Temporary Assistance for Needy Families (TANF): Size and Characteristics of the Cash Assistance Caseload
Released: 2016-01-29T00:00:00

Introduction

The Temporary Assistance for Needy Families (TANF) block grant provides states, territories, and Indian tribes with federal grants for benefits and services intended to ameliorate the effects, and address the root causes, of child poverty. TANF funds can be used in any manner a state can reasonably calculate helps it achieve the goals of (1) providing assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) ending the dependence of needy parents on government benefits through work, job preparation, and marriage; (3) preventing and reducing the incidence of out-of-wedlock births; and (4) encouraging the formation and maintenance of two-parent families. Thus, TANF truly is a broad-based block grant with broad discretion for the states to spend funds to meet federal goals.

TANF was created in the 1996 welfare reform law and is typically thought of as the federal program that helps states fund their cash assistance programs for needy families with children. Moreover, TANF is also most associated with the 1996 welfare reform policies imposing work requirements and time limits on families receiving assistance. Most of TANF's federal rules and requirements relate to families receiving assistance. TANF's performance is measured on state welfare-to-work efforts, with states assessed based on numerical work participation standards.

However, basic assistance—what many call "cash welfare"—accounted for only 27.6% of all TANF funding in FY2013. Additionally, many of the families that received TANF cash assistance in FY2013 represented family types that were not the focus of debate in 1996, and are not subject to TANF work requirements and time limits. These are families with children cared for by adults who are not themselves recipients of TANF: disabled parents receiving Supplemental Security Income (SSI); immigrant parents who are ineligible for TANF assistance but have citizen children who are eligible; and nonparent relative caregivers, such as grandparents, aunts, and uncles. In FY2013, 38.1% of families receiving TANF were composed of children in families cared for by adults who themselves were not recipients of TANF or did not come under TANF work rules.

This report examines the TANF cash assistance caseload, focusing on how the composition and characteristics of families receiving assistance have changed over time. It first provides a brief history of cash assistance for needy families with children, discussing how policy became focused on moving the predominately single parents who headed these families from welfare to work. It then traces the changes in the caseload composition since the 1996 welfare reform law, from a caseload dominated by unemployed single parents to a diverse caseload that had different routes to the benefit rolls as well as different circumstances on the rolls. It provides detail on caseload characteristics in FY2013, using data that states are required to report to the federal government. The report is intended to complement tabulations of these data already released by the Department of Health and Human Services (HHS).

This report does not describe TANF rules or provide current statistics on the TANF caseload or expenditures. For an overview of TANF, see CRS In Focus IF10036, The Temporary Assistance for Needy Families (TANF) Block Grant , by [author name scrubbed]. It also does not describe individuals and families who receive TANF benefits and services other than cash assistance. Federal law does not require states to report on their numbers or characteristics.

Brief History of Cash Assistance

The modern form of assistance for needy families with children has its origins in the early-1900s "mothers' pension programs," established by state and local governments. These programs provided economic aid to needy families headed by a mother so that children could be cared for in homes rather than in institutions. Federal involvement in funding these programs dates back to the Great Depression, and the creation of the Aid to Dependent Children (ADC) program as part of the Social Security Act of 1935. ADC provided grants to states to help them aid families with "dependent children," who were deprived of the economic support of one parent because of his death, absence, or incapacitation. The legislative history of the 1935 act explicitly stated that the purpose of ADC payments was to permit mothers to stay at home, rather than work:

The very phrases "mothers' aid" and "mothers' pensions" place an emphasis equivalent to misconstruction of the intention of these laws. These are not primarily aids to mothers but defense measures for children. They are designed to release from the wage-earning role the person whose natural function is to give her children the physical and affectionate guardianship necessary not alone to keep them from falling into social misfortune, but more affirmatively to rear them into citizens capable of contributing to society.

Over time, a combination of changes in social policy and changes in economic and social circumstances made cash assistance to needy families (often called "welfare") among the most controversial of federal programs. The Social Security Act was amended to provide social insurance protection for families headed by widows (survivors' benefits, added in 1939) and those with disabled members (disability benefits, added in 1956). This left families headed by a single mother with the father alive, but absent, as the primary group aided by ADC, later renamed Aid to Families with Dependent Children (AFDC). The cash assistance caseload also became increasingly nonwhite. States were first given the option to aid two-parent families beginning in 1961, but were not required to extend such aid until the enactment of the Family Support Act in 1988. Even with the extension of aid to two-parent families, this group never became a large part of the caseload, and most adult TANF cash assistance recipients continue to be single mothers.

The issue of whether lone mothers should work was also much debated. The intent of ADC to allow single mothers to stay home and raise their children was often met with resistance at the state and local level. It was also contrary to the reality that low-income women, particularly women of color, were sometimes expected to, and often did, work. Further, the increase in women's labor force participation in the second half of the 20 th century—particularly among married white women—eroded support for payments that permitted mothers to remain at home and out of the workforce. Beginning in 1967, federal policy changes were made to encourage, and then require, work among AFDC mothers.

In 1974, children surpassed the elderly as the age group with the highest poverty rate. Poverty rates for children in families headed by a single mother were particularly high—and over time an increasing share of children were being raised in such families. In the 1980s, there was increasing attention to "welfare dependency." Research at that time showed that while many mothers were on cash assistance for a short period of time, a substantial minority of mothers remained on the rolls for long periods of time. Additionally, experimentation on "welfare-to-work" initiatives found that requiring participation in work or job preparation activities could effectively move single mothers off the benefit rolls and into jobs.

"Welfare reform," aiming to replace AFDC with new programs and policies for needy families with children, was debated over a period of four decades (the 1960s through the 1990s). These debates culminated in a number of changes in providing aid to low-income families with children in the mid-1990s, creating a system of expanded aid to working families (e.g., increases in the Earned Income Tax Credit and funding for child care subsidies) and the creation of TANF, which established time limits and revamped work requirements for the cash assistance programs for needy families with children.

Most TANF policy today reflects the history of cash aid to needy families with children headed by a single mother and the policy debates of the 1980s and early- to-mid 1990s. Some things remain the same from that period—children remain the age group most likely to be poor, and children living with single mothers have very high poverty rates. However, some things are very different from the period when TANF was created, including the size and composition of the cash assistance caseload.

Trends in the Number of Families Receiving Cash Assistance

Figure 1 shows the trend in the average monthly number of families receiving cash assistance from TANF and its predecessor program (AFDC, ADC) from 1959 through 2013. The figure shows two distinct periods of rapid caseload growth. The first occurred from the mid-1960s to the mid-1970s. The second followed a period of relative stability in the caseload (around 3.5 million families) and occurred from 1989 to 1994. Following 1994, the caseload declined. It declined rapidly in the late 1990s, with continuing declines, albeit at a slower rate, from 2001 to 2008. The caseload increased again from 2008 through 2010 coincident with the economic slump associated with the 2007-2009 recession. That latest period of caseload increase was far less rapid and much smaller than the two earlier periods of caseload growth.

Trends in Caseload Characteristics: FY1988 to FY2013

The increases in the cash assistance caseload from 1989 to 1994, and its decline thereafter, were also associated with changes in the character of the caseload. Table 1 provides an overview of the characteristics of the family cash assistance caseload for selected years: FY1988, FY1994, FY2001, FY2006, and FY2013. The most dramatic change in caseload characteristics is the growth in the share of families with no adult recipients. In FY2013, 38.1% of TANF assistance families had no adult recipient; in contrast, in FY1988 only 9.8% of all cash assistance families had no adult recipient. These are families with ineligible adults (sometimes parents, sometimes other relatives) but whose children are eligible and receive benefits.

Some other notable characteristics of the caseload include the following:

Most families receiving assistance are small . The average number of recipients in a family stood at 2.5 recipients per family in FY2013. In that year, just over half (51.0%) of all families had only one child. The vast majority of adult recipients are women . In FY2013, 85.7% of adult recipients were women. As discussed, family cash assistance has historically been provided to families with children headed by a single mother. The FY2013 percentage is lower than in previous years examined in the table. Men slowly increased as a share of the caseload over time, but still remain a relatively small share of the total adult caseload. The families tend to have young children. In FY2013, 56.6% of all families had a child under the age of six, with 12.0% of all families having an infant. The majority of the caseload is racial or ethnic minorities. This was the case for all years shown in the table. Examining the racial/ethnic makeup of children, Hispanic children became the largest group of recipient children by FY2013. In FY2013, the share of child recipients who were Hispanic was 36.3%, compared with 29.9% who were African American, and 25.8% who were non-Hispanic white. The share of the child caseload that is Hispanic has grown over time. This reflects their growth as a share of all children in the general population and of all poor children. The incidence of TANF cash assistance receipt among Hispanic children and poor Hispanic children—like that of children in other racial and ethnic groups—has actually declined over time (see Table A-3 ).

TANF Families by Category

The increase in the share of TANF families with no adult recipient over the FY1988 to FY2013 period represents a major change in the character of the caseload. This section focuses on that change, classifying TANF families by the circumstances of the adults in the household.

The classification in this report divides the TANF assistance caseload into six categories. There are two main categories of families where there is an adult recipient or an adult who is considered "work-eligible" and hence represent the traditional concerns of cash assistance policies:

Families with TANF adult(s), not employed. This group dominated the cash assistance caseload in FY1988, but by FY2013 represented less than half of all cash assistance families. Families with TANF adult(s), employed. These are families with adult recipients or work-eligible parents, and at least one of these adults is employed. However, their employment is at low enough wages, or has been of short enough duration, that their family remains eligible for TANF cash assistance.

The remaining four categories shown in the figure are considered "child-only" families. In these families, the adults caring for the children are not considered TANF cash assistance recipients themselves, but they receive benefits on behalf of the children. There are three main categories of "child-only" families:

Parent is a Supplemental Security Income ( SSI ) recipient . These families are usually headed by a parent or couple who receives Supplemental Security Income. In general, they receive SSI on the basis of disability, meeting the federal law's criterion of being "unable to perform substantial gainful activity in the economy." SSI is paid only to individuals and couples and there is no federal funding for extra benefits if they have children. Therefore, states use TANF funds to provide benefits for children of SSI parents. Parent is an ineligible noncitizen . Federal law makes certain noncitizens ineligible for federally funded benefits. States have the option to use state funds to aid federally ineligible noncitizens who are lawfully present in the United States. Unauthorized immigrants are not eligible for either federally or state-funded TANF aid. However, there is a class of families known as "mixed status" families, with parents who are immigrants and children who are citizens because they were born in the United States. In these families, the children may be eligible for TANF regardless of the immigration status of their parents. Child (or child ren) in the care of a nonparent, caretaker relative . The first statutory goal of TANF is to provide assistance to needy families so that children can be cared for in their own homes or in the homes of relatives. If a nonparent relative cares for a child for whom they are not legally responsible financially, they can receive financial assistance from the state on behalf of the child. Some of these children are living with nonparent relatives because they have been removed from the home of their parents due to abuse or neglect. However, some are in these homes for other reasons.

The additional "child-only" category comprises families where the parent is in the home but for reasons other than those listed above is not a recipient or work-eligible adult or the family lives in a state that fails to provide information on non-recipient adults in the household.

Figure 2 shows the change in both the size and composition of the cash assistance caseload. As noted previously, from FY1988 to FY1994 the number of families receiving assistance increased from 3.7 million to 5.0 million per month, a 35% increase. In terms of numbers, the majority of that caseload growth was attributable to families with an adult recipient. However, also important in this period was the emergence of the "child-only" categories. In FY1988, the "child-only" categories represented about 10% of the overall caseload, a share that grew to 17% in FY1994.

From FY1994 to FY2001, the cash welfare caseload declined rapidly, from 5.0 million families to 2.2 million families per month, a 56% decline. Over this period of time, the TANF caseload's character changed dramatically. The number of families with an adult recipient and no employment fell from a monthly average of close to 3.8 million to less than 1 million (992,000). This represented a 74% decline in this population, substantially greater than the overall caseload decline. It was this group that was most closely identified with welfare dependency during the welfare reform debates of the 1980s and 1990s. In contrast, the total number of families in the child-only category declined by a comparatively small amount, from 869,000 per month in FY1994 to 789,000 in FY2001, a decline of 9%. Thus, "child-only" families—a population not discussed much during the welfare reform debates of the 1980s and 1990s—became a greater share of the overall caseload.

The FY2001 to FY2013 period also saw some declines in the overall caseload and continued changes in its composition, but the changes were far less dramatic than in the late 1990s. In FY2013, the TANF cash assistance caseload was very diverse.

Families with an adult recipient or work-eligible individual who was unemployed—the group that welfare-to-work policies have traditionally focused on—represented less than half of the caseload (44.7%). Another 17.3% of the caseload reflected families with employed adult recipients or work-eligible parents. The figure shows the three main groups of "child-only" families. (The groups of "child-only" families are shaded in blue.) The largest of the "child-only" categories represents children with nonparent relative caretakers (13.4%). The other two major categories of "child-only" families are where the parent is an ineligible noncitizen (11.2% of the total caseload) and child-only families where the parent is an SSI recipient (8.9% of the total caseload).

The composition of the TANF cash assistance caseload by family categories varies substantially by state. The variation reflects differences among states in both their demographic characteristics and policies. For TANF families by category and state in FY2013, see Table A-2 .

Characteristics of TANF Families, By Family Category: FY2013

The different categories of TANF families reflect different circumstances that either led or contributed to their remaining on the assistance rolls. Additionally, differences in the typical characteristics across the family categories highlight the diversity of the cash assistance caseload.

This section will focus on the five major categories of TANF families: (1) families with an adult recipient who is not employed; (2) families with an adult recipient, employed; (3) "child-only" families with an SSI parent; (4) "child-only" families with a nonparent, relative caretaker; and (5) "child-only families" with an ineligible immigrant parent. The data for the "child-only/other" category are missing important information for identifying these families' characteristics, and thus are not included in this section's analysis.

Number of Children

TANF families tend to be small, with the most typical family having only one child. However, there are some differences in family size among the different categories of families.

Table 2 shows TANF families by number of children and family size. Families with an employed adult tend to be slightly larger than those with adult(s) who are not employed. This is because TANF cash assistance eligibility thresholds and benefit amounts are higher for larger families; thus, larger families with earnings are more likely than smaller families with earnings to retain eligibility for TANF assistance.

TANF families with ineligible noncitizen parents are also somewhat larger than the average TANF family. In FY2013, 20.7% of families with an ineligible noncitizen parent reported earnings. (This percentage is not shown on the table.) Though the noncitizen parent is not in the assistance unit receiving benefits, the parent's earnings are typically deemed available to the family and count in determining both eligibility and benefits. Like other families with earnings, larger families with earnings are more likely to retain eligibility for benefits than are smaller families. Two-thirds of TANF child-only families with caretaker relatives were reported as single child cases in FY2013.

Age of Children

The majority of TANF families have young children. However, the age of the youngest child in the family also varies by family category.

Table 3 shows TANF families by family category and age of the youngest child. Families with an adult who is not employed are the focus of TANF welfare-to-work policies. These families often have pre-school children. In FY2013, two-thirds of TANF families with an adult who was not employed had a pre-school child (under the age of 6). Some of these families can be exempted from TANF work requirements. For example, TANF law allows single parents with a child under the age of 1 to be exempted from work and disregarded from the TANF work participation standards. In FY2013, close to one-fifth (18.2%) of TANF families with an adult who was not employed had an infant (under the age of 1).

In contrast, "child-only" families headed by an SSI parent or a nonparent relative tended to have older children. In FY2013, 30.5% of TANF child-only families headed by an SSI parent had a teenager as their youngest child. In FY2013, 28.9% of families with children cared for by a nonparent relative had a teen as their youngest child.

Race and Ethnicity of Child Recipients

The majority of the TANF cash assistance caseload is composed of racial and ethnic minorities. Among child recipients, the largest group is Hispanic children—36.3% of all child recipients in FY2013. There are differences in the racial/ethnic make-up of child recipients by family category.

Table 4 shows children receiving TANF cash assistance, by the category of their family and their race/ethnicity. African American children represent the largest group of children in two family categories that include TANF adults, as well as in child-only families with SSI parents.

Hispanic children make up most of children with ineligible noncitizen parents. The table also shows that the largest group of children in child-only families cared for by nonparent relatives is non-Hispanic white. Historically, children in families receiving cash assistance that are cared for by nonparent relatives have been more likely to be African American than other racial/ethnic groups. As late as FY2001, African American children accounted for a majority (52.6%) of all children in TANF child-only families cared for by a nonparent relative. However, throughout the 2000s, the share of TANF children in such families who were African American declined. This reflected a decline in the number of African American children who were cared for by nonparent relatives in the overall population.

Considerations

TANF was created in the 1996 welfare reform law ( P.L. 104-193 ), the culmination of decades of debate over the roles of low-income, single mothers in the home and in the workforce. The policies created within TANF reflect a primary outcome of that debate: that is, the expectation that single mothers should work to support their families, with TANF being at most temporary assistance rather than a long-term support they would depend on for themselves and their children.

In 2016, the TANF law turns 20 years old, with most policies the same as when the block grant was created. However, much has changed since 1996. States have used TANF as a broad-based block grant to fund a wide range of benefits and services addressing conditions and causes of economic and social disadvantage of children, in addition to providing cash assistance or traditional "welfare." Additionally, both the size and the composition of the TANF cash assistance caseload have changed markedly since welfare reform legislation was debated in the mid-1990s. The caseload is much smaller—1.7 million families in FY2013 versus 5.0 million families in FY1994. The type of family receiving assistance that was the focus of the welfare reform debates—families with an unemployed adult recipient, which accounted for three out of four families pre-reform—now accounts for less than half of all families on the rolls. Therefore, the majority of the caseload today represents families with characteristics that are different from those who are the focus of current TANF welfare-to-work policies.

TANF Families with Employed Adults

TANF cash assistance families with an adult reported as working represented 17.3% of the cash assistance caseload in FY2013—more than double the 7.5% share in FY1994. These often are families either in transition from welfare to work or are families with very low earnings. They also sometimes represent families in "earnings supplement" programs, which provide a TANF benefit (sometimes a small TANF benefit) to working parents who left traditional TANF cash assistance when they worked and/or received food assistance from the Supplemental Nutrition Assistance Program (SNAP). There was some attention to transitional benefits during the welfare reform debates. A series of welfare reform experiments showed that, without earnings supplements through continued assistance for working families, welfare-to-work initiatives tended to increase work and decrease receipt of welfare, but not increase family income. The experiments that showed increased family income were those that provided continued welfare assistance to families with earnings. TANF's work participation standards give states credit for providing cash assistance to families with earnings, so that states have the incentive to provide at least some earnings supplements to families who find work while on the rolls.

The welfare reform experiments discussed above were conducted in the late 1980s and early 1990s. Since then, there have been expansions of earnings supplements and aid to working families through refundable tax credits (the Earned Income Tax Credit and the Additional Child Tax Credit), subsidized child care, and expanded health insurance coverage. However, little attention has been paid to how cash assistance to working families fits together with other earnings supplements, such as the EITC, to achieve TANF goals.

TANF Policies for "Nontraditional" Cash Assistance Families?

Many of the "child-only" TANF assistance families are affected not only by TANF policy, but other social policies as well.

The child welfare system (child protective services, foster care, guardianship) could be involved with some of the children who are in the care of nonparent relatives because of, or risk of, abuse or neglect. Families with ineligible noncitizen parents are affected by immigration policies. Families with disabled parents who receive Supplemental Security Income (SSI) are affected by disability determination and redetermination policies.

Congress has focused on relative caregiving through child welfare legislation, specifically creating a program to help states reimburse kin who take legal guardianship of children who would otherwise be eligible for federal foster care assistance under Title IV-E of the Social Security Act.

Congress has shown interest in promoting coordination between TANF and other federal and state programs serving TANF families, including the "non-traditional" families. This has especially been true in terms of coordinating information between TANF and child welfare programs. P.L. 112-96 requires the Department of Health and Human Services (HHS) to develop standards of data reporting to facilitate the sharing of information between TANF and other programs. Earlier legislation ( P.L. 112-34 ) added similar language to facilitate data sharing between child welfare and other programs. In addition, a May 2013 Government Accountability Office (GAO) report said Congress could opt to require states to include in TANF state plans how they will coordinate services between TANF and child welfare programs.

Questions remain about whether and what policies within TANF should apply to "child-only" families. A 2012 report on "child-only" families from Chapin Hall at the University of Chicago, funded by HHS, raised concerns about each major group: whether TANF assistance to relative caregivers might be an inadequate replacement for foster care, and whether low rates of TANF receipt among potentially eligible families headed by SSI parents or ineligible immigrant parents might not be assuring a minimal standard of living for children in these families. The report did recommend that "explicit attention" be given to each component of the TANF caseload, including separate attention to each of the three major groups of "child-only" families.

The May 2013 GAO report said a potential option to better understand TANF's role in helping its "child-only" families would be to require states to provide additional information to the federal government about the status and needs of "child-only" families. This information could be provided, for example, in TANF state plans.

Congress could also establish—or require states to establish—goals and performance measures related to the well-being of children in "child-only" families. Congress could also require that annual reporting by states to HHS include a statement about how the goals related to "child-only" families are being met, and report on such performance measures that relate to these goals.