1. To document how well the demonstration was implemented;
2. To determine the impacts of the ACT waiver policies on a number of public assistance, economic and child outcomes; and to report participants’ views of welfare reform.

The ACT demonstration included the following components:

1. State Time Limits- Adult TANF recipients were assigned one of three time limit tiers (12, 24, 36 months) based on their educational attainment and work history.
2. Expanded TANF eligibility rules- ACT expanded TANF eligibility for certain low-income families.
3. Personal Responsibility Agreement — Caretakers were required to sign a personal responsibility agreement (PRA) as a condition of TANF eligibility. In counties with a Choices program, state time limits also applied. The PRA states the client will:
   • Cooperate with child support requirements
   • Provide immunizations and regular check ups for children
   • Refrain from voluntarily quitting their job
   • Participate in an employment services program.
   • Refrain from drug use and alcohol abuse
   • Provide proof of school attendance for each child
   • Participate in parenting skills classes if referred
   
   Those not complying received financial penalties.
4. One time cash payments in lieu of TANF — Allowed certain TANF eligible families who also met certain criteria crisis to obtain a one time payment of $1000 instead of TANF. This benefit was available to all eligible families and was not designed as a randomized experiment.

• The Time Limits (TL) pilot,
• The Responsibilities, Employment and Resources (RER) pilot in counties that were operating a workforce development program for TANF recipients in 1996 (RER Choices),
• The RER pilot in counties without a TANF workforce development program in 1996 (RER non-Choices).

Individuals were assigned from June 1996 through September 2000.

Other subgroup analysis

1. Four-year analysis: persons assigned early enough in the program so that four-year analyses could be conducted.
2. Before/After policy analysis changes analysis: persons assigned before and after several key policy changes that occurred during Oct 1999 and March 2000.
3. Tier group analysis — persons with varying levels of work and educational histories.

Eligibility-
Expanded eligibility rules including the disregard of children’s earnings and resources in the calculation of family benefits, increased resource limits permitted for eligibility determination, and the elimination of the work history requirement and 100-hour work rule for TANF-Unemployed Parent (TANF-UP) families.

Employment Activities-
As part of the personal responsibility agreement, a client could not voluntarily give up a job.

Financial Incentives:
Earnings disregards- Disregard of children’s earnings and resources in calculation of family benefits.
Direct Payment to Recipient — One Time Cash payment in lieu of TANF.
Transitional income benefits-Time limited transitional cash assistance ranging from 12-36 months depending on the recipients work history and educational attainment.

Program Requirements:
Personal Responsibility Agreement requirements include:Choices program attendance; Child support; Health screenings and immunizations for children; School attendance; Parenting skills classes; Refrain from selling and abusing illegal substances; not voluntarily quitting any job that offers more than 30 hours of paid work.

Support Services:
Time limited Transitional benefits-
12 months of transitional childcare and Medicaid for those who have reached the time limit.
18 months for those who voluntarily enter the CHOICES program.

Time Limits:
Time-limited benefits-Three tiered (12, 24, 36 months) state TANF limit benefits

Data was collected from June 1994 to December 1997.

Data prior to September 1997 was not available.

• Impacts on public assistance receipts from the ACT demonstration were small but significant.
• The ACT demonstration increased employment rates for some groups but had no effect on caretakers earnings.
• Weak overall impacts sometimes masked subgroup differences, especially by tier group.
• Staff and clients support the concept of time limits but the rules are too complex to understand.
• The interaction of state and federal time limits will result in the most disadvantaged families being the first to reach lifetime time limits on Texas TANF receipt.
• The increased use of financial penalties did not change most of the behaviors governed by the personal responsibility agreement.
• Most of the TANF caseload decline from 1995-1999 was not due to ACT waiver provisions.
• Impacts from this demonstration differ from those in other states but the mix of services is not comparable.
• A number of factors may have contributed to the small size of the impacts of the demonstration.
  • The structure of TX time limit policies with its many exemptions from state time limits.
  • Client confusion about the details and intent of both the time limit and PRA policies
  • Clients paying more attention to their immediate needs rather than future consequences embedded in these policies.
  • The exclusion of policies that supported employment from the set of policies included in the ACT demonstration

More specifically:

• Texas time limits caused small reductions in TANF receipt, slight increases in enrollment in Medicaid and transitional benefits but no change in use of food stamps.
• Persons facing TANF time limits received PRA penalties less often than other caretakers but differences were very small. For both groups, about two months of every year on TANF were spent in penalty status.
• The impacts of time limits differed by tier.
• Time limits caused a very small increase in caretaker employment but had no effect on overall quarterly earnings. Time limits affected Choices participation differently for short and long-term recipients and by tier.
• Time limits slightly increased the number of months in which child support was collected but produced no differences in other family or child outcomes.
• Expanded TANF eligibility rules allowed more working but very poor two-parent families onto TANF in the site with the highest share of Hispanic families.
• The personal responsibility agreement rules resulted in large increases in financial penalties, compared to earlier TANF sanctions.
• The combination of state time limits and the PRA produced small gains in caretaker employment and total family earnings, but had no impact on caretaker earnings.
• The combination of time limits and the personal responsibility agreement caused small increases in child support collections but few impacts on other family and child measures. This lack of impacts occurred even though many penalties were imposed for not complying with PRA provisions related to these outcomes.
• The personal responsibility agreement produced no overall impacts on the use of children’s TANF or Medicaid but increased caretakers’ time on TANF and Medicaid due to PRA rules. Use of food stamps declined for families subject to PRA
• Families subject to the PRA spent more time in penalty status.
• The PRA produced no overall impact on employment or earnings.
• No impacts were found in school attendance rates, most of the child support measures, or immunization rates, despite experimental groups being subject to PRA penalties in this area.
• Families typically needed one time payments due to losing their unemployment and used these payments to cover a one time emergency expense or to purchase or repair a vehicle.
• One time payments produced in few changes in household budgeting, employment, access to education and training, or access to child care.
• One time payments were not used to support persons outside the household.

Final Implementation Findings:

• An automated system assigned and tracked participation in this demonstration properly. This system provided consistency during a period when eligibility workers did not fully understand the complex rules of the ACT demonstration.
• Exemption from workforce services was the main reason that clocks did not ‘tick’ in the two experiments with state time limits.
• Staff initially had difficulty understanding and explaining ACT time limit provisions to clients, but their performance in this area improved over time.
• Clients understood that there were time limits but few knew what would happen to their benefits (TANF, food stamps, Medicaid) when they reached theirs.
• Workers explained personal responsibility agreement provisions accurately, but clients still did not understand the intent of the PRA or the consequences of not complying with its requirements.

Time Limits:

• After over five years of operation, the time limits experiment produced statistically significant but small reductions in TANF receipt coupled with small increases in the use of Medicaid and transitional benefits.
• Employment rates increased slightly but self-sufficiency earnings declined slightly.
• Few impacts on workforce development participation or family and child indicators were observed.
• Reduced TANF use and employment and child support collections gains were greatest among those who were best prepared to enter the workforce and those with short histories of welfare receipt.

Responsibilities, Employment and Resources:Choices Program:

• Three of the four RER sites in the Choices counties produced significant but varying impacts on welfare dynamics, large increases in financial penalties, slight gains in employment rates and family earnings, small reductions in Choices participation, increased use of child care subsidies and collection of child support but no impact on other adult and child outcomes.

• Non choices counties showed no consistent effects on the use of TANF benefits, slightly increased Medicaid receipt, and reduced the use of food stamps.
• Although there were no overall gains for employment or earnings, both increased for Tier 3 caretakers.
• While no differences were observed for families, experimental families used subsidized child care more often.

Time Limit experiment

• Test of random assignment revealed no significant differences between the two groups.
• After analyzing welfare dynamics, self-sufficiency, participation in workforce development services, and use of subsidized child care, positive net impacts were observed only for transfer from TANF cash benefits to transitional benefits and the percentage of cases using subsidized child care each month.

RER Choices Experiment

• Tests of random assignment revealed no significant differences between the two groups.
• In the first 19 months of the RER experiment in Choices counties, a statistically significant difference in the proportion of time spent on welfare was observed, with the experimental group spending less time on TANF than their counterparts in the control.
• There was a relatively small difference in the overall caretaker exit rates for the two groups.
• A statistically significant difference in the rate of welfare recidivism in the year following exit was observed between the experimental and control groups.
• A small but significantly significant difference in the rate of Choices participation is observed.
• There was no significantly significant difference in the rate of child care usage among the two groups.
• A statistically significant difference was shown in the rate of transfer to medical assistance-only status, transitional benefit-only status, and to payee only status.

RER Non-Choices experiment

• While no significant differences existed between the sizes of the groups, there were some differences in the demographics of the groups.
• Analysis of welfare dynamics from the first year found that the experimental group spent significantly less time on TANF than their counterparts.
• No statistically significant differences were found for any of the other welfare exit measures.
• No statistically significant differences were found for employment, earnings, or childcare measures.

• Texas time limit policies should be simplified and the groups to whom they apply should be re-examined.
• In their current form, personal responsibility agreement penalties in TX have little value as a behavior modification tool for affected families and should be re-evaluated.
• The implications of the increased number of “child-only” cases on low income families and TANF related policies should be explored.
• Existing TANF policies should be examined to assess whether they meet the needs of long term TANF recipients and those with more limited workforce qualifications.