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Maine says it’s reduced welfare penalties to $1.8 million

October 2, 2018

PORTLAND, Maine (AP) — Maine has largely avoided $28 million in federal penalties by making sure enough welfare recipients are working, according to a Sept. 25 letter obtained by The Associated Press from Republican Gov. Paul LePage’s administration to lawmakers.

Republican Gov. Paul LePage’s administration told lawmakers last week that Maine now only faces $1.8 million in fines for not meeting federal standards over the last decade. Department of Health and Human Services Acting Commissioner Bethany Hamm told the Legislature’s Government Oversight Committee that federal penalties for the fiscal years ending in 2012 through 2015 have been eliminated while federal regulators have “drastically reduced” penalties for the 2008 through 2010 fiscal years.

Maine and other states have struggled to meet the federal work participation rate of at least 90 percent of two-parent households receiving federal Temporary Assistance for Needy Families, or TANF. Maine has for years met another requirement to show that 50 percent of those receiving federal cash benefits are working.

“By successfully correcting failed attempts of the past, the significant improvement in TANF’s work participation rates highlights this administration’s continued commitment to supporting Mainers in their path to becoming self-sufficient,” said Acting DHHS Commissioner Bethany Hamm in a recent press release.

Federal regulators allow states to dispute the penalties or reduce them through corrective action plans. The penalties would end up in reduced future federal funding.

Maine Equal Justice Partners senior policy analyst Joby Thoyalil said Maine is meeting federal standards by providing a $15 monthly cash benefit to working families who receive food assistance. Maine is among many states that have had to resort to such legal tactics to meet federal standards, according to Thoyalil, who noted that both the conservative think tank American Enterprise Institute and the liberal-leaning Center on Budget and Policy Priorities have called for reform.

“The rates themselves that are required under federal TANF law are widely regarded as unmeetable because they’re so stringent,” Thoyalil said.

LePage’s administration cited the looming federal fines when Maine moved to privatize its welfare-to-work program in 2016. The administration says it’s working with the vendor Fedcap, to meet federal work participation rates without including families receiving the monthly cash benefit.

Congress is considering a bill to move away from the federal work participate rate and hold states accountable for meeting specific outcomes, like how many former recipients are employed months after leaving the program.

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