On August 22, 1996, "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) was signed into law. PRWORA is a comprehensive bipartisan welfare reform plan that dramatically changes the nation's welfare system into one that requires work in exchange for time-limited assistance. The Temporary Assistance for Needy Families (TANF) program replaces the former AFDC and JOBS programs. In TANF, states and territories operate programs; under the new law, Tribes have the option to run their own TANF programs. States, territories, and tribes each receive a block grant allocation; states have a maintenance of effort requirement. The total federal block grant is $16.5 billion each year through fiscal year (FY) 2002. The block grant covers benefits, administrative expenses, and services. States, territories, and tribes determine eligibility and benefit levels and services provided to needy families, and there is no longer a federal entitlement.

Under TANF, states are required to make an initial assessment of recipients' skills. With few exceptions, recipients must work after two years on assistance,. Twenty-five percent of all families in each state must be engaged in work activities or have left the rolls in FY 1997, rising to 50 percent in FY 2002. Single parents must participate for at least 20 hours per week the first year, increasing to at least 30 hours per week by FY 2000. Two-parent families must work 35 hours per week by July 1, 1997.

To count toward state work requirements, recipients will be required to participate in unsubsidized or subsidized employment, on-the-job training, work experience, community service, 12 months of vocational training, or to provide child care services to individuals who are participating in community service. Up to 6 weeks of job search (no more than 4 consecutive weeks) can count toward the work requirement. Single parents with a child under 6 who cannot find child care cannot be penalized for failure to meet the work requirements.

Families who have received assistance for five cumulative years (or less at state option) will be ineligible for cash aid under the new welfare law.

The new law requires states to maintain their own spending on welfare at 80 percent or more of FY 1994 levels. States must also maintain spending at 100 percent of FY 1994 levels to access a $2 billion contingency fund designed to assist states affected by high population growth or economic downturn.

Through FY 2003, $1 billion will be available for performance bonuses to reward states for moving welfare recipients into jobs.

Under the new law, unmarried minor parents will be required to live with a responsible adult or in an adult-supervised setting and participate in educational and training activities in order to receive assistance.

The new law also guarantees that women on welfare continue to receive health coverage for their families, including at least one year of transitional Medicaid when they leave welfare to work.