Temporary Assistance for Needy Families
Abstract and Keywords
In 1996, The Personal Responsibility and Work Opportunity Reconciliation Act repealed the 60-year-old national welfare program of Aid to Families with Dependent Children and replaced it with a new cash assistance program, Temporary Assistance for Needy Families (TANF). This law introduced a new generation of rules and regulations for delivering cash and other assistance to families who are poor, and it fundamentally changed the way the United States assists such families and their children. Opinions regarding the success of TANF and its impact on families vary; welfare caseloads have declined since TANF implementation, but economic self-sufficiency eludes many families.
Keywords: Aid to Families with Dependent Children (AFDC), cash assistance, Child Care and Development block grant, The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, TANF, welfare
Temporary Assistance for Needy Families (TANF), enacted as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, fundamentally transformed the nation’s response to poor families and their children. The new law terminated the federal entitlement to cash assistance previously authorized under Aid to Families with Dependent Children. In its place, states now are authorized to receive two block grants, one for TANF and the other for child-care services under the Child Care and Development Block Grant. This block grant funding mechanism is the primary vehicle for achieving the main purpose of TANF, which is to increase state flexibility in operating welfare programs (42 U.S.C., §601[a]). The legislation continues the traditional focus of Aid to Families with Dependent Children with the goal of assisting “needy families so that children may be cared for in their own homes or in the homes of relatives” (42 U.S.C., §601[a] ). Additional goals are to reduce welfare dependence through job preparation, work, and marriage; prevent and reduce the incidence of nonmarital pregnancies; and encourage the formation of two-parent families. The TANF program was reauthorized by the Deficit Reduction Act of 2005 (Pub. L. No. 109-171).
Who Receives TANF?
The TANF program is a public-assistance program for families with children who are poor. Under TANF, states have the authority to establish all eligibility requirements, and they are under no obligation to serve any particular type of family or any particular family. In general, however, financial eligibility is established through a means test; that is, families must demonstrate financial need for assistance according to standards set by each state. These standards include both income and asset limitations. In determining program eligibility, most states disregard some portion of a family’s earned income and almost all states (48) disregard some portion of earned income when determining the family’s actual benefit level (Rowe & Versteeg, 2005).
Annual reports to Congress detail characteristics of the TANF caseload (U.S. Department of Health and Human Services [USHHS], 2012). In Fiscal Year (FY) 2011, approximately 4.6 million people received TANF benefits, including 3.4 million children. The average TANF family size is 2.3 people. In recent years, as the adult-headed caseload has declined, child-only cases in which no adult received benefits have increased proportionately, representing 48.1% of the TANF caseload in FY 2009. Eighty-six percent of the adult recipients are women and 23% of the adult recipients are employed. African Americans represent 33% of the caseload, Whites 31%, and Hispanics of any race 29%. In FY 2009, the average length of TANF assistance nationally was 37.3 months. However, the range of average length of stay differs across states, from a high of 55.4 months (Georgia) to a low of 6.5 months (Idaho).
The TANF program continues the practice begun in the late 1960s to replace welfare with work, and a work-based welfare program is the major feature of TANF. In other words, the emphasis is on a labor-force attachment approach rather than a human-capital investment one. To receive benefits, adult recipients must engage in work or work-related activities when the state indicates they are ready or after 2 years on assistance, whichever comes first. The law allows few exceptions to the work requirements. If a recipient fails to comply with the work requirements, states may sanction the recipient by reducing or terminating benefits to the family. In the majority of states, sanctioning results in the termination of benefits to the entire family rather than a benefit reduction.
For all families, the average minimum hours of required work activity is 30 hours a week. The weekly requirement for two-parent families is 35 hours and the weekly requirement for single mothers with children under 6 years of age is 20 hours. Acceptable work activities include unsubsidized employment, subsidized private or public employment, work experience, community service, on-the-job training, job search, and job readiness. Vocational education is allowed but is restricted to no more than 12 months. Although states emphasize this “work-first” approach, research suggests that a broader approach that focuses on work as well as skill building is more successful (Gueron & Hamilton, 2002).
As part of the work-first strategy, most states have diversion programs that offer families a cash lump sum as an alternative to ongoing TANF assistance. In exchange, families agree not to reapply for cash assistance for a period of time. Some states’ diversion programs include referrals to job-search and job-placement services as well as alternative assistance programs (Rosenberg et al., 2008).
Caseload Reductions and Welfare Leavers
Caseloads have declined by 50% since the passage of TANF. Explaining the decline in caseloads is complex, given that TANF was implemented during a period of economic growth. In general, studies indicate that both economic conditions and welfare policy contributed to this dramatic decline in welfare caseloads (HHS, 2005), as well as historically low take-up rates; most recent data indicate as few as 37% of eligible families receive TANF assistance (Loprest, 2012). In view of the caseload declines, there are concerns about those who remain on welfare. Available administrative data show few significant changes in the caseload composition. However, several studies (for example, Bloom, Loprest, & Zedlewski, 2012; Danziger et al., 1999a; Hauan & Douglas, 2004) suggest that current welfare recipients have numerous barriers to employment, including low educational levels, limited or no work experience, limited job skills, and physical and mental-health problems. Danziger et al. (1999a), in a study of women receiving welfare in Michigan, found that 37% had two or three barriers to work and 27% had four or more barriers. The more barriers a woman had, the less likely she was to be employed. For this group with multiple barriers, work-first strategies will have limited effectiveness, and other more comprehensive services are needed to have an impact (Danziger et al., 1999b).
Of those who leave welfare, three fourths work at some point in the year after exiting welfare. However, only one third work the entire year. Although they work a significant number of hours (35 hours each week), former recipients tend to earn low wages and only one third have employer-sponsored health insurance. Their family income from all sources is near the poverty line, and studies suggest that it is not uncommon for leavers to experience material hardships such as hunger and housing problems (Acs & Loprest, 2007). Overall, approximately 30% return to TANF within a year (Acs & Loprest, 2007; Cancian, Meyer, & Wu, 2005).
Benefits under TANF
The average monthly cash and cash-equivalent benefit for a TANF family in 2009 was $431. Cash benefits vary widely from state to state because each state establishes its benefit level. For example, in 2009, the maximum benefit for a family of three with no income was $185 in Tennessee and $776 in California. Additionally, benefits may vary within a state by region, by urban or rural area, or by recipient status as exempt or not exempt from work participation requirements (HHS, 2012).
Under TANF, the federal legislation establishes a 5-year lifetime limit for receiving assistance from federal TANF funds. However, states are free to use their own funds to support families after 5 years—and they are also free to establish shorter time limits for receiving benefits. State policies regarding time limits for the receipt of assistance vary greatly and some are complex. Most states have elected to use the federal 5-year time limit for receiving TANF benefits. However, in some of these states, there are intermittent time limits; that is, after a designated period, most commonly 24 months, benefits are either reduced or terminated for a period of time, after which benefits are resumed. Nine states have established lifetime limits that are shorter than the federal limit, ranging from 21 to 48 months. Five states (Massachusetts, Maine, New York, Vermont, and Washington) have no lifetime limits, either because they have preexisting waivers or because they have chosen to use state funds if the 60-month limit for federal benefits is exceeded (HHS, 2012).
The most recent data suggest that case closures resulting from the federal time limits have been limited. On average, time limits account for 2–3% of case closures for any given month. States are allowed to exempt up to 20% of their welfare caseloads from the 5-year time limit because of hardship or domestic violence; to date, no state has exceeded the 20% level (Farrell, Rich, Turner, Seith, & Bloom, 2008).
Under the block grant, each state receives a fixed amount of federal dollars for the TANF program. Supplementing the block grant is a contingency fund to assist states in the event of an economic downturn. Although there are no matching-funds requirements, a “maintenance of effort” provision requires states to invest their own dollars in the TANF program. Combined federal and state expenditures for TANF in FY 2009 were $30.6 billion. Under TANF, funding has shifted from cash assistance to supportive services. In FY 2009, $10.8 billion, or 35% of expenditures, were for cash assistance and $19.7, or 64%, for “nonassistance” such as child care, transportation, and other employment and job-training supports. This contrasts with FY 1997, in which 73% was allocated to cash assistance and 8% to nonassistance activities (HHS, 2012). This pattern reflects the declining caseloads and the emphasis on labor-force participation.
To receive full grant funding, states are required to have 50% of all adult recipients and 90% of two-parent households engaged in work activities. When TANF was reauthorized as part of the Deficit Reduction Act of 2005 (Pub. L. No. 109-171), increased demands were placed on states for work participation rates. The state’s participation rate is based on families receiving TANF as well as families in state-funded programs included in the maintenance of effort spending. A state’s work participation rate may be reduced if declines in the TANF caseload occur after 2005. If states fail to meet the participation rates, their block grants may be reduced. States have met these higher participation rates through a variety of strategies, including applying caseload reduction credits and creating more unpaid work opportunities and other work supports allowable under the American Recovery and Reinvestment Act of 2009 (Hahn, Kassabian, & Zedlewski, 2012).
Family Violence Option
The potential vulnerability and needs of battered women are recognized through the Family Violence Option of the TANF legislation. Research suggests that between 15 and 56% of TANF recipients have been or are victims of domestic violence (U.S. Government Accountability Office [GAO], 2005b). Under the Family Violence Option, states screen for domestic violence and are given flexibility in applying TANF rules to victims of domestic violence. States may waive time limits, family caps, work requirements, and child support enforcement requirements if complying with them places clients at risk or unfairly penalizes them. Additionally, the Family Violence Option allows states to provide referrals for supportive and counseling services. All 50 states have adopted the Family Violence Option or have developed comparable state policies for responding to victims of domestic violence. Findings on the implementation of the Family Violence Option indicate that relatively few recipients have obtained waivers and that notification and screening for domestic violence is frequently inadequate and needs improvement (GAO, 2005b; Lindhorst & Padgett, 2005).
As a block grant, the Child Care and Development Fund makes available $5 billion annually for child-care services. Through matching funds and maintenance of effort provisions, states are required to invest their own funds in child-care services as well. In FY 2009, a total of $5.8 billion was spent on child-care services under the Child Care and Development Fund, TANF, and state spending. The Child Care and Development Fund serves approximately 1.75 million children (GAO, 2005a).
Under the Child Care and Development Fund, states may provide child-care subsidies to families earning up to 85% of the state median income and may transfer up to 30% of their TANF funds directly to child-care services. States also have flexibility in determining income eligibility limits, provider reimbursement rates, and the use of copayments. Twenty states are not able to serve all eligible applicants. Seventeen of these states give priority to TANF families and 14 states have established waiting lists (GAO, 2005a). Nationally, however, child-care subsidies may be underused; the most recent report of TANF to Congress showed only 17% of potentially eligible children received a child-care subsidy (HHS, 2012).
Family Structure Provisions
Several TANF provisions relate to the structure of families receiving TANF, including the birth of children, the number of parents, and parents’ legal marital status. Compared with the Aid to Families with Dependent Children program, TANF relaxed work-related eligibility requirements for two-parent families. In addition, states are encouraged, although not required, to use TANF dollars to promote marriage and the formation of two-parent families. However, they are prohibited from using TANF funds to assist teen parents who are not in school and not living in an adult-supervised setting. In addition, states have explicit permission to deny payment increases for parents who have additional children while on welfare, a policy referred to as a family cap. Nineteen states impose a full or partial family cap. The effectiveness of family caps in reducing out-of-wedlock births is difficult to determine (GAO, 2001), although some research indicates the family cap does not influence women’s childbearing decisions (Dyer & Fairlie, 2005; Wallace, 2009).
In 2005, the Deficit Reduction Act established a new marriage and fatherhood competitive grants program, with funding of $150 annually. Eligible applicants include state and local governments as well as various nonprofit organizations. Acceptable grant activities are wide ranging and include marriage and premarital education, marriage mentoring programs, and media campaigns.
Child Support Enforcement
Under TANF, states are required to operate a child support enforcement program following federal requirements. Families receiving TANF must assign support rights to the states and cooperate in establishing paternity as a condition of eligibility. States have the option of either denying or reducing benefits for refusal to cooperate in paternity establishment or securing child support. In FY 2009, the Child Support Enforcement Program distributed $1.8 billion in child support for families receiving TANF (HHS, 2012).
Under the Deficit Reduction Act, the federal share of child support collections is waived if states pass through child support to TANF families and disregard child support of up to $100 for one child and up to $200 for two or more children in determining benefits. Additionally, TANF child support orders must be reviewed and adjusted in a 3-year cycle. The Deficit Reduction Act reduced the federal share of child support administrative spending, a change expected to result in decreased child support collections (Child Welfare League of America, 2006).
Roles and Implications for Social Work
Cash support to families living in poverty has been and remains a politically controversial and complex issue in the United States (Heclo, 1997; National Association of Social Workers, 2007). Some of the most contentious issues in TANF include the structure of work requirements for adults, the impact of program changes on child well-being, and the funding and structure of marriage promotion activities and mechanisms that limit access to aid, including time limits, sanctions, and diversion programs.
The challenges and opportunities under TANF require that social workers focus on accessing services to ensure that clients understand the time-limited nature of welfare benefits as well as the services to which they are entitled. The “delinking” of welfare benefits from Medicaid and food stamps requires that particular attention be given to accessing these services as well as child-care subsidies and the earned income tax credit.
Additionally, social workers have a central role to play in the research, as well as the development and evaluation of new service models to assist clients with multiple barriers to employment and clients who interface with multiple service systems (Cancian et al., 2005; Danziger et al., 1999a, 1999b; Johnson, Chow, Ketch, & Austin, 2006; Lawrence, 2007; Lens & Vorsanger, 2005; Lindhorst & Padgett, 2005; Nam, 2005, Ozawa & Yoon, 2005).
Policy analysis must maintain a dual focus on national and state policies. Particular attention must be directed to the interaction and interrelatedness of various federal policies. Given the lack of federal oversight under TANF, ongoing monitoring of each state’s program is mandatory. Based on these analyses, advocacy agendas can target both state and federal levels (Hagen, 1999).
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