Last updated 09/08/2023

TANF is a block grant with many dimensions to it that can make it complicated to understand. There are a number of resources available to help you get a basic understanding of TANF, then you can delve into specific topics for more detail. The short videos linked below and the powerpoint slides used in the videos that are uploaded at the right will provide a relatively quick walkthrough of the various aspects of TANF and may be the best starting point. The material is a few years old, but most of the basic concepts have not changed.

TANF Overview

TANF Eligibility

TANF Spending

There also are a number of overview documents listed below that can also provide a good starting point.

CBPP Policy Basics on TANF and Tribal TANF: 

Policy Basics: Temporary Assistance for Needy Families | Center on Budget and Policy Priorities (cbpp.org)

Policy Basics: Tribal TANF | Center on Budget and Policy Priorities (cbpp.org)

CLASP TANF 101 Series:

TANF 101: Block Grant | CLASP

TANF 101: Cash Assistance | CLASP

TANF 101: Work Participation Rate | CLASP

CBPP TANF Report on TANF’s Benefits and Shortcomings: TANF Cash Assistance Helps Families, But Program Is Not the Success Some Claim | Center on Budget and Policy Priorities (cbpp.org)

One strategy states have used for getting additional cash to TANF recipients is to provide extra cash benefits to TANF recipients with high housing costs.

Some examples:

In Maine, TANF families can receive a housing supplement of up to $300 per month. Families are automatically considered for the supplement upon application or redetermination of their eligibility. To be eligible, families must have housing costs that exceed 50 percent of their countable income plus their TANF benefit and any child support payments they receive. Families can also receive the supplement if they do not receive TANF cash assistance, so long as their countable income is below the state’s standard of need. Families where only the child receives TANF assistance (known as a child-only case) are also eligible for the supplement.

In Minnesota, TANF families were eligible for a flat $110 per month housing supplement in 2023, so long as the family does not receive HUD rental assistance and is not a child-only case. All eligible families automatically receive the supplement. Going forward, the supplement will be indexed annually for inflation.

You can find more detail on these state approaches as well as other examples of how states are using TANF funds to address housing needs in the file linked at the right.

States can reduce housing instability in other ways including ensuring that families who are eligible for TANF benefits receive them, increasing monthly cash benefits for all families, eliminating and or minimizing sanctions that take away benefits from families, and operating effective work programs that prepare TANF recipients for high paying jobs. This paper both provides a rationale for why TANF benefits matter for housing stability and provides more detail on how states can use TANF to address family housing instability and homelessness: TANF Can Be a Critical Tool to Address Family Housing Instability and Homelessness | Center on Budget and Policy Priorities (cbpp.org)

These resources provide additional information for ways in which TANF can help reduce housing instability and homelessness. (You can also find additional information in the entry for non-recurrent short-term benefits.)

TANF-ACF-IM-2013-01 (Use of TANF Funds to Serve Homeless Families and Families at Risk of Experiencing Homelessness) | The Administration for Children and Families (hhs.gov)

Using TANF Funding to Provide Housing Assistance During the COVID-19 Pandemic | The Administration for Children and Families (hhs.gov)

Last Updated August 2023

Summary:  Expenditures that qualify as MOE include state and local government spending or third-party spending that benefits members of needy families and meets one of TANF’s four purposes. Examples of qualifying third-party expenditures include spending by food banks or domestic violence shelters on TANF-eligible families. Third-party MOE also can include in-kind contributions, such as volunteer hours or employer-provided supervision and training for people in subsidized jobs. While a number of states have reported third-party MOE in order to boost MOE to obtain caseload reduction credits or a portion of the TANF Contingency Fund, not all third-party spending is excess MOE spending; some states claim third-party expenditures toward their minimum MOE obligations.

Goal: Advocates should aim to reign in Third-party MOE spending that counts toward a state’s basic MOE requirement and redirect those dollars towards providing cash assistance to families. They should be also on the lookout for new Third-party MOE spending, as this may indicate a cut in other TANF MOE spending areas that the state is trying to back fill in order to avoid any consequences of reduced MOE. It is very important to distinguish Third-Party MOE that is used to meet a state’s minimum MOE obligation and Third-Party MOE that is in excess of a state’s MOE minimum requirement. If a state is using Third-Party MOE to meet its basic obligation, that means a state has withdrawn state funds that it previously spent to assist families with low incomes. Third Party MOE in excess of state’s minimum MOE obligation can be used to help states meet positive strategic policy goals, for example, obtaining additional funding through the Contingency Fund or operating a work program that focuses on helping parents to achieve their personal and family goals. It is important to note that non-profits often benefit from states’ Third-Party MOE practices and may oppose any efforts to eliminate the use of Third-Party MOE.

Key Resources and Data:

Unfortunately, the most recent report available on Third Party MOE was done in 2016. Still, the report provides a starting point to identify whether your state has a history of using Third Party MOE to meet their basic MOE obligation: GAO-16-315, TEMPORARY ASSISTANCE FOR NEEDY FAMILIES: Update on States Counting Third-Party Expenditures toward Maintenance of Effort Requirements. Most states that claim Third Party MOE have been doing so for a number of years.

The financial data that states report to HHS do not identify what reported spending arises from third-party MOE. The ACF-204 forms that states are required to submit to OFA or state budget documents may provide some helpful information. (You can request the ACF-204 directly from your state or from CBBP Income Security or CLASP staff.) Advocates were able to find that Georgia was counting third party MOE from food banks under Basic Assistance (further distorting how little the state spends on cash) by looking at the state’s 204. Although you cannot identify whether your state is claiming Third Party MOE from the annual TANF Expenditure that states report to OFA on the ACF-196R form, you can use that data to determine whether the state is spending excess MOE. That data can be found in Table C.3 (Analysis of State MOE Spending) in the annual TANF expenditure data tables  State TANF Data and Reports | The Administration for Children and Families (hhs.gov). The combination of the data from the ACF-204 and the ACF-196R provides the best data publicly available for piecing together information on a state’s MOE spending. Most states that

Last Updated August 2023

States typically disregard a portion of a TANF recipient’s earned income before counting the remainder of the earnings in determining the family’s monthly benefit amount.  These state earnings disregard policies help to make work pay by allowing working TANF families to “keep” more of their earnings and not cutting off benefits immediately when parents go to work or increase their earnings.

While nearly all states have used their flexibility under TANF to expand on the limited disregard of earnings allowed under TANF’s predecessor program, Aid to Dependent Children (AFDC), there may be new opportunities to improve upon or redesign state approaches. In considering changes to your state’s treatment of earnings of TANF recipients, first and foremost, is the question of how an earnings disregard policy change fits into your goals for TANF program improvements and your spending priorities.   Disregarding more earnings has a fiscal cost and can represent spending more dollars on families that have earnings, by allowing them to stay on cash assistance longer and by getting more benefits each month.  While this approach supports working families, it can compete with other spending priorities such as increasing benefit levels or expanding access to cash assistance to help to families with no other income.  As with all policies with fiscal impacts, there are trade-offs to consider depending on funding availability and other policy priorities.

Key Points Summarized:

• What your policy looks like now may guide whether and how you would propose to shape an expansion to or change from your current approach.  For example, if you already disregard a portion for work expenses or 100% of the first several months of earnings, you would not want to take a less generous approach to those aspects as part of a redesign.
• How does your earnings disregard interact with other eligibility computation policies such as net or gross income limits and budgeting methodology to lead to an eligibility exit level?
• What do you want the eligibility exit level to be and what are your investment priorities?  A higher disregard can represent spending more dollars on families that have earnings at the expense of increasing benefit levels or providing more help to families with no other income.
• Keeping the design simple delivers the clearest message that work pays and allows for greater ease of administration.  There may be an opportunity to tweak and improve more complicated earnings disregard structures while generally maintaining the same approach.

Background:

Earnings disregard policies and how they relate to eligibility exit levels

A state’s earnings disregard policy plays a key role in shaping eligibility income cut-off or exit levels, that is, the amount of earnings that lead to a TANF family being over-income and losing benefits.  Other factors shaping exit levels include the state’s benefit levels and the state’s approach to ongoing eligibility and budgeting of income (which sometimes includes various net or gross eligibility standard tests).  These factors interact with the earnings disregards to result in a state’s eligibility cut-off level.  This means that states using the same earnings disregard policy – for example, disregarding half of all earnings – could have very different eligibility exit levels because of these other factors

What level of earnings should result in loss of eligibility, that is, the TANF earnings exit level, is a key consideration in designing earnings disregard policies.

A state’s earning disregard policy and budgeting methodology also shapes the amount of the benefit that a working TANF family receives.  The design also controls how benefits ramp down over time or due to increases in earnings, that is, whether there is a smooth glide path of benefit reductions, gradual steps down, or a cliff.

Understanding your state’s earnings disregard and eligibility limit policies

The best way to understand how your state treats earnings of TANF recipients (or applicants) is to look at your state policies, typically in the TANF eligibility manual.  Information on earnings disregards and benefit computation may also be in the state TANF plan or in state information materials.

You can also look up the information for your state and compare to other states using the Welfare Rules Database (WRD) which compiles 50-state information on a range of TANF eligibility policies:  The Welfare Rules Database (urban.org).  These include earnings disregards, state approaches to budgeting of countable income, relevant standards used for eligibility, and resulting eligibility exit levels.  The key WRD tables to understand your state’s approaches here, and how they compare to other states are:

• Table II.A.1. Earned Income Disregards for Benefit Computation
• Table IV.A.6. Maximum Income for Ongoing Eligibility for a Family of Three
• Table II.A.2. Benefit Determination Policies
• Table II.A.3. Standards for Determining Benefits

The WRD also includes other tables about various aspects of financial eligibility determinations including ones relevant to disregards and eligibility standards for applicants.

The document link in the right column includes a summary of various state approaches to earned income disregards.

Related issues to consider:

There are a number of relevant considerations in making policy design choices:

• Interaction with other eligibility cut-off policies:  Some states use one or more gross or net income limits as part of determining initial or even ongoing eligibility.  These complex eligibility schemes may be holdovers from a pre-TANF era, having not been revisited.  Sometimes a state’s gross income standard is so high that it would not make a difference as someone with earnings at that level would never be eligible for benefits after the budgeting process and thus could be easily eliminated.  Other states may have net or gross income limits that can block initial or ongoing eligibility for a family that would otherwise qualify for a benefit but for failing this preliminary step.  A state’s net or gross income limit can thus undercut a state’s approach to treatment of earnings by making families ineligible at a lower level of earnings than would otherwise result from the benefit computation playing out.  All to say, any redesign of the earnings disregard policy should also consider how other cut-offs interact with it, and whether there is an opportunity to simplify and eliminate unnecessary or unreasonably low eligibility standards.

• Intersection with time limits: Allowing a working family to continue to receive reduced TANF benefits until income reaches a higher level, such as the federal poverty level, can mean that a family is likely using months of the TANF time clock at a time when the family has earnings.  A few states address this by “stopping the clock” when a family is working a certain number of hours; for example, Illinois stops the clock when a parent is working 30 hours a week, an approach that pairs well with the state’s relatively high earnings disregard and eligibility exit level.[1]  But most states, even with high disregards, have not chosen this clock stopping approach, and you may not be able to get it included as part of an earnings disregard package.

• Intersection with work participation rate: Keeping working families on cash assistance longer, by disregarding more earnings, can help a state achieve a higher work participation rate as these families would be counted as participating in work (if they work sufficient hours). In the wake of the Deficit Reduction Act of 2005, which made work rates harder for states to meet, a number of states expanded their earnings disregard policies, or added some initial period of disregarding 100% earnings largely for this reason.  TANF caseloads have declined so significantly since 2005, that most states already have very low target work rates and are not in need of a work rate boost.  In 2020, no state failed to meet the work rate that applies to all families and more than 20 states have a WPR target rate of zero.

• State’s approach to a post-TANF transitional benefits:  By expanding earnings disregardsand ramping benefits down gradually, states are in effect bolstering a gradual transition off cash assistance.  In addition, about a quarter of states provide a transitional cash assistance benefit for a period after  families leave TANF due to earnings.  State approaches for types of post-TANF transitional benefits vary in both amount and duration. For example, Utah provides a full monthly benefit for 2 months after exit and a half of a monthly benefit for the third month as its approach to transitional benefits.  For another example, Kansas provides $50 a month for five months.  Earnings disregard policies and post-TANF transitional benefits designs should be considered in relation to each other.  For example, a state that uses an earnings disregard approach that ramps benefits down and does not end TANF until earnings reach the federal poverty line may choose not to provide an additional cash transitional benefit.  But for a state that cuts benefits off at a much lower level of earnings, an additional post-TANF transitional cash benefit may be an important part of supporting stability upon TANF exit.

Note on policies for applicants: Some states use the same eligibility and disregard policies for applicants that the state uses for recipients.  Many states, however, use different policies for those who are applying for TANF; these may include a different earnings disregard policy for determining initial eligibility or net or gross income standards that applicants must meet.  The result can be that an applicant is denied benefits based on a level of earnings that would not result in ineligibility for a recipient.  However, once an applicant with earnings is determined eligible, then the benefit amounts would be computed using recipient earnings disregards. 

Advocates promoting improved earnings disregard policies should consider how their state treats earnings of applicants and whether to seek changes in those policies as well.   A state might choose to use lower eligibility thresholds or more limited earnings disregards for new applicants, particularly a state that disregards a large share of earnings and may not want to open access to broad numbers of working families.  Even so, a state with low eligibility limits for applicants may want to consider expanding its earnings disregards and initial eligibility standards so as to open access at least to very poor families with earnings.

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[1] For more information, see John M. Bouman, Margaret Stapleton, and Deb McKee, “Time Limits, Employment, and State Flexibility in TANF Programming: How States Can Use Time Limits and Earnings Disregards to Support Employment Goals, Preserve Flexibility, and Meet Stricter Federal Participation Requirements,” Clearinghouse Review, National Center on Poverty Law, September 2003.

Last updated August 2023 

Summary: In recent years, we have seen state legislative efforts to restrict TANF recipients’ ability to make cash withdrawals from their TANF EBT accounts. Section 4004 of the Middle Class Tax Relief and Job Creation Act of 2012 which restricts TANF recipients’ EBT use also requires states to include in their state TANF plans an explanation of how the state will ensure that recipients of TANF assistance: “have adequate access to their cash assistance; have access to using or withdrawing assistance with minimal fees or charges, including an opportunity to access assistance with no fees or charges; and are provided information on applicable fees and surcharges that apply to electronic fund transactions involving the assistance.” (Section 4004 of the Middle Class Tax Relief and Job Creation Act of 2012 also requires states to maintain policies and practices that prevent TANF-funded assistance from being used in any electronic benefit transfer transaction in any liquor store, casino, gambling casino, or gaming establishment, or any retail establishment that provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.)    

In 2016 guidance, TANF-ACF-PI-2016-02, the Administration for Children and Families stated that they interpret “adequate access” in section 4004 to be at odds with state policies to limit the amount of TANF benefits people can access as cash, the frequency they can withdraw benefits as cash, and whether TANF benefits can be deposited in personal bank accounts. In 2015, Kansas passed a bill to limit the amount of benefits that TANF recipients could withdraw as cash. However, the policy was never implemented and later repealed after the 2016 ACF guidance was released. In 2022, Missouri legislators also tried to fully prohibit TANF families from receiving benefits as cash, but the bill did not pass. 

Advocates’ Goal: Advocates should oppose any attempts to limit TANF participants’ access to cash. Even if such policies are at odds with current federal law, they still send a dangerous message that cash assistance is bad and that TANF recipients can’t be trusted. There is also the possibility that future administrations could interpret Section 4004 differently.  

Equity implications: Policies that seek to reduce access to cash and replace it with in-kind benefits are rooted in racist ideas that people with low incomes, especially Black and Latino people, cannot be trusted and will use cash benefits to purchase drugs and other temptation goods. 

Key Resources (Links included to the right);  

Talking Points: This document provides key points on why EBT cash access restrictions should not be imposed on TANF recipients. It also includes links to key research studies that can be used to push back against negative stereotypes about how people with low incomes spend their money.  

Advocate written testimony from Missouri: This testimony against HB 2085, which would completely bar families from accessing TANF benefits as cash, includes many of the talking points we have provided in the Talking Points document. 

Massachusetts Cashless System Commission reports: The 2012 report comes from a commission established by the Massachusetts state legislature to explore the possibility of moving to a cashless system in TANF. It is especially useful for documenting the costs of implementing a cashless EBT system: The 2019 report provides an update from the state agency on the issue: MA 2019 Report on the Establishment of a Cashless EBT System. 

Updated August 2023

“Assistance” has a very specific meaning in TANF. It is important because families that receive “assistance” are subject to four specific requirements; (1) work requirements, (2) time limits, (3) child support cooperation requirements and (4) assignment of any rights they have to child support to the state and federal government. All monthly cash benefits provided to TANF recipients are “assistance” but they are not the only benefits that meet the definition of assistance.  A very short-hand way of thinking of “assistance” is a cash payment, voucher or other form of providing help that is intended to help a family meet their ongoing basic needs, such as for food, clothing, shelter, utilities, personal care items or household needs. Some supportive services (e.g., transportation and child care) provided to non-working families also are considered assistance. Key exclusions include tax credits and “non-recurrent short-term benefits” that are provided to meet a specific episode of need and will not last for more than four months. States can avoid imposing time limits and child support requirements on families receiving “assistance” if they provide cash benefits through a separate state program (SSP), funded only with MOE funds that are not comingled with federal TANF dollars. Families receiving assistance through an SSP are, however, subject to work requirements. Considerations of whether a benefit meets the definition of assistance is important when considering providing food, diapers, period products, clothing or housing assistance to families who are NOT already receiving cash assistance. Benefits need not be provided in cash; in-kind benefits may be considered assistance if they do not meet the requirements of a non-recurrent short-term benefit.

The definition of assistance is laid out in regulations: 45 CFR § 260.31 – What does the term “assistance” mean? | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute (cornell.edu). The detailed text is included below.

HHS has also provided a Q and A document which can be found at this link: Q & A: Definition of Assistance | The Administration for Children and Families (hhs.gov).

This document, written by CBPP and CLASP staff after the passage of the DRA provides a discussion of when TANF-Related requirements apply (pages 21 -23):  Implementing TANF Changes in the Deficit Reduction Act: Win-Win Solutions for Families and States

Regulations defining what “assistance” means in TANF.

§ 260.31 What does the term “assistance” mean?

(a)

(1) The term “assistance” includes cash, payments, vouchers, and other forms of benefits designed to meet a family’s ongoing basic needs (i.e., for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses).

(2) It includes such benefits even when they are:

(i) Provided in the form of payments by a TANF agency, or other agency on its behalf, to individual recipients; and

(ii) Conditioned on participation in work experience or community service (or any other work activity under § 261.30 of this chapter).

(3) Except where excluded under paragraph (b) of this section, it also includes supportive services such as transportation and child care provided to families who are not employed.

(b) It excludes:

(1) Nonrecurrent, short-term benefits that:

(i) Are designed to deal with a specific crisis situation or episode of need;

(ii) Are not intended to meet recurrent or ongoing needs; and

(iii) Will not extend beyond four months.

(2) Work subsidies (i.e., payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training);

(3) Supportive services such as child care and transportation provided to families who are employed;

(4) Refundable earned income tax credits;

(5) Contributions to, and distributions from, Individual Development Accounts;

(6) Services such as counseling, case management, peer support, child care information and referral, transitional services, job retention, job advancement, and other employment-related services that do not provide basic income support; and

(7) Transportation benefits provided under a Job Access or Reverse Commute project, pursuant to section 404(k) of the Act, to an individual who is not otherwise receiving assistance.

(c) The definition of the term assistance specified in paragraphs (a) and (b) of this section:

(1) Does not apply to the use of the term assistance at part 263, subpart A, or at part 264, subpart B, of this chapter; and

(2) Does not preclude a State from providing other types of benefits and services in support of the TANF goal at § 260.20(a).

Last Updated August 2023

HHS puts out on annual report that includes state-by-state data on the Characteristics and Financial Circumstances of TANF Recipients every year. While the data in the report is somewhat limited, there is information in the report that may be useful. For the current TANF caseload, the report includes data on the number of recipients (adults and children), race/ethnicity, time limit exemptions and months accumulated, educational attainment, employment status, citizenship status, receipt of disability benefits, number of teen recipients (including teen parents), and the monthly average cash assistance payment. This report provides the best available information on the characteristics of child only cases.

The report also includes data on closed cases including the reason for the closure and employment status.

The report provides data separately for families served through an SSP (separate state program) which is funded only with MOE funds. These cases are not considered TANF cases and data on them is not included in the data in the report for TANF cases. (See Figure 2 and Table 2 in this report for information on the difference in TANF and SSP cases: Guide-to-Use-of-TANF-Funds.pdf (clasp.org)).

Two cautions when using the data in the report. First, the data is provided directly by the states and is of varying quality. You should be wary of any data element where there is a large percentage of cases where the data is not reported or is reported as “other.” The majority of states provide data on the full caseload, but a substantial number only provide data on a sample. When states provide data on a sample, the data may be skewed towards longer-term cases.

You can find the most recent report at this link: State TANF Data and Reports | The Administration for Children and Families (hhs.gov).

You can find the 2021 report at this link: Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2021 | The Administration for Children and Families (hhs.gov).

Some states periodically conduct their own studies that contain significantly more detail on the characteristics of TANF recipients.

Here is a link to a study done by Utah that includes very detailed data on the characteristics of TANF recipients, including data on Adverse Childhood Experiences (ACES):  Utah Redesign Wave 3 Report

Maryland produces annual reports on the characteristics of TANF recipients and leavers as well as some reports on special topics. (They have been producing these reports for most of the years TANF has been in existence.) You can find those studies at this link:  Safety Net Research (umaryland.edu)

Last updated August 2023

Work verification plans provide an underutilized vehicle for exercising state flexibility in implementing TANF work requirements. Below, we first describe what is required of states then discuss how states can use their work verification plan to maximize the flexibility they have in operating their work programs.

States are required to submit a work verification plan to the Office of Family Administration to demonstrate how the state will verify the accuracy of the information that the state gathers and submits to determine its work participation rate (WPR). The work verification plan is a key component of how states are implementing the work requirements as laid out in the regulations promulgated after the passage of the deficit Reduction Act of 2005. A state’s work verification plan lays out how states will: (1) collect data for each of the 12 activities in which recipients must be engaged to count as meeting their required work participation requirement; (2) verify hours engaged in work and address issues such as excused absences, holidays and FLSA deeming; (3) identification of work eligible individuals; (4) implement internal controls to ensure consistent measurement; and (5) verify other data (e.g., characteristics of recipients) used in calculating the work participation rate. States can amend or update their work verification plan at any time.

Meeting the WPR is a requirement of states, not parents. States have total flexibility to decide which parents are subject to work requirements and what they must do to meet those requirements. States often conflate these two things and require all parents to be engaged in work activities that will count towards the WPR, but that is a state choice, not a federal requirement.

Because the majority of states meet their WPR primarily by counting the work hours of working parents, some states have modified their work verification plans to narrow the program activities on which they report data to the federal government. This has the potential to greatly reduce the administrative burden on staff and parents. For example, Texas — the first state to adopt this approach—only reports data on individuals who are working or completing a high school degree. Vermont and Massachusetts submitted a revised work verification plan and received approval to follow Texas’ approach. Kansas and North Dakota have both expressed interest in following this approach.

You can find details on what states are required to include in their work verification guide in this document: Work Verification Plan Guide | The Administration for Children and Families (hhs.gov).

Texas’ work verification guide can be used as a template for other states:  Work Verification Plan Guide (texas.gov). (State work verification plans can be obtained by requesting them from the state agency or through an online search.)

We have uploaded three documents produced by advocates in PA to encourage the state to adopt Texas’ approach to work verification. You can find those documents in the right column.

The Racial Impact and Human Toll of Federal TANF Hours Verification Requirements

How Pennsylvania Could Shift the Focus in its TANF E&T Programs from the Very Strict Verification of Hours Requirements Currently in Place to More Simplified Tracking of Participation and Outcomes, Without Compromising its Ability to Meet the Federal TANF Work Participation Rate

How TANF Employment and Training Activities Would be Tracked and Reported Under EPC’s E&T Participation Tracking Proposal

Last Updated: August 2023 

Making recurring adjustments to TANF benefit levels to keep pace with inflation, such as through a statutory cost-of-living adjustment (COLA), maintains families’ purchasing power and helps them meet basic needs.  

TANF benefit levels have not kept pace with rising costs. In July 2022, TANF benefits had lost value in 44 states and DC compared to 1996 levels due to inflation. In some states, benefit levels have not been changed since the days of AFDC. Overall, families who are receiving TANF cash assistance are losing purchasing power, harming their ability to afford basic necessities and provide for their children. Low-income families, who are disproportionately families of color, are also more impacted by inflation. This worsens existing racial disparities—Black children and are also much more likely than white children to live in states with the lowest benefits. 

COLAs, either through statute or administrative action, provide a key mechanism for helping families to meet rising costs. When possible, COLAs should be paired with one-time or gradual benefit increases of a larger scale in order to restore value lost to inflation, as a COLA only prevents future erosion to inflation. While benefit levels were too low to meet a family’s needs in most states in 1996, it may be a reasonable goal to set a target of restoring the value lost since TANF’s creation and implementing a COLA to prevent future loss, especially in the states that have not increased or cut benefits since 1996.  

When setting a COLA by tying benefits to a Standard of Need or to a share of the federal poverty guidelines, it is critical to make sure that the level set is not too low. For example, South Carolina and Texas make small adjustments to their benefit levels so that they remain around 17 percent of the poverty line—this leaves families with far too few resources even though benefits have nearly kept pace with inflation. 

Key Resources:  

CBPP’s annual benefits paper:  The CBPP annual benefits paper reports benefit levels in the 50 states and DC as of July 1^st. The paper also includes analysis comparing benefit levels to the federal poverty line, to inflation (since 1996), and to housing costs. The paper also includes some analysis on the disproportionate impact low benefits have on Black children, and some of the racist history in AFDC that led to where we are today. The paper may not have the most recent data available. If you need more recent data, please reach out to CBPP staff to see if updated data is available.  

This document, State Approaches to Indexing TANF Benefits for Inflation, provides a quick summary of state approaches to COLAs along with text from and links to the state statutes that established the COLAs.  

This document, COLA Talking Points, provides information that you can use to make the case for why increasing benefits annually is a good policy that can help reduce poverty and reduce racial inequities.  

This paper from the Century Foundation provides a rationale for why indexing benefits (and wages) for inflation is an important strategy for reducing poverty:  Keeping Up with Inflation (tcf.org). 

The rate of trauma among TANF recipients is high. A study of TANF recipients in Utah found that 91.2 percent TANF recipients reported at least one adverse childhood experience compared to 58.9 percent of the general population. TANF recipients were also substantially more likely to report experiencing 5 or more adverse experiences (45.8 percent) compared to the general population (10.1 percent). You can find more detail in the study at this link: Utah TANF Characteristic Study (Wave 3 with ACES data).

Because of the high rates of trauma among TANF recipients, there has been some efforts to make TANF programs to become more “Trauma-informed.” These programs aim to provide safety, create a sense of belonging, help to provide recipients with greater agency and to affirm their dignity. Most TANF programs have a long way to go to be trauma-informed.

Helpful resources include the following:

Building a Trauma-Informed Temporary Assistance for Needy Families Program: An Evaluative Toolkit (hhs.gov)

A Trauma-Informed Approach to Workforce (Provided by the National Fund for Workforce Solutions) – Corporation for a Skilled Workforce | Corporation for a Skilled Workforce

Kellogg Foundation Trauma-Informed Family Coaching Toolkit

The Role of Trauma and Poverty in Decision-Making: Implications for OTDA (Includes TANF) Practices (buffalostate.edu) (ODTA is the agency in New York State that includes TANF.)

Trauma-informed Temporary Assistance for Needy Families (TANF): A Randomized Controlled Trial with a Two-Generation Impact – PubMed (nih.gov) (This is from a program in Philadelphia. There are additional resources listed on the page that this links to.)

Weathering: How Ongoing Stress Harms Black and Poor Americans (Re-broadcast) | Econofact Chats

This piece on addressing racial trauma may also be helpful: EAP-Understanding-and-Dealing-with-Racial-Trauma.pdf (cuny.edu)