Resources
                                                         For Welfare Decisions
Vol. 6, No. 11                                                                                                                      July 2002
Applicant Diversion -- Recent Developments

Applicant diversion policies are intended to assist families to avoid welfare by helping to overcome short-term barriers to employment and self-sufficiency.  The Temporary Assistance for Needy Families (TANF) program allows states to design their own diversion program and provide this assistance for four months before federal work requirements, child support, reporting requirements and the federal time limit are triggered.  States have used this discretion to provide welfare applicants with short-term payments to address emergency needs; require applicants to search for a job for some period of time before becoming eligible for TANF; to refer applicants to other agencies for crisis intervention, job-related support or other services; and to provide vouchers to pay for child care, housing, transportation, food, and other daily or employment-related needs.    

Individuals who accept cash diversion payments usually are not eligible for TANF assistance for a period of time equivalent to the amount of the cash benefit.  However, they may still qualify for food stamps and Medicaid assistance, although they may not be aware of their eligibility for those programs.  Therefore, states have increased their efforts to notify diverted welfare applicants of the availability of food stamps, Medicaid and other forms of assistance. 

According to the U.S. Administration for Children and Families, 33 states offered some form of diversion cash payment in fiscal year 2000.  The majority of states with cash diversion programs also referred TANF applicants to job search or placement activities and/or alternative programs for additional services; two give their counties the option to do so.  For more information, see U.S. Department of Health and Human Services, April 2002 at http://www.acf.dhhs.gov/programs/opre/ar2001/chapter13.htm.

This Resources for Welfare Decisions supplements an earlier WIN publication, Applicant Diversion and Welfare Reform, available at http://www.welfareinfo.org/pamresourceoct.htm.  For additional information, visit the Welfare Information Network web site on Applicant Diversion at http://www.welfareinfo.org/applican.asp.

Publications and Electronic Resources

Administration for Children and Families.  Supporting Families in Transition.  A Guide to Expanding Health Coverage in the Post-Welfare World.  (Washington, D.C.: U.S. Department of Health and Human Services, March 1999) at http://www.cms.hhs.gov/medicaid/welfareref/welfare.asp.

Besharov, Douglas and Peter Germanis.  Welfare Reform: Four Years Later.  (College Park, MD: Welfare Reform Academy, 2000) at http://www.welfareacademy.org/pubs/four_yea.cfm.

Busansky, Phyllis.  Florida's Business Leaders Face Biggest Challenge in Welfare Reform.  (Indianapolis, IN: Hudson Institute, August 2, 2000) at http://www.hudson.org/index.cfm?fuseaction=publication_details&id=67.

Congressional Research Services.  Welfare Reform: Diversion as an Alternative to TANF Benefits.  (Washington, D.C.: Congressional Research Service, March 2001) at http://pennyhill.com/welfare/RL30230.html.

Golonka, Susan.  State Policy Options for Health Care Coverage for Families On, Leaving, or Diverted from Welfare and Other Low-Income Families.  (Washington, D.C.: National Governors Association, September 2000) at http://www.nga.org/cda/files/LOWINCOME.PDF.

Lower-Basch, Elizabeth.  “Leavers” and Diversion Studies: Preliminary Analysis of
Racial Differences in Caseload Trends and Leaver Outcomes.  (Washington, D.C.: U.S. Department of Health and Human Services, December 2000) at http://aspe.hhs.gov/hsp/leavers99/race.htm.

Office of the Assistant Secretary for Planning and Evaluation.  Leavers and Diversion Studies Web Page.  (Washington, D.C.: U.S. Department of Health and Human Services, March 2002) at http://aspe.hhs.gov/hsp/leavers99/index.htm.

Office of the Assistant Secretary for Planning and Evaluation.  Status Report on Research on the Outcomes of Welfare Reform.  (Washington, D.C.: U.S. Department of Health and Human Services, July 2001) at http://aspe.hhs.gov/hsp/welf-ref-outcomes01/index.htm.

Richardson, Phil, et al.  TANF Recipients, Leavers, and Diverters in North Carolina -- Final Report of Administrative Data.  (Reston, VA: Maximus, Inc., June 2001) at http://www.cortidesignhost.com/maximus/cpss/TANF_Recipients_Leavers_and _and_Diverters_in_North_Carolina-Final_Report_of_Administrative_Data.pdf.

Sherman, Amy.  The Lessons of W-2.  (Indianapolis, IN: Hudson Institute, June 2000) at http://www.hudson.org/index.cfm?fuseaction=publication_details&id=122.

Tecco, Mark and Frances Jackson.  Welfare Leavers and Diverters Research Study: Case Studies of Welfare Leavers and Diverters (South Carolina).  (Reston, VA: Maximus, Inc., October, 2001) at http://www.cortidesignhost.com/maximus/cpss/Case_Studies_of_Welfare_Leavers_in_South_Carolina.pdf.

U.S. Department of Health and Human Services.  Specific Provisions of State Programs – Temporary Assistance for Needy Families Program Fourth Annual Report to Congress.  (Washington, D.C.: U.S. Department of Health and Human Services, April 2002) at http://www.acf.dhhs.gov/programs/opre/ar2001/chapter13.htm.

Urban Institute.  Fast Facts on Welfare Policy -- Formal Diversion Programs.  (Washington, D.C.: Urban Institute, June 2002) at http://www.urban.org/UploadedPDF/900523.PDF. 

Valvano, Vincent, et al.  Evaluation of the Colorado Works Program. Third Annual Report, Part 1: Diversion Programs and Work Activity Participation.  (Berkeley, CA: Berkeley Planning Associates, August 2001) at http://www.cdhs.state.co.us/oss/CWP/index2.html.

Welfare Information Network.  Diversion, Benefits and Assets.  (Washington, D.C.: Welfare Information Network, June 30, 2001) at http://www.welfareinfo.org/Diversion.htm.

Zedlewski, Sheila R.  Are Shrinking Caseloads Always a Good Thing?  (Washington, D.C.: Urban Institute, June 13, 2002) at http://www.urban.org/UploadedPDF/Shorttakes_6.pdf.

Resource Contacts

What States are Doing

Iowa - Families applying for assistance through the Family Independence Program (FIP) are advised of other benefits that might enable them to avoid welfare.  In addition, the state has several diversion programs that provide immediate, short-term funds or services to assist FIP applicants address employment barriers.  The Pre-FIP Diversion program operates in specified areas of the state and provides short-term benefits, in the form of cash or vendor payments, vouchers, and/or non-cash services, to candidates with identifiable employment barriers.  The benefits address issues related to transportation, shelter, utilities, employment-related expenses, and child care.  Family Self-Sufficiency Grants are available statewide to help FIP participants pay for products or services that can help them to keep or accept employment, but are not available through other sources or approved under FIP.  Examples of locally-determined benefits include payments for car repairs or maintenance, relocation expenses, telephone hook-up charges, licensing fees, short-term child care, and purchase of special clothing related to a job or interview.  Families receiving payments are expected to obtain or retain employment within two calendar months.  Post-FIP Diversion provides up to 12 months of services to help stabilize or improve the employment status of families leaving FIP to reduce the likelihood of the family returning to cash assistance.  Services are defined by localities and may include some limited cash assistance to help meet a short-term need or overcome a barrier.  Contact the Family Investment Program at 515/281-3163.

Maryland gives counties the option to offer Welfare Avoidance Grants (WAG) to applicants for cash assistance.  Each county sets its own criteria for determining eligibility for a WAG and may require that applicants engage in job search activities.  Families that receive a WAG are not eligible for TANF assistance.  Local welfare agencies also may offer child care and Medical assistance as an alternative to cash assistance.  Individuals receiving this type of assistance who find a job within three months and have a child under the age of thirteen are eligible for Transitional Medicaid and Child Care Assistance.  These services are paid out of the state’s Child Care and Social Services Block Grants.  Contact the Maryland Family Investment Administration at 410/767-7338.

Montana offers a lump sum payment, as an alternative to cash assistance, to eligible applicants who are employed or have some form of income, including child support.  The payment is intended to assist with employment-related expenses, but is not subject to TANF-related work or time limit requirements.  In addition, the state has liberalized its income and eligibility criteria for Medicaid and simplified the eligibility requirements for Transitional Medicaid Assistance (TMA).  The TMA simplification expands Medicaid coverage to individuals who have received diversion payments or other assistance but do not meet the federal requirement that they receive cash benefits for 12 months.  Contact Karlene Grossberg at 406/444-1917.

North Carolina’s Benefit Diversion program targets families coping with a temporary crisis associated with employment.  To qualify for the diversion benefit, the crisis situation must be related to maintaining or accepting employment, have occurred during a short break between jobs, or be related to receipt of financial resources that could meet the family's needs (such as SSI).  Benefit Diversion is an optional package of services that includes a one-time, needs-based payment equal to a maximum of three months of cash assistance; Medicaid and Food Stamps; referrals to child care, child support, and other community and agency resources; and employment services.  Contact the North Carolina Division of Social Services at 919/733-3055.

Washington -The Washington WorkFirst program explores alternatives to TANF cash assistance (such as child support, re-employment or a diversion grant) for applicants facing a temporary emergency.  The Diversion Cash Assistance program provides cash to help families get through the emergency situation and to prevent them from needing ongoing public assistance.  The money may pay for utility and rent bills, transportation, employment-related expenses, food, medical care and childcare.  Families can receive up to $1,500 in Diversion Cash Assistance once in a year.  Applications are processed by eligibility specialists who also determine whether families qualify for food stamps and Medicaid.  Contact Phyllis Lowe at 360/413-3200. 

WIN Staff Contact: Jan Kaplan 202/628/5790 or welfareinfo@welfareinfo.org.

 

The Welfare Information Network is supported by grants from the Annie E. Casey Foundation the Charles Stewart Mott Foundation, the David and Lucile Packard Foundation, the William and Flora Hewlett Foundation, the Ford Foundation, and the Administration for Children and Families, U.S. Department of Health and Human Services.