TEXAS WORKFORCE COMMISSION LETTER
ID/No: WD 27-00
Date: March 14, 2000
Key Word: TANF/Choices
To: Local Workforce Development Board Executive Directors
Commission Executive Staff
Commission Local Offices
From: Jean Mitchell, Director of Workforce Development
Subject: New Earned Income Deduction Requirements for Temporary Assistance
for Needy Families/Choices Participants
To provide information to Local Workforce Development Boards (Boards) on the
new Earned Income Deduction (EID) requirements for Temporary Assistance for
Needy Families (TANF)/Choices participants.
General Appropriations Act, 76 th Legislature, Regular Session, Rider 31,
Article II, Texas Department of Human Services
In May 1999, House Bill 1, the General Appropriations Act, was passed by the
76th Texas Legislature. It required the Texas Department of Human Services
(TDHS) to increase EIDs for TANF clients. Under EID, clients‟ earnings are
disregarded for four months following employment. The new deduction is
designed to ease the transition from welfare to work by allowing clients to retain
additional money to help them cover new expenses related to employment.
PARTICIPATION REQUIREMENTS FOR EID:
All TANF recipients who enter employment can elect to use the EID. To promote
access to needed post-employment services, all TANF recipients who receive the
EID must participate in the Choices program, even if not enrolled in the Choices
program at the time of employment. The participation requirement for clients who
are working at least 30 hours per week and earning at least $700/month is limited
to reporting the hours of employment to Choices staff.
Clients working at least 30 hours per week but earning less than $700/month are
also required to participate in Choices services. Their participation is not limited
to reporting employment hours; other Choices activities must be assigned as
required to meet the client's required hours of participation.
All recipients who receive an EID are included in the denominator in calculating
Choices work participation rates.
Requiring participation in Choices presents new opportunities for Boards to offer
post-employment services to clients receiving the EID and to their families.
These services may be funded with TANF dollars or with Welfare-to-Work
(WtW) dollars if the clients are WtW eligible. A connection to the Texas
Workforce Centers can provide families with resources to assist them in
maintaining and enhancing their careers, particularly those who did not enter
employment through the Choices program.
CHANGE IN DEFINTION OF WORK CODE “M”:
All clients are assigned a work code by TDHS. This work code is used by Boards
to identify (among other things) clients who are mandatory Choices participants.
Clients with a “M” work code are mandatory Choices participants and should be
outreached for services. Historically, clients who were assigned a work code "M"
were nonexempt clients age 16 through 59 who worked less than 30 hours per
week (or not at all) and lived in a mid- or full-service county.
Effective March 1, 2000 clients who work 30 hours (or more) per week but earn
less than $700/month are no longer exempt. They will be assigned work code
"M" and will be mandatory Choices participants in mid- or full-service counties.
CHANGE IN DEFINITION OF WORK CODE “P”:
Under previous TANF policy, clients who obtained employment 30 hours per
week or received earnings equal to 30 hours (multiplied by the federal minimum
wage) were assigned a work code "P". These clients were exempt from
participation, but were eligible to volunteer for Choices services. However, in
many cases, a client's voluntary participation was impacted by a denial of TANF
benefits due to earnings.
Effective March 1, 2000, the “P” work code was redefined to include clients who
earn $700 or more per month. The “P” work code has been modified in The
Workforce Information System of Texas (TWIST) as follows:
Old Definition of “P” New Definition of “P”
Effective Through 2/29/00 Effective as of 3/1/00
Employed 30+ hours/wk (or Mandatory Employed
Earning the equivalent of 30+ hours/week@$700+/month
30 hours x federal minimum
WD Letter 27-00 2
With the implementation of the new EID policies, clients with a "P" work code
are included in the Texas TANF/Choices participation rate and subsequently, in
each Board's participation rate.
OUTREACH AND SERVICE DELIVERY PROCEDURES:
Although all clients with a “P” work code are mandatory Choices participants
(effective March 1, 2000), not all of these clients may have been enrolled in the
Choices program prior to their employment. For clients who were already
participating in Choices activities, Boards should continue to track their
participation (now in unsubsidized employment) and determine if clients are in
need of additional education, training, or support services. Boards should track
these additional services in TWIST.
Clients who were not previously enrolled in the Choices program will have to be
outreached and notified of their responsibility to report hours of employment.
The type of outreach should be determined locally, but must be flexible to
accommodate clients‟ employment schedules. Outreach and contact may be
conducted via the telephone, a letter, a home visit, or any other locally developed
All clients with a “P” work code should be given the opportunity to access
Choices post-employment services to enhance their employability. A
comprehensive career enhancing employment plan should be discussed with
clients during the initial contact. Discussions with clients should include not only
their requirement to report employment hours but also address any additional
education, training, or support services clients need to maintain and succeed in the
Most clients with a “P” work code, without an open Choices case, will appear in
the TWIST Outreach Pool. As mandatory Choices eligibles, they must be
outreached in the Choices program and their hours of employment recorded in
TWIST. Boards have the option of determining the procedure for documenting
employment hours and retaining the information in case files.
The Texas Workforce Commission (Commission) recommends that clients fill out
a weekly timesheet indicating the number of hours worked, sign this timesheet
and submit it to their caseworkers each week for maintenance in the clients‟ case
files. The Commission also recommends that Boards conduct a random sample of
these timesheets and verify with employers that the hours were reported
accurately. This procedure will provide a documented basis for the validity of
this self-reported client employment information.
In some cases, clients will not appear in the TWIST Outreach Pool. Currently
when cases are closed for any reason, eligible clients are „recycled‟ in TWIST and
reappear in the TWIST Outreach Pool within one to three months (as designated
by the Board). Clients with a “P” work code who are not enrolled in activities
will need to be outreached as quickly as possible because they are in the
participation rate denominator.
WD Letter 27-00 3
In order to identify any mandatory clients with a “P” work code who do not
appear in the TWIST Outreach Pool, Boards should use the automated TANF
Performance Report, that identifies the total eligible universe. This report will
identify all clients with a “P” work code.
After all clients with a “P” work code are identified, they can be sorted into three
1. Cases in TWIST (either open cases or cases with no activity): These clients
should continue to be contacted to report hours of employment.
2. In the TWIST Outreach Pool (and can be automatically outreached via
TWIST): These clients should be outreached and notified of their
participation requirements and other available services.
3. Neither an open case in TWIST nor in the TWIST Outreach Pool: These
clients should be manually outreached because they do not appear in the
automated TWIST Outreach Pool. They are mandatory Choices participants
and should be notified of their participation requirements and other available
Choices services. Once clients have responded, staff can „force open‟ or
'recycle' a case in TWIST to track the client's employment (participation)
SANCTION FOR FAILURE TO REPORT HOURS:
If clients do not respond to outreach or report hours of participation, they are in
violation of their required participation. A sanction should be initiated at once. If
a sanction is not initiated, the clients will remain in the Board‟s participation rate
Although participation of clients coded "P" is limited to reporting their hours of
employment, other Choices services (work activities, support services, etc.)
should be offered to clients to support their employment. However, clients‟
participation in other work activities is not subject to sanction because it is
Effective immediately, Boards will need to do the following:
Establish procedures for identifying all clients with a “P” work code.
Determine the method of contact (i.e., written correspondence, telephone
contact, extended office hours, etc.) that will be used to interact with clients
with a “P” work code.
Notify all clients with a “P” work code of their new participation
Offer additional Choices services to clients to enhance their employability and
to have those services reflected in career enhancing employment plans.
WD Letter 27-00 4
Establish procedures for verifying weekly hours of employment (e.g., provide
clients with a locally developed form, require at least four consecutive pay
stubs if clients are paid weekly, two if clients are paid biweekly, etc.)
Continue to verify eligibility monthly (TANF grants could potentially be
denied before or after the four-month EID period expires).
Sanction clients who fail to respond to outreach or fail to report hours of
Provide a list of other services available at the Texas Workforce Centers for
clients and their families.
Boards should ensure that information about the new EID requirements are shared
with appropriate staff members.
Direct inquiries to Sharon Roland via e-mail at email@example.com or
at (512) 936-3161.
Rescissions: None Expiration: Continuing
WD Letter 27-00 5