In Focus

Apr 29, 2016  |  PERMALINK »

HHS Guidance Highlights State Responsibility to Provide Less-Costly Access to TANF Benefits

By Elizabeth Lower-Basch

This week, the Administration for Children and Families (ACF) at the U.S. Department of Health and Human Services issued a “program instruction” to state agencies operating Temporary Assistance for Needy Families (TANF) programs. It provides first-ever guidance on the important requirement that states ensure clients have free or low-cost access to their benefits. In a 2014 joint paper from CLASP, the California Reinvestment Coalition (CRC), and the Asset Building Program at the New America Foundation, we addressed this issue and highlighted best practices for electronic benefit transfer (EBT) payment cards used to deliver TANF benefits.  

Among the key points raised in the new guidance are:

  • States should maximize the flexibility for recipients to access cash withdrawals, including allowing clients to have benefits direct deposited into their own bank accounts.  Direct deposit to a consumer’s bank account often confers significant advantages, including access to a wider ATM network, the ability to pay bills and make purchases online, and a mechanism for saving and participating in the financial mainstream, which can be particularly helpful once the household has transitioned off of TANF. 
  • States should minimize or eliminate restrictions on the frequency or number of cash withdrawals and the amount that a recipient may withdraw at any one time.  The guidance is clear that provisions such as Kansas’ proposal to limit recipients to $25 withdrawals a day are disallowed because they would “prevent a needy TANF family from having adequate access to its cash assistance and impose an additional burden by requiring multiple trips to an ATM to access assistance.”
  • States should strive to minimize or eliminate withdrawal fees and ATM surcharges for TANF recipients, and must provide recipients an opportunity to access assistance with no fees or charges.  While most states already provide a limited number of free withdrawals each month, others charge fees starting with the first transaction.  States can also limit the surcharges that clients experience by contracting with a network having a large number of ATMs.  For example, California recently announced a new EBT contract that, starting in 2017, will allow TANF recipients to withdraw cash and check their balance without surcharges at Bank of America and NYCE network ATMs statewide.
  • States should maximize geographic distribution of ATMs and/or provide other cash access points so clients do not have to travel excessive distances—sometimes requiring significant expense and time—in order to access their benefits without surcharges.

In a CRC study, parents receiving TANF described the impacts of ATM fees: “Being on assistance means we need financial help and every cent matters. Paying fees to withdraw money takes away from the money our families need.”  In this guidance, ACF commits to reviewing state TANF plans to ensure that they are addressing these issues.  All states should review their policies and contracts to ensure that TANF benefits are helping needy families, and not being diverted to bank fees and that they are not otherwise creating unnecessary hurdles to accessing benefits.

Mar 4, 2016  |  PERMALINK »

It’s Not 1996 Anymore; TANF Cash Assistance Doesn’t Go Far Enough

By Randi Hall

Since 1996, inflation has eroded the value of a dollar by more than 30 percent. Some key costs have gone up much more—the average fair market rent for a two-bedroom apartment in the United States has increased by 71 percent and average transit fares have increased by 50 percent. But in many states, families with children receiving cash assistance under the Temporary Assistance for Needy Families (TANF) block grant are struggling to make ends meet with benefits that have remained stuck at 1996 levels.

In 23 states, TANF benefit levels have either decreased or remain unchanged since welfare reform was enacted in 1996. In some states, it has been even longer since families received an increase. The Mid-Minnesota Legal Aid recently released a report highlighting the erosion in value of basic cash assistance under the state’s Minnesota Family Investment Program (MFIP). A family of three can receive a maximum monthly grant of $532 under MFIP, an amount determined in 1986 that has not increased since. Similarly, New Jersey Policy Perspective reports that the maximum amount of assistance for a family of three has been set at $424 per month since 1987. Basic cash assistance under TANF leaves low-income families with significant gaps to meet their basic needs.

Cash assistance has failed to serve those who need it most, both in its nominally small grant amounts and in the restrictive income limits that disqualify working poor families. In 26 states and the District of Columbia, a family of three reporting annual earnings at 50 percent of the federal poverty level, or $19,790 in 2014, made too much to qualify for cash assistance under TANF. Annually adjusting the cash assistance amounts would immediately benefit working poor families facing material hardship. For example, if Minnesota’s monthly cash grant had been adjusted annually for inflation, a family of three would afford to purchase $1,148 in goods and services (more than double the purchasing power of the $532 amount that’s been frozen in time since 1986.)

A few states are trying to address this issue. This year, New Jersey lawmakers have stated their intent to raise the state’s monthly benefit grant over three years while calling for an annual cost of living increase. State representatives in Virginia have offered two separate bills that would increase the monthly benefit amount for TANF recipients.

One reason benefit levels have remained stagnant in so many states is that the TANF block grant itself has not been adjusted for inflation since the program was created. Another reason is that many states use a large share of their grants for purposes other than cash assistance. President Obama’s proposed FY 2017 budget addresses both these issues. It would increase the block grant by $8 billion over 5 years—requiring a corresponding increase in state spending—and would also require states to spend at least 55 percent (rising to 60 percent over time) of the funds for core purposes and benefits: cash assistance, work-related activities, and child care. While these improvements are vital to expand economic opportunity and stability for poor families with children, states should not wait for federal action to adjust monthly benefit amounts to meet the cost of living in the 21st century. After all, it’s not 1996 anymore.

Feb 29, 2016  |  PERMALINK »

Implications of CCDBG Reauthorization for TANF

By Christine Johnson-Staub

In an effort to meet requirements of the 2014 Child Care and Development Block Grant (CCDBG) Act, which was reauthorized in 2014, states are undertaking massive policy changes in their CCDBG programs. This gives them the opportunity to raise questions about the interaction between the new CCDBG rules and the Temporary Assistance for Needy Families (TANF) block grant, and to make changes to better coordinate the two programs.  Many states use TANF funds to offer child care assistance, and families who receive cash assistance under TANF may receive child care funded by either CCDBG or TANF.

New rules under the CCDBG Reauthorization apply to all CCDBG-funded care, including care funded with money transferred from TANF to CCDBG. New federal guidance jointly issued by the Administration for Children and Families’ (ACF’s) Office of Child Care and Office of Family Assistance clarifies those CCDBG rules for families that receive TANF assistance and also receive CCDBG-funded child care. The guidance also encourages further coordination between CCDBG and TANF-funded child care at the state level to provide low-income families with access to continuous, stable child care with common health and safety standards, regardless of funding stream.

Approximately 14 percent of families served by CCDBG nationally also receive cash assistance from TANF, and in some states the share is much higher. TANF families served in CCDBG are subject to the same new rules as other families, including 12-month eligibility and a minimum of 3 months of continued assistance before termination even if TANF benefits have been terminated. The guidance encourages states to consider the opportunities offered by CCDBG reauthorization to further align policies. For example, states can:

  • Review their policies and practices related to child care access as families move from TANF to post-TANF employment and education, to ensure children and families retain their child care assistance and maintain stable care arrangements through fluctuations in work schedules and earnings.
  • Encourage collaboration across lead TANF and CCDBG agencies throughout the CCDBG planning and implementation process, including consulting on provisions in state plans and training staff in both programs to fully understand changes in CCDBG policies and how they impact TANF operations.
  • Ensure that child care funded with TANF dollars meets the same health and safety standards as services funded with CCDBG dollars. President Obama’s recently proposed federal budget for FY2017 included a proposal that, if adopted by Congress, would require child care funded directly through TANF and the Social Services Block Grant (SSBG) meet CCDBG health and safety standards.
  • Apply CCDBG’s strengthened provider payment practices, such as paying based on enrollment rather than attendance to the extent practicable, to child care funded directly by TANF.

As states continue their CCDBG implementation work, this guidance from ACF offers options that can help them coordinate across agencies operating CCDBG and TANF programs, finding opportunities in their policies and practices to increase economic stability for families and more consistently provide children with access to stable care that supports their development. 

Read the ACF Information Memorandum>>

See CLASP resources on CCDBG Reauthorization>>

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