Temporary Assistance for Needy Families

Abstract

Temporary Assistance for Needy Families (TANF) is a federal block grant program with a state contribution requirement that supports the provision of state aid to low-income families with children in the United States, including but not limited to cash assistance. Created by the 1996 welfare reform law, which ended entitlement to cash benefits under TANF’s predecessor Aid to Families with Dependent Children, TANF cash aid includes time limits and work requirements. States are also free to set their own program rules and may use funds for purposes other than direct poverty relief and services for cash assistance clients. Consequently, TANF varies widely across states in generosity of benefits, behavioral rules to which clients must adhere, and in the uses of program resources, with only about one-quarter of all state and federal TANF funds used for traditional cash assistance. Other priorities funded under TANF include work supports and child care, programming to promote two-parent families, refundable tax credits, and support of state child welfare systems. The end of entitlement to cash assistance under TANF was associated with a sharp decline in welfare caseloads and increases in employment in single-mother families nationwide. The initial implementation of TANF also coincided with a boom economy in the mid- to late-1990s and was immediately preceded by a large expansion of the Earned Income Tax Credit for low-wage workers. Studies disagree on the relative role each of these factors played in both caseload and employment trends, and women who moved off of welfare and into the labor force are often in unstable, low-paying jobs. The defining characteristic of cash-assistance receiving families is deep economic deprivation, and benefits do not bring a household above official income poverty in any state. In most states, they do not even bring a family to 50% of poverty. Cash assistance under TANF nonetheless remains an important backstop for families in extremely difficult circumstances.