Temporary Assistance For Needy Families - Funding and Eligibility

Funding and Eligibility

PRWORA replaced AFDC with TANF and ended entitlement to cash assistance for low-income families, meaning that eligible families may be denied aid even if they are eligible. Under TANF, states have broad discretion to determine who is eligible for benefits and services. In general states must use funds to serve families with children, with the only exceptions related to efforts to reduce non-marital childbearing and promote marriage. States cannot use TANF funds to assist most legal immigrants until they have been in the country for at least 5 years. TANF sets forth the following work requirements in order to qualify for benefits:

1. Recipients (with few exceptions) must work as soon as they are job ready or no later than two years after coming on assistance.
2. Single parents are required to participate in work activities for at least 30 hours per week. Two-parent families must participate in work activities 35 or 55 hours a week, depending upon circumstances.
3. Failure to participate in work requirements can result in a reduction or termination of benefits to the family.
4. States, in fiscal year 2004, have to ensure that 50 percent of all families and 90 percent of two-parent families are participating in work activities. If a state meets these goals without restricting eligibility, it can receive a caseload reduction credit. This credit reduces the minimum participation rates the state must achieve to continue receiving federal funding.

While states are given more flexibility in the design and implementation of public assistance, they must do so within various provisions of the law:

1. Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
2. end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
3. prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies;
4. and encourage the formation and maintenance of two-parent families.

Funding for TANF underwent several changes from its predecessor, AFDC. Under AFDC, states provided cash assistance to families with children, and the federal government paid half or more of all program costs. Federal spending was provided to states on an open-ended basis, meaning that funding was tied to the number of caseloads. Federal law mandated that states provide some level of cash assistance to eligible poor families but states had broad discretion in setting the benefit levels. Under TANF, states qualify for block grants. The funding for these block grants are fixed and the amount each state receives is based on the level of federal contributions to the state for the AFDC program in 1994 States are required to maintain their spending for welfare programs at 80 percent of their 1994 spending levels, with a reduction to 75 percent if states meet other work-participation requirements. States have greater flexibility in deciding how they spend funds as long as they meet the provisions of TANF described above.

In July 2012, the Department of Health and Human Services released a memo notifying states that they are able to apply for a waiver for the work requirements of the TANF program. Critics claim the waiver would allow states to provide assistance without having to enforce the work component of the program. The administration has stipulated that any waivers that weaken the work requirement will be rejected. The DHHS granted the waivers after several Governors requested more state control. The DHHS agreed to the waivers on the stipulation that they continue to meet all Federal requirements. States were given the right to submit their own plans and reporting methods only if they continued to meet Federal requirements and if the state programs proved to be more effective.