TANF Benefits Remain Low Despite Recent Increases in Some States
October 25, 2018
Direct financial assistance for the nation’s poorest families with children fell again in purchasing power this year and is now at least 20 percent below its 1996 levels in 36 states, after adjusting for inflation. Although some states increased benefits during the past year, benefits are still too low for families relying solely on assistance from Temporary Assistance for Needy Families (TANF) to make ends meet.
For 99 percent of recipients nationally, the purchasing power of their benefits is below the level in 1996, when lawmakers passed the law that created the TANF block grant. Living on such limited incomes risks exposing children to excessive levels of hardship and stress, which research shows can negatively affect their health and undermine their development, limiting their future economic and social mobility. To improve all children’s chances of succeeding over the long term, states should invest more TANF federal and state spending in direct financial assistance for families (cash assistance), halt the erosion of TANF benefits, and restore the purchasing power lost over the past 22 years.States should halt the erosion of TANF benefits and begin restoring the purchasing power lost over the past 22 years.
Ten states plus the District of Columbia increased TANF benefits between July 2017 (the start of fiscal year 2018 in most states) and July 2018; six states enacted legislation or made administrative changes that will raise benefit levels after July 2018. No state cut benefits, but most states did not adjust benefits, allowing inflation to continue eroding the benefits’ value.
As of July 1, 2018, every state’s TANF benefits for a family of three with no other cash income were at or below 60 percent of the poverty line, measured by the Department of Health and Human Services’ (HHS) 2018 poverty guidelines. Most states’ benefits were below 30 percent of the poverty line. While benefits are below 60 percent of the poverty line for all TANF recipients, black families are disproportionately impacted by these low benefits, as they are more likely than white families to live in the states with the lowest benefits and that serve the fewest eligible families.
This paper, an annual update of state TANF benefit levels as of July 1, covers changes in TANF benefits between July 1, 2017 and July 1, 2018. The benefit levels cited here reflect the monthly benefits for a family of three with no other income as of July 1, 2018; they may exceed what many families actually receive because families often do not receive the maximum TANF benefit and family grants in seven states (California, Connecticut, Illinois, 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 Raising Benefits for 2018 and 2019
Ten states and the District of Columbia raised TANF benefit levels between July 1, 2017 and July 1, 2018 (see Table 1). Though most increases were very small, the median state benefit increased from $432 to $450. In addition, six states made legislative or administrative changes to increase benefits later in 2018 or in 2019. Many of the grant increases represent historic changes for the state TANF programs. In five states — Illinois, Maine, Massachusetts, New Jersey, and Tennessee — the benefit increases will be the first in their state in over a decade.
Benefit Increases Through June 2018
- The District of Columbia raised benefits by about 13 percent to bring benefits in line with other high-cost jurisdictions. In the future, D.C. will use a cost-of-living adjustment (COLA) to increase benefits annually.
- Maine raised its benefits by about 20 percent in October 2017, which was the first time it increased benefits in more than a decade.
- New Mexico cut benefits during the economic downturn. The state restored this cut through an administrative change, increasing benefits by about 9 percent.
- New Jersey’s grant rose by $10 per person effective July 1, meaning a family of three’s monthly benefit increased by $30 to $454.  This is New Jersey’s first benefit increase in 31 years.
- Washington’s grant rose by about 9 percent through legislative action in 2017 and 2018; the increase went into effect in July 2018. This increase more than restores a 2011 benefit cut.
Several states made automatic or periodic adjustments to reflect changing state-specific living costs or maintain a particular share of the federal poverty line.
- Maryland raised benefits by about 4 percent based on changes in the state’s Minimum Living Level, a standard of need tied to living costs.
- The New Hampshire benefit, which is 60 percent of the poverty line, increased from $1,021 to $1,039 for a family of three.
- Ohio raised benefits by $9 based on a COLA.
- South Carolina, where benefits are tied to the state’s Need Standard, raised benefits by $3.
- Texas, where the maximum grant is 17 percent of the federal poverty line, raised benefits by $4.
- In Wyoming, benefits have kept pace with inflation since the state implemented a COLA in 2009. Benefits increased by about 2 percent since 2017.
Benefit Increases After July 2018
Six states scheduled increases that will take effect after July 1, 2018.
- California will increase its benefit level for a family of three from $714 to $785 in April 2019. This increase is the first in a multi-step process to lift the grant to at least half of the poverty line. The state will also restore its COLA, which was eliminated in 2009.
- In September 2018, Colorado increased benefits by 10 percent from $462 to about $508 for a family of three to more closely align them with the current cost of living. This is the state’s first increase in nearly a decade.
- Illinois’ benefit will increase for a family of three from $432 to $520 effective October 2018. This will be the state’s first increase in over a decade.
- Massachusetts will raise the benefit for a family of three from $618 to $633 effective November 2018. This will be the state’s first increase in over a decade.
- Each house of the New Jersey legislature has passed legislation that will increase benefits by 10 percent from pre-July 2018 levels. This would increase benefits for a family of three from $454 to $466.
- Tennessee will raise its benefits to meet the current Standard of Need effective December 2018. The benefit for a family of three will increase from $185 to $277, about a 50 percent increase. This is the first increase to the state’s benefit since before 1996.
|States That Have Raised TANF Benefits in Past Year Monthly Benefit for a Family of Three|
|July 2018 Benefits||Amount of Increase Since July 2017|
|District of Columbia||$576||$68|
Benefits Leave Families Below Half of Poverty Line in Nearly All States
Although TANF benefit increases are good news, 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, 33 states do. In 18 of those states, benefit levels are at or below 20 percent of the poverty line — that is, $346 a month for a family of three or less.
Moreover, the country’s black population is more likely than the white population to live in the states with the lowest benefit levels. (See Appendix Table 7a.) Over half (53 percent) of the country’s black population lives in a state with benefits that are at or below 20 percent of the poverty line. Only 39 percent of the white population lives in these same states. Many of these states had some of the lowest benefits at TANF’s outset and have failed to make much progress since then.
Because 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. 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 their benefits today than in 1996 in 47 states and D.C. (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 36 states, after adjusting for inflation.
- Fifteen states had the same nominal benefit levels in July 2018 as in 1996, meaning that benefits have fallen in inflation-adjusted terms by about 37 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 TANF’s predecessor, Aid to Families with Dependent Children (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
While TANF benefit levels have risen slightly, the cost of housing in most areas also continues to rise, substantially so 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 and D.C., compared with only eight states in 1996. Between 1996 and 2018, the median Fair Market Rent nationally rose from $543 to $924, while the median TANF benefit only rose from $377 to $450. (These figures are in nominal dollars.) The share of housing costs that TANF benefits cover declined in all but two states between 1996 and 2018. (See Figure 3.)
TANF benefits do much less to cover housing costs in states where black families are more likely to live. This includes states where the cost of living is presumed to be low. Nearly half (48 percent) of the country’s black population lives in states with benefits that cover less than one-third of the housing costs for a modest two-bedroom apartment. Only 30 percent of the white population lives in these same states.
Most TANF families receive no housing subsidies — in fact, only slightly more than 20 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.
TANF families without housing assistance likely have high rates of housing instability — resulting in doubling up with friends or relatives, living in substandard conditions, frequent moves, eviction, and/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.
Black Families Likelier to Live in States With Less Access to — and Less Spending on — Basic Assistance
How well TANF supports a family in poverty largely depends on where they live. As this paper explains, black families are likelier to live in states with lower benefits. They are also more likely to live in states with lower levels of access to and spending on TANF direct financial assistance.
In general, states’ TANF cash assistance programs aren’t robust. They serve few families in poverty and spend little on monthly cash grants for families. Nationally in 2017, 23 families received TANF cash assistance for every 100 families in poverty (known as the TANF-to-poverty ratio, or TPR).a Overall, in 2017, states spent about 23 percent of their TANF funds on basic assistance, which is primarily cash grants to families.b Many states fall below the national average on one or both indicators. States with low TPRs often have low basic assistance spending.
Black families are more likely to live in states that underperform on these two indicators. About 39 percent of the black population lives in states that have TPRs of 10 or less, compared to 28 percent of the white population. And 31 percent of the black population lives in states spending 10 percent or less of their TANF funds on basic assistance, while only 25 percent of the white population does. Twenty-four percent of the black population lives in the eight states that fall the lowest on both of these indicators — Arizona, Arkansas, Indiana, Kansas, Louisiana, Mississippi, North Carolina, and Texas — compared to only 18 percent of the white population.
These findings represent a troubling reality. Black families already face more difficult labor market prospects due to structural racism and employment discrimination, and those that live in these states have limited access to critical financial assistance when they fall into crisis.
a CBPP analysis of poverty data from the Census’ Current Population Survey and TANF caseload data collected by CBPP from state agencies.
b CBPP analysis of Department of Health and Human Services 2017 TANF financial data.
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 85 percent of TANF households consistently receive SNAP benefits. In fiscal year 2016, the average monthly SNAP benefit for households with TANF income was $404. 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.
However, because TANF benefits are so low in states where many black families live, more than half (53 percent) of the black population lives in states where families receiving TANF direct financial assistance are still below 50 percent of the poverty line, even with the addition of SNAP. In comparison, only 39 percent of the white population lives in these same states. (See Appendix 7b.) (Moreover, 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.)
After Years of Disinvestment, It’s Time to Raise TANF Benefits
Over two decades after its creation, TANF is not fulfilling one of its core purposes: to provide direct financial assistance for poor families. States spend only about a quarter 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 funding in those areas has been flat or declining for over a decade. Instead, 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, even when they also receive SNAP. In particular, TANF families often find themselves in poor housing conditions with few resources to pay for even a modest apartment.
A growing body of evidence shows that economic security programs, like direct financial assistance, can improve children’s long-term outcomes.  However, as noted above, black families are more likely to live in the states with the lowest TANF benefits and have the lowest levels of access to and spending on direct financial assistance. This means that nationally, a black child in poverty has access to fewer resources than a white child in poverty, putting poor black children at greater risk of poor outcomes.
TANF recipients have a limited time on benefits and must participate in work or work-preparation activities (unless they qualify for a state exemption). During this time-limited, work-focused window, TANF benefits need to do a better job of enabling families to meet basic needs so they can focus on finding work and/or increasing their skills to become self-sufficient. The destitution that accompanies today’s low TANF benefit levels frequently creates instability that can interfere with these goals.
In general, states 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:
- First, they should reinvest TANF and MOE funds back into TANF’s core purposes, such as providing higher cash grants for participating families. States should also direct those funds toward services and activities that support families that either receive or qualify for TANF direct financial assistance.
- Second, as part of this reinvestment, states should 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.
- Third, they 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.
|APPENDIX TABLE 1|
|Monthly TANF Benefit Levels* (Single-Parent Family of Three)|
|July 1996||July 2000||July 2005||July 2010||July 2016||July 2017||July 2018||Change 1996-2018 (inflation-adjusted dollars)|
|APPENDIX TABLE 2|
|TANF Benefit Levels as Percentage of Federal Poverty Level|
|APPENDIX TABLE 3|
|Changes in Real (Inflation-Adjusted) TANF Benefits Comparing 2018 Benefits with Benefits in 1996, 2000, 2005, and 2010|
|APPENDIX TABLE 4|
|TANF Benefit Levels as Percentage of Fair Market Rents|
|APPENDIX TABLE 5|
|2018 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 6|
|State TANF-to-Poverty Ratios and Share of Total TANF Spending on Basic Assistance|
|TANF-to-Poverty Ratio||Share of Total TANF Spending on Basic Assistance|
|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||TPR of 10 or Less||Spends 10% or Less of TANF Funds on Basic Assistance||TANF and SNAP Benefits Remain Below 50% of FPL||Share of U.S. Black Population||Share of U.S. White Population|
|APPENDIX TABLE 7B|
|Share of Black and White U.S. Population Living in States Falling Lowest 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 With TPR of 10 or Less||Live in States Spending 10% or Less of TANF Funds on Basic Assistance||Live in States Where TANF and SNAP Benefits Remain Below 50% of FPL|
|Share of U.S. Black Population||53%||48%||39%||31%||53%|
|Share of U.S. White Population||39%||30%||28%||25%||39%|
 CBPP calculation of state TANF caseload data.
 See Appendix Table 1 for states with regional variation in TANF benefits.
 In 2017, D.C. lawmakers passed legislation that eliminated the District’s TANF time limit policy. This protected thousands of families from having their benefits cut after 60 months on the program. D.C. is the first jurisdiction to eliminate time limits in the country. D.C. increased the benefits for these families to be similar to others that had not yet hit the 60-month time limit, resulting in benefits rising for a family of three past 60 months from $154 to $576.
 Both houses of the New Jersey legislature have passed legislation that will correct a drafting error and raise TANF benefits by 10 percent from pre-July 2018 levels rather than by $10, but at publication time for this paper, the correction was awaiting final legislative and executive action. This change would be retroactive to July 1, 2018.
 Maryland’s TANF benefits combined with SNAP benefits must equal at least 61 percent of the Maryland State Minimum Living Level (MLL) and are indexed depending on annual changes to the MLL. Maryland’s MML is indexed to the United States Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPI-U).
 Ohio’s TANF benefits are raised each January based on the Social Security Administration’s COLA for Social Security and Supplemental Security Income benefits in the previous year.
 South Carolina’s benefit level is indirectly tied to the federal poverty level. The benefit is a share (currently 33.7 percent) of the state’s Need Standard, which in turn is 50 percent of the federal poverty level. The state can change the benefit level by adjusting the percentage of the Need Standard that TANF benefits meet or by adjusting the Need Standard’s percentage of the poverty level.
 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.
 The Massachusetts state legislature raised the basic grant for a family subject to the work requirement to equal the grant that families that are exempt from the work requirement receive ($593 for a family of three plus $40 for a rent allowance). This will result in a benefit increase for a majority of recipients who are non-exempt.
 The Standard of Need reflects the income families need to cover the combined costs of necessities like housing, food, clothing, medical care, and other items.
 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.
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, 118(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, https://www.cbpp.org/research/housing/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term.
 “Temporary Assistance for Needy Families (TANF) 12th Report to Congress Fiscal Years 2014 and 2015,” Department of Health and Human Services, Office of Family Assistance, January 2018, https://www.acf.hhs.gov/sites/default/files/ofa/12th_annual_tanf_report_to_congress_final.pdf.
 “Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2016,” Department of Agriculture, Food and Nutrition Service, November 2017, https://fns-prod.azureedge.net/sites/default/files/ops/Characteristics2016.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 the 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.
 A statutory 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, the state’s inflation indicator, 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.