Steps in the Right Direction: States Improve TANF Programs

July 17, 2013

By Elizabeth Lower-Basch and Lavanya Mohan

While TANF is an insufficient safety net, as we have discussed, a handful of states have recently done the right thing for low-income families by passing laws that improve their TANF programs. California, Minnesota, Illinois and Nebraska have all enacted laws that strengthen TANF programs to serve needy families.

Asset Limits: The Illinois state legislature passed a bill that removes the restrictive asset limit eligibility requirements for TANF applicants and recipients. Under the previous state rule, families could not have more than $3,000 in savings without losing TANF eligibility. This meant that low-income families could never move towards financial security by building their savings. By removing the asset limit altogether, Illinois will allow needy families to save for emergency needs, unexpected expenses or perhaps even a downpayment on a car.  Pending the Governor’s signature, Illinois joins Hawaii, which repealed its asset limit earlier this year, and six other states.

Family Caps: While typically TANF cash grants are based on family size, “family cap” laws prevent benefits from increasing to offset the added expenses when children are born into families already receiving TANF. These laws create hardships for needy families, especially affecting the most vulnerable poor infants. Moreover, studies have shown that family caps do not lower birth rates. As part of its budget, Minnesota repealed its family cap law. Similar legislation is still pending in California.

Subsidized Employment: California, Nebraska and Minnesota all increased TANF funding for subsidized employment, providing TANF recipients with valuable training through employment programs while providing employers with full and partial wage subsidized employees.  These programs build on the successes of the programs that 37 states operated in 2009-2010 under the TANF Emergency Fund.

Education and Training: Nebraska also passed legislation that allows TANF recipients to meet their work requirements by pursuing a high school diploma or GED. As discussed at a recent hearing on work requirements in TANF programs, federally countable work activities are too stringent and narrow. Allowing education and training to count towards state work requirements, even when not federally countable, provides TANF recipients a path to lasting economic security.

Benefit Levels: After years of cuts, California and Minnesota have passed legislation that has slightly increased benefit levels. Minnesota has appropriated $21 million for FY2014 - FY2015 and $47 million for FY2016 - FY2017 towards TANF programs. This means that TANF recipients who do not receive housing subsidies will see benefits raised by $110 per month – the first increase since 1986. Also, eight years after grant levels were cut due to budget shortfalls, California has increased the maximum TANF grant levels by five percent. In addition to including $50 million for this increase in the 2013 state budget, California has enacted a new funding stream that will provide funding for future grant increases. After years of state cuts, increased funding to TANF programs bodes well for needy families.

These promising developments in state TANF programs will provide poor families with a stronger safety net and financial security. More states should consider following the lead of these others. CLASP has recommended programs and policies that states can consider to alleviate the hardship faced by families and children and promote economic opportunity. 

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