The Temporary Assistance for Needy Families (TANF) block grant provides federal funding to states, tribes, and territories for a wide range of benefits, services, and activities to address both the effects of and the root causes of child poverty. It is best known for funding state cash assistance programs to families with children who are very poor. These programs—often called welfare programs—have historically been the focus of policy controversy and debate, and they remain the topic of most discussions of TANF. The 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ( P.L. 104-193 ), created TANF and culminated a decades-long evolution in policy about how to aid needy families with children, and under what circumstances. TANF replaced the Aid to Families with Dependent Children (AFDC) program, which was a cash assistance program for needy families with children. Most of these children were in families with a non-employed single mother. A major focus of the debates leading to the 1996 welfare reform law was how to move non-employed single mothers from welfare to work. TANF is a broad-purpose block grant with national goals. One of those goals is to end the dependence of needy parents on government benefits, in part by promoting job preparation and work. That goal is enforced by TANF's measure of program performance: the work participation standard. This report provides an overview of TANF's federal rules regarding participation in work and job preparation; shows the trends in the TANF work participation rate (WPR); and examines the degree to which non-employed TANF work-eligible individuals are engaged in welfare-to-work activities. The statutory purpose of the TANF block grant is to "increase the flexibility of states in operating a program" to achieve four statutory goals, which are to 1. provide assistance to needy families with children so that children may be cared for in their own homes or in the homes of relatives; 2. end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 3. prevent and reduce the incidence of out-of-wedlock pregnancies; and 4. encourage the formation and maintenance of two-parent families. States may use the TANF funds that finance benefits, services, and other activities to achieve that statutory purpose and any of the four goals. States may also count state expenditures made for TANF-eligible families on these benefits, services, and activities toward the TANF state spending requirement, known as the maintenance of effort (MOE) requirement. These benefits, services, and other activities go well beyond cash assistance for needy families and associated activities, such as work and job preparation activities. TANF funds can also be used for benefits, services, and activities for larger populations than just families receiving cash assistance. In FY2015, a total of $31.7 billion in federal TANF dollars and associated state funds was used on a wide range of expenditures. Basic assistance, which includes cash assistance, totaled $7.8 billion (about 25% of all federal and state TANF funds). Work program expenditures totaled $2.1 billion (6.7% of the total). The remaining TANF dollars included those spent on activities to support work (child care, refundable tax credits) and on an array of social services, including early childhood education (pre-K) and services for families in which the children have experienced, or were at risk of experiencing, abuse and neglect (child welfare services). These activities are broader than those that were financed in TANF predecessor programs, and they can fund benefits for populations other than those eligible for or receiving cash assistance. Note that even the $2.1 billion for work program expenditures might reflect services provided to persons in families with children who are not receiving cash assistance. As indicated on the figure, a major use of TANF funds is to support those in families with children, and who are already working, as opposed to the pre-1996 focus on supporting families with a non-employed single parent. The child care expenditures and refundable tax credits (e.g., state add-ons to the Earned Income Tax Credit) generally go to working families. Additionally, as discussed in this report, a greater share of those receiving assistance under TANF are working compared to those who received cash assistance under AFDC. The wide range of uses of TANF funds—and the ability to use state-funded expenditures for any program providing services to TANF-eligible families—mean that TANF is effectively not a single program, but a funding stream. That is, TANF federal and state funds may be directed to multiple state-level programs providing different benefits to different groups of families. The TANF statute applies the work participation standard to states with respect to families that receive TANF- or MOE-funded assistance. The statute itself does not define "assistance"; it is defined in regulations promulgated by the Department of Health and Human Services (HHS) as follows The term "assistance" includes cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs (i.e., for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses). The HHS regulations further defined some TANF activities that do not constitute assistance, such as child care or transportation aid for working families, refundable tax credits, and work subsidies. Short-term, one-time payments to meet emergency (i.e., not ongoing) needs are also not considered assistance. Because the TANF work participation standard applies only to families receiving assistance, it does not apply to the families that are aided by the bulk of TANF dollars (unless those families also receive assistance). Further, families that receive any benefit that meets the technical definition of assistance are counted when determining if states meet their work participation standards. Ongoing cash assistance—the monthly "welfare" check—is one form of assistance. As noted above, however, there are other forms of benefits that would also be considered assistance, such as food or housing benefits, that may be paid for out of TANF and state MOE funds. The federal TANF work participation standards apply to the states; it is the states that design the work participation requirements for individual recipients. In general, states can be expected to design their work requirements that apply to individuals with an eye toward meeting their work participation standard. States determine who to exempt from requirements, what types of activities to assign a recipient to, and how to sanction those who fail to comply with requirements. Most states ultimately end benefits for families with work-eligible individuals who fail to comply, though the two largest states (New York and California) do not end benefits for the children in families with a noncomplying individual. While the purpose of TANF is to increase state flexibility, the law does have provisions to hold states accountable for operating programs to meet national goals. The detailed mechanics of the TANF work participation standard, as well as a glossary of terms used in discussing it, can be found in Appendix A . The following are key elements of the standard: A numerical participation target set in the statute at 50% for all families and 90% for two-parent families. "Credits" against these statutory targets for caseload reduction and excess state spending. These credits reduce the numerical target and differ by state and year. A set of rules for calculating a state's work participation rate (WPR). Among these are rules to determine what families are included or excluded from the WPR. They also include rules that specify the activities that count toward the WPR and the minimum hours per week of participation required for a family to be considered "engaged in work" and count toward the state's WPR. States that fail to meet their work participation standards are at risk of being penalized. States can avoid or reduce their penalties for failing to achieve their minimum WPR by either claiming a reasonable cause or entering into a corrective compliance plan. If a state comes into compliance (i.e., meets its minimum WPR) within the timeframe of the corrective compliance plan, it is not penalized. States may meet their work participation standard in whole or in part through caseload reduction. Caseload reduction comes from having fewer families on the assistance rolls than in an earlier year. This might result from families leaving assistance faster, or fewer families coming onto the rolls. States may receive credit toward their work participation standard from caseload reduction by either means, regardless of whether fewer families receive assistance because of decreased need in the state, or whether that caseload reduction occurs even while need in the state is increasing. The TANF caseload reduction credit gives states a one percentage point reduction in their statutory work participation standard for each 1% decline in their caseload. Currently, states are given credit for caseload declines from FY2005 to the most recent prior year. That, is, caseload reduction credits for FY2015 are based on caseload declines from FY2005 through FY2014. However, states are not given credit for caseload reduction that results from changes in federal or state policies. In determining a state's caseload reduction credit, the state provides HHS with (1) its gross caseload decline and (2) an estimate of the effects of policy changes on that decline. The caseload reduction credit is given for net caseload reduction, after the effects of policy changes are factored out. For example, for FY2015 states would be given credit for net caseload declines from FY2005 through FY2014. If a state's net caseload decline was 25%, it would receive a 25 percentage point credit against its work participation standard.