TANF Benefits and Time Limits

Have cash assistance benefit levels increased and have they been indexed to inflation?

Are TANF funds used to provide "Diversion" grants to families needing one-time or emergency funds that will not count toward the lifetime limit on benefits?

Are appropriate cases designated as "child-only" (e.g. parent receiving SSI benefits or non-parent caretaker), thereby excluding the family from the TANF work requirement and time limits?

Are state MOE funds used to "stop the clock" on the 60-month lifetime limit of TANF benefits for income eligible families engaged in work activity at least 30 hrs/wk?

Are extensions to TANF 60-month lifetime limit granted through the FVO waiver?

If the state has a lifetime limit for cash assistance that is less than 60 months, are there appropriate extensions (e.g. for those who have unsuccessfully sought work) and exemptions (e.g. parents who are disabled or caretakers of disabled children)?

Have sufficient TANF funds been placed in a state "rainy day fund" to cover the next economic downturn, when the need for assistance will increase?

TANF Work Requirement

Is "work activity" defined to include activities that prepare TANF recipients for better employment, such as post-secondary education and ESL classes?

Are TANF or WtW funds used to provide comprehensive work preparation and supported-employment programs for the hard-to-employ?

Are exemptions from the TANF work requirement granted through the FVO waiver?

Are state MOE funds used to provide cash assistance for those whom the state wishes to exempt from the TANF work requirement (i.e. disabled parents, elderly caretakers, and caretakers of severely disabled children)?

Is the state opting to exempt single parents of children under age one from the work requirement, thereby saving child care resources for other low-income families?

Rewarding and Supporting Work

Are recipients allowed to earn sufficient income, and still retain eligibility for partial cash assistance to maintain financial stability while transitioning off welfare?

Are asset allowances (e.g. savings, value of vehicle, real estate, and business equipment) for TANF eligibility sufficient to provide families the insurance against financial uncertainty, that is necessary to sustain economic independence?

Are families transitioning to work and other low-wage earning families offered child care subsidies through CCDBG, TANF or WtW funds?

Are families transitioning to work and other low-wage earning families provided transportation assistance through TEA-21, TANF or WtW funds?

Are TANF or WtW funds used to provide follow-up services, such as crisis management and counseling, to aid in work retention?

Are TANF funds used to provide a substantial match to reward families for saving through Individual Development Accounts (IDAs)?

Are TANF funds used to enhance earnings through refundable state Earned Income Tax Credits and Child and Dependent Tax Credits for families too poor to owe taxes?

Other Assistance Programs

Are state MOE funds used to provide food and cash assistance to newly arrived (after 8/22/96) legal immigrants?

Are non-TANF, low-income families made aware of their eligibility for Food Stamps and Medicaid, and are their applications processed according to federal requirements?

Are two-parent families made eligibility for Medicaid to the same extent as single-parent families?

Are countable income and resources defined in a manner to expand eligibility for Medicaid to more low-income, uninsured families?

Are all uninsured, minor children in families up to 200% of poverty eligible for CHIP?

Are premiums and co-payments for services provided through CHIP "nominal", so as not to be prohibitive for low-income families?

"Twenty Questions" probes state policy choices to determine if your state is utilizing its options to help welfare recipients and other low-income families achieve greater economic security. Responses can be used to flag key areas where your state is not using available funds and flexibility, and to make an overall assessment of your state as welfare policy for poor families with children.

The primary source of federal funds for poor families with children is the block grant that created the Temporary Assistance to Needy Families (TANF) program that replaced Aid to Families with Dependent Children (AFDC) and the former job assistance program. While TANF ended the entitlement for cash assistance for very poor families, most states have placed only limited, if any, new restrictions on eligibility for cash assistance and some states have raised benefit levels. The amount of annual authorized TANF funding was based on a period when AFDC caseloads were high due to a poor economy, thus declining caseloads have left most states with a surplus of TANF funds. By the end of FY' 98, approximately $3 billion in federal TANF funds, for FY' 97 and FY' 98 combined, were left unexpended and unobligated. States can designate these unexpended funds as a reserve for the "rainy day" when an economic downturn increases the need for cash assistance, or use them and future surpluses to fund policies and programs that assist families to permanently leave welfare.

In addition to cash assistance, TANF funds can be expended for supports and programs that enhance income and the capacity to work for families who meet the TANF criteria. Many states have enacted policies that increase household income and assets. Some states have opted to use TANF funds for comprehensive employment and training programs that assist recipients prepare for work, retain employment, and move to better jobs. States are also using TANF funds for child care or transportation assistance to make work feasible. The final federal regulations for TANF affirm the flexibility states have to determine how to best use these funds to assist low-income families. (TANF regulations also permit states to use the Family Violence Option (FVO) to waive, without penalty, certain TANF requirements for a victim of domestic violence when complying with the requirements would make it more difficult for the victim to escape domestic violence.)

For a state to receive its TANF funds, it must meet its maintenance of effort (MOE) requirement by maintaining annual state funding at 80% (or 75% if the work participation rate is reached) of historic levels. These MOE funds can be combined with TANF funds, or used to fund separate programs that better meet the needs of certain low-income families. Expenditures on these so-called "separate state programs" can help states meet the MOE requirement, but the basic requirements that attach to use of TANF funds -- time limits, work participation requirements, and child support assignment -- do not apply because the programs include no TANF funding. The final TANF regulations express support for creation of separate state programs and make it clear that states will not be penalized for policy initiatives that actually further the goals of welfare reform.

States can access several other federal funding sources for aiding families in transitioning from welfare to work if the state authorizes the required matching funds. In addition to creating TANF, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) included the Child Care Development Block Grant (CCDBG) expanding funds for child care assistance. Provisions in PRWORA also make it possible for states to provide Medicaid coverage to more uninsured, poor working parents. The Balanced Budget Act of 1997 created the Welfare-to-Work grants (WtW) for employment-related activities aimed largely at individuals on welfare facing significant work barriers. This act also created the state child health insurance programs (CHIP) to provide health care coverage to uninsured children living in low-income families. The new Transportation Equity Act for the 21st Century (TEA-21) provides funding to assist states and localities develop flexible transportation services to connect welfare recipients and other low-income persons to jobs and other employment-related services.

For more information, contact Sandra Venner at the Center on Hunger and Poverty.