25th Anniversary of TANF

This week marks the 25^th anniversary of the enactment of the Temporary Assistance for Needy Families (TANF) block grant. In August of 1996, TANF replaced the decades-old Aid to Families with Dependent Children program. TANF provides a flexible block grant with fixed funding and gives states, territories, and tribes wide latitude in the design of their work and cash assistance programs and in the use of TANF funds for services for children and families.  This has led to a wide range of services, benefit levels and eligibility requirements across states. The TANF statute also eliminated the federal entitlement to cash assistance, set a time limit of 60 months on the receipt of federally funded cash assistance, and requires states to engage 50 percent of all families in work activities or potentially face a monetary penalty.

Today, fewer than 25 percent of eligible families receives cash assistance under TANF, average benefit levels are low, and there is limited engagement in work activities, including education and training. In 18 states, the maximum benefit is less than 20 percent of the federal poverty level, providing just $362 a month or less for a family of three to meet basic needs. On average, states are spending only 22 percent of the combined federal and state TANF funds on cash assistance and just 10 percent on work activities to help parents prepare for and find jobs. In addition, Black children are more likely than White children to live in states with low benefit levels, barriers to access, and punitive policies.

Despite these challenges, there are promising programs and practices that demonstrate a commitment to families with low incomes and a spirit of innovation.  Many states and counties are adopting evidence-based and other promising practices such as coaching models of case management that empower individuals to set their own course; training and career pathways in high-growth sectors; subsidized employment to help workers get a foot in the door; and two-generation initiatives that aim to improve outcomes for both parents and children.  There are many excellent examples of how TANF agencies responded to the pandemic, including by using technology to facilitate access to benefits, providing online case management, issuing one-time benefit increases, and relaxing requirements.

We encourage jurisdictions to use the occasion of the 25^th anniversary of TANF to take measure of their programs and consider how they can strengthen them. Agencies can adopt a number of policies and practices that could help alleviate poverty and reduce racial inequity, prepare needy families for the challenges of a post-pandemic economy, and respond to emergency needs.  Jurisdictions with unobligated TANF balances are particularly well-positioned to consider making changes.  We urge jurisdictions to consider the following options:

1. Increase monthly cash benefit amounts for TANF cash assistance recipients and/or index the benefit amount to inflation.  There are seventeen states that have not increased their monthly cash benefits since 1996, resulting in a 40 percent or greater decline in the value of the benefits due to inflation. We encourage states and tribes to examine whether their benefit levels provide an adequate safety net for families.

2. Invest in skills training for TANF participants for jobs that will be in demand and pay well in the post-pandemic labor market.  We encourage states to collaborate with the workforce system and education community to facilitate training for the skills needed for the emerging post-pandemic labor market. 

3. Support newly employed families with transitional benefits and services.  This could include uniforms, work supplies, child care, and transportation assistance. 

4. Support the use of information technology to facilitate access to TANF and engage parents, based on lessons learned from service delivery during the pandemic.  Possibilities include enhanced online application and redetermination processes, secure web-based platforms for case management, and opportunities for participants to engage virtually, such as through web-based classes for employment training, job search, and work readiness.

5. Provide comprehensive benefits and supports to address the short-term needs of families facing a specific episode of need or crisis situation.  While states and tribes are using Pandemic Emergency Assistance Fund monies for certain non-recurrent short-term (NRST) benefits, they should consider whether to supplement or establish broader NRST benefits using TANF funds as well. These could cover short-term cash benefits; short-term rental or mortgage assistance; utility and energy assistance; housing search and placement services; clothing allowances; family counseling; financial and credit counseling; and certain legal services.

The Biden administration’s recent expansion of the children’s tax credit and additional funds for child care for low-income families have demonstrated the efficacy of federal programs in reducing poverty and responding to the economic downturn caused by the pandemic. As TANF reaches the 25-year mark, it is critical to focus on the approaches that will best support poor children and families, especially as they continue to experience the ongoing effects of the pandemic.