Report Temporary Assistance for Needy Families

The primary function of Temporary Assistance for Needy Families is to provide cash assistance and employment training to low-income families to help meet their basic needs. It has four broad federal purposes that programs and services administered by states must conform to:

1. Provide assistance to needy families so children can be cared for in their own homes or in the homes of relatives.
2. End the dependence of needy parents on government benefits by promoting job preparation, work and marriage.
3. Prevent and reduce the incidence of out-of-wedlock pregnancies.
4. Encourage the formation and maintenance of two-parent families.

TANF was enacted as part of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and replaced the Aid to Families with Dependent Children program. It is a fixed, broad-purpose federal block grant to states, the District of Columbia, Puerto Rico, U.S. Virgin Islands and Guam. Some tribal organizations also receive TANF funds through the Tribal TANF program.

States must supplement federal TANF funds with state maintenance of effort funds equal to 80% of their 1994 contribution to AFDC. Since 1996, federal TANF funds have been set at approximately $16.5 billion per year. As a result, the value of the block grant has declined 40-50% since 1996. Similarly, the required contribution amounts from states were established in 1996 and have not changed, despite population changes.

TANF was last reauthorized by Congress through the Deficit Reduction Act of 2005 and has continued via short-term extensions since 2010. The program was most recently extended through Sept. 30, 2024, by the Consolidated Appropriations Act of 2024.

Eligibility & Work Requirements

Direct cash assistance and services provided under the first two federal TANF purposes must be limited to “needy families.” States have the flexibility to decide what families qualify as needy.

Federal law requires that a TANF participant must: 1) be a U.S. citizen or legal or qualified noncitizen; 2) be unemployed or underemployed; 3) have low, very low or no income; and 4) satisfy one of the following: have a child 18 years of age or younger; be pregnant; or be 18 years of age or younger and the head of the household. States can implement additional eligibility requirements beyond those required under federal law.

Federal law limits TANF assistance for program participants to a total of 60 months. States may allow exceptions for up to 20% of families due to hardship. Most states have adopted the federal 60-month limit at the state level, while some have shorter, stricter time limits on assistance.

Child Support Enforcement

Under federal law, TANF program participants must assign rights to child support enforcement over to the state. Under these arrangements, the state enforces a participant’s right to child support, collects the child support funds on behalf of the participant and reimburses itself for the cost of providing TANF assistance using the collected child support funds.

Many states have implemented child support pass-through policies that allow families to keep some or all of their collected child support funds. Many states also disregard those payments so families do not fall out of compliance with income-eligibility requirements due to the passed- through child support.

Drug Felony Prohibition

Federal law establishes a lifetime prohibition on TANF benefits for individuals who are convicted of drug-related felonies. State legislatures can opt out of the ban, and most states have fully or partially opted out.

Work Requirements

Federal law requires states to meet specified work participation rates. WPR measures the percentage of work-eligible TANF participants who are engaged in federally authorized work activities. Generally, only low-income families receiving cash assistance to meet their basic needs are included in WPR under federal law. Families receiving state-funded cash assistance are included in WPR if those state funds are counted toward the state’s maintenance of effort obligation. For states that meet their WPR benchmark, their maintenance of effort requirement is reduced to 75% of their 1994 contribution to AFDC.

States must meet both an all-families WPR and a more stringent two-parent families rate:

• The All-Families Rate requires that 50% of families receiving cash assistance under TANF be engaged in a work activity for at least 30 hours per week. This requirement is reduced to 20 hours per week for single parents with children under the age of 6 years.
• The Two-Parent Families Rate requires that 90% of two-parent families be engaged in work activities for at least 35 hours per week.

A state’s WPR requirement may be reduced for a fiscal year by the caseload reduction credit. This regulation allows the federal government to give a state credit for reducing its TANF caseload for reasons other than changes in program eligibility. The credit is calculated based on the percentage reduction in a state’s TANF cases since 2005. Though the caseload reduction credit is intended to ensure more families graduate from TANF by achieving self-sufficiency, critics argue it can incentivize states to reduce the number of families assisted rather than engage more needy families.

States that do not meet the WPR benchmark for one year face a penalty of up to 5% of their federal TANF block grant. This penalty may increase by 2% each additional year, up to a maximum reduction of 21%. States that incur this penalty must use state funds to make up for the loss of federal funds or face additional penalties. The U.S. Department of Health and Human Services will not impose a penalty if a state corrects its violation within a specified period.

Work Activities

Federal law lists 12 categories of eligible work activities. Nine are “core activities,” meaning they can be counted for all hours of work activity participation:

1. Unsubsidized employment.
2. Subsidized private sector employment.
3. Subsidized public sector employment.
4. Work experience.
5. On-the-job training.
6. Job search and job readiness assistance.
7. Community service programs.
8. Vocational educational training, for up to 12 months.
9. Providing child care services to an individual who is participating in a community service program.

The other three activities—called “non-core activities”—can only be counted in combination with at least 20 hours per week of a core activity:

1. Job skills training directly related to employment;
2. Education directly related to employment; and
3. Satisfactory attendance at a secondary school or in a course of study leading to a high school equivalency certificate.

Sanctions

Under federal law, states must reduce or terminate benefits when a program participant falls out of compliance with a work requirement “without good cause.” States can determine their own sanctions, and most states have implemented full-family sanctions. Under this policy, the entire family’s TANF benefits can be terminated if one parent fails to comply with work requirements. Some states have eliminated full-family sanctions.

Family Violence Option

Under federal regulations, states may adopt the family violence option, which requires them to screen TANF participants for domestic violence and refer survivors to supportive services. States must also provide survivors with good cause waivers of certain program requirements. Most states have adopted the family violence option.

States Legislative Trends

States have broad flexibility to design and administer their TANF program. NCSL analyzed legislation enacted between 2020 and 2024 and identified four major trends: 1) studying TANF expenditures, 2) easing eligibility for special populations, 3) mitigating benefits cliffs and 4) increasing the flexibility of administrative requirements.

Studying TANF Expenditures

Some legislatures authorized studies of their states’ TANF block grant expenditures and MOE funds to better understand their financial and administrative landscape. Louisiana (SR 107, 2021) requested its legislative auditor to conduct an efficiency audit of the Department of Children and Family Services’ administration of the TANF program. Texas (H 1516, 2021) requires an external efficiency audit be conducted every six years to investigate the implementation and administration of the TANF program to examine fiscal management, efficiency of the use of resources and the effectiveness of the state’s efforts in achieving the goals of the TANF program.

Tennessee (H 1975/S 2293, 2024) requires the state’s commissioner of human services to include in the annual TANF block grant report information about the department’s access to and use of federal TANF funds in furtherance of the four purposes of the TANF program. The report must include information regarding overall spending; the number of contracts and examples of expenditures in furtherance of each purpose; expenditures for programs to encourage two-parent family formation and preservation; expenditures for parenting education, mediation, marriage education, marital counseling and visitation facilitators. The report must also address initiatives to facilitate fatherhood support and inclusion and a review of all program expenditures to ensure inclusion of both parents.

Easing Eligibility for Special Populations

Six states—Georgia, Illinois, Indiana, Oklahoma, New Hampshire and North Dakota—recently passed legislation expanding eligibility to participate in TANF to special populations. Georgia (H 129, 2023), Oklahoma (H 1932, 2023) and North Dakota (S 2181, 2023) expanded eligibility to women who are pregnant but whose households do not include minor children. Indiana (S 265, 2023) also expanded TANF eligibility to pregnant women who meet the income requirements and increased the income eligibility threshold for that population to 35% of the federal poverty level in 2025 and 50% in 2027.

Illinois (H 88, 2021) prohibits individuals from being determined ineligible to participate in TANF based upon a conviction for any drug-related felony under state or federal law. New Hampshire (S 172, 2023) expanded TANF eligibility to court-appointed guardians of dependent children.

Mitigating Benefits Cliffs

States are increasingly considering legislation to mitigate benefits cliffs. Florida (S 2500, 2023) appropriated funds to analyze options and develop a plan for the legislature to address benefits cliffs experienced by families participating in TANF. New Hampshire (H 2, 2023) required its Department of Health and Human Services to continue studying graduated, proportional assistance for recipients of public assistance programs, including TANF.

States are also reducing financial eligibility requirements for TANF participants. Inflexible income limits can cause TANF participants to experience a sudden, total loss of benefits due to a small increase in earnings that pushes them out of eligibility and off a cliff. Indiana (H 1009, 2022) prohibited the consideration of up to a $15,000 increase in earnings once a household has been determined eligible for TANF. Maine (H 50, 2023) passed legislation to disregard 100% of a TANF participant’s earned income or increase in earned income received during their first three months of employment and 75% for their fourth through sixth months of employment.

States have also enacted laws to increase flexibility with asset limits to incentivize families to save money. Indiana (H 1361, 2022) prohibited TANF participants from becoming ineligible due solely to an increase in assets of up to $10,000. The bill also prohibits the value of a child’s primary residence from being considered when calculating TANF eligibility. Massachusetts (H 4012, 2021) eliminated its asset test for TANF eligibility while allowing income generated by assets to be treated as countable income.

Increasing the Flexibility of Administrative Requirements

States also are increasing the flexibility of administrative requirements, such as time limits and work requirements, to prevent eligible families from being disenrolled. For example, Oklahoma and Virginia passed legislation to broaden the scope of qualifying work activities. Oklahoma (H 1931, 2023) authorized its Department of Human Services to include substance abuse treatment and mental health counseling as part of assigned work activities in participants’ TANF employability plan if they are found to be engaged in substance abuse. Virginia (H 1820, 2021) authorized educational activities that lead to a postsecondary credential as qualified TANF work activities.

Other states have sought to lessen the severity of sanctions and provide administrative flexibility during times of economic distress. Maine (H 44, 2021) repealed full-family termination of TANF benefits when one parent falls out of eligibility compliance. Washington (H 1755, 2022) provides hardship extensions of the lifetime limit on TANF assistance when the state’s unemployment rate is equal to or greater than 7%.