Temporary Assistance for Needy Families - TANF
Basic Concept:
TANF is a program funded by a federal block grant given to the states which in turn provide cash assistance and other services to low income families
TANF Services:
TANF replaced the Aid to Families With Dependent Children (AFDC) program in 1996
Unlike AFDC which dealt solely with cash assistance, TANF has four broad goals: 1
Provide assistance to needy families so that children can be cared for in their own homes
Reduce the dependency of needy parents by promoting job preparation, work and marriage
Prevent and reduce the incidence of out-of-wedlock pregnancies
Encourage the formation and maintenance of two-parent families
Because these goals are more general, states are able to use TANF funding in many different ways as long as they fit within these constraints
TANF funding goes to areas such as:
Basic assistance (such as cash payments and vouchers)
Work, education, and training activities (such as GED classes or job skills training)
Child Care
Refundable Tax Credits (like state EITCs)
Out-of-Wedlock Pregnancy Prevention
Multiple other programs
Although TANF replaced a basic assistance program, less than ¼ of TANF funds went towards basic assistance and about ½ went to core programs in FY 2017 (see chart)
*All data comes from the U.S. Administration for Children and Families. “Other” includes the categories “Transferred to SSBG,” “Out-of Wedlock Pregnancy Prevention,” “Non-Recurrent Short Term Benefits,” “Work Supports & Supportive Services,” “Services for Children and Youth,” “Authorized Solely Under Prior Law,” “Fatherhood & Two-Parent Family Programs,” and “Other.”
How TANF is Funded: 2
The federal government provides a block grant worth $16.5 billion each year
The amount of the block grant has remained the same since TANF’s creation in 1996, thus inflation has diminished TANF's real value by 40% since its inception:
The grant is divided up amongst the states
States must also provide funds because of a “maintenance of effort” (MOE) requirement
States must contribute at least 80% of what they contributed to AFDC programs in 1994
State contributions (called state TANF funds or MOE funds) were over $14.7 billion in FY 20173
Eligibility Requirements for Cash Assistance:
Eligibility for cash assistance may differ from the eligibility requirements of other TANF services
Focusing on cash assistance programs, states have a great deal of flexibility to tailor eligibility
However, there are three overarching federal regulations that states must follow: 4
50% of families receiving TANF must be engaged in a “work activity”* for 30 hours a week
This is reduced to 20 hours a week for single parents with children younger than 6
90% of two parent homes must be engaged in a “work activity” for 35 hours a week
A family must work 55 hours a week if it receives federally funded child care
The federal government also sets a maximum TANF benefit period of 60 months (with a few exceptions under specific circumstances)
If the first two qualifications are not met, a state will lose a portion of its TANF funding
States get a “caseload reduction credit” which lowers these 50% and 90% thresholds based on how much its TANF caseload has fallen since 2005 (cannot be because of changes in eligibility)
While some individuals (such as SSI recipients) are not counted towards these thresholds, the regulations put pressure on states to give TANF benefits to people capable and ready to work. 5
As long as these federal regulations are followed, states can set their own rules regarding work and can place limits on income and assets for both initial and ongoing eligibility
States also have some freedom to dictate the duration and amount of benefits paid out
The result of this flexibility are TANF programs that look very different from state to state
*There are 12 “work activities” (9 core, 3 non-core) that can be done to meet work requirements: 6
Examples:
Examples:
What they count for:
9 core work activities
-Unsubsidized employment-Community service programs-Job search and job readiness assistance
-Core activities count towards the full number of work activity hours required each week
3 non-core categories
-Secondary school or pursuing a GED-Education directly related to employment-Job skills training directly related to employment
-Non-core activities count towards the required work activity hours each week only after 20 hours of core activities have been completed
Benefits of TANF: (7)
In FY 2018, an average of 3,234,514 people received TANF or MOE cash benefits each month 8
TANF cash benefit programs in different states vary greatly in their level of generosity
In the median state in 2018, a family of three received $447 per month
The amount of TANF benefits paid out is also inconsistent throughout the country
In 2018, for a family of three, the maximum TANF benefit paid ranged from $170 per month in Mississippi to $1039 per month in New Hampshire
In some states (such as Alabama and Maryland) an individual must conduct a job search before even applying for TANF
While most states abide by the lifetime benefit limit of 60 months, some states limit TANF benefits to an even shorter time (for example Arizona and Arkansas have lifetime limits of 24 months)
States also differ in the manner in which they cut off benefits if requirements are not met
Initial sanctions range from reducing benefits to closing a TANF recipient’s account
The most severe sanction in most states is the closing of a TANF recipient’s account
Shortcomings of TANF:
Because the TANF block grant has not been indexed to inflation, funding for the program is much lower now than what it was originally intended to be
There are time limits on some of the “work activities” that limit their effectiveness
For example, vocational training only counts as a core work activity for 12 months even though most vocational training programs last 18-24 months9
Job search/job readiness is restricted to just six weeks even though it encompasses key rehabilitative programs that may last much longer
Because TANF recipients are expected to find another work activity or lose benefits after these limits run up, stipulations like these disregard the needs of beneficiaries
They also hurt individuals’ job prospects, the opposite of the program’s intent
There are serious criticisms about the allocation of TANF funding
Nationally, only 48.2% of TANF spending went to what the Hamilton Project calls “core services” (cash assistance, child care, and work-related activities and supports)
”Non-core services” are often offered to recipients that are financially better off and some non-core services are thought to be less valuable 10
Just 23 out of every 100 families with children in poverty received cash assistance in 2015 11
This is a steep decline from 1996-1997 when 64 out of every 100 families with children in poverty received benefits
According to the Hamilton Project, TANF raised 800,000 children out of poverty and 600,000 children out of deep poverty (below 50 percent of the poverty line) in 2010
This is much less than in 1995 when AFDC raised 1.8 million children out of poverty and 2.4 million children out of deep poverty 12
Because they do not help with the work requirement rate, some of the most needy populations (those with significant employment barriers) are not prioritized by TANF programs
Holding other variables constant, states with higher African American populations have more stringent, more restrictive, and less generous TANF benefits
Moreover, 63% of African Americans live in states with the lowest TANF-to-poverty ratios, therefore they are receiving disproportionately less support than their white counterparts 13
TANF Spending by state: FY 2018
Endnotes
1. TANF goals according to the U.S Department of Health and Human Services Office of the Administration of Children and Families.
2. Information from the Center on Budget and Policy Priorities.
3.Statistic from the U.S. Department of Health and Human Services Office of the Administration for Children and Families.
4. Information from the Urban Institute.
5. Information from the Center on Budget and Policy Priorities.
6. Information included in the table from the Urban Institute.
7. Statistics from the Center on Budget and Policy Priorities.
8. Statistic from the U.S Department of Health and Human Services Office of the Administration of Children and Families.
9. Information from the Center on Budget and Policy Priorities.
10. Information from the Hamilton Project.
11. Statistic from the Center on Budget and Policy Priorities.
12. Statistic from the Hamilton Project.
13. Information from the Urban Institute.