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 However, the policy was never implemented and later repealed after the 2016 ACF guidance was released.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.