Can a State use TANF funds to create a subsidized employment slot if the State determines that a wage subsidy is needed to prevent a TANF-eligible individual from being laid off?
A6: The TANF regulations at 45 CFR 261.70 explicitly provide that a State may not create a subsidized job slot when an individual is on layoff from the same or a substantially equivalent job, and that a State may not create a subsidized job slot when an employer has terminated an individual from employment or caused an involuntary reduction in its work force in order to fill the vacancy with a subsidized worker. Apart from these regulatory prohibitions, the program operates under the general principle that any expenditure of TANF funds must be reasonably calculated to accomplish the purposes of TANF. For example, we think it is reasonable to assume that if a State’s subsidized employment program provided a TANF-eligible individual with an employment opportunity that would not have been available in the absence of the subsidy, then the subsidized employment meets a TANF purpose. In some instances, a State could conclude that saving a job for a TANF-eligible individual would further the
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