Senior Policy Analyst
Temporary Assistance for Needy Families (TANF) cash benefits for the nation’s poorest families with children fell again in purchasing power in 2014 and are now at least 20 percent below their inflation-adjusted 1996 levels in 38 states, our new report explains. As the country moves past the economic downturn and state revenues recover, states should halt the erosion of TANF benefits and begin restoring the purchasing power lost since TANF’s creation in 1996.
While eight states raised benefits between July 2013 (the start of fiscal year 2014 in most states) and July 2014, the remaining states didn’t, allowing inflation to continue to erode the benefits’ value. As of July 2014:
Of the eight states that raised benefits in the past year (California, Connecticut, Maryland, Ohio, South Carolina, South Dakota, Texas, and Wyoming), all but California did so through annual or periodic adjustments that limit erosion due to inflation. Other states should consider adopting this approach — as well as benefit increases to make up at least some of the lost ground since 1996.
TANF recipients have a limited time on benefits, and most must participate in work or work-preparation activities. During this time-limited, work-focused window, TANF benefits need to better enable families to meet basic needs so they can focus on finding work and/or increasing their skills in order to leave welfare.