Income Support Program Lifts Families out of Poverty

Emily Fetsch | August 30, 2022

Temporary Assistance for Needy Families (TANF) is a program that is effective in reducing poverty. Yet despite the program having successfully lifted thousands of families across the country out of poverty, Kansas spending on TANF is out of step with national trends. Current Kansas policy is not utilizing the program as well as it could be and that must be changed so families can work toward financial stability in the long term.

What Is TANF?

TANF is a family support payment program to help Kansas families provide for their children and achieve firm financial footing. TANF funding is distributed to Kansas as a block grant, meaning the state has more flexibility to administer the program (including determining benefit eligibility) compared to traditional entitlement programs.

In 2020, Kansas spent roughly $177 million in both federal and state monies for the TANF program. Of this, 7 percent was spent on basic assistance (income support), far below the national average (22 percent). This limited distribution of monies for income support places Kansas 42nd in state rankings for this type of spending.

Kansas differentiates from national TANF spending in many of the most directly related TANF spending categories. The state has substantially decreased spending in these categories over the past 20 years.

• Basic (cash) assistance: The national average of cash payments to families is more than three times the percentage as Kansas (22 percent vs. 7 percent). Kansas spent $56 million in 2001, compared to just $13 million in 2020.
• Work activities: The national average percentage of work activities spending is 20 times the Kansas percentage (10.0 percent vs. 0.4 percent).
• Child care: Kansas spends just 4 percent of its TANF spending on child care, compared to the national average of 17 percent.

There are other spending categories that are less directly related to the key purpose of TANF where Kansas is out of step with national spending.

• Tax credits: Kansas spends more than twice the national average of the percentage of TANF spending going to tax credits (22 percent vs. 9 percent). Kansas uses TANF dollars to fund the state portion of the Earned Income Tax Credit, which is not common nationally and accounts for much of the difference.
• Child welfare: Kansas spends three times the national average of the percentage of TANF spending — amounting to almost one-fourth of total spending — on child welfare (24 percent in Kansas vs. 8 percent nationally).

Because TANF is a block grant, Kansas is not required to spend all the funds annually. As of 2020, Kansas has accumulated $61 million in unspent TANF block grant funds, equal to 60 percent of its annually allocated block grant.

Who Is Eligible for TANF in Kansas?

As a block grant, Kansas has discretion over eligibility for the program and benefit amounts. The program, at the federal level, is for “needy” families, but does not define “needy.” Federal law requires Kansas to meet a “work participation rate” (WPR) or face a penalty. However, that rate is adjusted if caseloads have fallen since 2005 (like they have in Kansas). Due in part to this “caseload reduction credit,” more than half of states have an adjusted WPR of zero.

Therefore, the threat of a penalty is largely nonexistent. 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 in poverty 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.

It is important to note “the WPR is a requirement on states, not on individuals. States are expected to engage individuals in work within 24 months of their participation in TANF, but the state determines what constitutes being engaged in work. There is no penalty if the state does not meet this requirement.” (CBPP)

Where Are We Now? What Did the "HOPE" Act Do?

In 2015 and 2016, the Kansas Legislature passed the “HOPE” Act, which implemented barriers for families accessing anti-poverty programs. As a result, Kansas has seen a continued decline of children and families accessing programs that help thousands of people make ends meet. Restrictions include:

• Shortening the amount of time a family can remain eligible for cash assistance. Federal law allows for five years of eligibility within a lifetime. Kansas reduced that to two years.
• Increased work requirements, including for pregnant women and mothers of infants. Federal law allows a new mother 12 months to care for her infant before she must return to work; the HOPE Act cut that period for new Kansas mothers to just three months.
• Limiting what recipients can spend TANF dollars on.

The state continues to see the negative effects of the “HOPE” Act, and it is clear repealing these restrictions is vital to child health and development. Extreme restrictions on TANF benefits hurts families’ economic stability, ability to plan for the future, and capacity to deal with unexpected events. TANF benefits are stagnant and do not adjust with increasing inflation; the few families receiving TANF are stretching these dollars more every year.

In addition, restrictions that deprived families of TANF have implications beyond economic stability. A study from the University of Kansas shows a troubling link between lack of access to anti-poverty support for children, like through TANF, and foster care placement. The research demonstrates that as restrictions increase for anti-poverty programs, more Kansas children enter the foster care system. We could keep more children out of the foster care system (and save the state thousands of dollars in the process) if we improved access to family support programs so that parents and caregivers do not have to struggle to feed and care for their kids.

How Can We Improve?

The decrease in support has harmed families trying to survive, but Kansas can reverse these negative trends. Policymakers can repeal the restrictions outlined in the HOPE Act and do more to strengthen anti-poverty programs like TANF. Strengthening TANF helps ensure every child has the chance to succeed and improves health, child welfare, and education outcomes for Kansas kids.