The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions

Publication Date: August 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

Type:

Abstract:

The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of benefits and services for low-income families with children. TANF was created in the 1996 welfare reform law (P.L. 104-193). Its funding was recently extended through FY2010 by the Deficit Reduction Act of 2005 (P.L. 109-171). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748). It will be updated.

Funding and Expenditures. TANF provides fixed funding to states, the bulk of which is provided in a $16.5 billion-per-year basic block grant. States are required in total to contribute, from their own funds, at least $10.4 billion under a maintenance-of-effort (MOE) requirement. The $16.5 billion basic block grant, which will be provided to states through FY2010, represents the same basic block grant as provided in the 1996 welfare reform law. The grant is not adjusted for inflation or changes in the cash welfare caseload (see "Caseload," below). It has lost 20% of its value (purchasing power) to inflation from FY1997 through FY2006.

Though TANF is best known for funding cash welfare payments for needy families with children, the block grant and associated state MOE funds are used for a wide variety of benefits and activities. In FY2005, expenditures on activities associated with a "traditional" cash welfare program -- cash benefits themselves ($11 billion), administrative costs, and spending on work activities -- totaled only half of total TANF and MOE funds. TANF also contributes funds for child care and services for children who have been, or are at risk of, abuse and neglect.

Caseload. Though only about half of federal and state expenditures are associated with cash welfare, the "TANF caseload" number commonly discussed is the number of families and recipients receiving cash welfare. Information is not available on families and individuals who receive TANF benefits and services other than cash welfare. In June 2006, 1.9 million families, consisting of 4.6 million recipients, received TANF- or MOE-funded cash welfare. The "typical" welfare family is headed by a single mother with one or two children. However, the cash welfare caseload is very heterogenous. In FY2004, about four out of 10 cash welfare families were "child-only" cases -- families in which the adult is ineligible for cash in his or her own right.

Benefits. TANF cash benefits are set by states. In January 2005, the maximum monthly benefit for a family of 3 ranged from $923 in Alaska to $170 in Mississippi.

Work Requirements. TANF requires states to engage 50% of all families and 90% of two-parent families in work activities. These participation standards are reduced for caseload reduction from FY2005. In FY2004 (the last year for which data are available), states achieved average work participation rates of 32% for all families and 47% for two-parent families. Most states are likely to have to increase work participation in order to achieve the FY2007 TANF work participation standards.