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 Aid to Families with Dependent Children (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 focused on the accurate delivery of cash benefits now focuses on encouraging families to make the transition from welfare to work. Part of this shift translates into a dramatic increase in the range of circumstances in which families' welfare benefits can be reduced or canceled. In particular, sanctions--financial penalties for noncompliance with program requirements — have become central features of most states' efforts to promote self-sufficiency through their TANF programs. A primary goal of work-oriented sanctions is to encourage TANF recipients who might not be inclined to participate in work activities to do so. A secondary goal is to encourage greater reporting of earnings, especially among families who work in jobs where earnings are not reported through official channels. The logic behind sanctions is that adverse consequences can be used to influence the decisions clients make. Sanctions have long been used to enforce program requirements. However, with the emergence of "full-family" sanctions that eliminate all of a family's cash grant, the imposition of work requirements on a greater share of the TANF caseload and greater emphasis on encouraging TANF recipients to become self-sufficient, they have taken on much greater significance.
While consensus holds that sanctions have been an important policy change implemented through state welfare reform efforts, they are among the least studied. Additional information on the role sanctions have played in welfare reform can help inform policy discussions regarding whether all states should be required to impose more stringent sanctions and help program administrators identify strategies for using sanctions to promote greater compliance with program requirements. This report presents findings from a study of the use of sanctions in two local welfare offices in each of three states — Illinois, New Jersey, and South Carolina. In this chapter, we provide a brief context for the study, outline the study design, and describe the study states. Chapter II presents our findings on how the study sites implemented sanctions. Chapter III describes our findings on how often sanctions are used, how the characteristics of sanctioned and nonsanctioned families compare, and how sanctioned families fare over time. Finally, Chapter IV summarizes our findings and identifies important unanswered research questions. (author abstract)