New Statistics Report More Parents on Welfare Working

HHS News Release

HHS Secretary Donna E. Shalala announced today that 36 states and the District of Columbia met the first round of welfare-to-work participation rates for all families as required by the new welfare reform law. States also reported that more parents were working and earning more than previously recorded.

Nearly all of the 37 states and D.C. subject to participation rate requirements for the period of July to September 1997 met the minimum requirement for all parents on welfare to be working or engaged in welfare-to-work activities. The information from one state remains incomplete and will be verified shortly. Nearly half the 33 states and D.C. subject to the higher participation requirement for two-parent families met the rate. Several states had no two-parent families in their welfare programs. The July to September 1997 period is the first time that states were required to meet a 25 percent work participation rate for all families and a 75 percent rate for two-parent families. As 1997 was a transition year for the new welfare program, states that started their programs after April 1997 were not required to report work rates. All the states did receive a credit for prior year reductions in their caseloads toward meeting the participation rate. Also, several states had adjustments to their rates because they continued waivers approved under the Clinton Administration.

The Administration also released new statistics derived from the Census Bureau that show 1.5 million parents on welfare were working in March 1998 who had received welfare in 1997. Also, the data reveals a dramatic shift towards employment among welfare recipients. The percentage of single women on welfare who worked in the same year increased by 50 percent from 40 percent in 1992 to 60 percent in 1997.

"This early report is very promising and shows that we are making progress in moving parents on welfare into jobs or giving them the work skills they need to get a job," said Secretary Shalala. "We are committed to supporting states in their efforts to help families achieve self-sufficiency and break the cycle of welfare dependency."

According to the new state data, the number of parents on welfare who were working jumped substantially since the last reporting period of October 1996 to June 1997. The states reported that more than 18 percent of adults on welfare were employed compared to a 14 percent employment rate for the previous period. Earned income for families on welfare also increased by 17 percent, with the monthly average of earned income increasing from just over $500 to nearly $600. The proportion of adults on welfare in direct work-related activities -- including employment, work experience and community service -- tripled over previous years. In 1997, nearly 22 percent of adults were working or in work experience compared to slightly over 7 percent in 1992.

"The employment and earnings news from this first report under TANF is very exciting," said Olivia A. Golden, HHS assistant secretary for children and families. "We're seeing early progress by states in developing welfare-to-work programs that deliver. We continue to encourage states to build on these initial efforts with investments to help parents get higher paying jobs and with supports like child care to help families keep those jobs," Golden added.

Under the welfare law, states that fail to meet the minimum participation rates for all families are subject to a penalty of 5 percent of their annual federal block grant. Because fiscal year 1997 was a transition year for the TANF program, states will be subject to the penalty for one-quarter or less of their block grant amount. However, states can take corrective action or appeal the penalty for a reasonable cause exception. Most of the states that are subject to a penalty failed to meet the two-parent participation rate. In that case, the penalty amount will be based on the percentage of two-parent families in the state's caseload.

The states that failed to meet the two-parent participation rates are Alabama, Arizona, California, District of Columbia, Iowa, Kansas, Maine, Michigan, Mississippi, Nebraska, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Texas, Virginia, and Washington. Information for West Virginia is incomplete.

The report contains other statistics on the characteristics of families on welfare, but there were no major changes from the previous reporting period of October 1996 to June 1997. The average family size of three-one adult and two children-remained the same. Other characteristics of individuals that remained largely unchanged include distributions by race and ethnicity, age, marital status, and percentage of teen parents.

Some statistics, including education level, citizenship, number of closed cases, and receipt of other benefits, are incomplete, because individual state reports were not available or were inconsistent with prior reporting periods. The department has worked vigorously with states to address reporting problems and expects that subsequent reports will be more accurate, routine and timely.

The participation rate tables is available on the World Wide Web athttp://www.acf.dhhs.gov/news/press/1998/prrate97.htm. The full report is available at http://www.acf.dhhs.gov/programs/opre/particip/index.htm.

Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Contact: Michael Kharfen, (202) 401-9215