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Tuesday, January 11, 2011

The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions

Gene Falk
Specialist in Social Policy

The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of benefits and services for low-income families with children. TANF was created in the 1996 welfare reform law (P.L. 104-193). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk). 

TANF Funding.
TANF provides fixed funding to states, the bulk of which is provided in a $16.5 billion-per-year basic block grant. States are required in total to contribute, from their own funds, at least $10.4 billion under a maintenance-of-effort (MOE) requirement. The basic block grant is not adjusted for inflation or changes in the cash welfare caseload (see “Cash Welfare Caseload,” below). It has lost 26% of its value to inflation from FY1997 through FY2010. P.L. 111-291 funds TANF through the end of FY2011. 

State Spending.
Though TANF is best known for funding cash welfare payments for needy families with children, the block grant and MOE funds are used for a wide variety of benefits and activities. In FY2009, expenditures on basic assistance (cash welfare) totaled $9.3 billion—28% of total federal TANF and MOE dollars. TANF also contributes funds for child care and services for children who have been, or are at risk of being, abused and neglected. 

Cash Welfare Caseload.
In June 2010, the number of families receiving TANF cash welfare was 1.9 million families, consisting of 4.5 million recipients, of which 3.4 million were children. The cash welfare caseload is very heterogeneous. The type of family historically thought of as the “typical” cash welfare family—one with an unemployed adult recipient—accounted for less than half of all families on the rolls in FY2008. Another 15% of cash welfare families had an employed adult, while almost half of all families had no adult recipient. Child-only families include those with disabled adults receiving Supplemental Security Income (SSI), adults who are nonparents (e.g., grandparents, aunts, uncles) caring for children, and families consisting of citizen children and ineligible noncitizen parents. 

Cash Welfare Benefits.
TANF cash benefits are set by states. In July 2009, the maximum monthly benefit for a family of three ranged from $923 in Alaska to $170 in Mississippi. Benefits in all states represent a fraction of poverty-level income. In the median state (Kansas), the maximum monthly benefit of $429 for a family of three represents 28% of poverty-level income. 

Cash Welfare Work Requirements.
TANF requires states to engage 50% of all families and 90% of two-parent families in work activities. However, these standards are reduced by caseload reduction from FY2005. Further, states may get an extra credit against these standards by spending more than required under the TANF MOE. In FY2008, states achieved an all-family participation rate of 29.4% and a two-parent rate of 27.6%. That year, nine jurisdictions failed the all-family standard, and six jurisdictions failed the two-parent standard. States that fail to meet work standards are at risk of being penalized by a reduction in their block grant.

Date of Report: December 20, 2010
Number of Pages: 33
Order Number: RL32760
Price: $29.95

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