TANF: Temporary Assistance
for Needy Families
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.
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).
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).
The Economic Recovery Bill recently passed by congress in February 2009 provides states with additional financial resources and increased flexibility in program benefits due to the recession. Though the original 1996 welfare law provided a “contingency fund,” in case of increased families on the TANF roles and times of decreased state funds (due to decreased state income), this fund may run out of money. The new Economic Recovery Bill provides additional contingency funds to states on a temporary basis to states that are offering assistance to more families, expanding subsidized employment or expanding aid programs for families. The original TANF provisions required that as states’ TANF caseloads increase, the number of enrollees participating in welfare-to-work activities must also increase. The Economic Recovery Bill ensures that as the recession affects more families, and in turn finds more families receiving TANF benefits, that the “work participation rate” (number of adult TANF recipients employed in welfare-to-work activities) does not need to be increased.
For more information, click here (outside link).
- 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
- National Center for Children in Poverty. Temporary Assistance for Needy Families (TANF) Cash Assistance. Accessed 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.
- Parrott, Sharon. Center on Budget and Policy Priorities. “Despite Critics’ Over-Heated Rhetoric, The Economic Recovery Bill Does Not Undermine Welfare Reform.” Available at: http://www.cbpp.org/2-17-09tanf.pdf [pdf]. Accessed on February 24, 2009.