Twenty years ago next month, Congress passed and President Clinton signed controversial legislation to replace Aid to Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF) block grant program. One of TANF’s main purposes is to increase the stability of two-parent families, but discussion tends to focus almost exclusively on single-parent families. A new report, funded by the U.S. Department of Health and Human Services and authored by analysts at the Urban Institute, provides useful information on the extent to which TANF is helping two-parent families. In this post, after providing some background on AFDC and TANF, I highlight some of the report’s main findings and discuss policy implications.
Under AFDC, states received matching funds from the federal government to provide income assistance, employment services, and child care to very low-income families with children. For the first several decades of its existence, AFDC eligibility was effectively limited to children of widows and other single mothers. In the early 1960s, states were allowed, but not required, to extend AFDC to children and parents in two-parent families under what became known as the AFDC-Unemployed (AFDC-UP) program.
It wasn’t until the passage of the Family Support Act of 1988 that all states were required to operate an AFDC-UP program—22 states did not do so before the law’s passage. Even so, these reforms did not require states to treat one-parent and two-parent families in an equitable fashion. To qualify for benefits under AFDC-UP, two-parent families had to meet a work history test that did not apply to one-parent families receiving AFDC. In addition, states without an AFDC-UP program as of 1988 were allowed to limit benefits to six months in each 12-month period.
Under TANF, instead of matching federal funds for income assistance, employment services, and child care for low-income families, states receive fixed block grant funding ($16.5 billion per year) that can be used for a very broad range of benefits and services. In addition, states must contribute a fixed amount of their own funds each year ($10.4 billion). The amount of income assistance provided in nearly all states is very low—the median state benefit amount is $428 per month for a family of three.
Although TANF continues to be referred to as a “welfare” program, only about one-fourth of program funds are spent on providing income assistance to families. About 16 percent of TANF funds are spent on child care, and another roughly 7 percent on work-related activities. The remaining half of program funding is used in diverse ways that are not well documented.
Although TANF continues to be referred to as a “welfare” program, only about one-fourth of program funds are spent on providing income assistance to families.
To receive TANF income assistance, a family must include at least one minor child and meet other income, asset, and eligibility requirements set by the state in which they live. Married and unmarried two-parent families (ones that share a biological or adopted child) are generally eligible for TANF assistance, except in three states that only allow two-parent families if one or both of the parents has a disability. Other states do not disqualify two-parent families altogether but do impose additional requirements on them that single-parent families are not subject to. For example, in six states, after being found eligible, two-parent families are subject to a 30-day waiting period before they can receive any assistance.
If biological parents live together, both their incomes and assets are counted in determining TANF eligibility, whether they are married or not. In all but four states, if a parent is living with an unmarried partner who is not the father or mother of any children in the unit, the partner is not eligible for TANF assistance, and their income and assets are generally not counted in determining eligibility. Some states, however, reduce the amount of benefits a family may receive if a parent lives with an unmarried partner or another unrelated adult.
When states provide income assistance, they must ensure that 50 percent of “all families” and 90 percent of two-parent families receiving it are working or engaged in specific work-related activities for a certain number of hours each week. To count toward the work rate, a two-parent family must work or participate in certain other work-related activities for 35 hours per week, or 55 hours per week if they receive child care. There is wide agreement that the 90 percent rate is unrealistic and unfair for two-parent families. Mainly due to the 90-percent rate, just under half of all states (24) use state dollars to provide assistance to some or all of the two-parent families they assist without having to meet the federal rate. In Congressional testimony last year, Eloise Anderson, Secretary of the Wisconsin Department of Children and Families, urged Congress to eliminate the higher rate for two-parent families, calling it a “disincentive to marry or be in a stable family….”
Most Eligible Two-Parent Families Do Not Participate in TANF
In their report for HHS, the Urban Institute researchers generally used two different definitions of a two-parent family: 1) a household in which two adults are married or share a biological or adopted child; and 2) two-parent families in which both parents are included in the TANF “assistance unit”—where both get TANF benefits and have their income counted for eligibility purposes—and are subject to TANF work requirements.
Using the narrow, TANF-specific definition, they found that receipt of TANF income assistance among two-parent families who meet the program’s income and other eligibility criteria was very low and has declined steadily over time. In 2013, only about 80,000 two-parent families received TANF income assistance on average each month. The Urban Institute researchers estimate that only 12 percent of two-parent families who were eligible for TANF assistance actually received it in 2013. The percentage of eligible single-parent families who received TANF assistance is also low, but at 28 percent is more than twice the share of eligible two-parent families who receive help.
The researchers also documented extraordinary variation among the states in the number of two-parent families receiving help. Only 18 states provided TANF or state-only assistance to more than 1,000 two-parent families. Three states helped zero two-parent families in 2013. More than half of two-parent families who received assistance in 2013 lived in two states (California and New York), which provided assistance to 38 percent and 24 percent of eligible families, respectively. By contrast, in the two other largest states in terms of population—Florida and Texas—only 2 percent and 3 percent of eligible two-parent families, respectively, received assistance.
The steady decline in TANF participation and the very low rate of participation among eligible two-parent families stands in sharp contrast to trends in other means-tested programs, including the Supplemental Nutritional Assistance Program (SNAP, previously known as food stamps) and Medicaid. Reforms to SNAP over the last decade have made it much more two-parent and working-parent family-friendly. According to a recent study conducted by the Government Accountability Office, more people who received SNAP benefits in 2012 lived in two-parent families with children than in single-parent families.
Of the two-parent families that do receive TANF assistance, the researchers found that just over half (53 percent) were Hispanic, 28 percent were white, non-Hispanic, and 9 percent were black. In the vast majority of cases, the parents receiving assistance (86 percent) were U.S. citizens. In about half of the two-parent families receiving assistance, the parents were married. In most cases, the family had at least one child under age 6.
State Differences in Access to TANF Benefits and Services
As noted above, states spent about 16 percent of TANF block grant funds on child care and 7 percent on employment services. Unfortunately, we have little information on the extent to which two-parent families nationwide benefit from these TANF-funded services. As part of their study, however, the Urban Institute researchers interviewed TANF staff in 10 states about the differences in access to TANF-funded child care and employment services based on family structure. In three states, TANF staff said they did not provide child care to two-parent families receiving TANF assistance. And in most of the 10 study states, “services for two-parent families not receiving [income] assistance were significantly limited or non-existent...” A few of the study states did provide more services to two-parent families. In Hawaii, for example, two-parent families who were TANF eligible could receive support services and benefits even if they opted not to receive income assistance.
The researchers also interviewed TANF staff and two-parent families about the extent to which TANF services met families’ needs. Both TANF directors and families emphasized the need for more access to education than is allowed under the federal rules.
TANF increasingly resembles a form of revenue sharing rather than a coherent program.
Why Do So Many TANF-Eligible Families Not Receive Assistance?
The TANF block grant is structured in a way that provides states with strong incentives to restrict access to income assistance for both one-parent and two-parent families. Federal funding provided to states has been frozen since 1997, without any increase for either inflation or population. As a result, the value of the block grant is one-third less today than it was in 1996. Moreover, states can use federal TANF funds for a variety of benefits and services, including ones that are not means-tested. In many states, federal TANF funds have been used to replace reductions in state spending. Consequently, TANF increasingly resembles a form of revenue sharing rather than a coherent program. At the same time, the strong incentives the law provides for restricting access to income assistance are not counter-balanced by the kind of basic protections for low-income families that exist in programs like the EITC, Medicaid, and SNAP.
Recent changes to the TANF program in Arizona provide only the most recent example of the program’s flawed incentive structure for states. Arizona reduced the number of months a parent can receive TANF assistance to 12 months in their lifetime—the shortest TANF time limit in the nation —and then used the savings to plug holes in the state’s budget, and fund foster care and adoption services.
This new report and other evidence that has accumulated since TANF’s establishment provides little reason to think that TANF is providing most struggling two-parent families with the assistance and services they need to weather tough times together. TANF needs to be reformed in a way that focuses the program on providing a core set of assistance and services to struggling families, including two-parent families.
Shawn Fremstad is a Senior Fellow at the Center for American Progress and a Senior Research Associate with the Center for Economic and Policy Research.