Wonky Word Wednesdays loves to focus on acronyms. Last week we did OTO, and this week we are going to give you one that has been in the news recently – TANF.
TANF stands for Temporary Assistance for Needy Families. Congress passed an act in 1996, which created the TANF program, replacing the Aid to Families with Dependent Children (AFDC) program, which had been providing cash assistance to poor families since 1935.
But exactly what is TANF? And how is this funding used?
TANF is a federal block grant, which means the federal government allocates a set amount to each state each year. States then have some flexibility on setting up their own TANF program and how to use the funds (within certain parameters). Along with federal dollars, states receiving TANF funding must use some of their own state dollars to operate TANF services and administer benefits. While eligibility and benefits vary because states have a great deal of discretion, typically, TANF benefits come in the form of cash assistance to families living in severe poverty. This cash assistance is often used to pay for bare essentials like rent and food.
In Montana, eligibility limits are complicated, but in general, families with income at or below 30% of the federal poverty line qualify for TANF. This means a single mother with two children earning $6,000 or less a year would qualify for TANF cash assistance. Once families qualify, and in order to continue receiving TANF benefits, parents must also comply with strict work requirements that include a set number of weekly work hours and other criteria like on-the-job training or job search and job readiness assistance.
While TANF is targeted to support families living in severe poverty, since its implementation, TANF has fallen short in reaching many families experiencing poverty. As the number of families experiencing poverty continues to increase nationwide, the number of families participating in TANF has dramatically decreased.
During the mid 1990s (the period that TANF was created and replaced AFDC), 63% of Montana families living in poverty received assistance through AFDC. In 2012 (16 years after TANF replaced AFDC), only 13% of families living in poverty in Montana received assistance through TANF (see table below).
Lets be clear. This drop is not because TANF is effectively reducing poverty. Instead, more and more families are living in poverty and unable to receive TANF benefits because of confusing program structures and strict eligibility requirements.
Last year, the Montana Department of Health and Human Services (the agency that administers TANF) established a steering committee to look at ways that the state can better help those living in poverty. And just yesterday, a Congressional committee released a discussion draft on how to improve the federal TANF law. This is an encouraging development, and we’ll be sharing more thoughts over the next several weeks on how that law may help Montana families struggling to make ends meet. To understand what is happening at the federal level, you can read more here.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.