Budget Summary: Temporary Assistance for Needy Families (TANF)
November 15, 2023
Temporary Assistance for Needy Families (TANF) is the country’s public assistance program, providing cash assistance and employment services to low-income families through a broad array of programs aimed at breaking the cycle of poverty.
TANF was the product of a national welfare reform bill in 1996, replacing the Aid to Families with Dependent Children (AFDC) program, which had provided cash assistance to poor families since 1935. With this reform, much of the funding and decisions about how to use TANF transferred to the states.
Federal funds may be used for a wide range of benefits and services for families with children, but must reasonably fit within the fourfold statutory purpose to:
- Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
- End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
- Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and
- Encourage the formation and maintenance of two-parent families.
While these broad purposes give states a great deal of flexibility and discretion in program design, rigid funding requirements and eligibility guidelines leave little leeway for states to adjust during recessions or when the needs of their communities change.
A portion of the funding may also be transferred to either the Child Care and Development Fund (CCDF) or the Social Services Block Grant (SSBG). Unused TANF funds can also be saved and carried over (without fiscal year limit) to provide any allowed TANF benefit or service in the future.
TANF in Kansas
The Kansas TANF program provides basic cash assistance, grants for work supports, child care, and early childhood education, as well as tax credits through the state’s Earned Income Tax Credit (EITC). The Department for Children and Families (DCF) is the state agency responsible for management of TANF with responsibilities including, but not limited to:
- Administering and supervising the TANF program, pursuant to section 402(a)(4) of the Social Security Act;
- Requesting and receiving TANF funding from the federal government;
- Submitting required programmatic and financial TANF reports to the federal government; and
- Submitting a State Plan that certifies the TANF program design.
Federal TANF funding is administered through a block grant, which gives each state a fixed amount of money based on expenditures in the pre-TANF programs in the early- to mid-1990s. To ensure states do not substitute federal dollars for state dollars, states must also contribute non-federal dollars to meet a maintenance of effort (MOE) requirement based on spending in the pre-TANF programs in FY 1994. The state portion (which can include spending by local governments, non-governmental entities like private charities) should be at least 80 percent of what it had spent in federal FY 1994, with a reduction to 75 percent if the state meets the work participation rate (WPR) requirement.
If a state does not meet the MOE requirement in any fiscal year, the federal government reduces the dollar-to-dollar allotment of the state's TANF grant in the following year. Federal law allows a state to transfer up to 30 percent of its federal TANF funds to its CCDF every year.
Kansas receives $101 million annually through the TANF block grant and is required to spend at least $62 million (at the 75 percent rate) of its own money each year on TANF-related programs through its MOE contributions.
Since 2011, Kansas has received $913 million in federal block grant funding with the allocation generally increasing over the years. The annual federal TANF block grant has been frozen since its creation, without adjustments for inflation or other changes in circumstances and lost about 47 percent of its value between 1997 and 2021 due to inflation.
The state makes transfers to the SSBG each year but stopped transfers to the CCDF in FY 2015, choosing to use funds from the Children's Initiatives Fund, which is the state’s spending mechanism for annual Tobacco Master Settlement Agreement payments.
In 2021, the state spent a total of about $162 million in TANF funds, including $90 million in federal resources, $62 million in state MOE, and $10 million in transfers to the Social Services Block Grant.
The deliberate flexibility and discretion of the TANF model allows states to decide for themselves how to best use funds; however, Kansas has taken advantage this to the point where just 14 percent of what the state spends on welfare dollars goes to the “core” goals in the welfare law – cash assistance, child care subsidies and programs that help families join the work force.
In 2021, the state spent the largest share of its TANF resources (just under half) on EITC tax credits (25.3 percent) and child welfare- and foster care-related payments and services (23.3 percent) combined.
Compared to national averages in 2021, Kansas spent:
- 6.2 percent on basic cash assistance, far below the national average of 22.6 percent.
- 4.1 percent on child care, compared to 12.4 percent nationally.
- 3.9 percent on work activities and supports combined, compared to 10.0 percent nationally.
- 21.9 percent on child welfare and foster care services, compared to 9.0 percent nationally.
- 23.7 percent on tax credits, compared to 8.5 percent nationally.
Cash assistance, also known as basic assistance, is any benefit to a family that comes in the form of cash, vouchers, or payments that help meet ongoing or basic needs, such as rent and groceries. Cash assistance in Kansas provides a monthly cash benefit to struggling families that have children, or are expecting children, with the amount based on family size. The current (2023) maximum monthly benefit for a family of four living in a high-cost, high population county is $497 per month, for an annual total of $5,964. This amounts to about 20 percent of what a family would need to make to be above the federal poverty threshold.
While federal law allows for five years of eligibility within a lifetime, the Kansas Legislature reduced that to three years in 2015 and then further reduced it to just 24 months in 2016. Other barriers, such as increased work requirements and a drastic decrease from 12 to three months for the time new mothers have to care for their infants before returning to work, have caused a drop in cash assistance spending from $56 million in 2001 to $10 million in 2021.
The added barriers have also had a significant impact on the total number of families receiving cash assistance – only 3,000 in 2022, with even fewer projected in coming years.
Kansas has not fully spent its TANF block grant each year. TANF regulations allow a state to carry over any unspent TANF funds from year to year. There is no federal time limit for spending carried over funds, allowing it to be used in any future year. Funds must, however, be spent on achieving one of the four TANF purposes. This permits flexibility in timing of the use of TANF funds, including the ability to build a balance of funds for unexpected occurrences that might increase costs (such as recessions or natural disasters).
Unspent funds are tracked as unspent obligations (which are already committed to spend later) and unobligated balances (which are not committed and available to make new spending commitments). In 2021, Kansas had about $62 million in total unspent TANF funds (compared to $10 million in 2011), with about $58 million of that not obligated for any purpose.
Diminishing caseloads without grant increases have contributed to generally large amounts of unspent funds that should be used to support TANF families.
In Kansas, TANF eligibility is very limited, with only very low-income Kansas families eligible to receive benefits. Kansas has seen a marked decline in families living in poverty receiving TANF benefits. When the program began in 1995/1996, more than half (52) of every 100 Kansas families living below the poverty line received TANF income support, compared to just nine families of every 100 families in 2019/2020.
Currently, to be eligible, families must meet all the following criteria:
- At least one child under age 18 lives in the household.
- For initial eligibility, make a maximum monthly income of $519 for a family of three, or roughly $6,220 per year.
- The household has less than $2,250 in resources and assets.
- Adults in the household must participate in program requirements to stay in compliance, including participation in approved work activities. Exceptions are made if the individual is taking care of a child under three months of age or a disabled household member (but not if the receiving individual is ill or incapacitated).
- Cooperate with child support enforcement.
The Bottom Line
Poverty-reduction programs like TANF are crucial to providing resources to help families meet basic needs and move out of poverty. However, as currently structured, TANF is not meeting this purpose. Year-over-year participation has decreased while poverty rates continue to increase.
Simply put, TANF is not doing enough because of extreme restrictions that are making it more difficult for families to access the temporary aid that they need to become financially stable again.
Cash assistance, child care subsidies, and work programs are proven tools to help struggling families get a foothold in today’s economy so they can support their children and build a future. Kansas policymakers should be ensuring state welfare money is used to maximize the public investments needed to promote opportunity for everyone.
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