TANF: Earned Income Disregard Q & A

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What is the purpose of the TANF 3 month Earned Income Disregard?
Research has shown that the first three months after TANF closure due to earnings are the most critical months for success or failure.   Much like SNAP’s transitional food benefit, the Earned Income Disregard provides a brief cushion of support during the transition from TANF to self-sufficient employment.  Most employers hold earnings back at least a week, and depending on the pay schedule it could be up to 2 months before an individual receives a full paycheck.  The Earned Income Disregard period will help alleviate some stress of meeting basic needs and assist in preparing to budget for rising rent and utility costs.  This will also allow the family to prepare for their family share co-pay for child care that will begin at the end of the disregard period  The ultimate goal is to promote  and reduce the number of people forced to return to TANF because their initial earnings are not high enough to meet all of their family’s needs.
Will every TANF participant that begins employment receive 3 additional months of TANF?
 No.

  • If the TANF recipient has less than 3 TANF months remaining before they reach their 60 month life time limit, the Worker will only allow the disregard period for the number of months it takes to reach the 60th month; or
  • If the TANF recipient failed to report new employment, the worker will need to prorate from the time the case would have been eligible to receive the Earned Income Disregard and only allow the number of months it would take to reach 3 months; or
  • Client earnings exceed $2,064 per month.
Does the TANF Client complete a time sheet (TW-13) during the Earned Income Disregard Period?
No. We do not require the TW-13 if employed. This to protect client confidentiality and prevent the employer from knowing the client is a TANF recipient.  Case notes are updated to show the number of hours and rate of pay.  From this calculation, the worker should have the information they need for each month of employment.  Each month the Worker must make a case note when they are entering participation hours.  If the client works less than verified, the client will come in to report the decrease of their income.
Do I have to code TANF Work Participation hours?
Yes. The Earned Income Disregard months count toward our federal and state TANF participation.  TANF work participation hours MUST be coded each month the client receives the earned income disregard.
Does a TANF recipient receive the Earned Income Disregard every time they start a new job?
No. The Earned Income Disregard is only available once in a 12 month period.  If a TANF recipient loses their employment before their disregard period ends, the remaining disregard months are forfeited for the year.
A TANF recipient received their 3 month earned income disregard 5 months ago, but lost their employment soon after. The TANF recipient now has new earnings that will close the case. Do I give them the 3 month earned income disregard again?
No.  The Earned Income Disregard is only available once every 12 months.  If they received an earned income disregard any time during the last 12 months they are not eligible.  The Worker will need to close the case on Reason 03 as with any other earned income case closure.
How do I know what month to start the Earned Income Disregard?
The same policy is applied to the determining the Earned Income Disregard as in applying any other change.  The earnings should be diverted beginning the next effective date.
Is my client still eligible for Flex Funds during the 3 month disregard?
Yes.
Does the Earned Income Disregard count against the 60 month lifetime limit?
Yes.
My TANF client requested his TANF closed when he obtained employment and does not want the additional TANF months. What do I do?
The Worker should:

  • Counsel with the client and explain the benefit of the additional TANF months.
  • Explain to the client the process is as follows: The computer automatically sets it up this way for the benefit of the client. The client does not get a choice in the process. This will still provide the family with CMB benefits for up to one year following the 3 months or Earned Income Disregard.
How do I know when to close the TANF case?
It is important for the Worker to document in case notes the beginning and scheduled end dates.  The computer will close the case automatically after the third month on “Earned Income” (03) and place the case into Continued Medical Benefits (CMB). Worker should have also opened an employment authorization so that hours of participation may be entered. The review date should be set for the final month to close that authorization.
Will my TANF clients have to pay a child care co-pay during the earned income disregard period?
No.   The individual will still be a TANF recipient and will have no child care co-pay until the case is closed at the end of the earned income disregard period.
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