Tanf Cash Benefits Have Fallen by More Than 20 Percent in Most States and Continue to Erode
The pandemic has taken a toll on many families' economic security. Some families with low incomes lost employment or work hours, and families with children experienced heightened food insecurity and struggled to pay for housing costs.
One way states addressed these financial challenges was by extending the length of time families could receive cash assistance in ways that still met federal requirements. Through these policies, families receiving aid would not accrue months toward a time limit, families reaching a time limit could continue receiving benefits, or previously time-limited families could reapply for cash benefits.
States made these changes by altering their time limit policies in the Temporary Assistance for Needy Families (TANF) program. TANF is a block grant program that provides cash assistance and other services to families with low incomes. Under TANF, states must adhere to federal rules but can set some policies at their discretion. Though there were no changes to federal TANF rules during the pandemic, most states used the program's flexibility to modify their policies to provide more support for families.
How do TANF time limits work?
Federal law sets a 60-month lifetime limit for families with an adult receiving federally funded TANF benefits. States can use the federal limit, impose a shorter limit, or combine a shorter limit and the federal limit. States cannot stop counting months toward the federal time limit for families whose benefits are paid using federal TANF dollars, but they do have the option to extend benefits for up to 20 percent of their caseload beyond the 60-month federal lifetime limit. If states choose to provide assistance to more than 20 percent of families beyond 60 months, they must use state funds to provide benefits to these families.
Our new report shows how many states used this flexibility to temporarily change their policies during the pandemic. Some states implemented changes only to their shorter state time limit, which meant they could use either federal or state funds to pay for the benefits. For example, Connecticut has a 21-month lifetime limit, which is shorter than the 60-month federal lifetime limit. The state suspended its lifetime limit because of the COVID-19 pandemic; therefore, Connecticut could fund benefits for recipients beyond 21 months (and up to 60 months) with either state or federal funds.
Several other states used their own funds to exempt months from being counted toward a time limit or to extend benefits beyond the federal time limit. In Washington State, recipients could receive benefits beyond the 60-month time limit because of the pandemic. Because this is beyond the federal limit, the state used state funds to assist these recipients.
What were time limit policies during the COVID-19 pandemic?
The changes to state time limit policies fall under three policy umbrellas:
- providing exemptions or suspensions
- providing extensions
- removing previous benefit terminations because of reaching the time limit
By granting exemptions or suspensions to the time limit, some months of benefits did not count toward the time limit, so families would not reach the time limit during the pandemic. Extensions to the time limit allowed families to receive benefits for additional months beyond the time limit. Lastly, by removing previous time limit benefit terminations, eligible families previously terminated for reaching the time limit could reapply for benefits.
In response to the pandemic, a total of 21 states made changes to their state time limit policies. Of those, 9 states provided an exemption to the time limit or temporarily suspended the time limit, and 12 states provided time limit extensions.
Of these states, some granted blanket extensions for all participants, and others granted extensions based on specific hardship caused by the pandemic. Maine allowed families who previously lost their benefits because of reaching the time limit to reapply for benefits if otherwise eligible. Washington, DC, does not impose a time limit (instead funding assistance beyond the 60-month federal lifetime limit with state funds) so, even without any policy changes, no TANF recipients in DC were affected by time limits during the pandemic.
Twenty-nine other states generally impose time limits and did not make pandemic-related changes to their time limit policies. Still, some recipients in these states may have been eligible for extensions or exemptions based on other existing criteria, such as high local unemployment or caring for a sick family member.
Tracking COVID-19 policies across states
Modifying state time limit policies is one way states can help families continue receiving benefits during periods of economic instability, as demonstrated during the pandemic. Given the flexibility of the TANF program, states can also make changes to how they impose time limits to help struggling families in the future.
Our newly updated Welfare Rules Database tracks state time limits and other TANF policy variations across the 50 states and DC. It provides accessible, detailed information on how states provide cash assistance under the TANF program. As states continue to adapt their policies to help families during the pandemic, the Welfare Rules Database can be a resource for analyzing how pandemic-related policy changes vary across states. Tracking these complex rules and changes can support researchers and policymakers as they work to assist children and families in need.
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Source: https://www.urban.org/urban-wire/states-can-use-tanfs-flexibility-extend-cash-assistance-families-need
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