Expand Economic Opportunity and Reduce Child Poverty

Enhance Temporary Financial Assistance

The Temporary Assistance for Needy Families (TANF) program is designed to provide short–term cash assistance and guidance in finding a job to families facing severe financial hardship. This benefit can be a critical rung on the ladder to self-sufficiency as it helps very-low-income families to become and remain employed, and improve their economic position. Research has shown that providing earnings supplements to welfare recipients increases the chances they will be employed. [i]

What Can Policymakers Do?

• Increase the benefit level . In 2008, all but one state (Alaska) had benefit levels that are less than half of the Federal Poverty Level. [ii] Increasing the TANF level would help very poor families, the majority of whom are working, be able to better make ends meet. See an analysis and comparison of state TANF benefit levels by the Center on Budget and Policy Priorities.
  
  

• Make work pay by raising earning limits. When families begin earning higher wages, the abrupt end of financial assistance can derail there effort to achieve financial stability. Alternatively, states that continue to provide financial assistance to workers have improved employment outcomes and reduced poverty. [iii] To encourage families to work, many states have increased the portion of a recipient’s earned income that they may “disregard” for the financial eligibility tests. Some states even disregard 100 percent of earned income for a few months after recipients find new jobs, allowing them to earn as much income as possible without lowering their TANF benefits. See more information on cash benefits by the Urban Institute. In addition, some states also offer limited cash assistance to individuals who leave TANF to help support their work efforts. See an analysis of state supplemental assistance by the Center on Budget and Policy Priorities.

• Promote work by encouraging option to pursue education and training. A primary road to reducing poverty is increasing education levels. People with greater education and training can better compete for better paying jobs, getting off of TANF, and ultimately out of poverty. [iv]

Federal rules now provide states with slightly more flexibility in the kinds of education and training TANF recipients are allowed to participate in and still receive assistance. While a TANF recipient is still not allowed to pursue BAs or advanced degrees and “count” toward a state’s TANF work requirement, they are allowed to pursue some vocational education and English as a Second Language classes. [v]

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