Policy Brief: Cash Assistance Should Reach Millions More Families

The Temporary Assistance for Needy Families (TANF) block grant is designed to provide a temporary safety net to families in poverty — primarily those with no other means to meet basic needs — but its reach has shrunk considerably over time.^[1] In 2018, for every 100 families in poverty, only 22 received cash assistance from TANF, down from 68 families when TANF was first enacted in 1996. This “TANF-to-poverty ratio” (TPR) is the lowest in the program’s history. (See Figure 1.) If TANF had maintained the same reach to families in poverty as its predecessor, Aid to Families with Dependent Children (AFDC), had in 1996, nearly 3.6 million families would have received TANF in 2018, about 2.4 million more than reported for that year.

Our analysis finds that:

• TANF provides a temporary safety net to few poor families and its reach continues to shrink, both nationally and in nearly every state. Black children are disproportionately likely to live in the group of states that have the lowest TPRs, compared to white children; as a result, Black children nationally are less likely than white children to have access to TANF assistance when they fall into crisis.
• State TANF caseloads have fallen in recent years due both to declines in the need for assistance and to state policy changes that make the program less accessible. The biggest caseload declines, however, have occurred in states with major policy changes.
• TANF lifts far fewer families out of deep poverty (that is, incomes below half of the poverty line) than AFDC and has put poor children at risk of much greater hardship, with the potential for long-term negative consequences.

The states and the federal government have a critical role in ensuring that families with the lowest incomes have access to a minimum level of support to meet their basic needs. The TANF block grant shifted that responsibility to states, which — with no national standards to hold them accountable for providing assistance to families in need — acted in their own self-interest, not in the best interest of families in poverty and particularly of families of color.

Figure 1

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TANF’s Reach Declining in Most States, Often Sharply

Generally, the TPR has declined over time because TANF caseloads have fallen much more than the number of poor families. That’s been the case over the past decade, for example: between 2006 and 2018, the number of families in poverty fell by 8 percent (from about 6 million to about 5.6 million), while the number of families receiving TANF fell by 34 percent (from 1.9 million to less than 1.3 million).

The national TANF-to-poverty ratio misses the extreme — and growing — variation among the states. In 2018 the TPR ranged from 68 in California down to just 4 in Louisiana.^[2] (See Table 1.) The TPR fell in a majority of states in recent years for several reasons: increases in the number of families living in poverty during and immediately following the recession, the failure of state TANF programs to respond to increased need during and after the recession, and state policy and administrative changes that made TANF less accessible, among other factors.

An especially troubling trend is the growing number of states with TPRs of 10 or less. In 2006, only two states (Idaho and Wyoming) had such low ratios. The list grew during the Great Recession and has continued growing since then. In 2018, 16 states — Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, North Carolina, North Dakota, Oklahoma, South Carolina, Texas, Utah, and Wyoming — had TPRs of 10 or less.

The wide variation among state TPRs also exacerbates disparities among racial groups in access to TANF. Nearly 41 percent of the nation’s Black children live in states with TPRs of 10 or less, compared to only 30 percent of the white children.^[3] Historically, a significant share of the Black children lived in states with lower-than-average access to direct financial assistance under AFDC. The removal of the federal minimal eligibility standards, the increase in state flexibility, and incentives for states to reduce caseloads have led to the decline in the TPR nearly every year since TANF’s start.

State Policy and Administrative Changes Have Driven Big Caseload Declines

TANF caseloads in most states have reached their lowest levels in the program’s history in the past decade and are much lower than when TANF was last reauthorized (by the Deficit Reduction Act, which took effect in 2006). In 39 states, caseloads fell by more than 20 percent between 2006 and 2018.

Caseloads fall when the need for assistance goes down or when states make the program less accessible. Both have occurred in the past ten years, but the biggest caseload declines occurred in states that made major policy changes that created barriers to TANF. Some states shortened or otherwise changed their time limits, cutting off families that remained in need. Others made it harder for families to qualify for benefits in the first place, such as by imposing more stringent applicant requirements. For example, between 2009 and 2015, Arizona cut benefits, shortened time limits to 12 months (the shortest in the country), and imposed other eligibility restrictions. These changes account for most of the 82 percent drop in Arizona’s TANF caseload between 2006 and 2018, which lowered its TPR from 27 to just 6.

Moreover, emerging evidence from a few states shows that many families leaving TANF due to restrictive state policies are worse off. A report from Washington State found that families cut off from the program due to time limits were more likely than other families leaving TANF to have barriers preventing them from entering the labor market and had higher rates of homelessness. A report reviewing data from Kansas found that most families leaving TANF due to stricter work sanctions did not find steady work or earn enough to lift their families out of deep poverty.

TANF Lifts Far Fewer Children Out of Deep Poverty Than AFDC

The decline in access to TANF benefits has left many of the poorest families without resources needed to meet their basic needs. TANF has failed to maintain the standard set by AFDC in reaching families, particularly those with children and those in deep poverty. TANF benefits are not sufficient to lift families out of poverty in any state, and while AFDC lifted more than 2.8 million children out of deep poverty in 1995, TANF lifted only 287,000 children out of deep poverty in 2016.^[4]

The evidence is clear that when families have more income, children do better in the future. Income support programs can improve children’s academic, health, and economic outcomes, the National Academies of Sciences’ report on reducing childhood poverty finds.^[5] Even relatively small amounts of income make a difference. Among families with incomes below $25,000, children whose families received a $3,000 annual income boost when the children were under age 6 earned 17 percent more as adults and worked 135 more hours per year after age 25 than otherwise-similar children whose families didn’t receive the income boost, research finds.^[6] That research suggests that TANF policy changes that cut families’ income, such as establishing harsher sanctions or shorter time limits or significantly reducing benefits, could harm young children now and in the future.

TANF Should Do More to Help Families Meet Basic Needs and Support Work

TANF is overdue for significant improvements. State and federal policy changes should focus on serving more families that need assistance, alleviating the program’s deep racial disparities, and ensuring that adequate resources are available to achieve these goals. For example, states should lift income thresholds and asset tests, remove barriers to access, and stop cutting off families that are still struggling. Additionally, federal policymakers should hold states accountable for serving families in need, require states to direct a specific share of TANF resources to families receiving cash assistance, and increase the block grant and index it to inflation.