RD220 - Report on the Virginia Independence Program and Other Projects Funded with the Temporary Assistance for Needy Families Block Grant


Executive Summary:
The federal Temporary Assistance for Needy Families (TANF) block grant funds a host of important and effective programs throughout the Commonwealth including the Virginia Independence Program (VIP). The VIP consists of two related but distinct sets of requirements for TANF participants, eligibility requirements and work requirements. The policies that mandate eligibility requirements became effective statewide on July 1, 1995. The Virginia Initiative for Employment not Welfare Program (VIEW) is the work-related portion of VIP that requires participants to be employed or engaged in a work activity. Implementation of VIEW was phased in over a two-year period beginning in July 1995, and ending in October 1997.

Since VIP was implemented in July 1995, the TANF caseload has dropped from 70,797 to approximately 34,750 in June 2006, a 51% decrease. Of the 112,232 TANF recipients enrolled in VIEW since 1995, more than 83,000 found employment and joined the work force by June 2006. This caseload decline contributed to a net savings in federal and state funds of over $957 million.

Item 345 of the 2007 Appropriations Act provides for a spending strategy designed to protect families at risk and facilitate the transition to economic self-sufficiency. Federal TANF funds are being used to finance these strategies through the funding of a myriad of projects designed to help TANF participants gain and keep employment leading to the elimination of the need for public assistance.

Virginia has been highly successful in implementing its TANF Program. TANF was reauthorized with the passage of the Deficit Reduction Act of 2005 on February 8, 2006. Reauthorization of TANF introduced several changes including: the elimination of the high performance bonus; a change in the baseline for the computation of the caseload reduction credit; a requirement that state-only funded cases be included in the calculation of the work participation rate; and new federal regulations on verifying work participation and defining work activities. The most significant change is in the baseline for the caseload reduction credit. Since Virginia’s caseload decreased by 50%, the work participation target was reduced to almost 0%. Under the new calculation, the credit will decrease significantly, if it is not eliminated, requiring more participants to be engaged in work activities each month in order for Virginia to reach the required work participation rate. New federal and state regulations took effect on October 1, 2006. The impact of these changes will be reflected in the General Assembly report for SFY 2007.