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Sanctions are financial penalties
for failing to comply with work or other requirements of state
welfare programs. They have been a central feature of the
welfare reforms of the 1990s. Although time limits may receive
more attention in the media, many more families have been
directly affected by sanctions, and sanctions have arguably
played a greater role in reshaping welfare recipients' day-to-day
experiences.
Sanctions will be an important topic
of discussion when Congress considers the reauthorization
of the Temporary Assistance for Needy Families (TANF) block
grant in 2002. Some participants in the reauthorization debate
will argue that Congress should require all states to use
"full-family sanctions" in which a family's entire
cash welfare grant is terminated rather than the partial sanctions
in place in some states today. Others will contend that sanctions
disproportionately affect the most vulnerable families and
that Congress should restrict the use of full-family sanctions
and require states to reach out to families before and after
reducing or terminating benefits to try to resolve the problems
that lead to noncompliance.
The Evolution of Sanction Policies
Financial sanctions have long been
used to enforce work-related requirements for welfare recipients.
What changed in the 1990s was the severity of the penalties
and the frequency of their use.
Until the early 1990s, sanctions
did not involve terminating a family's entire Aid to Families
with Dependent Children (AFDC) grant. Rather, the individual
who failed to comply (usually the parent) was removed from
the grant calculation, resulting in a lower grant and reflecting
the view that children should not be punished for their parent's
noncompliance. At the same time, however, noncompliance with
eligibility-related requirements (for example, failure to
appear for a redetermination interview at the welfare office)
did result in closing the case and terminating benefits.
Some welfare staff and administrators
complained that sanctions under AFDC were too small to effectively
induce recipients to comply with work requirements. In addition,
when a family's AFDC grant was reduced owing to a sanction,
the family's food stamp benefits were generally increased,
partly offsetting the cash sanction. Critics also contended
that recipients often abused the conciliation process, a federally
required procedure intended to resolve participation problems
before sanctions were imposed.
In the early 1990s, the federal government
began granting waivers of AFDC rules, including waivers that
allowed states to impose full-family sanctions. By mid-1996,
nearly half the states had received such a waiver. Then the
1996 welfare reforms required states to terminate or reduce
benefits "pro rata" when recipients failed to comply
with work requirements, but the amount and duration of sanctions
were not otherwise specified. The act also changed the food
stamp rules so that benefits are no longer increased when
the cash grant is cut, and required states to reduce (or,
at state option, eliminate) the food stamp grant when a TANF
sanction is imposed. Finally, the law eliminated the requirement
for states to have a conciliation process.
What States Are Doing
There is great variation in state
sanction policies today, although most states have policies
that are more stringent than required by federal law. According
to the State Policy Documentation Project operated by the
Center for Law and Social Policy in Washington, D.C., 36 states
use full-family sanctions and 18 of these impose full-family
sanctions on the first instance of noncompliance. In the other
18 states, partial sanctions can escalate to full-family sanctions
with repeated or continued noncompliance. In most states,
repeated noncompliance triggers a sanction that remains in
place for at least a minimum period-typically three or six
months-even if the individual agrees to comply earlier. In
seven states, repeated or continued noncompliance can result
in lifetime ineligibility for benefits. It is important to
note, however, that several states with large TANF caseloads,
such as California, New York, and Texas, do not use full-family
sanctions; thus, a substantial proportion of TANF recipients
nationwide are not subject to such sanctions.
Most states have procedures to resolve
disputes before sanctions are imposed but, in many states,
the process is less extensive than the AFDC conciliation process.
Almost all states have specific criteria that constitute "good
cause" for failing to comply with work mandates. Federal
law prohibits states from sanctioning single custodial parents
with preschool children if they cannot find child care. Most
states also grant good cause exemptions when a recipient is
ill or incapacitated, is caring for an incapacitated family
member, or lacks transportation.
Although some information on state
sanction policies is available, there is little systematic
data on how, and how often, sanctions are imposed. One point
is clear, however; during the 1990s most states extended work
requirements to a greater share of the welfare caseload and
began to enforce the requirements more aggressively. These
trends were bound to generate more sanctioning.
The most comprehensive national study
of sanctioning, conducted by the U.S. General Accounting Office
(GAO) in 2000, estimated that 136,000 families (5 percent
of the national TANF caseload at the time) received reduced
benefits or no benefits due to sanctions in a typical month
in 1998. However, GAO counted recipients as being subject
to a full-family sanction only in the month when the sanction
was imposed, even though sanctions cause many families to
remain off assistance for more than one month. Thus, GAO's
5 percent estimate is low.
If one simply projects GAO's monthly
estimates over several years, it is easy to conclude that
well over half a million families have had their cases closed
due to full-family sanctions (although there is no way to
know how many families are counted more than once in this
total). This compares to perhaps 85,000 families who have
had their cases closed because of time limits.
There are anecdotal reports that
sanctions are often imposed on clients who do not understand
the program rules or who have good cause for their failure
to comply, but it is impossible to determine how often this
happens. Data from a Connecticut program that assists certain
families who are terminated from welfare due to noncompliance
show that a significant proportion are allowed to return to
welfare, often because the individual qualifies for a medical
exemption. A recent study by Wisconsin's Legislative Audit
Bureau found evidence that some new mothers were sanctioned
in error. A detailed study of eight states conducted by the
Inspector General of the Department of Health and Human Services
(DHHS) found that, while the states usually explained sanctions
clearly, most of the TANF clients who were interviewed did
not understand the sanction rules. In addition, the study
found that the sanction notices mailed to clients who failed
to comply were often confusing or inaccurate.
Other studies have found that caseworkers
often have substantial discretion in imposing sanctions and
interpret good cause criteria differently; thus, clients who
engage in the same behavior are not equally likely to be sanctioned.
A number of states and localities
have developed special pre-sanction review procedures to evaluate
the circumstances of non-compliant families before sanctions
are imposed. These reviews are sometimes conducted by contracted
service providers, and may involve home visits. A review process
that precedes case closures in Tennessee results in a substantial
fraction of proposed sanctions being rescinded, either because
the recipient comes into compliance or because the sanction
was erroneous. State officials report that the fraction of
closures overturned in this manner has dropped over time,
in part because the review process has helped staff better
understand program policies. Other states and counties have
developed post-sanction outreach programs to check on the
well-being of sanctioned families and their children, identify
obstacles to participation, and try to reengage clients in
work activities.
Who is Being Sanctioned and How are They
Faring?
A number of states have examined
the characteristics of recipients who are sanctioned. Sanctioned
clients are a diverse group, but the studies have consistently
found that, on average, sanctioned clients have lower levels
of education and are more likely than other recipients to
face barriers to employment such as physical and mental health
problems. This finding may be attributable to the fact that
such families tend to remain on assistance longer, increasing
the odds that they will be sanctioned.
States that have used administrative
records or surveys to follow sanctioned families after they
left welfare have also found some consistent results; notably,
that sanctioned welfare leavers have lower employment rates
and earnings than individuals who left welfare for other reasons.
Fewer studies have examined the material
well-being of sanctioned families that are off welfare, and
it is difficult to decide on the most appropriate benchmark
for assessing their circumstances. One can compare families'
circumstances before and after leaving welfare, but it is
not possible to definitively attribute changes to the sanctions.
Several studies have compared sanctioned welfare leavers to
individuals who left welfare "voluntarily," but
the meaning of this comparison is not always clear.
One of the most comprehensive studies,
conducted by Thomas Fraker and his colleagues at Mathematica
and published in 1997, surveyed families in Iowa that were
in the midst of a 6-month period of ineligibility for benefits.
This study confirms that sanctioned families are a diverse
group: about 40 percent had higher income than while they
were on welfare, while 49 percent had lower income. Even among
the latter group, however, there was little evidence of extreme
deprivation such as homelessness.
Similarly, studies that have compared
the circumstances of sanctioned leavers with those of other
leavers have found that sanctioned families report lower income,
but not necessarily higher levels of material hardship (e.g.,
housing problems, food insufficiency). Such hardships are
common among all categories of leavers.
Do Sanctions Work?
Most people would agree that sanctions
are not designed to reduce welfare caseloads, but rather are
intended to persuade recipients to comply with work requirements
and to find jobs. Do they achieve this goal?
It is inherently difficult to answer
this question because many people respond to the threat of
sanctions and never actually experience them. Findings from
the National Evaluation of Welfare-to-Work Strategies conducted
by the Manpower Demonstration Research Corporation and published
in 2001 suggest that programs need to enforce work-related
mandates in order to obtain high rates of participation in
employment activities. In programs that did not closely monitor
attendance and rarely imposed sanctions, participation rates
were only slightly higher for adults in the group subject
to work mandates than for adults in the control group that
faced no mandates. Among the programs that enforced mandates,
however, higher sanction rates were not associated with higher
participation rates. Some observers contend that programs
that do a good job of communicating expectations to recipients
do not need to sanction as often.
Another way to examine the utility
of sanctions is to see how recipients respond after they are
sanctioned. Staff from the Florida Department of Children
and Families used administrative data to examine more than
3,000 cases that were closed due to sanctions in June 2000.
About 45 percent received cash assistance in the subsequent
6 months, probably by coming into compliance with program
rules (many of these clients also worked during the period).
Another 32 percent worked but did not receive any cash assistance
(in fact, most of these people also worked in the quarter
before the sanction was imposed). The remaining 23 percent
neither worked nor received cash assistance during the 6 months
after they were sanctioned, although a majority of them received
food stamps (figure 1).
These results provide further evidence
that there are distinct subgroups within the sanctioned population.
Some people respond to sanctions by coming into compliance.
Others respond by finding jobs-or continue to work in jobs
they had before they were sanctioned. In such cases, the sanction
may have allowed for early identification of individuals who
had already found jobs and stopped communicating with the
welfare office. Ten years ago, when there were fewer work-related
requirements, recipients' first scheduled appointment after
accepting a job would more likely have been a redetermination
interview and the welfare exit might have been classified
as eligibility-related. But simply taking a job and leaving
welfare without notifying the welfare office now often results
in losing food stamps, Medicaid, and other transitional benefits.
The people who neither worked nor
returned to welfare may have had other income not captured
in the administrative data. Even so, they are a cause for
concern. Among those who worked and did not receive welfare
in the second quarter after exit, nearly 40 percent earned
less than $1,500, suggesting that they were working part-time
or were unsteadily employed. The two categories of non-workers
and part-time workers account for a substantial minority of
the sanctioned clients, and add to the evidence cited above
which suggests that some portion of sanctioned clients may
face barriers to steady employment. Caseworkers interviewed
by the Office of the Inspector General reported that sanctions
are very effective for certain groups of recipients (e.g.,
those who are working off the books), but usually do not provide
motivation for clients facing multiple barriers to employment.
Do Full-Family Sanctions Work Better Than
Partial Sanctions?
It is not clear whether full-family
sanctions generate larger changes in recipients' behavior
than partial sanctions. It may be that most of the recipients
who are able to follow the rules are induced to do so by partial
sanctions. If that were true, full-family sanctions could
end up imposing greater penalties on people who are unable
to comply.
Some analysts have argued that full-family
sanctions are particularly important in the context of time
limits: when clients do not respond to partial sanctions,
they often end up exhausting their months of eligibility without
obtaining needed employment services. Others argue that full-family
sanctions increase the likelihood that families with the most
serious employment barriers will simply exit from welfare
without receiving needed services.
Unfortunately, there is very little
direct evidence to inform this debate. Many welfare-to-work
programs using partial sanctions have generated high rates
of participation in employment activities-and substantial
increases in employment and reductions in welfare use-but
there have been very few comparable evaluations of programs
using full-family sanctions.
One study by Robert Rector and Sara
Youssef of the Heritage Foundation in Washington, D.C. found
that states with strong work requirements and full-family
sanctions have experienced much larger welfare caseload reductions
than other states. This seems plausible, since full-family
sanctions result in more case closures, but the study does
not address whether the sanctions induced more people to work.
On the other hand, a study by Sandra Hofferth, Stephen Stanhope,
and Kathleen Harris of the University of Maryland did not
find an association between stricter sanction policies implemented
under waivers and work-related welfare exits (stronger work
requirements were associated with work exits).
Despite strong views on both sides,
at this point there is not enough solid evidence to draw firm
conclusions about the relative effectiveness of full-family
and partial sanctions.
Additional Reading
Fraker, Thomas, and others. 1997. Iowa's
Limited Benefit Plan: Summary Report. Washington, D.C.: Mathematica
Policy Research.
Hofferth, Sandra L., and others. 2001.
"Exiting Welfare in the 1990s: Did Public Policy Influence
Recipients' Behavior?" (Unpublished manuscript). College
Park: Department of Family Studies, University of Maryland.
Office of the Inspector General, U.S.
Department of Health and Human Services. 1999. Temporary Assistance
for Needy Families: Improving Client Sanction Notices.
Office of the Inspector General, U.S.
Department of Health and Human Services. 1999. Temporary Assistance
for Needy Families: Educating Clients About Sanctions.
Pavetti, LaDonna, and Dan Bloom. 2001.
"State Sanctions and Time Limits." In The New World
of Welfare, edited by Rebecca M. Blank and Ron Haskins. Washington,
D.C.: Brookings.
Rector, Robert, and Sarah Youssef. 1999.
The Determinants of Welfare Caseload Decline. Washington,
D.C.: Heritage Foundation.
Wisconsin Legislature Audit Bureau.
2001. Audit Summary: Wisconsin Works (W-2) Program (Report
01-7).
Goldberg, Heidi, and Liz Schott. 2000.
A Compliance-Oriented Approach to Sanctions in State and County
TANF Programs. Washington, D.C.: Center on Budget and Policy
Priorities.
Dan Bloom is a senior research
associate at the Manpower Demonstration Research Corporation.
Don Winstead was the welfare reform
administrator at the Florida Department for Children and Families
when this brief was written. He is now the deputy assistant
secretary in the Office of the Assistant Secretary for Planning
and Evaluation at the Department of Health and Human Services
(DHHS). Neither the Florida Department for Children and Families
nor DHHS is responsible for the views expressed in this brief.
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