenter stated that we did not consult Tribes about
the interim final rule and that Tribes were expressly discouraged from
providing input because the rule was directed at States and was not
intended to impact Tribal TANF programs directly.
Response: The rulemaking process included a period for public
comment on the interim final rule. Tribes as well as other
organizations and individuals were free to express their opinions and
to offer advice on the rule. Several Tribes and Tribal Organizations
took the opportunity to submit comments, which we have addressed in the
preamble to this final rule. Further, ACF representatives actively
participated in a National Summit on State and Tribal TANF in July
2006, at which State and Tribal representatives discussed the
provisions of the DRA and the interim final rule in detail and
expressed comments. The National Alliance of Tribal TANF, one of the
Summit sponsors, summarized these comments and formally submitted them
to us. They are also addressed in this preamble.
D. Tribal TANF
Comment: One commenter observed that Tribal TANF programs could be
adversely affected by States that fail to meet the work participation
rates because the funds that States transfer are critical to the
operation of Tribal TANF programs. This commenter also
[[Page 6779]]
expressed concern that funding and regulatory changes to State TANF
programs will negatively affect various Tribal programs.
Response: State MOE funding plays an important role for Tribal TANF
programs. We will continue to encourage States to support the Tribal
TANF grantees with MOE funding; however, the decision to provide MOE
funding rests solely with the States. States may also impose conditions
on Tribal TANF programs on the use of State MOE funds. Primarily, the
Federal role regarding State MOE is to ensure that States expend the
required amount of funds in compliance with requirements. (For a more
detailed discussion of Federal policy on MOE funds provided to Tribal
TANF programs, please see our Policy Announcement, TANF-ACF-PA-00-4
dated November 27, 2000.)
We do not think it is likely that State TANF agencies will reduce
MOE funding for Tribal TANF programs. If a State does fail a work
participation rate, it must meet an 80 percent MOE requirement. States
that meet the work participation rates need only spend at the 75
percent MOE level. Any State that may potentially fail either the
overall or two-parent participation rate needs to ensure that it has
expended 80 percent of its historic level of spending, a five
percentage point increase for many States. In addition to the need to
expend additional MOE funds, we have heard no State indicate that it is
contemplating any reductions in providing funding to Tribal TANF
programs.
Comment: A few commenters expressed concern that restrictions
imposed by this regulation could create an influx of Tribal clients
moving to areas in which Tribal TANF programs exist, thereby increasing
the costs to these programs. Because Tribal funding is based on 1994
caseload data, Tribes have substantially limited ability to renegotiate
effectively for increased funding.
Response: We understand the commenters' concerns; however, we have
seen no evidence that this rule will prompt Tribal members to move into
areas served by a Tribal TANF program or that such a potential influx
would exceed the 1994 caseload level. In fact, if States effectively
implement the DRA provisions, we expect further caseload declines.
Comment: One commenter expressed opposition to any attempt to
extend these regulations to the Tribal TANF program regulations.
Response: As we noted in the preamble to the interim final rule,
the regulatory changes promulgated in response to the enactment of the
DRA only apply to States, the District of Columbia, and the Territories
of Guam, Puerto Rico, the Virgin Islands, and American Samoa. We are
not planning to amend the Tribal TANF program regulations at 45 CFR
part 286 to comport with these DRA 2005 final rules.
IV. Part 261--Ensuring That Recipients Work
Section 261.2 What Definitions Apply to This Part?
This section of the regulation defines work activities and work-
eligible individuals. Section 407(d) of the Social Security Act
specifies 12 separate and distinct activities. Under the original TANF
rule, we chose not to define these work activities to provide maximum
program design flexibility to States. We simply listed the 12 work
activities in 45 CFR 261.30 in the order they appear in the Act. As GAO
found, this led to disparities in State definitions of work activities
that resulted in inconsistent work participation measurement and
undermined the principle of equitable treatment. In particular, States
with narrow definitions were at a disadvantage in meeting the
participation requirements compared to States with broader definitions.
In addition, the GAO report (GAO-05-821) raised concerns that some
States integrated activities to avoid various statutory limitations on
some TANF work activities, such as the six-week time limit on counting
hours spent in job search and job readiness assistance.
The Deficit Reduction Act of 2005 required HHS to promulgate
regulations to ensure consistent measurement of work participation
rates. The law specifically required us to determine whether an
activity of a recipient of assistance may be treated as a work
activity. Thus, in the interim final rule, we defined each of the
countable work activities to promote consistency in the measurement of
work participation rates and to maintain the integrity of the work
participation rates. By defining work activities, we ensure that all
States are judged on the same basis that is, that there is a level
playing field.
Our definitions follow the order of the list of work activities in
section 407(d) of the Social Security Act. For ease of reference, we
refer to the nine work activities that count for the first 20 hours of
required work or the corresponding 30-hour requirement for two-parent
families (or 50-hour requirement for two-parent families receiving
federally subsidized child care) as ``core'' activities and the three
activities that can only count as participation after the core
requirement is met as ``non-core'' activities.
We were guided by four basic principles in developing the work
activity definitions in this final rule.
First, we attempted to define each work activity in a common sense
way. If a particular activity was not explicitly listed in the statute,
we attempted to see if it could fit under one of the 12 activities
listed in law. For example, treatment, counseling, and rehabilitation
activities, in our judgment, fit best under job search and job
readiness assistance, when such activity prepares an individual for
work. However, we could not add wholesale categories of work activities
to the 12 listed in the law. Our task was to specify whether and where
certain activities fit within these already existing statutory
categories.
Second, we defined each activity to focus on work and help move
families to self-sufficiency. Work activities should help individuals
develop the skills necessary to become job ready and go to work. We do
not want families to exhaust their time-limited benefits and discover
that they are not prepared to support themselves.
Third, we tried, as far as possible, to make the definitions
mutually exclusive of one another. Since Congress created 12 distinct
activities, we wanted to bring meaning to them as distinct activities.
Fourth, we made supervision an explicit part of each definition.
For programs to be successful, it is important that the case manager or
provider knows what each person is supposed to be doing and that he or
she is accountable on a timely basis for ensuring that the client
actually performs such assigned tasks.
Comments and Responses on Cross-Cutting Issues for Work Definitions
We received many comments on this section of the interim final
rule. Some comments applied to multiple activities or applied generally
to defining the activities at all. We respond to those cross-cutting
comments in this section and have grouped the comments and our
responses by topic for the ease of the reader. We respond to comments
that focus more narrowly on a specific definition in the discussion of
each activity below.
General Topics
Comment: Some commenters wrote that the work activity definitions
in the interim final rule narrowed the range of what States can count
toward their work
[[Page 6780]]
participation rates and recommended giving States more flexibility in
defining work activities. One commenter recommended allowing States to
develop their own definitions.
Response: The DRA directed HHS to define work activities to achieve
greater consistency among States. For some States, the new definitions
may narrow countable activities, but we believe they actually expand
them in other States. For example, under the original rule, some States
counted substance abuse and mental health treatment as community
service or as job search and job readiness assistance. Some States did
not count these activities at all, even if a substantial number of
individuals participated in such treatment. Our new definitions make
substance abuse treatment, mental health treatment, or rehabilitation
activities an explicit part of job search and job readiness assistance.
This will allow all States to count individuals participating in these
activities and thus could actually increase work participation rates in
these States. In general, we believe the work activity definitions
specified in the interim final rule were reasonable and consistent with
the goals of the TANF program, and thus we have retained them, with
appropriate modification, in the final rule. As a practical matter, we
do not believe that these definitions have a restrictive effect on what
most States currently count because the dominant activity in most
States has traditionally been unsubsidized employment, an activity
whose definition most commenters did not find restrictive.
Comment: Several commenters expressed the view that the emphasis on
mutually exclusive activities restricts State flexibility in developing
cost-effective programs by making it more difficult for them to
``blend'' program activities. The commenters recommended that we make
the definitions more ``flexible'' and permit program approaches that
integrate and combine activities under one work activity definition.
Response: Programs that combine work with training or other
services have shown promise in helping TANF recipients make the
transition to the labor force and move toward self-sufficiency. We
believe that the final rule gives States the flexibility to operate
programs of blended activities. Section 407(d) of the Act specifies 12
separate and distinct activities. Thus, we have tried to define each
activity to have a specific and distinct meaning, but it was not always
possible to make them mutually exclusive. In fact, some types of
activities can be categorized under more than one work activity
definition. For example, many of the training activities counted under
vocational educational training can also count under job skills
training directly related to employment and education directly related
to employment. The former is a core work activity that is limited to 12
months in a lifetime, whereas the latter are non-core activities that
can only count once the core activity requirement has been met.
Comment: Some commenters maintained that the most effective
welfare-to-work programs included a variety of employment and education
and training activities. In their opinion, mutually exclusive
definitions would discourage States from combining work activities.
Moreover, they maintained that doing so would require separate tracking
of each activity and impose an added administrative burden. In
addition, because some activities, such as job search and job readiness
assistance and vocational educational training, have statutory
limitations on their duration, the commenters thought that States might
be reluctant to include these activities in a broader program that
blends activities because it would limit the long-term use of those
activities. Commenters urged us to allow States to combine activities
and report all participation under one activity. Several commenters
suggested that States should be allowed to count an individual
participating in more than one activity in the activity that makes up
the majority of the hours of participation. For example, many of these
commenters recommended that we allow States to count a limited number
of hours of job search or training as part of another activity, such as
work experience, if the other activity represents the majority of the
hours of participation.
Response: We strongly support State programs that combine
activities and believe that our definitions fit well with such blended
programs. It is important that States report the hours of participation
for each work activity in the appropriate category to ensure that the
data are comparable across States. If an individual has exhausted the
time allowed to count an activity, it does not prevent a State from
continuing to combine it with other activities; it only affects what a
State can report toward the participation rates. We note that a policy
that allows some activities to count within others based on standards
such as what constitutes a ``significant majority'' of hours would
still require States to track the hours of each activity separately to
determine which activity is the primary activity. Thus, combining the
activities would not achieve the suggested administrative
simplification.
Comment: Many commenters expressed general support for education
activities or for the ability to count a wider array of educational
activities. Several commenters asserted that the regulations will limit
access to education and training, and were concerned that this would
hinder client access to higher paying jobs and undermine their efforts
to become self-sufficient. For those with limited basic skills and
language difficulties, some commenters proposed expanding the
definitions of various core activities to increase opportunities of
countable participation. Commenters also suggested that we expand the
definition of vocational educational training to include education
directed at achieving a baccalaureate or advanced degree.
Response: We appreciate the value of education and training for all
individuals. Some recipients need to develop skills to become
employable; others benefit from education and training in order to
advance in the workplace. While we cannot add educational categories to
the explicit 12 activities listed in the TANF statute, we believe that
our definitions permit considerable flexibility to provide a range of
education and training services to TANF families. Under vocational
educational training, we permit a variety of postsecondary education
activities, including associate degree programs, instructional
certificate programs, industry skill certifications, and other course
work. In addition, the definition of job skills training directly
related to employment permits virtually all vocational educational
training activities to count under that component as well. States may
choose this activity for those individuals who have exhausted their 12-
month limit on vocational educational training or to conserve these
months for those who have sufficient additional participation in other
core work activities. Remedial education and ESL can count under
vocational educational training, if they are a necessary and regular
part of the work activity, and also can count under education directly
related to employment. States have considerable flexibility to mix and
match work activities so that they can count a wide range of
activities. Although the interim final rule did not permit States to
count participation in baccalaureate or advanced degree programs in
vocational educational training, we have been persuaded by commenters
to allow such participation and have changed the definition
accordingly.
[[Page 6781]]
Comment: Some commenters thought that the new work activity
definitions ``do not allow for the singular economic, cultural, and
geographic circumstances'' that characterize some States. For example,
they pointed out that the rural nature of some communities makes it
difficult to serve some work-eligible individuals, both because the
range of activities may be limited and also because various
documentation and supervision standards are hard to apply.
Response: We are sympathetic to concerns related to serving remote
areas and areas where employment opportunities are limited due to high
unemployment or other conditions. However, the statute does not make
any allowance for such factors in the calculation of work participation
rates, except that it limits the maximum overall rate to 50 percent.
Under one of TANF's predecessor programs, the Job Opportunities and
Basic Skills Training (JOBS) program, States could exempt individuals
living in remote areas, but Congress chose not to continue this
exemption when it enacted TANF in 1996. The law does provide penalty
relief, though, if a State can demonstrate that high unemployment or
regional recession caused or contributed to its failure to meet the
work participation rates. Readers should refer to Sec. Sec. 261.51(d)
and 262.5 of this chapter for more information on penalty relief.
Comment: Some commenters suggested that the work activity
definitions exceeded our legal authority. One commenter noted, ``Many
states have used more expansive definitions over the past 10 years, and
HHS has never suggested that they were in violation of the statute.''
Another commenter asserted that there is ``no statutory basis to impose
a mutually exclusive list of definitions to what Congress said should
be viewed as a whole.'' Some commenters contended that specific
regulatory provisions were not consistent with the statute.
Response: The Deficit Reduction Act of 2005 specifically required
us to determine ``whether an activity * * * may be treated as a work
activity. * * *'' We believe the interim final rule was consistent with
Congressional and statutory intent. We did not intend to suggest that
States were in violation of the prior statute and rules. Rather,
Congress saw a need for uniform definitions and the rule provides them.
Comment: Some commenters wrote that aspects of our definitions were
not necessary because they were not required by the statute, for
example, the limitation that only supervised homework can count.
Response: The statute is generally silent on what we should include
in most definitions. In defining the work activities, we found it
necessary to specify what can count as part of an activity and the
conditions that must be met to ensure that actual participation in the
activity occurs and thus keep definitions consistent across States.
Comment: One commenter urged us to count as part of a work activity
the time it takes to travel to and from the work or training site. The
commenter thought this was particularly important in rural areas that
are isolated and lack public transportation.
Response: Travel time to and from work sites does not count toward
the participation rates. We chose not to count commuting time to and
from a work site because commuting is not ``engaging'' in the activity
for which the State gets credit and because this approach is analogous
to the work world, since most employees receive no pay for the time it
takes them to commute to their jobs. However, we do allow a State to
count the time an individual spends in job search and job readiness
assistance traveling between multiple interviews. Please refer to the
preamble discussion of that work activity for more detail in this area.
Daily Supervision
Comment: Several commenters asked for clarification regarding the
daily supervision requirement for unpaid work activities. Several
commenters objected to the requirement that job search and job
readiness assistance include daily supervision because they said it is
a costly and time-consuming requirement. These commenters generally
noted that the time and resources spent on daily supervision should be
focused on providing direct services to help families move toward self-
sufficiency. Several commenters suggested that we limit the requirement
so that ``someone with responsibility for oversight of the individual's
participation had contact with the recipient, and that the supervision
does not have to be done by the TANF agency itself or an employment
services contractor.'' Some commenters recommended eliminating the
requirement altogether.
Response: We agree with many of these points and would like to
clarify this requirement. Daily supervision means that a responsible
party has daily responsibility for oversight of the individual's
participation, not necessarily daily, in-person contact with the
participant. The goal of such supervision is to ensure that individuals
are participating and making progress in their assigned activities. A
work site sponsor, classroom instructor, contracted service provider,
community-based provider, job search instructor, treatment provider, or
even a TANF agency employee could fulfill that role. In addition, the
supervision need not involve in-person contact, but can be by telephone
or electronic contact where those methods are suitable.
Daily supervision as described above is a central part of the final
rule. It ensures that individuals who participate in work activities
make progress in their assigned activities. Supervision is part of
everyday life in paid employment, despite the cost and time involved,
because it provides value. We should expect no less for all TANF work
activities.
Comment: One commenter asked for clarification regarding whether
``supervision is only required on days when an individual is scheduled
to participate,'' noting that it would not make sense to require
supervision on the other days.
Response: We agree and have clarified the final rule to indicate
that supervision is only required for days when an individual is
scheduled to participate.
Distance Learning Activities
Comment: Several commenters asked whether time spent in distance
learning programs could count toward the work participation rates. They
noted that this was particularly important in rural areas and that some
programs keep track of the time individuals spend on a computer in ways
that participants cannot change.
Response: We agree that distance learning is an important way for
some families to gain the skills needed to move toward self-
sufficiency. We will count time spent in distance learning to the
extent that such programs otherwise meet the work activity definitions
and include supervision. A State should explain in its Work
Verification Plan how it will provide supervision and monitor hours of
participation in distance learning.
Good or Satisfactory Progress
Under the definitions in the interim final rule, two of the TANF
work activities involving education required that participants make
``good or satisfactory progress'' in order for their hours of
participation to count: Education directly related to employment and
satisfactory attendance at secondary school or in a course of study
leading to a certificate of general equivalence (GED). The preamble to
the
[[Page 6782]]
interim final rule explained that this includes a standard of progress
developed by the educational institution or program in which the
individual was enrolled. It also said that good or satisfactory
progress should be judged by both a qualitative measure of progress,
such as grade point average, as well as a quantitative measure, such as
a time frame within which a participant is expected to complete such
education. We expressed interest in receiving comments that describe
other possible criteria or definitions for what constitutes making
``good or satisfactory progress.''
Comment: Several commenters observed that the preamble to the
interim final rule described ``good or satisfactory progress'' somewhat
differently for the two activities to which it applied. In the case of
``education directly related to employment'' we wrote that the standard
could be developed by either the education institutions or the program.
For ``satisfactory attendance at secondary school,'' we allowed the
State or the educational institution/program to set the standard. The
commenters asked for clarification of this policy and recommended a
wide variety of approaches for setting ``good or satisfactory
progress'' standards. Some commenters urged us to leave the standards
to educational institutions and programs, while others recommended that
States establish them. A number of commenters also proposed giving
States the flexibility to choose to establish either or both
qualitative and quantitative measures.
Several commenters cautioned that the criteria for ``good or
satisfactory progress'' should not discourage placing individuals with
barriers in education, noting that they may require more time and help
in meeting such standards. They suggested that the standards should
include appropriate accommodations for individuals with disabilities.
Other commenters recommended that we eliminate the requirement of
``good or satisfactory progress'' because many individuals with
learning disabilities are often not identified by State agencies and
fall through the cracks.
Some commenters recommended creating good cause exceptions for
those facing unusual or unexpected circumstances that prevented them
from making progress as expected. Good cause exceptions, they
maintained, would prevent States from being penalized when individuals
participate for the required number of hours but are unable to progress
due to various circumstances. Another commenter asked us to clarify
that States would not be retroactively denied credit toward the
participation rate because a client participated for the required hours
but failed to make adequate progress.
One commenter noted that the interim final rule did not specify the
frequency with which ``good or satisfactory progress'' should be
verified and commented that some measures of progress, such as grade
point average, may not be available until the end of a quarter or
semester. The commenter also explained that some educational programs,
such as Adult Basic Education, may not have testing that produces
grades to calculate a grade point average. The commenter recommended
that States use ``subjective performance evaluations provided by the
instructor to demonstrate progress * * * that simply indicate if
academic performance was unsatisfactory or satisfactory.''
Response: The commenters raised many compelling points. We believe
that the easiest way to accommodate these concerns is simply to delete
the requirement for ``good or satisfactory progress'' from the
definitions of education directly related to employment and
satisfactory attendance at secondary school or in a course of study
leading to a GED. Although we believe such standards are valuable and
should be part of any educational activity, based on the input from
commenters, we have determined that the appropriate standards can vary
based on too many circumstances to mandate their inclusion in these two
activities. Educational institutions are generally in the best position
to establish standards of progress, but they may not make separate
determinations of progress based on the circumstances of individuals, a
role a caseworker might best perform. Therefore, the final rule gives
States flexibility in deciding whether to set standards of ``good or
satisfactory progress'' and, if they do, to develop the standards that
are best suited for their clients.
Assessment
Comment: Several commenters recommended that the definition of
various work activities include the assessment of participants' skills.
Response: Our work activity definitions permit assessment of an
individual's suitability for a particular work activity.
Section 261.2(b) Unsubsidized Employment
In the interim final rule, we defined unsubsidized employment as
full-or part-time employment in the public or private sector that is
not subsidized by TANF or any other public program. We did not change
the definition in the final rule. We have responded to comments
concerning self-employment activities in the discussion of Sec.
261.60(c).
Comment: Commenters found our definition of unsubsidized employment
to be appropriate.
Response: We agree and have retained the same definition in the
final rule.
Sections 261.2(c) and (d) Subsidized Private Sector Employment and
Subsidized Public Sector Employment
In the interim final rule, we defined both subsidized private
sector employment and subsidized public sector employment as employment
for which the employer receives a subsidy from TANF or other public
funds to offset some or all of the wages and costs of employing a
recipient. We described three possible subsidized employment program
approaches: (1) To use TANF funds that would otherwise be paid as
assistance to reimburse some or all of an employer's costs; (2) to rely
on a third party as the employer of record during the trial employment
period, like a temporary staffing agency; and (3) to develop
``supported work'' programs for individuals with disabilities.
In the final rule, we made a minor wording change to the
definitions of each of these activities, substituting the word
``individual'' for ``recipient.'' We made this change both for
consistency with other definitions and to make clear that these
activities are allowable for any work-eligible individual.
Comment: Several commenters asked whether participation in various
supportive activities, such as substance abuse treatment, mental health
treatment, and rehabilitation activities could count as subsidized
private sector or public sector employment. These and other activities
are often integrated as part of a supported work program, transitional
jobs program, or other subsidized employment activity.
Response: Hours of participation in various supportive activities
can count if they are integrated parts of subsidized employment. This
means that, in order to count, the individuals must be paid for all of
the hours they participate in such activities. For example, some
transitional jobs programs are structured to include direct work and 10
to 15 hours of barrier removal or other activities, including mental
health and substance abuse treatment, job search, and training.
Participants are paid wages for all hours of participation. Otherwise,
if the individuals are not paid while participating in these
[[Page 6783]]
activities, the participation should be reported as a blend of
subsidized employment and another appropriate activity. Most likely
this would be job search and job readiness assistance, but could be
another activity.
Comment: Several commenters noted that some individuals assigned to
subsidized employment soon have earnings that are sufficient to make
them ineligible for assistance. They asked whether such individuals
could continue to count in the numerator of the participation rate.
Response: Although we understand the commenters' concern, the work
participation rate calculations include only families with a ``work-
eligible individual.'' (Please refer to the discussion of Sec.
261.2(n) for more detailed information about the definition of ``work-
eligible individual.'') If a State wants to count a family
participating in subsidized employment that is ineligible for a regular
assistance payment, it could create and pay an alternative assistance
grant. The State could then count the family toward the rate. Of
course, since the family retains assistance, this would not generate a
caseload reduction credit, as might be the case otherwise.
Comment: Several commenters asked whether employers would be
required to hire and retain individuals engaged in subsidized
employment once the subsidy period ended. The preamble guidance to the
interim final rule stated, ``At the end of the subsidy period, the
employer is expected to retain the participant as a regular employee
without receiving a subsidy.'' Some commenters explained that many
transitional jobs programs place participants in short-term subsidized
employment to provide experience, training, and guidance that enable
that individual to obtain unsubsidized employment elsewhere, even
though it may not result in a permanent position with the same
employer. Other commenters recommended that we limit the expectation of
continued employment to private sector employers to avoid creating a
``revolving door'' of subsidized employees.
Response: The preamble language in this regard was a suggestion,
not a requirement. We continue to caution that States should not allow
employers to recycle TANF recipients in subsidized employment slots
simply to reduce their competitive labor costs. The positions should
lead to ongoing, stable employment or prepare individuals for such
employment.
Comment: Several commenters asked whether they must limit the
duration of subsidized employment positions. They noted that the
preamble to the interim final rule suggested ``that States generally
limit the duration of subsidized employment programs to six to twelve
months.''
Response: The limited duration is a recommendation, not a
requirement. Longer placements may be appropriate, for example, in
supported employment of individuals with disabilities or for other
participants based on their individual circumstances, economic
conditions, or other factors.
Comment: One commenter noted, ``Congress listed public and private
sector subsidized employment as separate work activities; therefore it
is reasonable to have different expectations depending on the sector of
the employer.'' In particular, the commenter suggested that it may be
appropriate to limit the duration of the employment subsidy to private
sector employers ``where there is an expectation of continued
employment with that employer,'' but that such limits should not be
placed on public sector (and non-profit) employment.
Response: We agree that durational limits help ensure that the
primary benefit of the subsidy is to the employee, but do not see the
need to apply different standards to the private and public sectors. We
leave it to States to determine such limits regardless of whether they
apply to private sector or public sector employment.
Comment: One commenter recommended that States describe in their
Work Verification Plans how a subsidized employment program will lead
to unsubsidized employment ``where there is an expectation of continued
employment with the same employer, and how the program will avoid
displacement of current workers.''
Response: We agree that the ultimate goal of subsidized employment
is to move the individual to unsubsidized employment and off welfare.
However, the purpose of the Work Verification Plan is to ensure that
States report participation data that is consistent with the law and
regulations and that States adequately verify the accuracy of that
participation data. The Work Verification Plan does require States to
describe how their services and programs meet the definition of a work
activity.
There is a statutory prohibition on displacement for all work
activities in section 407(f) of the Act and the existing regulatory
provision at Sec. 261.70. Thus, we do not believe the Work
Verification Plan needs to include this information.
Comment: One commenter recommended that HHS ``design the payment
structure'' to reflect the range of services offered under subsidized
employment.
Response: We believe the details of program design should be left
to the States because the circumstances of individuals and the
effectiveness of program activities may vary based on a number of
factors.
Section 261.2(e) Work Experience
In the interim final rule, we defined work experience (including
work associated with the refurbishing of publicly assisted housing) if
sufficient private sector employment is not available, as a work
activity performed in return for welfare that provides an individual
with an opportunity to acquire the general skills, training, knowledge,
and work habits necessary to obtain employment. We reminded readers
that work experience participants continue to receive their TANF grants
and that they do not receive wages or compensation by virtue of
participating in the activity. Nonetheless, they may be considered
employees for the purpose of the Fair Labor Standards Act (FLSA), which
means that they must be compensated at no less than the higher of the
Federal or State minimum wage.
Comment: Several commenters suggested that work experience could
sometimes be considered a ``paid'' activity. Others thought that the
definition should exclude the phrase ``performed in return for
welfare.''
Response: We considered these views carefully but chose to retain
the definition of work experience we published in the interim final
rule, keeping it as an unpaid activity to distinguish it from the four
``paid'' activities that already exist. In our view, the purpose of
work experience is to gain the skills needed to acquire a paid
position. States that have work experience programs that involve the
payment of wages should reclassify them as subsidized employment or on-
the-job training. The fact that there may be an employer-employee
relationship in a work experience assignment, triggering the minimum
wage requirements of the FLSA, does not make the work activity
``paid.'' Rather, the individual is receiving compensation from the
family's TANF grant in lieu of wages.
Comment: Several commenters asked us to clarify that not all work
experience activities are subject to the FLSA. One commenter asked for
clarification on who the employer is with respect to work experience
positions--the State or the work site sponsor (if other than the
State). The commenter was unsure
[[Page 6784]]
because the State provides worker's compensation.
Response: It is the responsibility of the Department of Labor to
determine whether or not the FLSA applies to an activity and who the
employer is. We recommend that readers direct any questions regarding
the FLSA to the Wage and Hour Division of the U.S. Department of Labor
at 1-866-4-USWAGE, TTY 1-877-889-5627 or the following Web site: http://www.dol.gov/esa/whd/flsa/index.htm
.
Comment: Several commenters asked whether the definition of work
experience precludes a State from counting a participant who combines
unsubsidized employment with work experience because the statutory
language limits work experience to situations where ``sufficient
private sector employment is not available.'' In addition, the interim
final rule defined the purpose of work experience as improving the
employability ``of those who cannot find unsubsidized employment.''
Response: The statutory language does not prevent States from using
work experience for those who are in paid employment. We recognize that
there may be circumstances in which an individual's employment is not
sufficient to meet the work activity requirement and a State may place
such an individual in another work activity. In this circumstance, work
experience could be appropriate because sufficient employment may not
be available for ``full-time'' work. Although we cannot strike the
statutory phrase, ``if sufficient private sector employment is not
available,'' we are clarifying that ``sufficient'' means enough for
full-time employment.
Comment: Several commenters recommended that the definition of work
experience (and community service) include ``background checks and
assessment of participants'' skills as they related to a job site and
required by a specific work experience slot.''
Response: Our definition permits background checks and the on-site
assessment of an individual's suitability for a particular work
experience slot. States must assess each recipient of assistance over
18 years of age or who has not finished high school (or the
equivalent).
Comment: Some commenters suggested that we consider training,
education, and vocational educational training to be part of work
experience. They noted that the preamble discussion of community
service programs in the interim final rule offered a rationale for
providing training within that activity, citing the example of an
individual assigned to clerical support who needs to attend a computer
training class. They suggested that a similar provision should apply to
work experience and that we should expand it to include other forms of
educational or vocational educational training activities.
Response: States may wish to supplement work experience with
training, but we do not believe that formal training, education, and
vocational educational training programs should be considered part of
work experience. Work experience is defined as work performed in return
for welfare and is intended to provide an individual with an
opportunity to acquire the general skills, knowledge, and work habits
necessary to obtain employment. We make an exception in community
service because that activity involves a service that is of direct
benefit for the community and limited training may count if it is an
integral part of the activity. We have deleted the reference to
``training'' in the definition of ``work experience'' to clarify this
point, as that reference referred to training in general workplace
skills, not to formal instruction that can be provided through other
TANF work activities.
Comment: Several commenters asked whether short periods of job
search and job readiness assistance or vocational educational training
could be embedded and counted within work experience. These commenters
suggested that such programs are more effective than work experience
alone and that not permitting such embedded activities to count would
discourage States from combining work experience with activities
designed to move TANF recipients into unsubsidized jobs. Other
commenters contended that ESL should be included as part of work
experience because the ability to speak English is a prerequisite for
employment.
Response: As we have noted before, we fully support State efforts
to integrate and combine work activities. Reporting hours of work
separately for the different activities should not impede a State's
ability to offer integrated services or encourage individuals to
combine activities. We attempted to define activities so that they are
mutually exclusive because the law provides 12 distinct activities, so
in general, including activities that meet one of the other work
activity definitions would be inappropriate, particularly in the case
of activities with established limitations in statute, i.e., job search
and job readiness assistance and vocational educational training. ESL
is an educational activity that can count under vocational educational
training, if it is a necessary and regular part of the work activity,
and also can count under education directly related to employment.
However, we note that States can count short absences from various
activities to participate in, for example, a job search activity under
the excused absence policy (described in Sec. 261.60(b) of this
chapter). In addition, as we describe in the section on job search and
job readiness assistance, we give States greater flexibility to count
sporadic hours of participation in job search and job readiness
assistance without triggering a full week in that activity that would
otherwise count against its durational limits.
Comment: One commenter recommended that we require States to
``consider TANF workers as employees of the state, eligible therefore
for all state employee benefits and covered by all worker protection
statutes.''
Response: The DRA did not change the worker protections or employee
benefits available to work activity participants, so the final rule
does not make any changes to existing policy in this regard. The
original TANF rule clarified that, notwithstanding specific language
limiting the scope of the TANF rules, TANF programs are subject to
Federal employment and non-discrimination laws. These protections
continue to apply under the final rule. Since there is no statutory
basis for a requirement such as the commenter suggested, we do not
believe we have the authority to require TANF workers to be considered
employees of the State. State law generally governs whether an
individual must be considered an employee or may be considered an
employee for purposes of State employee benefits. Also, the worker
protection statutes themselves define the situations that they cover,
many of which apply to individuals participating in TANF work
activities.
Comment: One commenter asked for clarification that work experience
positions could be created with private sector employers. The commenter
stated that this would expand the number of placement opportunities and
the chances for individuals to transition into unsubsidized employment.
Response: Work experience positions may be created with public
sector, private sector, community-based, faith-based, or nonprofit
employers or work site sponsors.
Section 261.2(f) On-the-Job Training
In the interim final rule, we defined on-the-job training (OJT) as
training in the public or private sector that is given to a paid
employee while he or she is
[[Page 6785]]
engaged in productive work and that provides knowledge and skills
essential to the full and adequate performance of the job. In the
preamble to the interim final rule we invited comments on whether the
definition of OJT should be broadened ``beyond paid employment to
include other aspects of training.''
Comment: Several commenters suggested that we expand the definition
to include unpaid training, such as occupational training, basic skills
remediation, and English language instruction, as well as pre-
employment skill upgrading. Several commenters noted that many
employers provide both on-site and off-site training to employees. The
commenters maintained that including unpaid training positions would
help ensure that recipients receive needed work skills and would
simplify reporting. Other commenters recommended including unpaid
internships or externships, arguing that participants would have an
opportunity to learn in a work setting that could lead to employment
opportunities.
Response: We considered all of these suggestions carefully in
writing the final rule. Ultimately, we chose not to expand OJT to
include unpaid training activities. We made this decision because,
first, we could not reconcile the notion of unpaid training with being
``on-the-job,'' and second, such unpaid training can count under a
variety of other work activities, including vocational educational
training and job skills training directly related to employment. We
think this is the most common-sense way to bring meaning to the 12
distinct work components. Regarding the location of training, we would
like to emphasize that paid training, whether provided off-site or at
the work site, fits the definition of OJT.
Comment: Several commenters recommended expanding the definition of
OJT to include training for prospective employees in addition to paid
employees.
Response: We have not included training for prospective employees
under OJT because they are not yet ``on-the-job.'' Instead, such
training could count under other work activities, including vocational
educational training or job skills training directly related to
employment, depending on the nature of the training.
Comment: Several commenters recommended including barrier-removal
activities in OJT if integrated into the program.
Response: We fully support the use of barrier-removal activities
for individuals who need these services. States may generally include
such services as part of a job search and job readiness assistance
activity. Also, such activities can count as unsubsidized or subsidized
employment if the individual is paid during the time of participation
in such activities.
Comment: Several commenters asked whether an employer was expected
to hire an OJT participant, based on the statement in the preamble:
``Upon satisfactory completion of the training, we expect the employer
to retain the participant as a regular employee. * * *''
Response: The preamble language was a suggestion, not a
requirement. As with subsidized employment, we expect employers to
provide training, guidance, and direction to help employees obtain
unsubsidized employment, whether with the employer providing the
training or with another employer. As long as the position is designed
to lead to unsubsidized employment, the activity would meet the primary
goal of the program.
Section 261.2(g) Job Search and Job Readiness Assistance
In the interim final rule, we defined job search and job readiness
assistance as the act of seeking or obtaining employment, preparation
to seek or obtain employment, including life skills training, and
substance abuse treatment, mental health treatment, or rehabilitation
activities for those who are otherwise employable. Such treatment or
therapy must be determined to be necessary and certified by a qualified
medical or mental health professional. We retained the general
framework of the definition in the final rule, but deleted the
requirement that an individual be ``otherwise employable'' because the
term was confusing and raised concerns that it could potentially deny
treatment to those who have a disability or face multiple barriers to
employment. We also deleted the term ``certified'' because it too
created some confusion. The final rule requires that there must be a
documented need for treatment or therapy determined necessary by a
qualified medical, substance abuse, or mental health professional.
The preamble to this section of the interim final rule also defined
a ``week'' for purposes of counting no more than six weeks per fiscal
year (or 12 weeks, for qualifying States) of job search and job
readiness assistance, no more than four of which may be consecutive. We
explained that the most commonly understood and simplest way to answer
this question was to use the ordinary definition of a week: seven
consecutive days, regardless of which day participation starts. We
received many comments on this provision. Most commenters contended
that six weeks was not enough time to help individuals with barriers to
employment. Many others urged us to consider an hourly equivalent to
these limitations to increase State flexibility.
In order to respond adequately to the comments we received, we
determined that it was necessary to include Sec. 261.34, which
specifies the limitations on counting job search and job readiness
assistance, in this final rule, despite the fact that it was not in the
interim final rule. Based on these comments, we have adopted an hourly
equivalent for purposes of the six-week (or 12-week) limit, giving
States more flexibility to provide job search and job readiness
assistance services, especially when such services are only needed for
a few hours per week. We describe the policies on these limitations in
more detail in the discussion of Sec. 261.34, but also respond to
comments on this topic here.
For the ease of the reader, we have grouped the comments and our
responses by topic within this section.
Treatment of Barrier Removal Activities
Comment: Many commenters welcomed the inclusion of substance abuse
treatment, mental health treatment, and rehabilitation activities as
countable activities. However, many commenters also expressed concerns
about limiting these specific activities to the category of job search
and job readiness assistance alone, an activity that can count for only
six weeks in a fiscal year (or 12 weeks, for qualifying States). They
said that these barriers to work are prevalent among the TANF
population and that States need more time to address them than the
durational limits allow. A number of commenters recommended that we
allow these activities to count under community service, job skills
training directly related to employment, or education directly related
to employment.
Response: Under the final rule, we generally limit the counting of
substance abuse treatment, mental health treatment, and rehabilitation
activities to the job search and job readiness assistance activity. In
defining work activities, we tried to determine whether such services
appropriately fit in any work component. The statute does not
specifically name substance abuse treatment, mental health treatment,
and rehabilitation activities as work activities or even otherwise
refer to these services. Because these are activities designed to make
somebody work-ready, we count them as job
[[Page 6786]]
readiness activities. We realize this means that counting participation
in these activities is limited to six weeks (or 12 weeks, for
qualifying States) in the preceding 12-month period, of which no more
than four weeks may be consecutive, but this was the only category
where it made sense to include them. However, if a portion of substance
abuse treatment, mental health treatment, or rehabilitation service
meets a common-sense definition of another work activity, then the
hours of participation in that activity may count under the appropriate
work category, such as work experience. In addition, if hours in
unsubsidized, subsidized private sector, and subsidized public sector
employment include treatment or rehabilitation services, a State may
count those paid hours under that work category.
Because counting participation in job search and job readiness
assistance is time-limited by statute, we caution States to assess
carefully the use of treatment, counseling, and rehabilitation
activities so that they count participation in these activities only
when they are needed to prepare recipients for work.
Comment: Several commenters objected to the requirement that a
qualified medical or mental health professional must determine when
treatment or therapy is necessary. One commenter maintained that it
could discourage some individuals from acknowledging the presence of
such barriers and delay or prevent the State from addressing them. In
addition, the commenter thought that the certification process would
pose an administrative burden for the States.
Response: Substance abuse treatment, mental health treatment, and
rehabilitation activities are important activities that can help
individuals overcome serious barriers to employment. We eliminated the
requirement for a ``certification'' but we believe that States must
document the need for such treatment or therapy by a qualified medical,
substance abuse, or mental health professional to ensure that a proper
diagnosis is made and an effective remedy is prescribed.
Otherwise Employable
Comment: Several commenters recommended that substance abuse
treatment, mental health treatment, and rehabilitation activities
should not be limited to those who are ``otherwise employable.'' They
suggested that such a limitation may be a violation of the Americans
with Disabilities Act of 1990 (ADA) and Section 504 of the
Rehabilitation Act of 1973 because States could use it to deny such
treatment to those who have a disability or face multiple barriers to
employment. The commenters noted that such individuals may need a broad
range of services beyond job search and job readiness, such as
subsidized employment or vocational educational rehabilitation, before
they are employable. One commenter suggested that individuals who are
not ``otherwise employable'' should be excluded from the definition of
a ``work-eligible individual.'' Some commenters also claimed that the
determination of who would be employable and who would not would create
an added administrative burden. Finally, they noted that job search and
job readiness assistance is already limited to six weeks per fiscal
year and that this language was more restrictive than needed and could
discourage States from providing these kinds of services to individuals
facing barriers to work.
Response: We think the commenters raised reasonable concerns. We
never intended the phrase ``otherwise employable'' to exclude
individuals who need more than one form of service or training before
they could become employed from counting via participation in mental
health or substance abuse treatment or rehabilitation activities. Our
intention was to ensure that the necessary services that work-ready
individuals may require were delivered in a logical and sequential
fashion. Too frequently, an applicant or new recipient is automatically
assigned to job search and job readiness assistance, regardless of the
needs identified in the client's initial assessment or in the
individual responsibility plan. Because the counting of this activity
is time-limited by statute, we wanted to ensure that such services were
available and appropriately provided at the time they would do the most
good in preparing for and finding work for participants. However, we
agree that this phrase may be confusing or could be misconstrued. Thus,
we have deleted it from the final rule; however, we still encourage
States to develop and deliver services based on the individual needs of
clients, rather than in automatic sequential steps.
Domestic Violence Activities
Comment: Some commenters recommended that we expand the definition
of job search and job readiness assistance to include participation in
domestic violence resolution activities. One commenter suggested that
we should classify such activities as ``rehabilitation activities.''
The commenter noted that victims of domestic violence often require job
readiness activities akin to rehabilitation activities to transition to
self-sufficiency, citing the following examples of domestic violence
resolution activities: ``having to relocate due to the violence, apply
for court orders of protection, attend court hearings, address
children's needs for trauma counseling or other supports, attend
counseling and support groups at a domestic violence program, meet with
case managers at domestic violence programs, etc.'' One commenter
explained that these were important activities that were apparently
consciously omitted from the interim final rule. Another recommended
allowing a certified domestic violence professional to certify the need
for such activities. A number of commenters indicated that counting
domestic violence resolution activities would address a problem noted
in the preamble to the interim final rule, notably the concern that
``States have been less effective in placing clients with multiple
barriers in work, including * * * those subject to domestic violence.''
They contended that the limitations of job search and job readiness
assistance ``exacerbate the difficulty victims have in participating
and advancing towards financial stability.''
Response: We fully support the efforts of States to identify
victims of domestic violence and to assist them in accessing
appropriate services to abate ongoing violence, to recover from
physical and emotional trauma, and to help children cope with the
effects of domestic violence. In the original TANF rule, all of Part
260, Subpart B was devoted to the special provisions for victims of
domestic violence. Those rules are unchanged and continue to offer the
same protections they have since their promulgation. The interim final
rule did not make modifications to that part of the regulation, in part
because it was outside the scope of our interim final rule authority,
but also because we stand by those protections. We continue to
encourage States to adopt the Family Violence Option (FVO), to
implement comprehensive strategies to identify and serve domestic
violence victims, and to grant federally recognized good cause domestic
violence waivers where victims need them.
Many domestic violence resolution activities should already meet
the definition of job search and job readiness assistance because they
accomplish the very goal of that work component: To help individuals go
to work. Any domestic violence service that directly relates to
preparing for
[[Page 6787]]
employment could be considered a job readiness activity. A State should
describe the activities it will offer in its Work Verification Plan and
explain how it prepares someone for employment. If the State provides
domestic violence services as ``rehabilitation activities,'' they
should be included in a service plan developed by a trained individual
and must be designed to lead to work. We note that few States counted
domestic violence resolution activities under the original rules,
despite the flexibility they had to do so.
In addition, as we noted in the cross-cutting issues section of
this preamble, existing provisions in the law address work
participation rate issues for States dealing with victims of domestic
violence. In particular, section 402(a)(7) of the Social Security Act
and the rules at Part 260, Subpart B allow States to grant good cause
domestic violence waivers to victims of domestic violence. States have
broad flexibility to determine which program requirements to waive and
for how long. Although these families remain in the work participation
rate calculation, there may be some activities that meet one of the
work activity definitions that would make them countable toward the
participation rate. If a State fails to meet a work participation rate,
we will determine that it had reasonable cause if the State can
demonstrate that its failure was due to granting federally recognized
good cause domestic violence waivers. As a matter of course, when we
determine the amount of a penalty for failure to meet the work
participation rate requirements, we recalculate the work participation
rate taking out any families in which individuals received a federally
recognized good cause domestic violence waiver of work requirements.
This may result in no penalty or a reduction in the penalty associated
with failure to meet the work participation rate. Please refer to Sec.
261.51 for more information about the formula for calculating the work
participation rate penalty.
Comment: One commenter asserted that the interim final rule
conflicted with the Family Violence Option in Federal law, which
provides for waivers of requirements that would place victims of
domestic violence at increased risk. The commenter added, ``As those
situations are going to have to be determined on a case-by-case basis,
the limited time for barrier removal activities is inflexible and
should not apply to barrier removal for family violence victims.''
Response: As the commenter noted, a State that elects the FVO must
screen and identify victims of domestic violence, refer such
individuals to services and, if needed, waive participation and other
program requirements for as long as necessary to escape domestic
violence. However, in providing this option to States, Congress did not
remove such families from the denominator of the participation rate
during the period of the domestic violence waiver. We believe the
original rules concerning victims of domestic violence explained above
ensure services and waivers for victims and provide necessary
``reasonable cause'' reduction or elimination of penalties for States.
Other Activities
Comment: Some commenters recommended expanding the definition of
job readiness to include activities such as English as a Second
Language (ESL) and remedial education--activities that the preamble to
the interim final rule indicated would not be countable. Other
commenters suggested new activities, such as behavioral health services
and parenting skills training.
Response: As we indicated in the preamble to the interim final
rule, only programs that involve seeking and preparing for work can
meet the definition of job search and job readiness assistance.
Although some of the activities commenters recommended are valuable and
may be medically appropriate, they do not constitute work or direct
preparation for work. Some activities meet the definition of one of the
other 11 work activities. For example, ESL would more closely fit the
definition of education directly related to employment and should be
counted under that activity.
Comment: One commenter expressed appreciation for ``the ability to
count the time spent in a substance abuse treatment facility or halfway
house doing work activities such as preparing meals, housecleaning, or
scheduling group activities.'' The commenter suggested extending this
to ``persons living in supported residential facilities for both mental
health and domestic violence reasons.''
Response: We do not distinguish between countable work activities
based on whether an individual lives in a residential facility or not.
As long as the activity fits within an approved definition, it can
count for participation rate purposes.
Comment: Several commenters indicated that six weeks may not be
long enough for a homeless person to find a job, implying that looking
for housing might be a job readiness activity.
Response: We appreciate the added challenges that homeless
individuals face in entering and participating in the workforce. We
encourage States to develop strategies that best meet the needs of
their various client populations, including the homeless. Although a
person with stable housing may have an easier time finding a job and
performing well on the job, the act of looking for a home is not an
employment activity. A job search and job readiness assistance activity
must have a direct connection to improving employability or finding
employment.
Comment: One commenter suggested that we allow travel time required
to complete job search activities to count. Travel is an integral part
of job search, the commenter explained, as clients go from one
interview to another, especially in large metropolitan or rural areas.
Response: A State may count travel time between interviews as part
of a job search and job readiness assistance activity, but not the
travel time to the first job search interview or the time spent
returning home after the last one. We make this distinction so that it
is consistent with the treatment of other work activities and analogous
to the work world, since most employees receive no pay for the time it
takes them to commute to and from their jobs.
Using Job Interviews as Proxy for Hours
Comment: Several commenters urged allowing States to use a job
application as a proxy for a standard set of hours of participation,
e.g., completing one application or going on one interview would
constitute two hours of participation. They contended that this
approach is easier to administer and more consistent with existing
State practice.
Response: While we sympathize with the commenters'' desire to
minimize administrative burdens, we believe the most effective welfare-
to-work programs incorporate close supervision and careful monitoring.
This allows program administrators to track actual hours. Thus, we
explicitly require States to report the actual hours of participation
for each work activity. The rule does not allow a State to report
estimated hours of participation based on the number of job search
contacts an individual makes.
Four-, Six-, and 12-Week Limits
Comment: Several commenters suggested eliminating the six-week and
other durational limits on job search and job readiness assistance
because six weeks is not sufficient to address the
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barriers faced by some recipients. Some commenters suggested limiting
such extensions to those with short-term disabilities that need more
than six weeks of treatment.
Response: The six-week and other durational limitations are
statutory and cannot be changed through regulation.
Comment: Several commenters recommended not counting participation
in job search and job readiness activities against the various
durational limits under certain circumstances, including situations in
which the participant does not have enough hours to count in the work
participation rate or has enough hours to count in the rate without
counting the hours in job search and job readiness assistance. Some
commenters noted that States could simply fail to report such hours so
as to avoid triggering the durational limits or report them under the
category ``Other Work Activities'' on the TANF and SSP-MOE Data
Reports, which reflects the hours of participation but does not apply
them in determining the work participation rates or the durational
limits. The commenters noted, however, that this would understate their
true level of participation and could be construed as violating the
``complete and accurate'' data reporting standard. Instead, they
recommended allowing States to submit this information, but not to
count participation if it were not needed to meet the work
participation rate.
Response: We understand the commenters'' concerns regarding the
durational limits on job search and job readiness assistance, but these
limits are set forth in the statute and we do not have the legal
authority to ignore hours of participation reported under this
activity. We strongly encourage States to report hours of job search
and job readiness assistance that they do not wish to count toward the
participation rate (and thus count against the various limits that
apply to that activity) under the category ``Other Work Activities'' on
their data reports, rather than to fail to report them at all because
using the ``Other'' category gives better information on the overall
engagement levels of individuals, even though those hours do not
contribute to State achievement in the work participation rates.
However, we do not consider either using the category ``Other Work
Activities'' or failing to report such hours at all as a violation of
the requirement for complete and accurate data.
Converting Weeks to Hours for the Six-Week (or 12-Week) Limit
Comment: Several commenters contended that the definition of a week
in the interim final rule was too rigid. It specified that even one
hour of participation in job search and job readiness assistance
triggered a week for the six-week (or 12-week) limit on the activity.
They suggested defining a week in terms of countable hours for job
search and job readiness assistance, that is, an hourly equivalent of
six weeks. For example, one commenter recommended that we define six
weeks as 120 hours for a single custodial parent with a child under six
years of age and 180 hours for all other work-eligible individuals.
This recommendation was based on the fact that such families need an
average of 20 and 30 hours, respectively, to count toward the overall
work participation rate. The commenters asserted that an hourly
conversion would give States more flexibility to structure work
activities to meet the needs of the participants.
Response: In defining work activities and related terms, we had to
balance legitimate practical concerns with statutory language. The
statute limits job search and job readiness assistance to six weeks
(or, under certain conditions, 12 weeks), with no more than four
consecutive weeks. These limitations were specifically included, in
large part because, under the former JOBS program, unstructured and
ongoing job search was the primary or only activity for many
participants. We share the commenters'' interest in increasing State
flexibility and have redefined a ``week'' of job search and job
readiness assistance for the six-week (or 12-week) limit based on the
average number of hours required for an individual's family to count in
the overall work participation rate. For this purpose, one week equals
20 hours for a work-eligible individual who is a single custodial
parent with a child under six years of age and equals 30 hours for all
other work-eligible individuals. Thus, six weeks of job search and job
readiness assistance equates to 120 hours for the first group and 180
hours for all others. For those months in which a State can count 12
weeks of this activity, these limits are 240 hours and 360 hours,
respectively. To ensure consistency with other provisions in this rule,
we have modified the requirements under Sec. 261.34 to make these
limits apply to the preceding 12-month period, rather than each fiscal
year. For example, the statute allows States to disregard from the work
participation rate calculation families that have been subject to a
work-related sanction for up to three months in ``the preceding 12-
month period.'' Similarly, this same time frame is used for the
``excused absence'' policy.
Defining a week in this way allows States to provide job search and
job readiness assistance activities incrementally and stretched over an
entire year or in six actual weeks, depending upon how the State
chooses to structure its particular work program for an individual.
Defining a week in this manner is consistent with Congressional intent
because it provides an overall cap on the amount of job search and job
readiness assistance that States can count as work participation, while
still giving States the ability to provide recipients with meaningful
job search and job readiness assistance activities.
Counting Sporadic/Episodic Periods of Job Search and Job Readiness
Assistance
Comment: Some commenters objected to counting limited periods of
participation in job search and job readiness assistance as a full week
of participation in the activity. They contended that this would
discourage States from engaging individuals in this activity or sending
them on job interviews. They suggested giving States flexibility to
integrate short periods of participation in this activity with other
countable activities. They noted that even a single hour of job search
reported in a week would ``constitute a full week for purposes of the
limitation [on counting job search and job readiness assistance].''
They maintained, ``The statutory time limit on these activities was
designed to prevent clients from being left to languish indefinitely in
unproductive job search, not to create barrier