In Focus

Jul 28, 2016  |  PERMALINK »

In TANF’s Twentieth Year, Prioritizing Education and Training is Needed

By Randi Hall

New work participation data released this week from the Office of Family Assistance shows that recipients of cash assistance under the Temporary Assistance for Needy Families (TANF) block grant have little access to education and training activities, even though today’s labor market increasingly requires workers to have postsecondary credentials in order to access steady well-paying jobs.  Specifically, the recent share of work-eligible TANF recipients who participated in relevant activities—including education related to employment, vocational education, job skills training and satisfactory school attendance—was only 15 percent, down from 18.3 percent in 2013.

In a new policy brief, CLASP reviews the evidence for the need for postsecondary credentials for labor market success and the effects of obtaining such credentials for TANF recipients.   The brief reiterates the importance of emphasizing educational and job training pathways for TANF recipients, and highlights recent state policy changes that reflect the realities of today’s economy and the opportunity to make further changes by aligning employment programs for TANF recipients with the new Workforce Innovation and Opportunity Act (WIOA).

The brief also identifies federal policy changes that would support states by giving them credit toward the federal work participation rate for engaging TANF recipients in education and training, such as those included in last year’s discussion draft bill for TANF reauthorization put forth by the U.S. House Ways and Means Subcommittee on Human Resources. While we largely supported the initiatives outlined in the draft bill to strengthen TANF’s core purposes and improve the measure of its work participation rate, we raised concerns over the lack of additional flexibility and funding to address and support recipient families' needs and barriers to employment.  Senator Angus King’s (I-ME) recently introduced Enhancing and Modernizing Pathways to Opportunity through Work, Education, and Responsibility (EMPOWER) Act,  would go further toward support education and training for TANF recipients.  The summary of the bill highlights how the EMPOWER Act would  allow states to incorporate education and training opportunities as a pathway to move TANF recipients into stable jobs that pay adequate wages.

While the EMPOWER Act received bi-partisan co-sponsorship from Sens. Kelly Ayotte (R-NH), Sherrod Brown (D-OH) and Shelly Moore Capito (R-WV),  Congress has now adjourned for the Presidential conventions and the August recess.  Given the limited time in which Congress will be in session during this election year, it is unlikely that either the House or the Senate will take up TANF reauthorization this year.  However, these bills provide good starting points for a discussion next year.

The U.S. economy has vastly transformed since TANF was created, but TANF has not.  TANF should be redesigned to improve its effectiveness as both a safety net and an employment program, so that it can truly reduce poverty.

Jun 30, 2016  |  PERMALINK »

Arizona Cuts TANF Lifetime Limit to 12 Months—Harshest in the Country

By Jessica Gehr

Effective July 1, Arizona will lower its lifetime limit on receipt of cash assistance under the Temporary Assistance for Needy Families (TANF) block grant to just 12 months, the shortest in the nation. When this limit takes effect tomorrow, 938 families including 1,500 children will immediately lose benefits that allow them to meet basic needs, as well as the connection to services that help parents obtain skills, education, or employment. Moreover, families who have previously received TANF assistance for at least 12 months will no longer be able to receive help if they lose their job or have a new baby.

This move by Arizona is the latest in a series of draconian reductions in the lifetime limit, beginning in 2010 when the limit was lowered from 60 months to 36 months and continuing in 2011 when the state further reduced TANF’s lifetime limit to 24 months. In addition to lowering the number of months that families can receive assistance, in 2009, Arizona reduced the amount of cash assistance provided to families through TANF by 20 percent. As a result of all these cuts, for every 100 Arizona families in poverty, just nine receive cash benefits from TANF — down from 55 families before welfare reform in 1996, according to the Center on Budget and Policy Priorities.

Federal TANF law requires states to provide families with an adult receiving benefits no more than 60 months of federally funded TANF assistance. However, TANF does not establish minimum benefits, and many states have established shorter limits. The Arizona time limit even applies to families where a relative is not personally receiving benefits but is caring for a child who is eligible for assistance. The state will save less than one percent of its annual budget by limiting TANF eligibility.

TANF block grant funds can be used for a broad range of services that benefit low-income families. At the same time that Arizona has cut TANF benefits, it has increasingly used TANF funds to support child welfare activities. In FY 2014, Arizona reported three-quarters of combined TANF and state maintenance of effort (MOE) spending as “other,” which is possible because the structure of the block grant allows states to divert funds from TANF to plug budget holes in other areas. While child welfare is an important service, states should not divert TANF funds away from families in need to finance other shortfalls. Instead, states should spend general-fund dollars to address the increasing demands in other areas of the state budget. 

 

Limiting a critical work support such as TANF exacerbates the struggles families are experiencing and can make it harder for parents to get back in the workforce. According to Arizona’s TANF agency data, more than a quarter of the parents who will be cut off tomorrow are currently in education and training activities; losing benefits will make it harder for them to complete this training and find lasting work. These cuts will force more children into deep poverty and hardship, putting them at risk of lasting negative effects on their mental and physical health, as well as educational and economic outcomes. Arizona should reverse this ill-advised and short-sighted policy choice. And as part of TANF reauthorization, Congress should establish minimum standards for TANF benefits and require states to spend a minimum portion of their TANF funds on cash assistance, child care, and work activities.

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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.

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