The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) made unprecedented changes to the welfare system in the United States, eliminating the 60 year-old AFDC program and replacing it with a block grant to states to create the Temporary Assistance for Needy Families (TANF) program. A system that once emphasized the accurate delivery of cash benefits is now focused on encouraging families to make the transition from welfare to work. As a part of this shift, the range of circumstances in which families' welfare benefits can be reduced or canceled has dramatically increased. In particular, sanctions--financial penalties for noncompliance with program requirements--have become central features of most states' TANF programs. The primary goal of sanctions is to convince clients that there are immediate consequences associated with the decisions they make. Sanctions have long been used to enforce program requirements and, with the emergence of "full-family" sanctions that remove all of a family's cash grant, have taken on a much greater significance.
Although there is a general consensus that sanctions have been one of the most important policy changes implemented through state welfare reform efforts, they are among the least studied. In this paper, we summarize what is known about the role they play in welfare reform. The first section is a review of state TANF sanction policies. In this section, we use existing information to describe the structure and stringency of work-oriented sanctions, their cost, the context in which they are applied, and strategies to encourage compliance. The second section is a review of research findings on sanctions--including the incidence and duration of sanctions, characteristics and circumstances of sanctioned families, and the impacts and the implementation of sanctions. The final section concludes with a summary of the gaps in our knowledge of the role of sanctions in welfare reform. (author abstract)