TANF

How It Works

Temporary Assistance for Needy Families (TANF) provides cash assistance to very low-income families. The program has four primary purposes:

Provide assistance to needy families so that children can be cared for at home
End the dependence of needy parents on government benefits 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

TANF is funded through a combination of state and federal funds. It is a federal block grant program, therefore there is no guarantee that all families who qualify will receive aid.

The federal government sets basic rules for administering TANF. Under federal rules:

A portion of a State’s caseload must meet federal work criteria – half of the families receiving TANF benefits must be engaged is some kind of work related activity for at least 30 hours a week.
A lifetime benefit limit of five years exists for most recipients, although States can set shorter limits or use state funds to extend the limit.
States are bared from using federal TANF funds to assist most legal immigrant until they have been in the U.S. for at least 5 years.

However, states in general, have wide discretion in developing their programs, including setting income eligibility limits and benefit levels. More than one-third of states have an income limit less than 50% of the Federal Poverty Level (FPL) and benefit levels vary between states from $200 to $1,000 per month for a family of three.

History

Aid to Families with Dependent Children (AFDC) was established by the Social Security Act of 1935 to assist states in providing cash welfare payments for needy children who had been deprived of parental support or care because their parent was absent from home, incapacitated, deceased or unemployed. States defined “need,” set their own benefit levels and established income and resource limits within federal limitations and administered their programs. States were entitled to unlimited federal matching funds for benefit payments and states were required to provide aid to all persons who were eligible under federal law and whose income and resources were within state limits.

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act eliminated AFDC, the Job Opportunities and Basic Skills Training (JOBS) program and the Emergency Assistance program and created TANF, a block grant program.

In general, since 1996, the number of TANF caseloads has fallen and the number of single parents who now work has risen. However, those who work generally earn low wages and often remain poor. Click here for an example of a working low-income family. In addition, many families left welfare not because they became employed, but because they were terminated from the program for failing to meet requirements. For more information, click here (outside link).

Policy Update

The Deficit Reduction Act of 2005 (DRA) reauthorized TANF. However, the DRA issued new regulations that substantially increased the proportion of recipients required to participate in work activities. The new regulations require 50% of all adults and 90% of two-parent households receiving TANF benefits in a state must participate in a set of work activities defined in the law. TANF already assists fewer than half of families with children who qualify, partly because of policies in many states which make it difficult for some very poor families to get both income assistance and the job help that should go with it. The new regulations put increasing pressure on states to meet the new work rates, either by making their programs less accessible or less effective in helping families move to work, or increasing expenditures in an already stretched state budget to effectively improve family employment outcomes.

For more information, click here (outside link).

Links

National Center for Children in Poverty

Center on Budget and Policy Priorities

Center for Law and Social Policy

US Department of Health & Human Services Office of Family Assistance

References

National Center for Children in Poverty. Temporary Assistance for Needy Families (TANF) Cash Assistance. Available at: http://www.nccp.org/policy_long_ description_12.html. Accessed March 1, 2007

US Department of Health & Human Services. Aid to Families with Dependent Children (AFDC) and Temporary Assistance for Needy Families (TANF). Available at: http://aspe.hhs.gov/HSP/abbrev/afdc-tanf.htm. Accessed April 12, 2007.

Center on Budget and Policy Priorities. An Introduction to TANF (2005). Available at: http://www.cbpp.org/1-22-02tanf2.htm. Accessed April 19, 2007.

Center on Budget and Policy Priorities. Implementing the TANF Changes in the Deficit Reduction Act: “Win-Win” Solutions for Families and States. (2007). Available at: http://www.cbpp.org/2-9-07tanf.htm. Accessed April 12, 2007.