Families Can’t Get by on Cash Assistance

By Ashley Burnside

The sharp rise in unemployment driven by the COVID-19 pandemic has drawn attention to both the importance of Unemployment Insurance (UI) and the extent to which it falls short of needs. Temporary federal expansions have helped bolster UI. But another cash assistance program – Temporary Assistance for Needy Families (TANF) – has received less attention and no additional support. These programs both need immediate shoring up to respond to the COVID-19 pandemic, as well as long-term structural reforms so they can better meet families' needs.

UI provides unemployed workers with cash that helps them afford food, cleaning supplies, technology for at-home schooling, utility bills, and other necessities. However, many workers – especially those in part-time jobs or in "gig economy" positions where they are paid as independent contractors – do not qualify for state UI benefits. This disproportionately harms Black and Hispanic workers who are likelier to work in the gig economy. Even with UI expansions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Black unemployed workers have received UI at lower rates than white workers. Unfortunately, those workers who do qualify and get benefits don’t receive enough to afford to meet their basic needs. 

Without the CARES Act expansions, state UI benefits leave workers without the money they need each month to pay for rent, utilities, transportation, and other essential costs. For example, a single parent with one child in Boone County, Kentucky would receive an average of $1,185 per month in UI benefits – about $3,500 less than the average living expenses there of $4,733 for the family. Average housing costs in Boone County alone cost $1,007 – nearly the entire monthly UI benefit. 

Monthly TANF cash assistance benefits fall even further short of meeting families’ monthly expenses. TANF benefits are at or below 60 percent of the poverty line in all states and below the fair-market rent in all states. Black families are likelier to live in states where their TANF benefits cover an even smaller share of their housing costs. In 38 states, TANF benefits are below $600 per month. That same family in Kentucky would only receive $225 per month in TANF benefits – less than one-fifth of what they could receive in UI benefits. 

Racist and sexist stereotypes about who is “deserving” versus “undeserving” of financial support during times of hardship have directly impacted how TANF is funded, how states have chosen to manage the program, and how low monthly benefits are for families. Stigma around the “welfare queen” dating back to the 1980s ignited public resentment against cash assistance recipients and inspired further racist stereotypes about Black women. People who are employed or recently unemployed have been deemed as “deserving” of financial support, while those who are not working due to caregiving responsibilities, health needs, or inability to find work are seen as lazy and “undeserving.” Black women face barriers to getting stable employment and high-paying jobs due to – among other challenges – racial discrimination in hiring, the wage gap, and racial segregation in urban areas. Despite this, Black women have historically participated in the workforce at higher rates—a fact that’s often overlooked. But the lingering stereotypes about people who receive cash assistance have led to federal and state policies that have reduced both the reach of the program and the benefits for those who receive assistance.

As lawmakers continue to debate the level of UI benefits needed to support workers during this unprecedented time, we must also advocate for increased TANF benefits that are aligned with costs of living. Congress should increase the TANF block grant and adjust it to inflation, and states should raise their monthly TANF benefits to at least 50 percent of the poverty line. States should also distribute emergency assistance benefits to families as additional financial support during the pandemic and economic crisis. Finally, lawmakers should consider implementing a Jobseeker’s Allowance to provide financial support for unemployed people who are not eligible for UI, such as graduating students or people re-entering society after incarceration.

To learn more about TANF, read our TANF 101 policy briefs.