TANF Reaching Few Poor Families
November 28, 2018
The Temporary Assistance for Needy Families (TANF) block grant is designed to provide temporary financial assistance to poor families, primarily those with no other means to meet basic needs. But since TANF’s creation in 1996, its reach has declined dramatically. In 2017, for every 100 families in poverty, only 23 received direct financial assistance from TANF — down from 68 families in 1996. This “TANF-to-poverty ratio” (TPR) reached its lowest point in 2014 and has remained there.
Some policymakers have pointed to TANF as a model for other programs — most recently, proponents of taking away SNAP (formerly food stamp) benefits, Medicaid coverage, or housing assistance from people who don’t meet rigid work requirements. But states’ experience with TANF shows why it should not be held up as a model. There is strong evidence that TANF’s work requirements and block grant structure exacerbate, rather than reduce, deep poverty (that is, incomes below half of the poverty line). The federal government has a critical role in ensuring that low-income families have access to a minimum level of support to meet their basic needs; block grants hand that responsibility over to states, which — with no national standards to hold them accountable for assisting families in need — have acted in their own self-interest, not in the best interest of the most vulnerable members of society.
There is strong evidence that TANF’s work requirements and block grant structure exacerbate deep poverty.States’ broad flexibility in TANF has led to wide variation among state TPRs, which range from 65 in California down to just 4 in Louisiana (see Appendix Figure 1). In a growing number of states — now up to 16 — the ratio is 10 or less, meaning that for every 100 families living in poverty, 10 or fewer receive TANF cash assistance. In 2006, the last time TANF was reauthorized, only two states had a ratio that low; in 1996, none did. The wide variation among state TPRs also exacerbates disparities among racial groups in access to TANF. Black families are disproportionately likely to live in the group of states that have the lowest TPRs, compared to white families.
Because of TANF’s limited reach, many families that hit upon hard times because they have lost a job, are fleeing domestic violence, or facing a health or mental health crisis have no access to cash assistance. Families need cash income to pay their rent and utilities, purchase personal care items such as laundry detergent, toothpaste, or toilet paper, and pay co-payments for their medication, among other needs. Lack of financial resources to address these basic needs often puts families on a downward spiral, making it even harder to get back on their feet.
What Is the TANF-to-Poverty Ratio?
We use the TANF-to-poverty ratio to examine changes over time in poor families’ access to TANF to help meet their basic needs. We calculate the ratio by dividing the number of TANF cash assistance cases by the number of families with children in poverty from the Census Bureau’s Current Population Survey (CPS). We use two-year averages for our state-level calculations to improve the reliability of the data. (See Appendix A for further details about our methodology.)
When this ratio falls, it means TANF is less responsive to need than in previous years. The TPR can fall because: (1) the number of families receiving cash assistance from TANF falls, without a corresponding drop in the number of families living in poverty; or (2) the number of poor families rises, without a corresponding increase in the number of families receiving TANF benefits.
The TPR has both strengths and limitations. Its strengths include: (1) it provides a measure of access to TANF benefits that is consistent over time and across states; and (2) it uses readily available data, making it transparent and relatively current. Two key limitations are: (1) it is less reliable in small states because of sample size limitations in the CPS; and (2) the underreporting of income from public benefit programs in the CPS has worsened over time, making the official poverty estimates less accurate than they once were.
Cash Assistance for Poor Families Largely Disappearing in Many States
In 2017, for every 100 families in poverty, just 23 families received TANF financial (cash) assistance — a roughly two-thirds decline from TANF’s creation in 1996, when 68 families received cash assistance for every 100 in poverty. (See Figure 1.) Between 2016 and 2017, both poverty and caseloads declined, and the TPR remained unchanged. In 2006, the last time federal policymakers reauthorized TANF, 31 families received TANF for every 100 families in poverty.
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 2017, 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). Between its post-recession peak in 2010, when close to 2 million families received TANF (see Appendix B, Table 2) and 2017, the TANF caseload fell by 36 percent.
TANF-to-Poverty Ratio Falling in Most States, Often Sharply
The national TANF-to-poverty ratio misses the extreme — and growing — variation among states. In 2017 the TPR ranged from 65 in California to 4 in Louisiana. (See Figure 2.) (To improve the reliability of the state-level poverty data, we created two-year averages of the poverty numbers; we also transformed the caseload data into two-year averages to calculate the TPRs. The years cited here are for the latter of the two years.)
The TPR fell in a majority of states between 2006 and 2017 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. (See Appendix B, Table 1.) The TPR dropped by more than 10 points in 26 states over this period; in 15 of those states, it dropped by 20 points or more. In states with TPR declines, TANF caseloads fell while poverty rose or remained high, or caseloads rose by a relatively small amount while the number of families in poverty rose substantially.
An especially troubling trend is the growing number of states with TPRs of 10 or less. In 2006, only two rural states (Idaho and Wyoming) had such low ratios, and in 1996, none did. The list grew during the Great Recession and has continued growing since then. In 2017, 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. Three of these states have had especially large drops in their TPRs since 2006: Indiana (28 points), Kansas (23 points), and Arizona (21 points). (See Figure 3.)
In 2006, the two states with TPRs of 10 or less had under 1 percent of the total number of families with children living in poverty. In 2017, the 16 states with TPRs of 10 or less had 35 percent of the families in poverty.
States With Lowest TPRs Have Larger Shares of Black Residents
The wide variation among state TPRs also exacerbates disparities among racial groups in access to TANF. Almost 40 percent of the nation’s black population lives in states with TPRs of 10 or less, compared to only 28 percent of the white population. Nationally, therefore, black families are less likely than white families to have access to TANF assistance when they fall into crisis. Similarly, 57 percent of the black population lives in states with TPRs of 15 or less, compared to 44 percent of the white population. (See Appendix B, Table 4.) Moreover, if black families do manage to receive TANF cash benefits, they are more likely to live in states with the lowest benefit levels, which do little to help families meet their basic needs.
Historically, many black families lived in states where access to direct financial assistance has been below the national average. Many of the states with the lowest TPRs in 2017 also had relatively low access under TANF’s predecessor, Aid to Families with Dependent Children (AFDC). Supporters of replacing AFDC with TANF argued that states know best how to support their residents in need and so should receive more flexibility over their programs. But having gained increased flexibility through TANF, states generally didn’t improve their programs to better meet the needs of poor families; instead, they restricted access to TANF.
Policy Changes Have Severely Restricted TANF Access in Some States
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 34 states, caseloads fell by more than 20 percent between 2006 and 2017. 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 with major policy changes that made TANF less accessible. 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:
- Arizona cut benefits, shortened time limits, and imposed other eligibility restrictions starting in 2009 to help address its budget problems. These changes account for most of the nearly 80 percent decline in Arizona’s TANF caseload between 2006 and 2017, which lowered its TPR from 27 to just 6. In 2015, Arizona enacted legislation further shortening the time limit to 12 months, the shortest in the country.
- Indiana made administrative and procedural changes after 2006, including instituting job search requirements for applicants and toughening sanctions penalties. Between 2006 and 2017, Indiana’s caseload dropped by 84 percent and its TPR dropped from 35 to 7.
Moreover, emerging evidence shows many families leaving TANF due to restrictive state policies are worse off. States rarely track whether parents find work or how they fare after leaving TANF, but two recent studies in Washington State and Kansas provide important insights for families leaving TANF that are consistent with earlier research on families that lost TANF benefits due to time limits and sanctions.
- The Washington State study found that families losing benefits due to the state’s time-limit changes were likelier than families leaving TANF for other reasons to have barriers that prevented them from entering the labor market and leaving TANF on their own. For example, they were likelier to have significant mental and physical health issues: two-thirds of parents in that group had an indication of mental illness, 23 percent had a chronic illness, and 25 percent needed alcohol or drug treatment. Three years after losing TANF, fewer than half were employed, and they had higher rates of homelessness than families that left TANF for other reasons. In spite of their high rates of health issues, these families had not received TANF extensions based on disability and few transitioned to Supplemental Security Income.
- In 2011, Kansas implemented stricter sanctions for those not meeting work requirements. A review of the data on families leaving TANF due to these sanctions found that while most parents worked at some point after leaving the program, most did not find steady jobs that paid enough to make ends meet. In fact, about 70 percent of sanctioned families did not earn enough to lift themselves out of deep poverty four years after being sanctioned. 
Earlier research found that families whose TANF benefits were reduced or eliminated due to work-oriented sanctions were more likely to have physical or mental health issues and lower levels of education. Work-sanctioned families are also more likely to experience hardships such as utility shut-offs.
Like low state TPRs, state sanction policies disproportionately affect black families. Nearly every study comparing the race and ethnicity of sanctioned and non-sanctioned TANF recipients finds that African American recipients are significantly more likely to be sanctioned than their white counterparts.
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 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 2.7 million children out of deep poverty in 1995, TANF lifted only 349,000 children out of deep poverty in 2015. (See Figure 4.) In 1995, only three states had more families living in deep poverty than receiving AFDC. By 2016, the vast majority of states had more families living in deep poverty than receiving TANF.
Evidence shows that the drop in direct financial assistance receipt under TANF is a main driver of rising “extreme poverty,” a measure the World Bank uses of the number of households surviving on $2 or less per person per day. Researchers H. Luke Shaefer and Kathryn Edin found that the number of U.S. households living in extreme poverty in any given month more than doubled between 1996 and 2011, from 636,000 to 1.46 million; the number of children living in such households also doubled, from 1.4 million to 2.8 million. These households are “concentrated among those groups who were most affected by welfare reform,” they explained. Even for families that receive TANF assistance, benefits are so low that they do little to lift a family out of deep poverty. In Mississippi, where benefits for a family of three are the lowest in the country, families whose income consists solely of TANF may still find themselves in extreme poverty.
Two well-known poverty researchers, Greg J. Duncan and Katherine Magnuson, have shown that poverty among young children not only slows them in school but also shrinks their earnings as adults. Work-requirement pilot programs and other anti-poverty experiments “suggest that income plays a causal role in boosting younger children’s achievement” in preschool and elementary school, they note. They also found that 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. TANF is often a critical income source for the most vulnerable families with young children, and the Duncan-Magnuson findings suggest 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
Some policymakers have praised TANF’s work requirements as a model for other programs, but an examination of state policies under TANF provides compelling evidence that imposing work requirements and expanding state flexibility in programs such as SNAP and Medicaid would be devastating for low-income families and have harmful long-term consequences for their children.
TANF’s combination of nearly unfettered state flexibility, fixed block grant funding, narrowly defined work requirements, and time limits has created a system in which very few families in need receive direct financial assistance (as the TPR data in this paper show) or help preparing for success in today’s labor market. The lack of any minimum federal standards has allowed states to enact extremely restrictive eligibility policies, leaving the poorest families unable to meet basic needs through either employment or cash assistance. The decline in TANF’s reach has disproportionately affected black families, as the states where the smallest share of poor families receive TANF also have larger shares of black residents.
Also, as other CBPP reports have shown, states facing budget shortfalls have taken TANF funds from the poorest families to help address those shortfalls. Moreover, the TANF block grant has not been increased since its inception and has lost more than a third of its value due to inflation.
Other anti-poverty programs cannot fill the role that TANF is supposed to play. The Earned Income Tax Credit (EITC) is very effective at boosting working families’ overall income, but because it’s an annual, lump-sum payment provided when a family files income taxes, families cannot access the EITC throughout the year if a crisis occurs, and not all families can work or find work that would qualify them for the EITC. Other cash assistance programs, like Unemployment Insurance (UI) and Supplemental Security Income (SSI), have eligibility standards that make them unavailable to the wider share of poor families who fall on hard times and need cash to meet their basic needs. Many families not receiving TANF benefits may receive food assistance from SNAP, but SNAP benefits cannot help families pay rent or buy diapers or clothes for their children.
The TANF block grant, established 22 years ago, is overdue for improvements. Federal policy changes should focus on three broad areas: providing an effective safety net to poor families with children, creating effective work programs to help parents prepare for work, and ensuring that adequate resources are available to achieve these goals. Specifically, policymakers should:
- Hold states accountable for serving families in need. States focus on what they are incentivized to do. To expand TANF’s reach, Congress should remove incentives that encourage states not to assist families and create a state accountability measure that focuses on serving families in need (such as the TPR). States that fail to meet a specified standard could be required to spend additional resources on direct financial assistance or work activities.
- Hold states accountable for employment outcomes. The primary measure of TANF’s success should be whether families leave the program with employment and are on a path to earn enough to provide for their families, not simply whether they participate in a pre-defined set of activities that may or may not prepare them for employment and help them move out of poverty. The measure should capture employment and earnings outcomes for families leaving TANF and should align TANF with other workforce programs under the Workforce Innovation and Opportunity Act.
- Require states to direct a specified share of federal and state resources to TANF’s core activities for the neediest families. TANF’s purposes are broad, which has provided states with the flexibility to spread TANF funds throughout their state budgets and to define needy families as they so choose. To direct more TANF resources to the program’s core purposes — cash assistance, employment assistance, and work supports — Congress should require states to spend a specific share of their state and federal TANF funds on these core purposes for families that are receiving or eligible for TANF cash assistance.
- Increase the TANF block grant to account for its decline in value, and index it to inflation in future years. The TANF block grant is worth about a third less than when it was created in 1996. Without additional funds, states are unlikely to spend additional resources to provide a cash safety net for more families. Any additional funds should be restricted to TANF’s core purposes: cash assistance, employment assistance, and work supports.
Methodology and Source Notes
TANF Caseload Data
In this analysis, AFDC/TANF caseload data from January 1979 through August 2006 were collected from the U.S. Department of Health and Human Services (HHS). Beginning in September 2006, this analysis uses caseload data collected directly from the states rather than the official data reported by HHS, as the state data more consistently reflect the number of families with children receiving cash assistance in each state over time.
These state data differ from the official HHS TANF data in two important ways. First, they include cases from solely state-funded programs. In most instances, these families had been in state TANF programs but were shifted to a solely state-funded program on or after October 2006, when the Deficit Reduction Act of 2005 (DRA) took effect, because states anticipated these families would not be able to meet TANF work participation requirements and thus would lower the state’s work participation rate. These cases are not included in the data reported to HHS as no TANF or state maintenance-of-effort (MOE) funds are used. While these families are not counted in the HHS TANF caseload numbers, they generally are seen as part of the state’s cash assistance program and continue to receive the same or comparable benefits as when they were on TANF.
Second, unlike the HHS data, the state data exclude cases in worker supplement programs, through which states provide modest TANF- or MOE-funded cash payments to working families. States generally created these programs after the passage of the DRA. Because these supplements make additional families eligible (or make current recipients eligible for a longer period of time), they increase the TANF or MOE caseloads that states report to HHS. Often, states provide a very small cash grant to these families — as little as $8 to $10 per month. The main purpose of these small grants is to raise the percentage of TANF families who are meeting their work participation requirement, thereby helping states meet their work participation requirement.
Including solely state-funded programs and excluding worker supplement programs in the caseload data used for our analysis provides us with a more consistent trend of the number of families receiving cash assistance in each state over time.
Data on the Number of Families with Children in Poverty
The number of families with children in poverty was calculated using Current Population Survey (CPS) data and the official Census poverty thresholds. We counted related subfamilies and primary families in a single household as one family but counted and determined the poverty status of unrelated subfamilies separately. “Deep poverty” refers to families with incomes below half the poverty line, which in 2016 was about $12,000 for a family of four. Two years of CPS data were merged to improve reliability for state estimates.
Ratio of Families on TANF to Families in Poverty
Ratios are calculated by dividing the number of TANF cases (based on administrative data from HHS or, since late 2006, data collected from states by CBPP) by the number of families with children in poverty (CPS data). We use two-year averages for these calculations to improve reliability.
These ratios should not be interpreted as the percentage of families with children in poverty served by TANF because the number of families on TANF is not a perfect subset of the number of families in poverty. A family above poverty could receive TANF benefits, for example: some families may be poor in the months they receive TANF but have higher incomes for the rest of the year; states may encourage work by continuing partial TANF benefits for certain families with earnings slightly above the poverty line; and in some households, large extended families may contain more than one eligible TANF case unit. For these reasons, it’s possible for a state to have more than 100 TANF families for every 100 families with children in poverty.
Using the Alabama ratio as an example, the data should be described as follows: In 1995, for every 100 Alabama families with children in poverty, AFDC served 34 families. In 2017, 9 families participated in TANF for every 100 families with children in poverty.
In Alaska and Hawaii, the TANF-to-poverty ratio is above 100 in 1994-95 because the HHS poverty guidelines used in determining program eligibility in these two states are significantly higher than the Census poverty thresholds used in determining the number of poor families. (This is not true for any of the other 48 states. HHS poverty thresholds are set higher in Alaska and Hawaii to allow for higher costs of living in these two states but do not vary elsewhere. The Census Bureau’s poverty thresholds do not vary for any state.)
|State TANF-to-Poverty Ratios Over Time|
|1995-96||2005-06||2011-12||2012-13||2013-14||2014-15||2015-16||2016-17||Ratio Change '05-06 to '16-17|
|National Single-Year TANF-to-Poverty Ratios|
|Number of families with children in poverty||Yearly average of number of families on AFDC/TANF||Ratio|
|TANF Caseloads Over Time|
|2006||2010||2012||2013||2014||2015||2016||2017||Percent Change ‘06-‘17|
|Share of Black and White U.S. Population Living in States with the Lowest TPRs|
|States with TPRs of 15 or Less||States with TPRs of 10 or Less||State Share of U.S. Black Population||State Share of U.S. White Population|
|Dist. Of Colum.||1%||0%|
|Total Population Shares for States with TPR of 15 or Less||57%||44%|
|Total Population Shares for States with TPR of 10 or Less||39%||28%|
 Because our state-level TPRs are based on two-year averages, the latest figures — which average data for 2016 and 2017 — may not reflect the full effects of some state actions between 2016 and 2017. Those effects will likely become clear after another year of data is available.
 Though TPRs have fallen both nationally and in every state since 1996, some states have seen increases in their TPRs in recent years. In 2017, the TPR increased in 20 states. These increases could mean that access to TANF has grown in those states or that the number of families in poverty has fallen.
 CBPP analysis of Census July 2017 population estimates by race and the TANF-to-poverty ratios.
 Ashley Burnside and Ife Floyd, “TANF Benefits Remain Low Despite Recent Increases in Some States,” Center on Budget and Policy Priorities, updated October 25, 2018.
 As noted, this paper’s analysis of state TPR’s uses two-year averages of TANF caseload data so that the data are comparable to the two-year averages we use for state-level poverty data. Additionally, poverty data are not available on a monthly basis. In this section, because we focus only on monthly average TANF caseload trends, two-year averages are not needed.
 Some other research shows that those families reaching the TANF time limits have more barriers to employment than other families in the caseload. See Pamela Ovwigho et al., “The TANF Time Limit: Barriers & Outcomes among Families Reaching the Limit,” Family Welfare Research & Training Group, University of Maryland School of Social Work, November 2007, http://www.familywelfare.umaryland.edu/reports1/tl_barriers.pdf and
Kristin Seefeldt and Sean Orzol, “Watching the Clock Tick: Factors Associated with TANF Accumulation,” National Poverty Center, May 2005, http://www.npc.umich.edu/publications/workingpaper04/paper9/04-09.pdf.
 Deleena Patton et al., “TANF Caseload Decline: The Well-Being of Parents and Children Leaving WorkFirst in Washington State,” Washington State Department of Social and Health Services, Economic Services Administration, April 2015, https://www.dshs.wa.gov/sites/default/files/SESA/rda/documents/research-11-216_1.pdf.
 Tazra Mitchell, LaDonna Pavetti, and Yixuan Huang, “Life After TANF in Kansas: For Most, Unsteady Work and Earnings Below Half the Poverty Line,” Center on Budget and Policy Priorities, February 20, 2018, https://www.cbpp.org/research/family-income-support/life-after-tanf-in-kansas-for-most-unsteady-work-and-earnings-below.
 LaDonna Pavetti, “TANF Studies Show Work Requirement Proposals for Other Programs Would Harm Millions, Do Little to Increase Work,” Center on Budget and Policy Priorities, November 13, 2018, https://www.cbpp.org/research/family-income-support/tanf-studies-show-work-requirement-proposals-for-other-programs-would.
 Ife Floyd, “TANF Cash Benefits Have Fallen by More Than 20 Percent in Most States and Continue to Erode,” CBPP, updated October 13, 2016, http://www.cbpp.org/research/tanf-cash-benefits-have-fallen-by-more-than-20-percent-in-most-states-and-continue-to-erode.
 CBPP analysis of data from Columbia University Population Research Center and U.S. Census Bureau. Corrections for underreported government assistance from Health and Human Services/Urban Institute Transfer Income Model (TRIM). Calculations use Supplemental Poverty Measure (SPM) and 2015 SPM poverty line adjusted for inflation.
In earlier editions of this paper, CBPP used a different methodology to calculate these figures. These new estimates use the SPM and the latest available data from the Health and Human Services/Urban Institute TRIM.
 H. Luke Shaefer and Kathryn Edin, “Extreme Poverty in the United States, 1996 to 2011,” National Poverty Center, February, 2012, http://npc.umich.edu/publications/policy_briefs/brief28/policybrief28.pdf.
 Greg J. Duncan and Katherine Magnuson, “The Long Reach of Early Childhood Poverty,” Pathways, Winter 2011, http://www.stanford.edu/group/scspi/_media/pdf/pathways/winter_2011/PathwaysWinter11_Duncan.pdf.
 Liz Schott, Ife Floyd, and Ashley Burnside, “How States Use Funds Under the TANF Block Grant,” Center on Budget and Policy Priorities, updated April 2, 2018, https://www.cbpp.org/research/family-income-support/how-states-use-funds-under-the-tanf-block-grant.
 For more details, see LaDonna Pavetti and Liz Schott, “TANF at 20: Time to Create a Program that Supports Work and Helps Families Meet Their Basic Needs,” CBPP, August 15, 2016, http://www.cbpp.org/research/family-income-support/tanf-at-20-time-to-create-a-program-that-supports-work-and-helps.