Policy Brief: States Must Continue Recent Momentum to Further Improve TANF Benefit Levels

Benefit Increases Can Promote Racial Equity and Child Well-Being

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. Despite recent increases, maximum TANF benefit levels are at or below 60 percent of the poverty line in every state and are below 20 percent in 16, mostly Southern, states. (See Figure 1.) In all but six states, benefit levels have declined in inflation-adjusted value since 1996. TANF benefits in all states also leave families unable to afford modest housing.

While TANF provides inadequate support 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 benefits are the lowest.[2] This continues a historical trend of states using their unfettered flexibility to set 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 benefits are the lowest.

Seventeen states increased benefit levels between July 2020 and July 2021. (See Table 1.) Some of the increases represent historic changes and continue the positive trend of states increasing benefit levels in recent years. Since 2015, 26 states and D.C. have raised their benefit levels at least one time, after a period when most states either cut or did not increase benefits in the aftermath of the Great Recession of 2007-09.

TABLE 1
States Raising TANF Benefits between July 2020 and July 2021
Monthly maximum benefit for a single-parent family of three
  July 2021 Benefit Increase Since
July 2020
Percent Change Recurring Adjustment?
Connecticut $709 $11 2% X
Illinois $543 $10 2% X
Maine $620 $9 1% X
Massachusetts $712 $119 20%  
Mississippi $260 $90 53%  
Nebraska $485 $17 4% X
New Hampshire $1,098 $12 1% X
Ohio $512 $7 1% X
Rhode Island $721 $167 30%  
South Carolina $305 $6 2% X
South Dakota $630 $15 2%  
Tennessee $387 $110 40%  
Texas $308 $5 2% X
Virginia $559 $51 10%  
Washington $654 $85 15%  
West Virginia $542 $202 59%  
Wyoming $726 $14 2% X

Note: TANF = Temporary Assistance for Needy Families.

Source: CBPP-compiled 2021 state benefit levels

TANF Benefits Are Low and Have Eroded in Value

Despite recent increases, TANF 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.) In 16 states,[3] benefit levels do not even reach 20 percent of the poverty line ($366 per month for a family of three), compared to seven states in 1996. Nationally, TANF 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.

Figure 1

In 2021, benefits in just six states had a real (inflation-adjusted) value that was the same as or higher than in 1996. (See Figure 2 and Table 2.) At the other end, 12 states[4] had the same nominal benefit levels in 2021 as in 1996, meaning that benefits have fallen by 41 percent in inflation-adjusted terms. Four states— Arizona, Hawai’i, Idaho, and Oklahoma — cut benefits without later restoring them, so these benefits are below their 1996 levels even without adjusting for inflation. In the remaining 29 states, benefit increases were not sufficient to keep pace with inflation, leading to an average value loss of 21 percent.

Figure 2

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)[5] for a two-bedroom apartment are well above 30 percent of their monthly 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.[6] 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 benefit for families who do not receive rental assistance. For example, Maine provides a housing supplement of up to $300 per month to households whose housing costs exceed 50 percent of their countable income. In Minnesota, TANF families who do not receive rental assistance are eligible for a flat housing supplement of $110 per month. More states should provide housing supplements to lessen the burden of high housing costs on TANF families.

State Benefit Decisions Rooted in Historical Racism Have Disparate Impacts

Low TANF benefits, which disproportionately affect the benefits available to Black children, are rooted in a long history of racist ideas and policies.[7] Fifty-two percent of all Black children in the United States live in states with benefit levels below 20 percent of the poverty line, compared to 41 percent of Latinx children and 37 percent of white children. (See Figure 3.)[8]

Figure 3

TANF 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.[9] This trend is consistent with findings regarding TANF’s predecessor, Aid to Families with Dependent Children (AFDC). States’ unfettered ability to set inadequate 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 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.[10]

In addition to keeping 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 additional cash to families who have another baby while receiving TANF.[11] 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.[12] These policies are based on racist ideas that Black women are lazy and immoral, but they harm families of all races.

TANF Benefit Increases Needed to Promote Racial Equity and Child Well-Being

While hardship rates have fallen in 2021 following a sharp increase due to the pandemic and recession, financial insecurity remains widespread.[13]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.[14] While TANF cannot ameliorate all of the barriers that families face, it can provide adequate benefits to help them meet their basic needs in times of crisis.

Given the history of cash assistance programs in the United States and what research tells us about child development, states and federal policymakers need to improve the adequacy of TANF benefits. Steps states can take now include:

  • Reinvest TANF dollars to provide higher benefit levels for participating families. At a minimum, states should raise their benefit levels to restore value lost to inflation since 1996.
  • Establish mechanisms to prevent benefits from eroding in the future. Adjusting TANF benefits yearly in step with inflation, such as through a statutory cost-of-living-adjustment (COLA),[15] would maintain families’ purchasing power and help them meet basic needs.
  • Provide additional monthly or short-term payments to families. States can to provide additional payments to TANF families to cover housing or other needs.
  • End policies that reduce or take away families’ benefits. In 2021, Maine passed legislation to end full family sanctions; Connecticut repealed its family cap law; and Illinois, Kentucky, and Nevada each fully lifted the TANF drug felony ban.

While states have the flexibility to ensure families have enough to afford the basic 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 benefits over time.

TABLE 2
State TANF Benefit Levels Relative to Poverty Line, 1996 and 2021
State Maximum Monthly Benefit, July 1996 Share of 1996 Poverty Line Maximum Monthly Benefit, July 2021 Share of 2021 Poverty Line 1996-2021 Change, Adjusted for Inflation
Alabama $164 15% $215 12% -22%
Alaska $923 68% $923 40% -41%
Arizona $347 32% $278 15% -52%
Arkansas $204 19% $204 11% -41%
California $596 55% $878 48% -12%
Colorado $356 33% $508 28% -15%
Connecticut $636 59% $709 39% -34%
Delaware $338 31% $338 18% -41%
District of Columbia $415 38% $658 36% -6%
Florida $303 28% $303 17% -41%
Georgia $280 26% $280 15% -41%
Hawai’i $712 57% $610 29% -49%
Idaho $317 29% $309 17% -42%
Illinois $377 35% $543 30% -14%
Indiana $288 23% $288 16% -41%
Iowa $426 39% $426 23% -41%
Kansas $429 40% $429 23% -41%
Kentucky $262 24% $262 14% -41%
Louisiana $190 18% $240 13% -25%
Maine $418 39% $620 34% -12%
Maryland $373 34% $727 40% 16%
Massachusetts $525 49% $712 39% -19%
Michigan $459 42% $492 27% -36%
Minnesota $532 49% $632 35% -29%
Mississippi $120 11% $260 14% 29%
Missouri $292 27% $292 16% -41%
Montana $438 40% $588 32% -20%
Nebraska $364 34% $485 27% -21%
Nevada $348 32% $386 21% -34%
New Hampshire $550 51% $1098 60% 19%
New Jersey $424 39% $559 31% -22%
New Mexico $389 36% $447 24% -32%
New York $577 53% $789 43% -19%
North Carolina $272 25% $272 15% -41%
North Dakota $431 40% $486 27% -33%
Ohio $341 32% $512 28% -11%
Oklahoma $307 28% $292 16% -43%
Oregon $460 43% $506 28% -35%
Pennsylvania $403 37% $403 22% -41%
Rhode Island $554 51% $721 39% -23%
South Carolina $200 18% $305 17% -9%
South Dakota $430 40% $630 34% -13%
Tennessee $185 14% $387 21% 24%
Texas $188 17% $308 17% -3%
Utah $416 38% $498 27% -29%
Vermont $597 55% $699 38% -30%
Virginia $354 33% $559 31% -6%
Washington $546 50% $654 36% -29%
West Virginia $253 23% $542 30% 27%
Wisconsin $517 48% $653 36% -25%
Wyoming $360 33% $726 40% 20%
Median state $377 35% $498 27% -21%

For more detailed notes on state benefit levels and sources, please see our full report at https://www.cbpp.org/research/family-income-support/tanf-benefits-still-too-low-to-help-families-especially-black.

 

End Notes

[1] Cindy Reyes is an intern with CBPP. 

[2] For more detail, see Ali Safawi and Cindy Reyes, “States Must Continue Recent Momentum to Further Improve TANF Benefit Levels,” CBPP, December 2, 2021, https://www.cbpp.org/research/family-income-support/tanf-benefits-still-too-low-to-help-families-especially-black.

[3] Alabama, Arkansas, Arizona, Delaware, Florida, Georgia, Idaho, Indiana, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, and Texas.

[4] Alaska, Arkansas, Delaware, Florida, Georgia, Iowa, Indiana, Kansas, Kentucky, Missouri, North Carolina, and Pennsylvania.

[5] The Department of Housing and Urban Development’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 2021,” National Low Income Housing Coalition (NLIHC), 2021, https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_2021.pdf.

[6] 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/.

[7] 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.

[8] CBPP analysis of 2020 U.S. Census population estimates collected from Kids Count Data Center, “Child Population by race in the United States,” Annie E. Casey Foundation, September 2021, https://datacenter.kidscount.org/data/tables/103-child-population-by-race?loc=1&loct=2#detailed/2/2-52/false/574/68,69,67,12,70,66,71,72/423.

[9] 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.

[10] Floyd et al., op. cit.

[11] 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.

[12] Ali Safawi, “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.

[13] CBPP, op. cit.

[14] National Academies of Science, Engineering, and Medicine, “The Consequences of Child Poverty,” A Roadmap to Reducing Child Poverty, 2019, https://www.ncbi.nlm.nih.gov/books/NBK547371/.

[15] 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.