Choices Guide - B-1200: Use of TANF Funds

B-1201: Flexibility in the Use of TANF Funds

As specified in the Temporary Assistance for Needy Families (TANF) Final Rules §260.20 (45 CFR Parts 260 through 265), states are authorized to use TANF funds to provide services consistent with the following four purposes of the TANF program:

  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 preventing and reducing the incidence of these pregnancies
  4. To encourage the formation and maintenance of two-parent families

Under TANF purposes 1 and 2, services, benefits and support services are allowable only if provided to needy families as defined by Texas in its TANF State Plan. Thus, states are required to establish financial eligibility criteria for services provided under either one of these two purposes. (Different programs can have different definitions of needy and therefore different financial eligibility requirements.) Additionally, under TANF purposes 1 and 2, services can be provided only to “families,” which is defined as a minor child (under 18 years of age or under 19 years of age and a full-time student) who resides with the family, or a pregnant individual, consistent with 42 USC §608(a)(10) regarding denial of assistance for minor children who are absent from the home for a significant period of time.

Under TANF purposes 3 and 4, services, benefits and support services are allowable to a universal population, including non-needy families.

Choices employment and training services are provided under TANF purpose 2.  Under the Choices work-first concept, the primary focus is on placing individuals in employment. Nevertheless, the work-first approach also recognizes that individuals may be provided, as appropriate, education and skills training related to the job, as well as other services to ensure lasting employment and the achievement of self-sufficiency.

Boards must submit a plan to Texas Workforce Commission (TWC) for approval that specifies how they will use TANF funds beyond the delivery of Choices services, as specified in B-1205.

B-1201.a: TANF Purpose 1 

To provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives.

Boards must be aware of the following:

Under TANF purpose 1:

The Texas Health and Human Services Commission (HHSC) is the state agency with primary responsibility for providing TANF assistance through its administration of the TANF cash assistance grant.

TANF services defined as “assistance” under TANF purpose 1 are subject to additional federal restrictions, such as the requirement to participate in work activities, time limits on the receipt of benefits and additional data reporting requirements. Some services provided through Choices are considered assistance because they are intended to address a basic need. The chart in B-1202 sets forth what is and is not considered assistance.

Most services, activities and support services for workforce activities contemplated by Boards are not considered assistance, as the TANF Final Rule defines assistance more narrowly than the proposed regulations.

TWC will not approve any requests to use TANF funds for stipends for youth in educational activities because these stipends are considered assistance under TANF purpose 1. WIOA does not consider stipends as assistance, thus under WIOA there are no potential income ramifications for families receiving TANF cash assistance from HHSC.
 

Examples of Allowable Activities

The following are examples of allowable activities that accomplish the goals of TANF purpose 1:

  • TANF Cash Assistance: Cash benefits, administered by HHSC.
  • Transportation for Unemployed Individuals: Transportation provided for more than four months to a person who is unemployed is considered a service intended to meet a person’s basic needs. If it is provided for fewer than four months, it can be classified as a short-term non-recurrent benefit.

Except for Choices participants, Boards must ensure that assistance is not provided under TANF purpose 1 without prior approval from TWC.

B-1201.b: TANF Purpose 2

To end the dependence of needy parents on government benefits by promoting job preparation, work and marriage.

Boards must be aware of the following:

Under TANF purpose 2:

Examples of Allowable Activities

The following are examples of allowable activities that accomplish the goals of TANF purpose 2:

Except for the Choices program, Boards must ensure that job preparation services are not provided under TANF purpose 2 without prior approval from TWC.

B-1201.c: TANF Purpose 3

To prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies.

Boards must be aware of the following:

Under TANF purpose 3:

  • Services can be provided to both needy and non-needy families without a specific individual eligibility determination.
  • There is no income eligibility required; however, states must establish objective criteria for the delivery of services to non-needy families.

Services that are reasonably calculated to accomplish this purpose include programs and services for youth such as counseling and after-school programs that provide supervision when school is not in session.

Examples of Allowable Activities

The following are examples of allowable activities that accomplish the goals of purpose 3.

Boards must ensure that services are not provided under TANF purpose 3 without prior approval from TWC.

B-1201.d: TANF Purpose 4

To encourage the formation and maintenance of two-parent families.

Boards must be aware of the following:

Under TANF purpose 4:

Some activities that are reasonably calculated to accomplish this purpose include parenting skills training, responsible fatherhood programs and job placement and training services for NCPs.

Example of an Allowable Activity

The following is an example of an allowable activity that accomplishes the goals of purpose 4.

Noncustodial Parent Choices Program: The NCP Choices program, a joint initiative of TWC, the Office of the Attorney General and local courts, is nationally recognized as the most successful child support employment project to date. Initiated in five workforce areas in August 2005, as of August 2016, it is operational in 21 workforce areasThe program targets low-income, unemployed, or underemployed NCPs who are significantly behind on their child support payments or establishing a new child support case 

Boards must ensure that services are not provided under TANF purpose 4 without prior approval from TWC.

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B-1202: TANF Assistance

The following table provides information on benefits, services and support services that meet or do not meet the definition of assistance. Summary information is also included on the impact on customers, service delivery management and program administration when services or support services considered assistance are provided with TANF funds to families not otherwise receiving assistance.

Assistance Includes: Assistance Does Not Include:

 

 

 

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B-1203: Services to the Non-Needy

Boards must be aware that under Temporary Assistance for Needy Families (TANF), some services can be provided to the non-needy population. There are no income, resource or other eligibility criteria for this population, and because they are a universal population, eligibility determination and verification are not required.

The non-needy population is eligible only for services provided under TANF purposes 3 and 4. They are not eligible for TANF purpose 2 services to promote job preparation and work, such as summer youth employment.

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B-1204: Customer Selection Criteria and Service Delivery

For both the needy and non-needy populations, Boards are expected to establish objective, fair and equitable criteria for their workforce service providers to determine which individuals are selected to receive services.  Examples include the following:

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B-1205: Board Plan for Use of TANF Funds

Boards must ensure that sufficient Temporary Assistance for Needy Families (TANF) resources are dedicated to Choices services in order to:

Boards must submit a plan to request approval to use a portion of their TANF funds, up to 10 percent of the remaining balance, for non-Choices activities, including NCP activities. However, Boards must be aware that there are no separate or additional funds for these expanded services.

B-1205.a: Plan Elements

Boards must ensure that the plan provides, at a minimum, the following:

Sample Board Plan for Submission to Texas Workforce Commission (TWC)

The following is a sample Board plan addressing the required elements:

The Board is requesting approval of the following plan to use a portion of its TANF funds to serve youth through a TANF Subsidized Employment Initiative (initiative).

Description of, and the need for, the activity:

The initiative will implement a youth employment program that focuses on subsidized employment and provides subsidized summer employment opportunities for low-income youth.

Historically, recruitment of youth dropouts to local workforce programs has been difficult; therefore, the Board intends to pilot methods of recruiting youth dropouts from the job seeker population in addition to using current outreach relationships with school districts and community colleges. The intent of the program is to yield strategies for successfully reducing the level of youth unemployment.

TANF purposes addressed by the activity:

The initiative will support school-age youth in subsidized employment activities provided during non-school hours in the summer. Youth will be placed at a supervised worksite developed for school-age youth, which provides training suitable for youth who would benefit from a hands-on learning environment.

Individuals to be targeted by the activity, including how eligibility will be documented, if applicable, and number to be served:

Only low-income youth who are between 14 and 24 years of age are eligible to participate in the initiative.

Low-income youth are defined as youth whose families are receiving any of the following means-tested benefits:

Anticipated total number of youth to be served:

The Board anticipates that the initiative will serve 30 youth:

Planned start and completion dates:

The initiative begins September 1, 2014, and ends August 31, 2015.

Planned amount of funds targeted for activity:

$75,000

Planned outcomes:

The initiative's planned outcomes are twofold: to help low-income youth participants enter the labor market by acquiring work experience and enhancing connections to employers, and to provide a strong incentive for employers to hire and train low-income youth for an occupation not requiring classroom-based training.

B-1205.b: Plan Approval Process

At least 90 days prior to implementation, Boards must e-mail their plans to bcm@twc.state.tx.us.

TWC reviews the Board plans to determine if, at a minimum:

If necessary, TWC will request additional information regarding Board plans. If the Board is authorized to proceed with its expanded use of TANF funds, TWC will notify the Board within 30 days of the plan submission.

B-1205.c: Reporting Wage Subsidies Provided under TANF Purpose 2 to HHSC

Under TANF purpose 2, Boards may subsidize employment wages to needy parents. When using TANF funds, an employer or third party must provide the subsidies to participants. TWC and Boards (as TANF administrative entities) are not considered third parties. Therefore, if the worksite is not the employer of record, Boards must use their fiscal agent (if different than the Board), grant recipient or a workforce service provider as the employer of record.

Boards must be aware that—unlike WIOA, where all wages and stipends are excluded as income in any federal means-tested program—TANF wage subsidies are considered income by HHSC in determining eligibility for TANF cash assistance, SNAP benefits and Medicaid.

Boards must ensure that workforce service providers do the following:

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