Association for Public Policy Analysis & Management

States are able to exempt up to 20 percent of their Temporary Assistance for Needy Families (TANF) caseloads from time limits and work requirements due to family hardships without being penalized by the federal government. This formalization of flexibility and generosity within the TANF program is considered by many advocates and practitioners to be a critical part of helping the most vulnerable families. Despite the ability to grant this arguably large number of exemptions, the uptake of the hardship exemption varies considerably over time and across states, with some states claiming zero during some years and others claiming the full 20 percent.

The proposed paper provides an overview of states’ use of the TANF hardship exemption pre- and post-implementation of the Deficit Reduction Act and discusses hypothesized reasons behind the variations in uptake. This project examines hardship exemption rates in the 50 U.S. states and D.C. from fiscal year 2002 to 2015, yielding 714 state-year observations. We gathered data from three sources: DHHS Administration of Children and Families caseload data, the Urban Institute’s Welfare Rules Database, and the University of Kentucky Center on Poverty Research. Graphs and descriptive statistics are used to present trends over time and across states, followed by discussion of what was learned from linear regression models using hardship exemption rates as the dependent variable.

Findings reveal statistically significant relationships between hardship exemption rates and key independent variables measuring state economic circumstances and implementation decisions. For example, regarding implementation strategies, many states have devised extensive categories and guidance on granting exemptions. Some states instruct caseworkers to follow these rules closely while others allow caseworkers to make decisions on a case by case basis, and results suggest a connection between these practices and use of the federal exemptions.