45 C.F.R. PART 261—ENSURING THAT RECIPIENTS WORK
Title 45 - Public Welfare
Authority: 42 U.S.C. 601, 602, 607, and 609; Pub. L. 109–171.
Source: 64 FR 17884, Apr. 12, 1999, unless otherwise noted.
This part includes the regulatory provisions relating to the mandatory work requirements of TANF and State work participation data verification requirements. [71 FR 37475, June 29, 2006] (a) The general TANF definitions at §§260.30 through 260.33 of this chapter apply to this part. (b) Unsubsidized employment means full-or part-time employment in the public or private sector that is not subsidized by TANF or any other public program. (c) Subsidized private sector employment means employment in the private sector 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. (d) Subsidized public sector employment means employment in the public sector 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. (e) Work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available means 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. The purpose of work experience is to improve the employability of those who cannot find unsubsidized employment. This activity must be supervised by an employer, work site sponsor, or other responsible party on an ongoing basis no less frequently than daily. (f) On-the-job training means training in the public or private sector that is given to a paid employee while he or she is engaged in productive work and that provides knowledge and skills essential to the full and adequate performance of the job. On-the-job training must be supervised by an employer, work site sponsor, or other responsible party on an ongoing basis no less frequently than daily. (g) Job search and job readiness assistance means 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. Job search and job readiness assistance activities must be supervised by the TANF agency or other responsible party on an ongoing basis no less frequently than daily. (h) Community service programs mean structured programs and embedded activities in which TANF recipients perform work for the direct benefit of the community under the auspices of public or nonprofit organizations. Community service programs must be limited to projects that serve a useful community purpose in fields such as health, social service, environmental protection, education, urban and rural redevelopment, welfare, recreation, public facilities, public safety, and child care. Community service programs are designed to improve the employability of recipients not otherwise able to obtain employment, and must be supervised on an ongoing basis no less frequently than daily. A State agency shall take into account, to the extent possible, the prior training, experience, and skills of a recipient in making appropriate community service assignments. (i) Vocational educational training (not to exceed 12 months with respect to any individual) means organized educational programs that are directly related to the preparation of individuals for employment in current or emerging occupations requiring training other than a baccalaureate or advanced degree. Vocational educational training must be supervised on an ongoing basis no less frequently than daily. (j) Job skills training directly related to employment means training or education for job skills required by an employer to provide an individual with the ability to obtain employment or to advance or adapt to the changing demands of the workplace. Job skills training directly related to employment must be supervised on an ongoing basis no less frequently than daily. (k) Education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency means education related to a specific occupation, job, or job offer. Education directly related to employment must be supervised on an ongoing basis no less frequently than daily. (l) Satisfactory school attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate means regular attendance, in accordance with the requirements of the secondary school or course of study, at a secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate. This activity must be supervised on an ongoing basis no less frequently than daily. (m) Providing child care services to an individual who is participating in a community service program means providing child care to enable another TANF recipient to participate in a community service program. This activity must be supervised on an ongoing basis no less frequently than daily. (n)(1) Work-eligible individual means an adult (or minor child head-of-household) receiving assistance under TANF or a separate State program or a non-recipient parent living with a child receiving such assistance unless the parent is: (i) A minor parent and not the head-of-household or spouse of the head-of-household; (ii) An alien who is ineligible to receive assistance due to his or her immigration status; or (iii) At State option on a case-by-case basis, a recipient of Supplemental Security Income (SSI) benefits. (2) The term also excludes: (i) A parent providing care for a disabled family member living in the home who does not attend school on a full-time basis, provided that the need for such care is supported by medical documentation; and (ii) An individual in a family receiving MOE-funded assistance under an approved Tribal TANF program, unless the State includes the Tribal family in calculating work participation rates, as permitted under section 261.25. [71 FR 37475, June 29, 2006] (a)(1) A parent or caretaker receiving assistance must engage in work activities when the State has determined that the individual is ready to engage in work or when he or she has received assistance for a total of 24 months, whichever is earlier, consistent with section 407(e)(2) of the Act. (2) The State must define what it means to engage in work for this requirement; its definition may include participation in work activities in accordance with section 407 of the Act. (b) If a parent or caretaker has received assistance for two months, he or she must participate in community service employment, consistent with section 407(e)(2) of the Act, unless the State has exempted the individual from work requirements or he or she is already engaged in work activities as described at §261.30. The State will determine the minimum hours per week and the tasks the individual must perform as part of the community service employment. (a) The State must make an initial assessment of the skills, prior work experience, and employability of each recipient who is at least age 18 or who has not completed high school (or equivalent) and is not attending secondary school. (b) The State may make any required assessments within 30 days (90 days, at State option) of the date an individual becomes eligible for assistance. An individual responsibility plan is a plan developed at State option, in consultation with the individual, on the basis of the assessment made under §261.11. The plan: (a) Should set an employment goal and a plan for moving immediately into private-sector employment; (b) Should describe the obligations of the individual. These could include going to school, maintaining certain grades, keeping school-aged children in school, immunizing children, going to classes, or doing other things that will help the individual become or remain employed in the private sector; (c) Should be designed to move the individual into whatever private-sector employment he or she is capable of handling as quickly as possible and to increase over time the responsibility and the amount of work the individual handles; (d) Should describe the services the State will provide the individual to enable the individual to obtain and keep private sector employment, including job counseling services; and (e) May require the individual to undergo appropriate substance abuse treatment. Yes. If an individual fails without good cause to comply with an individual responsibility plan that he or she has signed, the State may reduce the amount of assistance otherwise payable to the family, by whatever amount it considers appropriate. This penalty is in addition to any other penalties under the State's TANF program. (a) If an individual refuses to engage in work required under section 407 of the Act, the State must reduce or terminate the amount of assistance payable to the family, subject to any good cause or other exceptions the State may establish. Such a reduction is governed by the provisions of §261.16. (b)(1) The State must, at a minimum, reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during the month in which the individual refuses to work. (2) The State may impose a greater reduction, including terminating assistance. (c) A State that fails to impose penalties on individuals in accordance with the provisions of section 407(e) of the Act may be subject to the State penalty specified at §261.54. (a) No, the State may not reduce or terminate assistance based on an individual's refusal to engage in required work if the individual is a single custodial parent caring for a child under age six who has a demonstrated inability to obtain needed child care, as specified at §261.56. (b) A State that fails to comply with the penalty exception at section 407(e)(2) of the Act and the requirements at §261.56 may be subject to the State penalty specified at §261.57. A penalty imposed by a State against the family of an individual by reason of the failure of the individual to comply with a requirement under TANF shall not be construed to be a reduction in any wage paid to the individual. Source: 71 FR 37476, June 29, 2006, unless otherwise noted.
(a) Each State must meet two separate work participation rates in FY 2006 and thereafter, one—the two-parent rate based on how well it succeeds in helping work-eligible individuals in two-parent families find work activities described at §261.30, the other—the overall rate based on how well it succeeds in finding those activities for work-eligible individuals in all the families that it serves. (b) Each State must submit data, as specified at §265.3 of this chapter, that allows us to measure its success in requiring work-eligible individuals to participate in work activities. (c) If the data show that a State met both participation rates in a fiscal year, then the percentage of historic State expenditures that it must expend under TANF, pursuant to §263.1 of this chapter, decreases from 80 percent to 75 percent for that fiscal year. This is also known as the State's TANF “maintenance-of-effort” (MOE) requirement. (d) If the data show that a State did not meet a minimum work participation rate for a fiscal year, a State could be subject to a financial penalty. (e) Before we impose a penalty, a State will have the opportunity to claim reasonable cause or enter into a corrective compliance plan, pursuant to §§262.5 and 262.6 of this chapter. Each State must achieve a 50 percent minimum overall participation rate in FY 2006 and thereafter, minus any caseload reduction credit to which it is entitled as provided in subpart D of this part. (a)(1) The overall participation rate for a fiscal year is the average of the State's overall participation rates for each month in the fiscal year. (2) The rate applies to families with a work-eligible individual. (b) We determine a State's overall participation rate for a month as follows: (1) The number of TANF and SSP–MOE families that include a work-eligible individual who meet the requirements set forth in §261.31 for the month (i.e., the numerator), divided by, (2) The number of TANF and SSP–MOE families that include a work-eligible individual, minus the number of such families that are subject to a penalty for refusing to work in that month (i.e., the denominator). However, if a family with a work-eligible individual has been penalized for refusal to participate in work activities for more than three of the last 12 months, we will not exclude it from the participation rate calculation. (3) At State option, we will include in the participation rate calculation families with a work-eligible individual that have been penalized for refusing to work no more than three of the last 12 months. (c)(1) A State has the option of not requiring a single custodial parent caring for a child under age one to engage in work. (2) At State option, we will disregard a family with such a parent from the participation rate calculation for a maximum of 12 months. (d)(1) If a family receives assistance for only part of a month, we will count it 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. (2) If a State pays benefits retroactively (i.e., for the period between application and approval of benefits), it has the option to consider the family to be receiving assistance during the period of retroactivity. Each State must achieve a 90 percent minimum two-parent participation rate in FY 2006 and thereafter, minus any caseload reduction credit to which it is entitled as provided in subpart D of this part. (a)(1) The two-parent participation rate for a fiscal year is the average of the State's two-parent participation rates for each month in the fiscal year. (2) The rate applies to two-parent families with two work-eligible individuals. However, if one of the parents is a disabled work-eligible individual, we will not consider the family to be a two-parent family; i.e., we will not include such a family in either the numerator or denominator of the two-parent rate. (b) We determine a State's two-parent participation rate for the month as follows: (1) The number of two-parent TANF and SSP–MOE families in which both parents are work-eligible individuals and together they meet the requirements set forth in §261.32 for the month (i.e., the numerator), divided by, (2) The number of two-parent TANF and SSP–MOE families in which both parents are work-eligible individuals during the month, minus the number of such two-parent families that are subject to a penalty for refusing to work in that month (the denominator). However, if a family with a work-eligible individual has been penalized for more than three months of the last 12 months, we will not exclude it from the participation rate calculation. (3) At State option, we will include in the participation rate calculation families with a work-eligible individual that have been penalized for refusing to work no more than three of the last 12 months. (c) For purposes of the calculation in paragraph (b) of this section, a two-parent family includes, at a minimum, all families with two natural or adoptive parents (of the same minor child) who are work-eligible individuals and living in the home, unless both are minors and neither is a head-of-household. (d)(1) If the family receives assistance for only part of a month, we will count it as a month of participation if a work-eligible individual in the family (or both work-eligible individuals, if they are both required to work) is engaged in work for the minimum average number of hours in each full week that the family receives assistance in that month. (2) If a State pays benefits retroactively (i.e., for the period between application and approval of benefits), it has the option to consider the family to be receiving assistance during the period of retroactivity. At State option, we will include families with a work-eligible individual that are receiving assistance under an approved Tribal family assistance plan or under a Tribal work program in calculating the State's participation rates under §§261.22 and 261.24. The work activities are: (a) Unsubsidized employment; (b) Subsidized private-sector employment; (c) Subsidized public-sector employment; (d) Work experience if sufficient private-sector employment is not available; (e) On-the-job training (OJT); (f) Job search and job readiness assistance; (g) Community service programs; (h) Vocational educational training; (i) Job skills training directly related to employment; (j) Education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency; (k) Satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, if a recipient has not completed secondary school or received such a certificate; and (l) Providing child care services to an individual who is participating in a community service program. (a) A work-eligible individual counts as engaged in work for a month for the overall rate if: (1) He or she participates in work activities during the month for at least a minimum average of 30 hours per week; and (2) At least 20 of the above hours per week come from participation in the activities listed in paragraph (b) of this section. (b) The following nine activities count toward the first 20 hours of participation: Unsubsidized employment; subsidized private-sector employment; subsidized public-sector employment; work experience; on-the-job training; job search and job readiness assistance; community service programs; vocational educational training; and providing child care services to an individual who is participating in a community service program. (c) Above 20 hours per week, the following three activities may also count as participation: Job skills training directly related to employment; education directly related to employment; and satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence. (d) We will consider a work-eligible individual who participates in a work experience or community service program for the maximum number of hours per week that a State may require by dividing the combined monthly TANF grant and food stamp allotment by the appropriate minimum wage under the minimum wage requirement of the Fair Labor Standards Act (FLSA) to have participated 20 hours per week if actual participation falls short of 20 hours per week. This policy is limited to States that have adopted a food stamp workfare program and a Simplified Food Stamp Program. For families that need additional hours beyond the core activity requirement, these hours must be satisfied in some other TANF work activity. [71 FR 37477, June 29, 2006] (a) Subject to paragraph (d) of this section, a family with two work-eligible parents counts as engaged in work for the month for the two-parent rate if: (1) Work-eligible parents in the family are participating in work activities for a combined average of at least 35 hours per week during the month, and (2) At least 30 of the 35 hours per week come from participation in the activities listed in paragraph (b) of this section. (b) The following nine activities count for the first 30 hours of participation: Unsubsidized employment; subsidized private-sector employment; subsidized public-sector employment; work experience; on-the-job training; job search and job readiness assistance; community service programs; vocational educational training; and providing child care services to an individual who is participating in a community service program. (c) Above 30 hours per week, the following three activities may also count for participation: Job skills training directly related to employment; education directly related to employment; and satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence. (d) We will consider a family with two work-eligible parents in which one or both parents participate in a work experience or community service program for the maximum number of hours per week that a State may require by dividing their combined monthly TANF grant and food stamp allotment by the appropriate minimum wage under the minimum wage requirement of the Fair Labor Standards Act (FLSA) to have participated 30 hours per week if actual participation falls short of 30 hours per week. This policy is limited to States that have adopted a food stamp workfare program and a Simplified Food Stamp Program. For families that need additional hours beyond the core activity requirement, these hours must be satisfied in some other TANF work activity. (e)(1) If the family receives federally funded child care assistance and an adult in the family is not disabled or caring for a severely disabled child, then the work-eligible individuals must be participating in work activities for an average of at least 55 hours per week to count as a two-parent family engaged in work for the month. (2) At least 50 of the 55 hours per week must come from participation in the activities listed in paragraph (b) of this section. (3) Above 50 hours per week, the three activities listed in paragraph (c) of this section may also count as participation. (4) We will consider family with two work-eligible parents receiving federally funded child care in which one or both parents participate in a work experience or community service program for the maximum number of hours per week that a State may require by dividing their combined monthly TANF grant and food stamp allotment by the appropriate minimum wage under the minimum wage requirement of the Fair Labor Standards Act (FLSA) to have participated 50 hours per week if actual participation falls short of 50 hours per week. This policy is limited to States that have adopted a food stamp workfare program and a Simplified Food Stamp Program. For families that need additional hours beyond the core activity requirement, these hours must be satisfied in some other TANF work activity. [71 FR 37477, June 29, 2006] (a) Vocational educational training may only count for a total of 12 months for any individual. (b)(1) A recipient who is married or a single head-of-household under 20 years old counts as engaged in work in a month if he or she: (i) Maintains satisfactory attendance at a secondary school or the equivalent during the month; or (ii) Participates in education directly related to employment for an average of at least 20 hours per week during the month. (2)(i) For a married recipient, such participation counts as the greater of 20 hours or the actual hours of participation. (ii) If both parents in the family are under 20 years old, the requirements at §261.32(d) are met if both meet the conditions of paragraphs (b)(1)(i) or (b)(1)(ii) of this section. (c) In counting individuals for each participation rate, not more than 30 percent of individuals engaged in work in a month may be included in the numerator because they are: (1) Participating in vocational educational training; and (2) In fiscal year 2000 or thereafter, individuals deemed to be engaged in work by participating in educational activities described in paragraph (b) of this section. Yes. There are four limitations concerning job search and job readiness. (a) Except as provided in paragraph (b) of this section, an individual's participation in job search and job readiness assistance counts for a maximum of six weeks in any fiscal year. (b) If the State's total unemployment rate is at least 50 percent greater than the United States' total unemployment rate or if the State meets the definition of a needy State, specified at §260.30 of this chapter, then an individual's participation in job search and job readiness assistance counts for a maximum of 12 weeks in that fiscal year. (c) An individual's participation in job search and job readiness assistance does not count for a week that immediately follows four consecutive weeks of such participation in a fiscal year. (d) Not more than once for any individual in a fiscal year, a State may count three or four days of job search and job readiness assistance during a week as a full week of participation. Yes. A single custodial parent or caretaker relative with a child under age six will count as engaged in work if he or she participates for at least an average of 20 hours per week. A welfare reform waiver could affect the calculation of a State's participation rate, pursuant to subpart C of part 260 and section 415 of the Act. Source: 71 FR 37477, June 29, 2006, unless otherwise noted.
(a)(1) If the average monthly number of cases receiving assistance, including assistance under a separate State program (as provided at §261.42(b)), in a State in the preceding fiscal year was lower than the average monthly number of cases that received assistance, including assistance under a separate State program in that State in FY 2005, the minimum overall participation rate the State must meet for the fiscal year (as provided at §261.21) decreases by the number of percentage points the prior-year caseload fell in comparison to the FY 2005 caseload. (2) The minimum two-parent participation rate the State must meet for the fiscal year (as provided at §261.23) decreases, at State option, by either: (i) The number of percentage points the prior-year two-parent caseload, including two-parent cases receiving assistance under a separate State program (as provided at §261.42(b)), fell in comparison to the FY 2005 two-parent caseload, including two-parent cases receiving assistance under a separate State program; or (ii) The number of percentage points the prior-year overall caseload, including assistance under a separate State program (as provided at §261.42(b)), fell in comparison to the FY 2005 overall caseload, including cases receiving assistance under a separate State program. (3) For the credit calculation, we will refer to the fiscal year that precedes the fiscal year to which the credit applies as the “comparison year.” (b)(1) The calculations in paragraph (a) of this section must disregard caseload reductions due to requirements of Federal law and to changes that a State has made in its eligibility criteria in comparison to its criteria in effect in FY 2005. (2) At State option, the calculation may offset the disregard of caseload reductions in paragraph (b)(1) of this section by changes in eligibility criteria that increase caseloads. (c)(1) To establish the caseload base for FY 2005 and to determine the comparison-year caseload, we will use the combined TANF and Separate State Program caseload figures reported on the Form ACF–199, TANF Data Report, and Form ACF–209, SSP–MOE Data Report, respectively. (2) To qualify for a caseload reduction, a State must have reported monthly caseload information, including cases in separate State programs, for FY 2005 and the comparison year for cases receiving assistance as defined at §261.43. (d)(1) A State may correct erroneous data or submit accurate data to adjust program data or to include unduplicated cases within the fiscal year. (2) We will adjust both the FY 2005 baseline and the comparison-year caseload information, as appropriate, based on these State submissions. (e) We refer to the number of percentage points by which a caseload falls, disregarding the cases described in paragraph (b), as a caseload reduction credit. (a)(1) We will determine the overall and two-parent caseload reduction credits that apply to each State based on the information and estimates reported to us by the State on eligibility policy changes using application denials, case closures, or other administrative data sources and analyses. (2) We will accept the information and estimates provided by a State, unless they are implausible based on the criteria listed in paragraph (d) of this section. (3) We may conduct on-site reviews and inspect administrative records on applications, case closures, or other administrative data sources to validate the accuracy of the State estimates. (b) In order to receive a caseload reduction credit, a State must submit a Caseload Reduction Report to us containing the following information: (1) A listing of, and implementation dates for, all State and Federal eligibility changes, as defined at §261.42, made by the State since the beginning of FY 2006; (2) A numerical estimate of the positive or negative average monthly impact on the comparison-year caseload of each eligibility change (based, as appropriate, on application denials, case closures or other analyses); (3) An overall estimate of the total net positive or negative impact on the applicable caseload as a result of all such eligibility changes; (4) An estimate of the State's caseload reduction credit; (5) A description of the methodology and the supporting data that a State used to calculate its caseload reduction estimates; and (6) A certification that it has provided the public an appropriate opportunity to comment on the estimates and methodology, considered their comments, and incorporated all net reductions resulting from Federal and State eligibility changes. (c)(1) A State requesting a caseload reduction credit for the overall participation rate must base its estimates of the impact of eligibility changes on decreases in its comparison-year overall caseload compared to the FY 2005 overall caseload baseline established in accordance with §261.40(d). (2) A State requesting a caseload reduction credit for its two-parent rate must base its estimates of the impact of eligibility changes on decreases in either: (i) Its two-parent caseload compared to the FY 2005 comparison-year two-parent caseload baseline established in accordance with §261.40(d); or (ii) Its overall caseload compared to the FY 2005 comparison-year overall caseload baseline established in accordance with §261.40(d). (d)(1) For each State, we will assess the adequacy of information and estimates using the following criteria: its methodology; its estimates of impact compared to other States; the quality of its data; and the completeness and adequacy of its documentation. (2) If we request additional information to develop or validate estimates, the State may negotiate an appropriate deadline or provide the information within 30 days of the date of our request. (3) The State must provide sufficient data to document the information submitted under paragraph (b) of this section. (e) We will not calculate a caseload reduction credit unless the State reports case-record data on individuals and families served by any separate State program, as required under §265.3(d) of this chapter. (f) A State may only apply to the participation rate a caseload reduction credit that we have calculated. If a State disagrees with the caseload reduction credit, it may appeal the decision as an adverse action in accordance with §262.7 of this chapter. (a)(1) A State's caseload reduction credit must not include caseload decreases due to Federal requirements or State changes in eligibility rules since FY 2005 that directly affect a family's eligibility for assistance. (2) At State option, a State's caseload reduction credit may include caseload increases due to Federal requirements or State change in eligibility rules since FY 2005 if used to offset caseload decreases in paragraph (a)(1) of this section. (3) A State may not receive a caseload reduction credit that exceeds the actual caseload decline between FY 2005 and the comparison year. (4) A State may count the reductions attributable to enforcement mechanisms or procedural requirements that are used to enforce existing eligibility criteria (e.g., fingerprinting or other verification techniques) to the extent that such mechanisms or requirements identify or deter families otherwise ineligible under existing rules. (b) A State must include cases receiving assistance in separate State programs as part of its FY 2005 caseload and comparison-year caseload. However, if a State provides documentation that separate State program cases overlap with or duplicate cases in the TANF caseload, we will exclude them from the caseload count. (a) The caseload reduction credit is based on decreases in caseloads receiving assistance (other than those excluded pursuant to §261.42) both in a State's TANF program and in separate State programs that address basic needs and are used to meet the MOE requirement. (b) A State that is investing State MOE funds in eligible families in excess of the required 80 percent or 75 percent basic MOE amount need only include the pro rata share of caseloads receiving assistance that is required to meet basic MOE requirements. A State must report the necessary documentation on caseload reductions for the preceding fiscal year by December 31. (a) If we determine that a State did not achieve one of the required minimum work participation rates, we must reduce the SFAG payable to the State. (b)(1) If there was no penalty for the preceding fiscal year, the base penalty for the current fiscal year is five percent of the adjusted SFAG. (2) For each consecutive year that the State is subject to a penalty under this part, we will increase the amount of the base penalty by two percentage points over the previous year's penalty. However, the penalty can never exceed 21 percent of the State's adjusted SFAG. (c) We impose a penalty by reducing the SFAG payable for the fiscal year that immediately follows our final determination that a State is subject to a penalty and our final determination of the penalty amount. (d) In accordance with the procedures specified at §262.4 of this chapter, a State may dispute our determination that it is subject to a penalty. (a) We will reduce the amount of the penalty based on the degree of the State's noncompliance. (1) If the State fails only the two-parent participation rate specified at §261.23, reduced by any applicable caseload reduction credit, its maximum penalty will be a percentage of the penalty specified at §261.50. This percentage will equal the percentage of two-parent cases in the State's total caseload. (2) If the State fails the overall participation rate specified at §261.21, reduced by any applicable caseload reduction credit, or both rates, its maximum penalty will be the penalty specified at §261.50. (b)(1) In order to receive a reduction of the penalty amounts determined under paragraphs (a)(1) or (a)(2) of this section: (i) The State must achieve participation rates equal to a threshold level defined as 50 percent of the applicable minimum participation rate at §261.21 or §261.23, minus any caseload reduction credit determined pursuant to subpart D of this part; and (ii) The adjustment factor for changes in the number of individuals engaged in work, described in paragraph (b)(4) of this section, must be greater than zero. (2) If the State meets the requirements of paragraph (b)(1) of this section, we will base its reduction on the severity of the failure. For this purpose, we will calculate the severity of the State's failure based on: (i) The degree to which it missed the target rate; (ii) An adjustment factor that accounts for changes in the number of individuals who are engaged in work in the State since the prior year; and (iii) The number of consecutive years in which the State failed to meet the participation rates and the number of rates missed. (3) We will determine the degree to which the State missed the target rate using the ratio of the following two factors: (i) The difference between the participation rate achieved by the State and the 50-percent threshold level (adjusted for any caseload reduction credit determined pursuant to subpart D of this part); and (ii) The difference between the minimum applicable participation rate and the threshold level (both adjusted for any caseload reduction credit determined pursuant to subpart D of this part). (4) We will calculate the adjustment factor for changes in the number of individuals engaged in work using the following formula: (i) The average monthly number of individuals engaged in work in the penalty year minus the average monthly number of individuals engaged in work in the prior year, divided by, (ii) The product of 0.15 and the average monthly number of individuals engaged in work in the prior year. (5) Subject to paragraph (c) of this section, if the State fails only the two-parent participation rate specified at §261.23, and qualifies for a penalty reduction under paragraph (b)(1) of this section, its penalty reduction will be the product of: (i) The amount determined in paragraph (a)(1) of this section; (ii) The ratio described in paragraph (b)(3) of this section computed with respect to two-parent families; and (iii) The adjustment factor described in paragraph (b)(4) of this section computed with respect to two-parent families. (6) Subject to paragraph (c) of this section, if the State fails the overall participation rate specified at §261.21, or both rates, and qualifies for a penalty reduction under paragraph (b)(1) of this section, its penalty reduction will be the product of: (i) The amount determined in paragraph (a)(2) of this section; (ii) The ratio described in paragraph (b)(3) of this section computed with respect to all families; and (iii) The adjustment factor described in paragraph (b)(4) of this section. (7) Pursuant to §260.58 of this chapter, we will adjust the calculations in this section to exclude cases for which a State has granted federally recognized good cause domestic violence waivers. (c)(1) If the State was not subject to a penalty the prior year, the State will receive: (i) The full applicable penalty reduction described in paragraph (b)(5) or (b)(6) of this section if it failed only one participation rate; or (ii) 50 percent of the penalty reduction described in paragraph (b)(6) of this section if it failed both participation rates. (2) If the penalty year is the second successive year in which the State is subject to a penalty, the State will receive: (i) 50 percent of the applicable penalty reduction described in paragraph (b)(5) or (b)(6) of this section if it failed only one participation rate; or (ii) 25 percent of the penalty reduction described in paragraph (b)(6) of this section if it failed both participation rates. (3) If the penalty year is the third or greater successive year in which the State is subject to a penalty, the State will not receive a penalty reduction described in paragraph (b)(5) or (b)(6) of this section. (d)(1) We may reduce the penalty if the State failed to achieve a participation rate because: (i) It meets the definition of a needy State, specified at §260.30 of this chapter; or, (ii) Noncompliance is due to extraordinary circumstances such as a natural disaster, regional recession, or substantial caseload increase. (2) In determining noncompliance under paragraph (d)(1)(ii) of this section, we will consider such objective evidence of extraordinary circumstances as the State chooses to submit. (a) We will not impose a penalty under this part if we determine that the State has reasonable cause for its failure. (b) In addition to the general reasonable cause criteria specified at §262.5 of this chapter, a State may also submit a request for a reasonable cause exemption from the requirement to meet the minimum participation rate in two specific case situations. (1) We will determine that a State has reasonable cause if it demonstrates that failure to meet the work participation rates is attributable to its provision of federally recognized good cause domestic violence waivers (i.e., it provides evidence that it achieved the applicable work rates when individuals receiving federally recognized good cause domestic violence waivers of work requirements, in accordance with the provisions at §§260.54(b) and 260.55 of this chapter, are removed from the calculations in §§261.22(b) and 261.24(b)). (2) We will determine that a State has reasonable cause if it demonstrates that its failure to meet the work participation rates is attributable to its provision of assistance to refugees in federally approved alternative projects under section 412(e)(7) of the Immigration and Nationality Act (8 U.S.C. 1522(e)(7)). (c) In accordance with the procedures specified at §262.4 of this chapter, a State may dispute our determination that it is subject to a penalty. (a) Yes. A State may enter into a corrective compliance plan to remedy a problem that caused its failure to meet a participation rate, as specified at §262.6 of this chapter. (b) To qualify for a penalty reduction under §262.6(j)(1) of this chapter, based on significant progress towards correcting a violation, a State must reduce the difference between the participation rate it achieved in the year for which it is subject to a penalty and the rate applicable during the penalty year (adjusted for any caseload reduction credit determined pursuant to subpart D of this part) by at least 50 percent. (a) If we determine that, during a fiscal year, a State has violated section 407(e) of the Act, relating to imposing penalties against individuals, we must reduce the SFAG payable to the State. (b) The penalty amount for a fiscal year will equal between one and five percent of the adjusted SFAG. (c) We impose a penalty by reducing the SFAG payable for the fiscal year that immediately follows our final determination that a State is subject to a penalty and our final determination of the penalty amount. (a) We will reduce the amount of the penalty based on the degree of the State's noncompliance. (b) In determining the size of any reduction, we will consider objective evidence of: (1) Whether the State has established a control mechanism to ensure that the grants of individuals are appropriately reduced for refusing to engage in required work; and (2) The percentage of cases for which the grants have not been appropriately reduced. (a)(1) If the individual is a single custodial parent caring for a child under age six, the State may not reduce or terminate assistance based on the parent's refusal to engage in required work if he or she demonstrates an inability to obtain needed child care for one or more of the following reasons: (i) Appropriate child care within a reasonable distance from the home or work site is unavailable; (ii) Informal child care by a relative or under other arrangements is unavailable or unsuitable; or (iii) Appropriate and affordable formal child care arrangements are unavailable. (2) Refusal to work when an acceptable form of child care is available is not protected from sanctioning. (b)(1) The State will determine when the individual has demonstrated that he or she cannot find child care, in accordance with criteria established by the State. (2) These criteria must: (i) Address the procedures that the State uses to determine if the parent has a demonstrated inability to obtain needed child care; (ii) Include definitions of the terms “appropriate child care,” “reasonable distance,” “unsuitability of informal care,” and “affordable child care arrangements”; and (iii) Be submitted to us. (c) The TANF agency must inform parents about: (1) The penalty exception to the TANF work requirement, including the criteria and applicable definitions for determining whether an individual has demonstrated an inability to obtain needed child care; (2) The State's process or procedures (including definitions) for determining a family's inability to obtain needed child care, and any other requirements or procedures, such as fair hearings, associated with this provision; and (3) The fact that the exception does not extend the time limit for receiving Federal assistance. [64 FR 17884, Apr. 12, 1999; 64 FR 40291, July 26, 1999] (a) If we determine that a State has not complied with the requirements of §261.56, we will reduce the SFAG payable to the State by no more than five percent for the immediately succeeding fiscal year unless the State demonstrates to our satisfaction that it had reasonable cause or it achieves compliance under a corrective compliance plan pursuant to §§262.5 and 262.6 of this chapter. (b) We will impose the maximum penalty if: (1) The State does not have a statewide process in place to inform parents about the exception to the work requirement and enable them to demonstrate that they have been unable to obtain child care; or (2) There is a pattern of substantiated complaints from parents or organizations verifying that a State has reduced or terminated assistance in violation of this requirement. (c) We may impose a reduced penalty if the State demonstrates that the violations were isolated or that they affected a minimal number of families. Source: 71 FR 37479, June 29, 2006, unless otherwise noted.
(a) A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) and §261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may also include excused absences for hours missed due to holidays and a maximum of an additional 10 days of excused absences in any 12-month period, no more than two of which may occur in a month. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in an allowable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at §261.62. (c) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (a) A State must support each individual's hours of participation through documentation in the case file. In accordance with §261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity. (b) For an employed individual, the documentation may consist of, but is not limited to pay stubs, employer reports, or time and attendance records substantiating hours of participation. A State may presume that an employed individual participated in unsubsidized employment for the total number of hours for which that individual was paid. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) For an individual who is not employed, the documentation for substantiating hours of participation may consist of, but is not limited to, time sheets, service provider attendance records, or school attendance records. (e) For an individual who is self-employed, the documentation must comport with standards set forth in the State's approved Work Verification Plan. Self-reporting by a participant without additional verification is not sufficient documentation. (a) To ensure accuracy in the reporting of work activities by work-eligible individuals on the TANF Data Report and, if applicable, the SSP–MOE Data Report, each State must: (1) Establish and employ procedures for determining whether its work activities may count for participation rate purposes; (2) Establish and employ procedures for determining how to count and verify reported hours of work; (3) Establish and employ procedures for identifying who is a work-eligible individual; (4) Establish and employ internal controls to ensure compliance with the procedures; and (5) Submit to the Secretary for approval the State's Work Verification Plan in accordance with paragraph (b) of this section. (b) A State's Work Verification Plan must include the following: (1) For each countable work activity: (i) A description demonstrating how the activity meets the relevant definition at §261.2; (ii) A description of how the State determines the number of countable hours of participation for self-employed individuals; and (iii) A description of the documentation it uses to monitor participation and ensure that the actual hours of participation are reported; (2) A description of the State's procedures for identifying all work-eligible individuals, as defined at §261.2; (3) A description of how the State ensures that, for each work-eligible individual, it: (i) Accurately inputs data into the State's automated data processing system; (ii) Properly tracks the hours though the automated data processing system; and (iii) Accurately reports the hours to the Department; (4) A description of the procedures for ensuring it does not transmit to the Department a work-eligible individual's hours of participation in an activity that does not meet a Federal definition of a countable work activity; and (5) A description of the internal controls that the State has implemented to ensure a consistent measurement of the work participation rates, including the quality assurance processes and sampling specifications it uses to monitor adherence to the established work verification procedures by State staff, local staff, and contractors. (c) We will review a State's Work Verification Plan for completeness and approve it if we believe that it will result in accurate reporting of work participation information. (a) Each State must submit its interim Work Verification Plan for validating work activities reported in the TANF Data Report and, if applicable, the SSP–MOE Data Report no later than September 30, 2006. (b) If HHS requires changes, a State must submit them within 60 days of receipt of our notice and include all necessary changes as part of a final approved Work Verification Plan no later than September 30, 2007. (c) If a State modifies its verification procedures for TANF or SSP–MOE work activities or its internal controls for ensuring a consistent measurement of the work participation rate, the State must submit for approval an amended verification plan by the end of the quarter in which the State modifies the procedures or internal controls. (a) We will determine that a State has met the requirement to establish work verification procedures if it submits an interim Work Verification Plan by September 30, 2006 and a complete Work Verification Plan that we approve by September 30, 2007. (b) A “complete” Work Verification Plan means that: (1) The plan includes all the information required by §261.62(b); and (2) The State certifies that the plan includes all the information required by §261.62(b) and that it accurately reflect the procedures under which the State is operating. (c) For conduct occurring after October 1, 2007, we will use the single audit under OMB Circular A–133 in conjunction with other reviews, audits, and data sources, as appropriate, to assess the accuracy of the data filed by States for use in calculating the work participation rates. (a) We will take action to impose a penalty under §262.1(a)(15) of this chapter if: (1) The requirements under §§261.64(a) and (b) have not been met; or (2) We determine that the State has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates. (b) If a State fails to submit an interim or complete Work Verification Plan by the due dates in §261.64(a), we will reduce the SFAG payable for the immediately succeeding fiscal year by five percent of the adjusted SFAG. (c) If a State fails to maintain adequate internal controls to ensure a consistent measurement of work participation, we will reduce the adjusted SFAG by the following percentages for a fiscal year: (1) One percent for the first year; (2) Two percent for the second year; (3) Three percent for the third year; (4) Four percent for the fourth year; and (5) Five percent for the fifth and subsequent years. (d) If a State complies with the requirements in this subpart for two consecutive years, then any penalty imposed for subsequent failures will begin anew, as described in paragraph (c) of this section. (e) If we take action to impose a penalty under §§261.64(b) or (c), we will reduce the SFAG payable for the immediately succeeding fiscal year. (a) An adult taking part in a work activity outlined in §261.30 may not fill a vacant employment position if: (1) Another individual is on layoff from the same or any substantially equivalent job; or (2) The employer has terminated the employment of any regular employee or caused an involuntary reduction in its work force in order to fill the vacancy with an adult taking part in a work activity. (b) A State must establish and maintain a grievance procedure to resolve complaints of alleged violations of the displacement rule in this section. (c) This section does not preempt or supersede State or local laws providing greater protection for employees from displacement. A welfare reform waiver could affect a State's penalty liability under this part, subject to subpart C of part 260 of this chapter and section 415 of the Act. [64 FR 17884, Apr. 12, 1999. Redesignated at 71 FR 37479, June 29, 2006]
Title 45: Public Welfare
PART 261—ENSURING THAT RECIPIENTS WORK
Section Contents
§ 261.1 What does this part cover?
§ 261.2 What definitions apply to this part?
§ 261.10 What work requirements must an individual meet?
§ 261.11 Which recipients must have an assessment under TANF?
§ 261.12 What is an individual responsibility plan?
§ 261.13 May an individual be penalized for not following an individual responsibility plan?
§ 261.14 What is the penalty if an individual refuses to engage in work?
§ 261.15 Can a family be penalized if a parent refuses to work because he or she cannot find child care?
§ 261.16 Does the imposition of a penalty affect an individual's work requirement?
§ 261.20 How will we hold a State accountable for achieving the work objectives of TANF?
§ 261.21 What overall work rate must a State meet?
§ 261.22 How will we determine a State's overall work rate?
§ 261.23 What two-parent work rate must a State meet?
§ 261.24 How will we determine a State's two-parent work rate?
§ 261.25 Does a State include Tribal families in calculating the work participation rate?
§ 261.30 What are the work activities?
§ 261.31 How many hours must a work-eligible individual participate for the family to count in the numerator of the overall rate?
§ 261.32 How many hours must work-eligible individuals participate for the family to count in the numerator of the two-parent rate?
§ 261.33 What are the special requirements concerning educational activities in determining monthly participation rates?
§ 261.34 Are there any limitations in counting job search and job readiness assistance toward the participation rates?
§ 261.35 Are there any special work provisions for single custodial parents?
§ 261.36 Do welfare reform waivers affect the calculation of a State's participation rates?
§ 261.40 Is there a way for a State to reduce the work participation rates?
§ 261.41 How will we determine the caseload reduction credit?
§ 261.42 Which reductions count in determining the caseload reduction credit?
§ 261.43 What is the definition of a “case receiving assistance” in calculating the caseload reduction credit?
§ 261.44 When must a State report the required data on the caseload reduction credit?
§ 261.50 What happens if a State fails to meet the participation rates?
§ 261.51 Under what circumstances will we reduce the amount of the penalty below the maximum?
§ 261.52 Is there a way to waive the State's penalty for failing to achieve either of the participation rates?
§ 261.53 May a State correct the problem before incurring a penalty?
§ 261.54 Is a State subject to any other penalty relating to its work program?
§ 261.55 Under what circumstances will we reduce the amount of the penalty for not properly imposing penalties on individuals?
§ 261.56 What happens if a parent cannot obtain needed child care?
§ 261.57 What happens if a State sanctions a single parent of a child under six who cannot get needed child care?
§ 261.60 What methods may a State use to report a work-eligible individual's hours of participation?
§ 261.61 How must a State document a work-eligible individual's hours of participation?
§ 261.62 What must a State do to verify the accuracy of its work participation information?
§ 261.63 When is a State's Work Verification Plan Due?
§ 261.64 How will we determine if the State is meeting the requirement to establish and maintain work verification procedures that ensure an accurate measurement of work participation?
§ 261.65 Under what circumstances will we impose a work verification penalty for failure to submit a work verification plan or for failure to maintain adequate procedures to ensure a consistent measurement of the work participation rate?
§ 261.70 What safeguards are there to ensure that participants in work activities do not displace other workers?
§ 261.80 How do existing welfare reform waivers affect a State's penalty liability under this part?
§ 261.1 What does this part cover?
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§ 261.2 What definitions apply to this part?
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Subpart A—What Are the Provisions Addressing Individual Responsibility?
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§ 261.10 What work requirements must an individual meet?
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§ 261.11 Which recipients must have an assessment under TANF?
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§ 261.12 What is an individual responsibility plan?
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§ 261.13 May an individual be penalized for not following an individual responsibility plan?
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§ 261.14 What is the penalty if an individual refuses to engage in work?
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§ 261.15 Can a family be penalized if a parent refuses to work because he or she cannot find child care?
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§ 261.16 Does the imposition of a penalty affect an individual's work requirement?
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Subpart B—What Are the Provisions Addressing State Accountability?
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§ 261.20 How will we hold a State accountable for achieving the work objectives of TANF?
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§ 261.21 What overall work rate must a State meet?
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§ 261.22 How will we determine a State's overall work rate?
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§ 261.23 What two-parent work rate must a State meet?
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§ 261.24 How will we determine a State's two-parent work rate?
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§ 261.25 Does a State include Tribal families in calculating the work participation rate?
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Subpart C—What Are the Work Activities and How Do They Count?
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§ 261.30 What are the work activities?
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§ 261.31 How many hours must a work-eligible individual participate for the family to count in the numerator of the overall rate?
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§ 261.32 How many hours must work-eligible individuals participate for the family to count in the numerator of the two-parent rate?
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§ 261.33 What are the special requirements concerning educational activities in determining monthly participation rates?
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§ 261.34 Are there any limitations in counting job search and job readiness assistance toward the participation rates?
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§ 261.35 Are there any special work provisions for single custodial parents?
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§ 261.36 Do welfare reform waivers affect the calculation of a State's participation rates?
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Subpart D—How Will We Determine Caseload Reduction Credit for Minimum Participation Rates?
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§ 261.40 Is there a way for a State to reduce the work participation rates?
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§ 261.41 How will we determine the caseload reduction credit?
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§ 261.42 Which reductions count in determining the caseload reduction credit?
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§ 261.43 What is the definition of a “case receiving assistance” in calculating the caseload reduction credit?
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§ 261.44 When must a State report the required data on the caseload reduction credit?
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Subpart E—What Penalties Apply to States Related to Work Requirements?
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§ 261.50 What happens if a State fails to meet the participation rates?
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§ 261.51 Under what circumstances will we reduce the amount of the penalty below the maximum?
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§ 261.52 Is there a way to waive the State's penalty for failing to achieve either of the participation rates?
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§ 261.53 May a State correct the problem before incurring a penalty?
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§ 261.54 Is a State subject to any other penalty relating to its work program?
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§ 261.55 Under what circumstances will we reduce the amount of the penalty for not properly imposing penalties on individuals?
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§ 261.56 What happens if a parent cannot obtain needed child care?
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§ 261.57 What happens if a State sanctions a single parent of a child under six who cannot get needed child care?
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Subpart F—How Do We Ensure the Accuracy of Work Participation Information?
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§ 261.60 What methods may a State use to report a work-eligible individual's hours of participation?
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§ 261.61 How must a State document a work-eligible individual's hours of participation?
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§ 261.62 What must a State do to verify the accuracy of its work participation information?
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§ 261.63 When is a State's Work Verification Plan Due?
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§ 261.64 How will we determine if the State is meeting the requirement to establish and maintain work verification procedures that ensure an accurate measurement of work participation?
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§ 261.65 Under what circumstances will we impose a work verification penalty for failure to submit a work verification plan or for failure to maintain adequate procedures to ensure a consistent measurement of the work participation rate?
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Subpart G—What Nondisplacement Rules Apply in TANF?
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§ 261.70 What safeguards are there to ensure that participants in work activities do not displace other workers?
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Subpart H—How Do Welfare Reform Waivers Affect State Penalties?
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§ 261.80 How do existing welfare reform waivers affect a State's penalty liability under this part?
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