In every state, the Temporary Assistance for Needy Families (TANF) block grant supports cash assistance and a wide range of other programs and services for low-income children and families. CLASP conducts policy analysis and provides technical assistance on TANF to state and federal officials and administrators, advocacy organizations, grassroots groups, and research entities.
Jun 23, 2015 | PERMALINK »
Bad Policy for Kansas; Bad Policy for America
By Randi Hall
Last month, U.S. Senator David Vitter (R-LA) introduced the “Welfare Abuse Prevention Act” (S.1288), which would limit ATM withdrawals to $25 per day for recipients of Temporary Assistance for Needy Families (TANF) cash assistance. This federal legislation is modeled on a punitive welfare reform law enacted in Kansas earlier this year.
ATM withdrawal limits have severe implications for TANF recipients, diverting funds from struggling low-income families to banking institutions. While Kansas charges recipients fees for every ATM transaction, a majority of states charge TANF recipients ATM fees after their first or second withdrawals in a given month.
Policies that limit access to TANF cash benefits are driven by stereotypes and misconceptions about low-income families. Nationwide, TANF benefits are low; they are not enough to cover necessities such as housing, transportation, and clothing. For example, a single-parent household with two children in Kansas could receive a maximum of $429 a month in TANF benefits, but the fair market rent for a two-bedroom rental unit is $756 a month. When a family runs out of money before the end of the month, it is not because of poor budgeting choice; there is simply not enough money to cover expenses. In a recent study, TANF recipients described the hardship caused by these fees: “I'm spending money I desperately need on fees instead of diapers, my kid's allergy medicine, toilet paper… It reduces the amount of my cash aid that I can use because most of the places I need the cash don't take EBT cards.” Moreover, recipients may incur late fees on their rent or other bills if they are unable to access funds at the start of the month. In some remote areas, getting to an ATM may require long travel, increasing recipients’ expenses.
ATM withdrawal limits may violate federal requirements mandating that states provide “adequate access” to cash benefits and charge only “minimal fees” for withdrawals. If the U.S. Department of Health and Human Services determines that Kansas is non-compliant, the state could lose its $102 million TANF block grant. Governor Sam Brownback has signed an amendment to the law that allows the Kansas Department of Children and Families to raise or rescind the withdrawal limit. Using this authority, the Department should act swiftly to eliminate ATM restrictions.
CLASP encourages policymakers at the state and federal levels to reject any punitive measure that reduces the value of TANF benefits for low-income families. States should ensure that recipients can access their benefits by:
- Allowing and encouraging direct deposit of benefits;
- Ensuring that recipients may use EBT cards for low-cost or fee-free ATM withdrawals; and
- Providing clear information on ATM fees and surcharges.
In addition, states can support the economic security of TANF recipients by removing asset limits from the program, promoting savings, and offering financial literacy services.
TANF 101: Policy Briefs on Temporary Assistance for Needy FamiliesThis series of policy briefs provides basic explanations of the main components of TANF. We hope they will be helpful to policymakers, practitioners, and advocates at all levels of government. READ MORE »
- Elizabeth Lower-Basch | May 15, 2015 Testimony for the Record to the U.S. House Subcommittee on Human Resources on Improving Welfare Programs to Help More Families Find Work and Escape Poverty
- CLASP | Mar 06, 2015 Proposed Arizona Budget Widens Gap to Economic Security for Low-Income Families
- Helly Lee | Feb 09, 2015 WIOA: What Human Service Agencies and Advocates Need to Know
- Lavanya Mohan and Elizabeth Lower-Basch | Sep 05, 2014 No More Double Punishments
- Elizabeth Lower-Basch | May 29, 2013 New Research Shows Value of Subsidized Employment Programs to Employers, Employees
- Randi Hall | Jul 02, 2015 TANF 101: TANF in the Great Recession
- David Socolow, Elizabeth Lower-Basch, Michelle Derr, and Louisa Erickson | Jun 18, 2015 Webinar: WIOA-Human Services Collaborations: Opportunities and Challenge
- Elizabeth Lower-Basch | May 29, 2015 TANF 101: Work Participation Rate
- Elizabeth Lower-Basch | May 29, 2015 TANF 101: Block Grant
- Elizabeth Lower-Basch | May 29, 2015 TANF 101: Cash Assistance