The purpose was to provide incentives for welfare recipients to find employment. The bill requires adult welfare recipients to either be employed or enrolled in a job training program. Each episode of assistance is limited to 2 years and lifetime assistance is limited to five years. Importantly, the federal government now gives states incredible freedom in setting eligibility and support amounts. As a result, states are experimenting with new ideas about how to encourage people to work.
Early results appear promising.
Welfare caseloads fell dramatically since 1998 and many welfare recipients found employment. However, many households have seen a drop in their total incomes even after including TANF awards. Those who have still not found work may have little hope of doing so. Reform supporters claimed that the caseload decline was the result of work incentives built into the law. The opposition wonders what will happen to caseloads once the economy starts toward recession.