RD406 - Virginia Independence Program and Other Projects Funded with the Temporary Assistance for Needy Families Block Grant - October 2008


Executive Summary:
Virginia has been highly successful in implementing its federal TANF Program. The Commonwealth ranked first in the nation for job entry and second for job retention for Federal Fiscal Years (FFY) 04-06. In a new report, Welfare Reform After Ten Years-State Welfare Report Card 2008, prepared by the Heartland Institute, a nonprofit, nonpartisan public policy research organization, Virginia received a grade of A and ranked number five for the success of its welfare reform efforts.

The TANF block grant funds a host of important and effective programs throughout the Commonwealth including VIP. 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 of 1997.

Since VIP was implemented in July of 1995, the TANF caseload has dropped from 70,797 to approximately 33,000 in June 2007, a 54% decrease. Of the 123,034 TANF recipients enrolled in VIEW since 1995, more than 90,000 found employment and joined the work force by June of 2007. This caseload decline contributed to a net savings in federal and state funds of over $1 billion.

Item 349 of the 2008 Appropriation 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 myriad projects designed to help TANF participants gain and keep employment leading to the elimination of the need for public assistance.

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 0.0%. Under the new calculation, the credit will decrease significantly, 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.