The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established a new Temporary Assistance for Needy Families (TANF) program to replace the Aid to Families with Dependent Children (AFDC) program. The new welfare law also established new State reporting and data requirements for the TANF program. In September 1997, HHS issued the Emergency TANF Data Report specification providing States with guidance/instructions for the collection and submission of this important data.

While all States were required to have their new TANF program in place by July 1, 1997, 38 States and the District of Columbia chose to start their TANF program by March 1,1997. As a result, these States submitted data on the demographic characteristics and financial circumstances of families receiving assistance under their TANF program for the period of July-September 1997. These States transmitted 3,097,830 active cases and 268,762 closed cases. All States, the District of Columbia, Guam, Puerto Rico and Virgin Islands are required to submit TANF data for the 1998 federal fiscal year.

Under the new data reporting system, States have the option to submit either sample data or universe data to HHS. Twenty-three States submitted universe data, from which HHS randomly selected approximately 500 active cases each month to prepare this report. A total sample of 48,515 active cases was used to compile 29 TANF recipient characteristics tables. A total of 268,762 closed cases were used to compile Table 30 regarding reasons for closure. The statistical data in this report are estimates derived from samples and, therefore, are subject to sampling errors as well as non-sampling errors.

While the challenges posed for States and HHS by the implementation of a new reporting system have delayed the issuance of this report, we anticipate the 1998 data will be available earlier. In addition, we will continue to work with the States on completeness and reliability of the data. In this report we have identified data that clearly had major problems, in some cases, serious enough that we did not include the data in the report. In cases where numerous States reported questionable data or unusually large numbers of "unknown" or "other" categories, HHS urges caution in drawing conclusions on the basis of the data for this period.

The average monthly number of TANF families was 3,040,000 in the 39 States reporting TANF data for July - September 1997. The estimated total number of TANF recipients was 2,680,000 adults and 5,489,000 children. The average monthly number of TANF families decreased in all 39 States and reflects an overall 11 percent decrease from 3,423,000 families in October 1996 - June 1997. The 39 States reported that 673,600 TANF families had their assistance terminated during July - September 1997.

The average number of persons in TANF families was 2.1 persons. The TANF families averaged 2 recipient children, which remained unchanged. Two in five families had only one child. One in 10 families had more than three children.

About seventy percent of families had only one adult recipient, and seven percent included two or more adult recipients. For the 35 States that reported child-only cases, 23 percent of TANF families had no adult recipients, down about 0.7 percentage points for the comparable states for October 1996 - June 1997. Since child-only cases have been steadily rising since 1988, but the rate of increase slowed slightly between FY1996 and October-June 1997, this is some further evidence of what might be a slowing trend. We believe it will be important to review data for FY1998 before drawing this inference, however, because of the short reporting period and the fact that only two-thirds of States are represented.

Of TANF families, 95 percent received cash and cash equivalents assistance with the monthly average amount of $359 under the State TANF program. Of such TANF families, 85 percent received Food Stamp assistance, which is consistent with previous levels. Also, almost every TANF family received medical assistance under the State plan approved under title XIX.

Reasons for which TANF families received a reduction in assistance for the reporting month were: sanction at 2.5 percent, recoupment of a prior overpayment at 7.4 percent and other at 5.0 percent. "Other" could include reasons for a reduction in assistance, such as receiving a lower benefit based on a state policy to pay families that move from another State at a lower level, or the application of a family cap.

Understanding the reason for case closure is severely limited by the fact that States reported about two-thirds of all cases that closed did so due to "other" reasons. For example, while independent studies of the reason for families leaving welfare typically find that somewhat over half leave as a result of employment, States reported only 16 percent of cases closing due to employment, clearly an understatement of the true rate. We intend to address these data problems with the States in the future.

Employment increased by about 30 percent among TANF adult recipients. Compared to October 1996 - June 1997, when 14 percent of adult recipients were employed for the same 39 States, about 18 percent were employed in July - September 1997. Furthermore, the average earnings of those employed increased from about $506 per month to $592, an increase of about 17 percent. (About 10 percent of adult recipients had unearned income averaging about $226 per month.) Finally, an additional 40 percent of TANF adult recipients were in the labor force, i.e., seeking work but not employed, and almost one third of adult recipients were not in the labor force.

Work participation was mandatory for three of every five adult recipients. Of TANF adult recipients, about 8 percent were exempt from the work participation because they were single custodial parents with child under 12 months. Only three percent were exempt because of a sanction or participation in a Tribal Work Program. About 20 percent were exempt from the work participation status because of a good cause exception, e.g., disabled or in poor health. Nearly six percent were teen parents who were required to participate in education.

The average age of TANF adult recipients was 30 years. Of TANF adult recipients, 8 percent were teenagers and 18 percent were 40 years of age or older. Only 16 percent of adult recipients were married and living together.

TANF recipient children averaged about 8 years of age. Seven percent of recipient children were under 2 years of age, while 37 percent were of preschool age under 6. Only 7 percent of the children were 16 years of age or older.

The racial distribution of TANF recipient children was relatively unchanged. Black children continued to be the largest group of children, comprising about 40 percent of recipient children. About 29 percent of recipient children were white and 24 percent were Hispanic. Although the percentage for black children is up by about 2 percentage points, down by a similar amount for Hispanics and down by about 1 percentage point for whites, we believe that the combination of a short reporting period, State data problems, and a transition in reporting systems makes it premature to draw a conclusion at this point about whether this represents a true trend.

[Note: The tables are also available as an Excel 97 workbook.]