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Cash assistance benefits for the nation’s poorest families with children fell again in purchasing power in 2012 and are now at least 20 percent below their 1996 levels in 37 states, after adjusting for inflation.  Unlike in 2011, when six states reduced the already-low benefits they provide through the Temporary Assistance for Needy Families (TANF) program, no states cut benefit levels in 2012.  A few states increased their family grants, but most states kept them unchanged, allowing the benefits to continue to be eroded by inflation.  With the country’s economic outlook looking somewhat more favorable in the coming year, it is time for states to halt the erosion of TANF benefits and slowly regain some of the purchasing power lost over the past 16 years.

For a majority of recipients, the purchasing power of TANF benefits is below 1996 levels, after adjusting for inflation. These declines came on top of even larger declines in benefits over the preceding quarter-century; between 1970 and 1996, cash assistance benefit levels for poor families with children fell by more than 40 percent in real terms in two-thirds of the states.  As of July 1, 2012, benefits for a family of three with no other cash income for all states were below 50 percent of the federal poverty line, measured as a share of the Department of Health and Human Services poverty guidelines for 2012. Benefits were below 30 percent of the poverty line in the majority of states.  There is not a single state in the nation in which the TANF benefit level for a family of three with no other cash income is at least equal to the Fair Market Rent for a two-bedroom apartment.[1]   In fact, in 25 states, TANF benefits amount to less than half of the Fair Market Rent.

TANF provides a safety net to relatively few poor families:  in 2011, just 27 families received TANF benefits for every 100 poor families, down from 68 families receiving TANF for every 100 in poverty in 1996.  But for the families that participate in the program, it often is their only source of support and without it, they would have no cash income to meet their basic needs.

This paper is an annual update of state TANF benefit levels as of July 1 each year (the beginning of the fiscal year for most states).  This update covers the changes in TANF benefit levels between July 1, 2011 and July 1, 2012.  The benefit levels cited here reflect the benefits for a family of three with no other income as of July 1, 2012. (author abstract)

Posted by Rebecca Gorin, Self-Sufficiency Research Clearinghouse Staff

Of the 1.8 million low-income parents that participate in education and training activities, most are single parents of children under five who also hold full-time jobs. Many pursuing additional education are on more than one type of public assistance program, often facing competing requirements to maintain benefits--some prioritizing work, others emphasizing training and education.

The Temporary Assistance to Needy Families (TANF) Program, established in 1996 by the Personal Responsibility and Work Responsibility Act, marked a dramatic shift away from cash assistance, requiring participants to work in order to keep their benefits. Recently, several companion programs have begun to support education and training as a prerequisite to work and economic stability.  

For example, the Supplemental Nutrition Assistance Program (SNAP), administered by the U.S. Department of Agriculture, allocates $300 million annually to states to operate SNAP E&T programs. While states are afforded considerable flexibility in their design, these programs help participants with job searches, provide work experience, basic-skills training, and job retention services. The child support system, originally an enforcement mechanism to recoup welfare payments, is also beginning to offer employment supports, through pilot projects that provide case management, employment services and fatherhood/parenting activities to non-custodial parents with high barriers to employment. These pilots, are a part of the National Child Support Noncustodial Parent Employment Demonstration Project (CSPED) and aim to improve financial and emotional stability for children by increasing the economic capacities of their parents. 

These policy shifts have occurred as the literature and research base has grown on the effectiveness and outcomes of work-first policies, as well as education and training supports for low-income individuals. This research has found that flexible programs, like SNAP E&T, are well-equipped to respond to economic downturns in comparison to work-first programs. Studies also indicate that training programs that adapt to changing labor market conditions and take into account employer needs can help participants build career pathways. Employment-based child support programs are also proving to be effective at not only increasing child support payments but increasing the presence of non-custodial parents in their children’s lives. 

Learn More about Work First Policy from the SSRC:

The SSRC Library contains numerous evaluation reports and stakeholder resources on these policy, research and practice development, including:

• Balancing school, work, and family: Low-income parents’ participation in education and training: This 2014 brief by the Urban Institute used Survey of Income and Program Participation data to examine education and training participation by low-income parents and the barriers they face, outlining recommendations to better support low-income parents who pursue education and training while balancing family and work duties.
• The relationship between SNAP and work among low-income households: This 2013 study by the Center on Budget and Policy Priorities explored how and why SNAP has become a critical program in effective in supporting employment for low-income families.
• Improving engagement of TANF families: Understanding work participation and families with reported zero hours of participation in program activities: Based on interviews with TANF administrators, this 2015 Office of Planning, Research and Evaluation study identified factors that influence a family’s work participation and discusses promising practices for engaging clients improving employment outcomes for work-eligible families.
• The noncustodial parent employment program: Employment and payment outcomes: This 2011 evaluation of Maryland’s Noncustodial Parent Employment Program assessed the connection between job coaching, employment outcomes, and child support payment compliance and highlights significant positive child support outcomes.

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