TANF 101: Policy Briefs on Temporary Assistance for Needy Families

Twenty years after welfare reform dominated the headlines, many people have little understanding of how Temporary Assistance for Needy Families, or TANF, has changed. TANF is both a program of cash assistance for poor families with children and a block grant that states can use to support a range of services for low-income families. TANF utilizes work participation rates for families receiving cash assistance as the primary performance measure for states.

This 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.

TANF 101: Cash Assistance
Cash assistance under the TANF block grant is one of the smallest parts of our safety net for low-income families, but as a key “welfare” program, it plays an outsize role in the political discourse. This brief provides basic context on TANF benefits, requirements, the services provided to families who receive assistance, and their effectiveness in meeting families' immediate needs and assisting them in achieving long-term economic security. Cash assistance is only one of the many services and programs that states may fund with the TANF block grant, and this assistance accounts for less than a third of TANF and related state spending.

TANF 101: Block Grant
Nearly 20 years ago, the 1996 “welfare reform” law replaced Aid to Families with Dependent Children (AFDC) and related programs with the TANF block grant. AFDC was an uncapped federal matching program, under which states received more federal money when they spent more on cash assistance, and less when their caseloads declined. By contrast, under TANF states are given a fixed block grant that they can spend on a wide variety of activities to further any of the four statutory purposes. TANF also has a “maintenance of effort” (MOE) requirement under which states must continue to spend at least 75 percent of the amount that they did prior to welfare reform on programs serving needy families.  States may spend funds on a range of programs and services for needy families with children, regardless of whether the families are getting cash aid.

TANF 101: Work Participation Rate
TANF is a federal flexible block grant to states, with a range of goals, notably to provide income support that allows children to be raised at home, to promote work, and to encourage marriage. However, the federal government does not collect data on states’ performance in achieving the full range of goals. The only measure of performance for which states are held accountable is the work participation rate (WPR). States that fail to meet the WPR targets are at risk of losing a share of their block grant.

TANF 101: TANF in the Great Recession
From December 2007 to June 2009, the Great Recession highlighted the weakness of Temporary Assistance for Needy Families (TANF) as a safety net. TANF did not adequately respond to the sharp increase in need. During this period, unemployment rates climbed, peaking at 10 percent in October 2009 and driving millions of families into poverty. While families grappled with job loss and struggled to meet basic needs, TANF failed to react as a countercyclical measure for low-income households.