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Separate State Programs and Solely State Programs There are two categories of programs not allowed to be paid from TANF funds, the Separate State Program and the Solely State Program. The Separate State Program counts toward meeting the state’s MOE but participants are not counted in the state’s work requirements. Solely State Program expenditures do not count toward the state’s MOE and the participants are not counted toward the work requirements. The programs are paid from General Funds. Separate State Programs Nebraska has two Separate State Programs for ADC recipients. The first exempts single- and minor parents from work requirements if they meet the following criteria: 1) pregnant women beginning the first of the month before the month of the mother’s due date are exempt. 2) parents or needy caretaker relatives, guardians, or conservators of children under 12 weeks old. The second program allows parents to pursue post-secondary education in lieu of work. Post-secondary education is not allowed to count towards meeting the federal work requirements. Solely State Programs In Nebraska those exempt from the work requirements and federal time limits under the Solely State Program are those where the adult or minor parent is incapacitated with a medically determinable physical, mental or emotional impairment or those who have significant barriers to participation in approved work activities. Those barriers include a parent who is needed to provide continuous care for a family member with a disability; victims of domestic violence, single parents who are unable to obtain child care, and parents over age 65. Work Requirements The states’ work participation rates are 50% overall and 90% for two-parent families. States can reduce the targets through caseload reduction credits. For every percentage point the state reduces its caseload below the FY 2005 level, the credit reduces the States target participation rate by one percentage point. Excess MOE spending serves as a caseload credit reduction. Nebraska has claimed child welfare funds, tribal TANF, respite care expenditures, the Earned Income Tax Credit and early childhood grants in the excess MOE calculation. Failure to meet the work participation rates would result in penalties. The first year a penalty is assessed, the block grant is reduced by 5% (approximately $2.9 million in Nebraska) and by an additional 2% (approximately $1.2 million in Nebraska) for each subsequent year of non- compliance. The state’s MOE would increase by the percentage decline in the block grant. In FFY 2006, the state barely met the work participation rate, placing the block grant funding at risk. Excess MOE has helped to eliminate the likelihood of a penalty being assessed against the state, especially the Earned Income Tax Credit which provides the majority of the offset to the work participation rates. Allowable Transfers Federal law allows transfers of the TANF Block Grant of up to 30% to the Child Care and Development Block Grant ($16,988,170) and up to 10% to the Title XX Social Services Block Grant ($5,662,726). The combined amount cannot exceed 30% of the grant ($16,988,170).