Policy Brief: Increases in TANF Cash Benefit Levels Are Critical to Help Families Meet Rising Costs
Temporary Assistance for Needy Families (TANF), the primary cash assistance program for families with children when they face a crisis or have very low incomes, can play a key role in ensuring that these families have income for their basic needs. Research shows that cash assistance to families experiencing poverty can improve children’s long-term prospects. Fifteen states and the District of Columbia increased cash benefit levels between July 2021 and July 2022. (See Table 1.) All but six of these increases represent recurring adjustments. Some of the increases represent historic changes and continue the positive trend of states increasing cash benefit levels in recent years. The benefit level (in nominal dollars) in the median state is now $492, a decrease from last year’s median state benefit level of $498.
TANF falls short of its potential in providing cash assistance for all children, it does a particularly poor job of aiding Black children, who are more likely than white children to live in states where cash benefits are the lowest. This continues a historical trend of states using their unfettered flexibility to set cash benefit levels for TANF and its predecessor programs to preserve economic systems that exploit Black families. Latinx children are also somewhat more likely than white children to live in states where cash benefits are the lowest.
|States Raising TANF Cash Benefits between July 2021 and July 2022|
|Monthly maximum benefit for a single-parent family of three|
|State a||July 2022 Benefit||Increase Since |
|Percent Change||Recurring Adjustment?|
|District of Columbiad||$665||$7||1%||X|
TANF = Temporary Assistance for Needy Families.
a Massachusetts had a cash benefit increase that did not become effective until October 2022. The cash benefit level is now $783.
b California increased its cash benefit levels to $1,119 effective October 2022.
c In 2022 Connecticut changed the way its benefit is calculated, which resulted in its benefit increase of $62. Connecticut now ties its benefits to 73 percent of its Standard of Need, which is based on 55 percent of the federal poverty level. This means that benefits are effectively indexed to 40 percent of the federal poverty level and will automatically increase going forward. Prior to 2022 Connecticut's benefit level was based on a payment standard from the AFDC program, which was adjusted annually based on the Social Security Administration’s COLA for Social Security and Supplemental Security Income benefits, contingent on funds being available.
d The District of Columbia included a provision in its fiscal year 2023 budget to implement an annual COLA at the beginning of its fiscal year, October 2022. Its benefit as of October 1, 2022, is $696 for a family of three.
Source: CBPP-compiled 2022 state benefit levels
TANF Cash Benefits Are Low and Have Eroded in Value
In 15 states, cash benefit levels do not even reach 20 percent of the poverty line ($386 per month for a family of three), compared to seven states in 1996. Despite recent increases, TANF cash benefits still leave a family of three at or below 60 percent of the poverty line in every state. (See Figure 1 and Table 2.)
Nationally, TANF cash benefits have lost substantial purchasing power due to inflation and do far less to help families escape “deep poverty” (family incomes below half of the poverty line) than in 1996.
State Cash Benefit Decisions Have Disparate Impacts, Especially for Black Children
Low TANF cash benefits, which disproportionately affect the benefits available to Black children, are rooted in a long history of racist ideas and policies. Forty-eight percent of all Black children in the U.S. live in states with cash benefit levels below 20 percent of the poverty line, compared to 40 percent of Latinx children and 35 percent of white children.25 (See Figure 3.)
TANF cash benefit levels tend to be lower in states where Black residents make up a greater share of the population, when controlling for other factors, recent research finds. This trend is consistent with findings regarding TANF’s predecessor, Aid to Families with Dependent Children (AFDC). States’ unfettered ability to set inadequate cash benefit levels set the course for these racial and disparities. As Congress debated the 1935 Social Security Act, which created AFDC (originally Aid to Dependent Children or ADC), initial proposals by federal policymakers to provide adequate cash benefits were undermined by a then-powerful Southern congressional bloc, which insisted on state and local control over the program. Later attempts to establish a minimum federal benefit for AFDC were similarly rejected by Congress. By defeating these proposals and others that would have made cash assistance more adequate and accessible to Black women and their families, lawmakers preserved racial discrimination and segregation in the economy by ensuring that AFDC did not compete with the low wages paid to Black workers, who often were segregated into agricultural and domestic roles.
In addition to keeping cash benefit levels low, states with higher shares of Black residents are likelier to adopt punitive TANF policies that reduce or take away families’ benefits. These policies include full family sanctions, which take away a family’s entire benefit for not meeting work requirements, and family caps, which deny a higher benefit to families who have another baby while receiving TANF. They also include states’ decision whether to partially or fully lift the federal drug felony ban, which denies families benefits appropriate for their family size by making parents with drug felony convictions ineligible for assistance. These policies are based on racist ideas about Black women, but they harm families of all races.
Families Cannot Afford Modest Rent with TANF Benefits
In every state, modest rental housing is unaffordable for TANF families. Federal standards define rent (including utilities) as affordable when it takes up no more than 30 percent of a household’s income. For families whose only source of income is TANF, Fair Market Rents (FMRs) for a two-bedroom apartment are well above 30 percent of their monthly cash benefit in every state. This is particularly concerning for Black and Latinx children, whose families face higher rates of housing insecurity and eviction filing, both before and during the COVID-19 pandemic. When TANF families must spend more of their grant on their rent, they are left with less flexible income to spend on other needs.
A few states provide a housing supplement in addition to the base TANF cash benefit for families who do not receive rental assistance. For example, Hawai’i now provides a housing supplement of up to $500 per month to households participating in the First-to-Work program after the legislature found that many participants could benefit from additional assistance to meet housing costs. Families in Hawai’i receiving the $500 housing supplement could afford a rent that is 35 percent of FMR, compared to 9 percent without the supplement. More states should provide housing supplements to lessen the burden of high housing costs on TANF families.
Increasing TANF Benefits Is Critical for Families’ Economic Stability
A large and growing body of research shows that experiencing poverty and hardship, even briefly, can have detrimental, life-long impacts on children. Researchers have linked stress caused by a scarcity of resources to long-lasting negative consequences for children’s brain development and physical health. Income support programs can improve children’s academic, health, and economic outcomes, the National Academies of Sciences, Engineering, and Medicine’s report on reducing child poverty finds. While TANF cannot ameliorate all of the barriers that families face, it can provide adequate cash benefits to help them meet their basic needs in times of crisis.
Taking steps to raise cash benefit levels and enact COLAs are especially critical during periods of rising costs that disproportionately harm families of color and make it harder for families with low incomes to afford even necessities. Steps states can take now include:
- Reinvest TANF dollars to provide higher cash benefit levels for participating families. At a minimum, states should raise their cash benefit levels to restore value lost to inflation since 1996.
- Establish mechanisms to prevent benefits from eroding in the future. Adjusting TANF cash benefits yearly in step with inflation, such as through a statutory cost-of-living-adjustment (COLA), would maintain families’ purchasing power and help them meet basic needs.
- Provide additional monthly or short-term payments to families. States can provide additional payments to TANF families to cover housing or other needs.
- End policies that reduce or take away families’ benefits. In 2022, Colorado fully lifted the TANF drug felony ban; Connecticut and Oregon eliminated full-family sanctions; Rhode Island extended its time limit from 48 to 60 months; and Vermont significantly altered its work requirements.
While states have the flexibility to ensure families have enough to afford necessities, they have a long history of providing inadequate assistance to families — especially states with higher shares of Black residents. To ensure that no family falls below a certain income level, Congress needs to establish a federal minimum benefit. Congress also needs to make significant changes to TANF’s funding structure to retarget its resources to provide cash assistance, address funding inequities, and prevent the erosion of cash benefits over time.
|State TANF Cash Benefit Levels Relative to Poverty Line, 1996 and 2022|
|State||Maximum Monthly Benefit, July 1996||Share of 1996 Poverty Line||Maximum Monthly Benefit, July 2022||Share of 2022 Poverty Line||1996-2022 Change, Adjusted for Inflation|
|District of Columbia||$415||38%||$665||35%||-12%|
a Massachusetts had a cash benefit increase that did not become effective until October 2022. The cash benefit level for a family of three is now $783 with a -18 percent change between 1996 and 2022, adjusted for inflation. With the new cash benefit level, its share of 2022 poverty line is 41 percent.
For more detailed notes on state benefit levels and sources, please see our full report at https://www.cbpp.org/research/income-security/increases-in-tanf-cash-benefit-levels-are-critical-to-help-families-meet-0
 Da’Shon Carr was an intern with CBPP from June 2022 through December 2022.
 For more detail, see Ife Floyd and LaDonna Pavetti, “Improvements in TANF Cash Benefits Needed to Undo the Legacy of Historical Racism,” CBPP, January 26, 2022, https://www.cbpp.org/research/income-security/improvements-in-tanf-cash-benefits-needed-to-undo-the-legacy-of-historical.
 Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, and Texas.
 For more on the racist history of AFDC and TANF benefit levels, see Ife Floyd et al., “TANF Policies Reflect Racist Legacy of Cash Assistance,” CBPP, August 4, 2021, https://www.cbpp.org/research/family-income-support/tanf-policies-reflect-racist-legacy-of-cash-assistance.
CBPP analysis of 2021 U.S. Census population estimates collected from Kids Count Data Center, “Child Population by race in the United States,” Annie E. Casey Foundation, October 2022, https://datacenter.kidscount.org/data/tables/103-child-population-by-race-and-ethnicity?loc=1&loct=2#detailed/2/2-52/false/2048/68,69,67,12,70,66,71,72/423.
Heather Hahn et al., “Why Does Cash Welfare Depend on Where You Live?” Urban Institute, June 5, 2017, https://www.urban.org/research/publication/why-does-cash-welfare-depend-where-you-live.
 Floyd et al., op. cit.
Hahn et al., op. cit.; Joe Soss et al., “Setting the Terms of Relief: Explaining State Policy Choices in the Devolution Revolution,” American Journal of Political Science, Vol. 45, No. 2, Apr. 2001, http://urban.hunter.cuny.edu/~schram/ssvosettingthetermsofrelief.pdf.
Ali Zane, “Remaining States Should Lift Racist TANF Drug Felony Bans; Congress Should Lift It Nationwide,” CBPP, June 30, 2021, https://www.cbpp.org/blog/remaining-states-should-lift-racist-tanf-drug-felony-bans-congress-should-lift-it-nationwide.
 HUD’s FMRs are gross rent estimates that include the shelter rent plus the cost of all utilities except phone and internet. For more on FMRs, see Andrew Aurand et al., “Out of Reach 2022,” National Low Income Housing Coalition (NLIHC), 2022, https://nlihc.org/oor.
 Arloc Sherman, “Widespread Economic Insecurity Pre-Pandemic Shows Need for Strong Recovery Package,” CBPP, July 14, 2021, https://www.cbpp.org/research/poverty-and-inequality/widespread-economic-insecurity-pre-pandemic-shows-need-for-strong; CBPP, “Tracking the COVID-19 Economy’s Effects on Food, Housing, and Employment Hardships,” updated November 10, 2021, https://www.cbpp.org/research/poverty-and-inequality/tracking-the-covid-19-economys-effects-on-food-housing-and; Emily Lemmerman et al., “Preliminary Analysis: Who is being filed against during the pandemic?” The Eviction Lab, December 21, 2020, https://evictionlab.org/pandemic-filing-demographics/.
 For more on TANF housing supplements see Ali Zane, Cindy Reyes, and LaDonna Pavetti, ”TANF Can Be a Critical Tool to Address Family Housing Instability and Homelessness,” CBPP, July 19, 2022, https://www.cbpp.org/research/family-income-support/tanf-can-be-a-critical-tool-to-address-family-housing-instability.
 A statutory COLA is the best way to ensure that benefits keep pace with inflation. For example, Wyoming’s COLA is based on the Wyoming Cost of Living Index for the previous year. New Hampshire’s benefit level is tied to 60 percent of the federal poverty line, which is indexed for inflation. Therefore, the state’s benefit also rises each year with inflation. These policies have made New Hampshire and Wyoming two of only six states whose benefits have risen since 1996 in inflation-adjusted terms.
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Da’Shon Carr was an intern with CBPP from June 2022 through December 2022.