More States Raising TANF Benefits to Boost Families’ Economic Security
December 9, 2019
Temporary Assistance for Needy Families (TANF), the primary cash assistance program for families living in poverty, can play a key role in ensuring that families struggling to make ends meet have sufficient income for rent and other basic expenses such as food, clothes, transportation, and personal care products. Studies show that income matters: financial stability gives children a better chance of growing up healthy and with the opportunity to thrive. Recognizing the importance of income for children’s long-term growth and development — and the inadequacy of their existing TANF benefits — a number of states have chosen to raise their TANF grants to families in the past few years. Fourteen states plus the District of Columbia have done so since July 2018.
"States need to do much more for TANF to fulfill its core purpose of helping families that struggle to meet basic needs."
Yet states need to do much more for TANF to fulfill its core purpose of helping families that struggle to meet basic needs. Until recently, most states were going in the wrong direction; many still are. In 33 states, benefit levels have declined by at least 20 percent in inflation-adjusted value since TANF’s enactment in 1996. In every state, benefits are at or below 60 percent of the poverty line and fail to cover rent for a modest two-bedroom apartment. Also, while TANF is designed to help all families that are struggling, state decisions can exacerbate racial disparities: Black children are likelier to live in the states with the lowest benefit levels, even though Black families face some of the greatest hurdles to economic security.
States can provide more stability to families by raising benefit levels, at a minimum to recover their lost purchasing power since TANF’s creation, and by implementing mechanisms to preserve the benefits’ value over time. Boosting families’ incomes not only helps them meet their basic needs in the short term, but also builds well-being from childhood through adulthood, including improved academic, health, and long-term economic outcomes for children. All states, particularly those with the lowest benefit levels, should go further in increasing cash assistance for children and their parents to increase the likelihood that future generations will experience economic stability.
This report, an annual update of state TANF benefit levels as of July 1, covers benefit changes that took effect between July 1, 2018, and July 1, 2019. The benefit levels cited here reflect the maximum monthly benefit for a family of three with no other income as of July 1, 2019; they may exceed what many families actually receive because families often do not receive the maximum TANF benefit. Family grants in six states (California, Connecticut, New York, Pennsylvania, Vermont, and Virginia) vary by geographic region. Unless noted otherwise, this paper reports the benefit level in the state’s most populous region.
One-Third of States Raised Benefits for 2019 or 2020
Fourteen states plus the District of Columbia raised TANF benefit levels between July 1, 2018 and July 1, 2019 (see Table 1). Four states made legislative or administrative changes to increase benefits later in 2019 or in 2020. Though most increases were very small, the median state benefit increased from $450 to $486. Some of the increases represent historic changes for the state’s TANF program; in Colorado, Illinois, Minnesota, and Tennessee, for example, they were the first in roughly a decade or more. This positive trend started in 2013, the first year after the economic downturn in which no state cut benefit levels. Since then 22 states and D.C. have increased benefits one or more times.
Benefit Increases Taking Effect Through July 1, 2019
Six states plus the District of Columbia took specific legislative or administrative actions to increase grants by July 1, 2019. California’s increase, from $714 to $785 in April 2019, was the first in a multi-step process to move the grant to at least half of the poverty line.
|States Raising TANF Benefits in Past Year (Monthly benefit for family of three)|
|July 2019 Benefit||Increase Since July 2018||Increase Due to an Annual or Periodic Adjustment|
|District of Columbia||$642||$66|
Three of these states increased benefits for the first time in years. Colorado raised benefits from $462 to about $508 in September 2018, the first increase since 2009. Illinois raised benefits from $432 to $520 in October 2018, the first increase since 2008. Tennessee raised benefits from $185 to $277 in December 2018, the first increase since before TANF’s creation.
Eight states raised benefits as the result of annual or periodic adjustments to reflect changes in living costs or the federal poverty line. For example, Maine raised benefits from $582 to $594 in October 2018 based on Social Security’s inflation adjustment. The New Hampshire benefit, tied to 60 percent of the poverty line, increased from $1,039 to $1,066 in March 2019. The Wyoming benefit, which keeps pace with inflation through the state’s cost-of-living index, increased from $675 to $697 in July 2019.
Benefit Increases Taking Effect After July 1, 2019
Four states scheduled increases to take effect after July 1, 2019. California increased benefits to about 48 percent of the federal poverty level, raising benefits from $785 to $853 effective October 2019.
Illinois tied its benefit to 30 percent of the federal poverty level beginning in October 2019. Minnesota will increase its benefit by $100 per month per household beginning in February 2020, the first increase in over 30 years. Vermont raised benefits by about 10 percent in August 2019, to $699 for most of the state. 
Benefits Remain Far Below Poverty Line
Despite these increases, TANF benefits still leave family incomes at or below 60 percent of the poverty line in every state. (See Figure 1 and Appendix Table 2.) In 1996, 16 states had benefit levels at or below 30 percent of the poverty line; today, 32 states do. In 18 of those states, benefit levels are at or below 20 percent of the poverty line — that is, $356 a month or less.
While Black children and white children are equally likely to live in a state that increased benefit levels in the past year, Black children are still likelier than white children to live in the states with the lowest benefit levels. (See Appendix Table 7a.) Over half (55 percent) of Black children live in a state with benefits at or below 20 percent of the poverty line, compared to 40 percent of white children. Many of these states had some of the lowest benefits under TANF’s predecessor, Aid to Families with Dependent Children (AFDC), and have failed to make much progress since then. Among the states with the lowest benefits and the largest Black child populations:
- Florida, Georgia, and North Carolina have not increased benefits since before the start of TANF;
- Alabama, Louisiana, and Mississippi have not raised benefits in more than a decade; and
- Texas and South Carolina increase their benefit nearly every year but only to keep it at about 17 percent of the poverty line.
TANF benefits have fallen substantially in value, they do much less to help families escape “deep poverty” (family incomes below half of the poverty line) than in 1996. In all but three states, a poor family relying solely on TANF to provide the basics for its children — such as during a period of joblessness, illness, or disability — has less purchasing power with its benefits today than it did in 1996. (See Figure 2 and Appendix Tables 2 and 3.) In many states, the decline has been dramatic:
- Since 1996, benefits have fallen by 20 percent or more in 33 states, after adjusting for inflation.
- Fourteen states had the same nominal benefit levels in July 2019 as in 1996, meaning that benefits have fallen in inflation-adjusted terms by 39 percent.
- In four states (Arizona, Hawaii, Idaho, and Oklahoma), TANF benefits are below their nominal 1996 levels. After adjusting for inflation, benefits in Arizona, Hawaii, and Oklahoma have fallen by 40 percent or more from their 1996 levels.
The decline in TANF benefits since 1996 follows a quarter-century of major declines in the real value of benefits provided through AFDC. Between 1970 and 1996, AFDC benefits fell by more than 20 percent in every state but one and by more than 40 percent in two-thirds of the states, after adjusting for inflation.
Some families can combine TANF benefits with earned income to help meet basic needs; nearly all states have adopted “make work pay” policies under which TANF benefits phase out gradually as family earnings increase. But such families still become ineligible for TANF cash assistance at very low income levels in nearly all states. And not all TANF families can supplement benefits with earnings; many families include parents who have significant disabilities or other barriers to work.
Benefits Cover Only Fraction of Modest Housing Costs
"Only about 17 percent of TANF families receive HUD housing assistance."
While TANF benefit levels have risen slightly, the cost of housing in most areas also continues to rise, substantially in some areas. The monthly TANF benefit for a family of three is well below the estimated cost of a modest two-bedroom apartment and utilities (based on the Department of Housing and Urban Development’s [HUD] Fair Market Rents) in every state. It is less than half of the Fair Market Rent in 30 states plus D.C., compared with only eight states in 1996. Between 1996 and 2019, the median Fair Market Rent nationally rose from $543 to $958, while the median TANF benefit only rose from $377 to $486. (These figures are in nominal dollars.) In all but two states, TANF benefits covered a smaller share of housing costs in 2019 than in 1996. (See Figure 3.)
TANF benefits cover an especially small share of housing costs in states where Black children are likelier to live. (See Appendix Table 7a.) This includes states where the cost of living is relatively low. Almost half (46 percent) of Black children live in states with benefits that cover less than one-third of the housing costs for a modest two-bedroom apartment, compared to 27 percent of white children.
Only about 17 percent of TANF families receive HUD housing assistance. Some states provide small additional funds to help families cover housing costs, but these rarely cover the large gap between TANF grants and Fair Market Rents.
Housing is only one essential need that TANF families need cash income to cover. They have to buy food since SNAP benefits often do not last the entire month. Parents must buy clothes and shoes on a regular basis for growing children. Families also need cash to pay for transportation, telephone service, laundromats, toiletries, diapers and other baby supplies, school and work-related expenses, household cleaning supplies, health expenses not covered by Medicaid, and other miscellaneous costs. Because decent housing can prove expensive, TANF families without housing assistance often live with families and friends, contributing what they can to rent and utilities, or opt for more affordable but substandard housing. As a result, they have high rates of housing instability, resulting in frequent involuntary moves, eviction, or homelessness. Such instability can harm both adults and children and is associated with poor school performance, poor cognitive development, increased health risks, and mental health problems.
SNAP Benefits Help, But Large Shortfall Remains
TANF and SNAP benefits together do a better job of pulling families out of deep poverty than TANF alone. About 82 percent of TANF households consistently receive SNAP benefits. In fiscal year 2017, the average monthly SNAP benefit for households with TANF income was $397. Nevertheless, families receiving both SNAP and TANF benefits still fall below 75 percent of the poverty line in every state except one, as Figure 4 shows.
Because TANF benefits are so low in states where many Black children live, 55 percent of Black children live in states where TANF plus SNAP benefits are still below 50 percent of the poverty line, compared to 40 percent of white children. (See Appendix 7b.) (To simplify the comparison, CBPP’s calculation for the SNAP benefit uses reasonable assumptions for TANF families’ shelter costs and non-TANF income, which yield greater SNAP benefits than the average TANF family likely receives.)
Child Development Research Highlights Potential Gains From Raising TANF Benefits
"Income support programs can improve children’s academic, health, and economic outcomes."
Income supports like TANF during early childhood can improve the lives of children living in poverty, researchers generally agree. Raising the incomes of families in poverty relieves the stress caused by a scarcity of resources, which research has linked to 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’ report on reducing childhood poverty finds. Even relatively small infusions of cash, like those from TANF, can make a difference.
Unfortunately, TANF does not do enough to stabilize families in poverty. The block grant to states is fixed and has lost nearly 40 percent of its inflation-adjusted value since 1996. In addition, states spend only about 20 percent of federal and state TANF funds on basic assistance, down from 40 percent in 2000. In the years immediately after the 1996 law created TANF, large caseload declines allowed states to channel freed-up funds from TANF benefits to child care and work programs. But states over time redirected a substantial portion of their federal TANF and state maintenance-of-effort (MOE) funds to other purposes, in some cases to supplant (replace) existing state spending and thereby help close budget holes or to free up funds for purposes unrelated to low-income families or children.
Nor did states invest the funds freed up by caseload declines to maintain their direct financial assistance programs. This failure left the most disadvantaged families without the support they need to make ends meet. As this paper shows, it is increasingly difficult for TANF recipients to meet basic needs. In particular, TANF families often find themselves in poor housing conditions with few resources to pay for even a modest apartment. And because Black children are likelier to live in the states with the lowest TANF benefits, a Black child in poverty has access to fewer resources than a white child in poverty on a national basis, which puts poor Black children at greater risk of negative outcomes.
States in general need to improve the adequacy of TANF benefit levels. States with the lowest benefits, in particular, need to do more to ensure that all families in poverty have access to more cash to help them meet their basic needs. Many of the states that raised benefits in the past year did so through annual or periodic adjustments that generally occur by default or automatically. Such an approach — when combined with an initial benefit increase to recover lost purchasing power due to inflation — can be an effective way to protect benefits from erosion due to inflation. With many state TANF caseloads reaching their lowest levels ever, state policymakers can use the resulting savings to provide more adequate levels of basic assistance:
- States should reinvest TANF and MOE funds back into basic assistance or other areas to meet families’ basic needs, starting with providing higher cash grants for participating families. As part of this reinvestment, states should, at a minimum, restore the full value of benefits that has been lost since 1996 and any additional cuts made during the Great Recession, even if that requires several incremental increases over a period of years.
- States should establish mechanisms to prevent benefits from eroding in the future. Adjusting TANF benefits yearly in step with inflation can maintain families’ purchasing power and help them meet basic needs. This not only improves the lives of parents and children receiving TANF, but also helps local communities, as poor families quickly put that money into the local economy.
- States should direct any remaining funds toward services and activities that support families that either receive or qualify for assistance.
|APPENDIX TABLE 1|
|Monthly TANF Benefit Levels*|
|(Single-parent family of three)|
|July 1996||July 2000||July 2005||July 2010||July 2017||July 2018||July 2019||Change 1996-2019 (inflation-adjusted dollars)|
|New Jersey 15||424||424||424||424||424||466||559||-19%|
|APPENDIX TABLE 2|
|TANF Benefit Levels as Percentage of Federal Poverty Level|
|APPENDIX TABLE 3|
|Changes in Real (Inflation-Adjusted) TANF Benefits Comparing 2019 Benefits with Benefits in 1996, 2000, 2005, and 2010|
|APPENDIX TABLE 4|
|TANF Benefit Levels as Percentage of Fair Market Rents|
|APPENDIX TABLE 5|
|2019 TANF and SNAP Benefit Levels as Percentage of Federal Poverty Level (FPL)|
|TANF as Percent of FPL||SNAP + TANF as Percent of FPL|
|APPENDIX TABLE 7A|
|States Falling Lowest on Key TANF Economic Security Indicators|
|TANF Benefit Levels 0-20% of FPL||TANF Benefits Cover Less Than 1/3 of FMR||TANF and SNAP Benefits Remain Below 50% of FPL||Share of U.S. Black Child Population||Share of U.S. White Child Population|
|APPENDIX TABLE 7B|
|Share of Black and White Child Population Living in States Failing on Key TANF Economic Security Indicators|
|Live in States With TANF Benefit Levels 0-20% of FPL||Live in States With TANF Benefits Covering Less Than 1/3 of FMR||Live in States Where TANF and SNAP Benefits Remain Below 50% of FPL|
|Share of U.S. Black Child Population||55%||46%||55%|
|Share of U.S. White Child Population||40%||27%||40%|
 National Academies of Sciences, Engineering and Medicine, “A Roadmap to Reducing Child Poverty,” 2019, https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-poverty.
 Prior to October 2018, Illinois had different benefit levels based on geographic region.
 Wyoming’s benefit level is adjusted each July based on the state’s cost-of-living index for the previous year as determined by the Division of Economic Analysis.
 This benefit represents families living outside Chittenden County, Vermont.
 The 2018 poverty guideline from the Department of Health and Human Services for a family of three is $1,732 per month in the 48 contiguous states and Washington, D.C.; Alaska and Hawaii have higher guidelines. (See https://aspe.hhs.gov/poverty-guidelines.) CBPP uses HHS’ poverty guidelines in this analysis because they are a simplification of the poverty thresholds (the Census Bureau’s measure of poverty) and are used to determine financial eligibility for certain programs.
 Racial composition analysis based on U.S. Census July 2017 population data.
 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, April 2001, http://urban.hunter.cuny.edu/~schram/ssvosettingthetermsofrelief.pdf.
 1996 Green Book, House Ways and Means Committee, Table 8-15, http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=104_green_book&docid=f:wm014_08.pdf.
 Fair Market Rents, set by HUD, are gross rent estimates. They include the shelter rent plus the cost of all utilities except telephones.
 Analysis of compiled TANF benefit levels and data on state average FMRs published by the National Low Income Housing Coalition’s 2018 “Out of Reach” report, http://nlihc.org/sites/default/files/oor/OOR_2018.pdf.
 CBPP calculation of TANF caseload and HUD administrative data.
 Matthew Desmond, “Eviction and the Reproduction of Urban Poverty,” American Journal of Sociology, Vol. 118, No. 1, 2012.
 Will Fischer, “Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children,” Center on Budget and Policy Priorities, October 7, 2015, htps://www.cbpp.org/research/housing/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term.
 “Characteristics and Financial Circumstances of TANF Recipients Fiscal Year (FY) 2018,” Department of Health and Human Services, Office of Family Assistance, https://www.acf.hhs.gov/sites/default/files/ofa/fy18_characteristics_web_508_2.pdf.
 “Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2017,” Department of Agriculture, Food and Nutrition Service, February 2019, https://fns-prod.azureedge.net/sites/default/files/resource-files/Characteristics2017.pdf.
 In calculating typical SNAP benefits, this analysis assumed that a family’s shelter costs are the median shelter costs for families of three receiving SNAP with incomes at or below 80 percent of the poverty line and that the household received no income besides the TANF benefit. A family’s SNAP benefit is based on its income and deductions, most significantly the capped deduction for high shelter costs. A family receives the maximum SNAP benefit if its net income (income minus deductions) is zero, usually because its income is low or its shelter costs are high relative to income. In two-thirds of states, the TANF benefit is so low that the estimated SNAP benefit used in Figure 4 is the maximum monthly benefit for a family of three in 2018 ($504). However, the SNAP benefit that an individual TANF family actually qualifies for, based on its particular circumstances, is likely lower than the maximum benefit because many TANF households either have other income or do not incur shelter expenses high enough to receive the maximum benefit.
 Arloc Sherman and Tazra Mitchell, “Economic Security Programs Help Low-Income Children Succeed Over Long Term, Many Studies Find,” Center on Budget and Policy Priorities, July 17, 2017, https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-help-low-income-children-succeed-over.
 Greg Duncan and Katherine Magnuson, “The Long Reach of Early Childhood Poverty,” Pathways, Winter 2011, https://inequality.stanford.edu/sites/default/files/PathwaysWinter11_Duncan.pdf.
 A statutory cost-of-living adjustment (COLA) is the best way to ensure that benefits keep pace with inflation. TANF agencies will fare much better in their state budget process if a COLA is part of the baseline of a current-needs budget. For example, Wyoming’s COLA is based on the Wyoming Cost of Living Index for the previous year. The COLA has made Wyoming one of only three states whose benefits have risen since 1996 in inflation-adjusted terms. Ohio’s COLA follows the same approach used for Social Security and SSI benefits: the state uses the Social Security Administration’s COLA percentage to raise TANF benefits at the start of every calendar year.