Work Participation Rate Calculation Changes: Recalibration of the Caseload Reduction Credit and Prohibition of Small Checks in Work Participation Rate Calculation
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The U.S. Department of Health and Human Services proposes to amend TANF regulations effective October 1, 2025, as required by the Fiscal Responsibility Act of 2023. The base year for calculating the caseload reduction credit will reset from fiscal year 2005 to fiscal year 2015, allowing states to potentially receive a larger credit for caseload declines since 2015 when determining if they meet the 50% overall and 90% two-parent work participation rates. Additionally, families receiving less than $35 per month in assistance funded solely by Separate State Program (SSP) funds will be entirely excluded from both the numerator and denominator of work participation rate calculations. These changes aim to update outdated benchmarks and prevent states from using nominal 'small checks' to artificially inflate their work participation rates.
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Key Changes
- Resets caseload reduction credit base year from FY 2005 to FY 2015 effective October 1, 2025
- Excludes families receiving less than $35 monthly in SSP-funded assistance from both numerator and denominator of work participation rate calculations
- Applies only to Separate State Program (SSP) funded benefits under $35; does not affect TANF or commingled MOE funded cases
+ 3 more changes with Pro
Obligations
What this law requires
Reset the base year for calculating the caseload reduction credit from fiscal year 2005 to fiscal year 2015, effective October 1, 2025
Exclude from both the numerator and denominator of TANF work participation rate calculations all cases receiving assistance payments of less than $35 per month funded solely by Separate State Program (SSP) funds, effective October 1, 2025
Recalculate state work participation rates using the new FY 2015 base year instead of FY 2005 for purposes of meeting the 50% overall and 90% two-parent work participation rate requirements
Submit written comments on the proposed rule amendments by May 6, 2026, if providing input
Include agency name and docket number ACF-2026-0265 or RIN 0970-AD07 on all comment submissions