The Temporary Assistance for Needy Families (TANF) program is a vital poverty alleviation program that, if modernized, could help resolve major challenges in the job market.
However, at a time when employers are searching for talent to solve labor shortages across an array of occupations and industries, the federal design of TANF misses the mark on helping recipients prepare for in-demand jobs and enter occupations that pay family-sustaining wages. The current “welfare-to-work” strategy funnels recipients into unstable low-paying jobs and doesn’t address critical labor shortages. These worker shortages will only intensify: Bureau of Labor Statistics experts project further decreases in the labor force participation rate by 2030.
As we approach the 25th anniversary of Congress enacting TANF through the Personal Responsibility and Work Opportunity Act of 1996, Jobs for the Future (JFF) has joined up with the American Public Human Services Association (APHSA) to offer seven key policy recommendations that would optimize the program’s value for recipients, employers, and taxpayers, and to suggest a series of best practices from state agencies that can improve access now.
Policy change will require a major overhaul of TANF’s rules and a concerted effort to expand participation in the program. We urge Congress to act now to align the TANF program with our nation’s broader economic recovery and growth strategy, and we call on state agencies to consider the examples below for more efficient and effective administration.
Challenges and Opportunities for Federal Reform
Currently, TANF mandates that parents receiving cash assistance must participate in work or work-related activities. However, the narrow set of allowable work activities, which come with specific time limits and minimum hourly requirements, make it difficult for local human services agencies to prioritize personalized solutions that support the economic well-being of TANF recipients and their families. Instead, TANF should prioritize helping individuals without sufficient income for basic needs to attain the skills and credentials necessary for family-supporting careers. At the same time, federal policy must ensure that TANF services align with and address needs for other forms of assistance, such as income support, food assistance, safe housing, and child care. These holistic supports sustain the social, emotional, and physical well-being of families and, in turn, bolster successful transitions to employment and meaningful career pathways.
Federal policy must ensure that TANF services align with and address needs for other forms of assistance, such as income support, food assistance, safe housing, and child care.
In reshaping the TANF policies, Congress should ensure that the program reaches all families in need. Currently, TANF fails to reach most families that qualify based on income guidelines. In November 2020, only 21 percent of qualifying American families received TANF cash assistance. Meanwhile, the pandemic has furthered the need: In 2022, the U.S. child poverty rate hit 17 percent overall, 25.4 percent for Black children, and 23.9 percent for Latinx children.
Seven Ways to Optimize TANF’s Impact
JFF and APHSA have each issued recommendations for changing TANF: JFF issued a brief in 2020, and APHSA recently developed a legislative framework rooted in a set of core principles for TANF modernization. Across both organizations, there is much consensus on the reforms that can help drive an outcome-oriented, customer-centered TANF program that helps families achieve economic advancement.
Here are seven key recommendations from both JFF and ASPHA:
- Adopt comprehensive, individualized career and family success plans that prioritize solutions that work. Achieving this requires replacing the existing Work Participation Rate and Work Verification Plan requirements with individualized assessments to build customized service plans.
- Increase spending on core activities that support families’ short-term and long-term success, providing cash assistance to address basic needs insecurities, paired with work, education and training activities, case management, and child and family well-being support.
- Increase TANF block grant levels and index TANF to inflation to provide adequate assistance to support families’ basic needs. Unchanged since 1995, the real value of the TANF block grant has dropped by more than 38 percent because of depreciation caused by inflation. Limited funds and complex federal rules curb more meaningful TANF investments in people and communities.
- Integrate services that support families by co-locating public assistance service centers and adopting standard intake processes for TANF, Workforce Innovation and Opportunity Act (WIOA), and other aid programs and services for families whose incomes do not suffice to meet basic needs.
- Eliminate the “benefits cliff” effect where benefits decrease sharply as TANF participants’ earnings grow to the extent that, counterintuitively, their net income decreases overall. Strategically utilizing “income disregards” and evaluating cash assistance level structures ensures that families can meet their basic needs while expanding their career and economic mobility.
- Measure TANF outcomes aligned with WIOA performance measures, including employment, earnings, credential attainment, educational progress, and measurable skills-gains metrics.
- Increase the evidence base for best practices in aligning TANF with WIOA, housing assistance, child welfare, child support, and related public services by investing in pilot initiatives, research, and technical assistance, and informing states’ investments in strategies that work. The existing federally funded Pathways to Work Evidence Clearinghouse could be expanded to manage this information.
Impact and Success at the State Level
Many states have already found high-quality and innovative approaches to administering their TANF block grants, combining related funding sources to maximize access and participation in employment opportunities. By leveraging the strengths of each agency, states can better target aid to the families who need it most, reduce duplicative spending, and improve participant outcomes.
The District of Columbia (DC), for example, has successfully adopted several reforms over the past seven years. The DC Department of Human Services (DHS) and the Economic Security Administration (ESA) partnered to redesign TANF, replacing the “work-first” compliance model with a barrier-reduction model. The District integrated intake and service centers across TANF, SNAP, Medicaid, and WIOA programs, and across housing assistance, child care support, and family services, allowing families to confirm eligibility and complete intakes in one place for an array of services. To account for inflation and ensure sufficient benefits levels, DC tied cash assistance levels to the annual Consumer Price Index (CPI). In 2018, the city also modified and expanded TANF Employment & Training (E&T) to offer two pathways for qualifying families: educational and occupational training—an approach that permits and encourages stackable credentials and work-based learning and fosters job placement, employment preparation, and retention.
In Maryland, the recently implemented statewide combined workforce plan requires each of the 12 Local Workforce Development Areas to establish TANF-WIOA alignment plans specific to each county’s needs and measured by statewide Benchmarks for Success. The benchmarks evaluate progress toward the following goals, all intended to increase the earning capacity of Maryland’s workforce system customers: maximizing access to employment, maximizing access to and use of skills and credentialing, maximizing access to and use of life management skills, and eliminating barriers to employment. In 2016, the state adopted a “no wrong door” approach to TANF administration. Under this model, all administrators are trained to register TANF participants in the Maryland Workforce Exchange and offer systemwide orientation.
In Pennsylvania, the Department of Human Services Bureau of Employment Programs’ TANF Employment & Training redesign efforts (launched in 2020) have greatly alleviated administrative burdens associated with TANF and, in turn, have significantly improved service provision. Despite pandemic conditions, the state saw a 14 percent increase in referral-to-enrollment rates and an overall increase in E&T program enrollment. E&T providers adopted an intensive case management approach centered on customers’ individual career goals and barriers to long-term employment. The state also expanded support services such as mental health, transportation, child care, housing, and legal aid assistance. Finally, Pennsylvania expanded E&T activities to include high school equivalent options, community college, and credit-bearing job training, among other high-quality education and career preparation activities.
Congress and the Biden administration should work with states to shift from the constant verification and compliance model of TANF welfare-to-work programs to a model that centers on barrier reduction, career pathways, and intensive case management.
When tackling TANF reauthorization, federal policymakers should consider these reform ideas and best practices from states. Doing so would expand access to vital support services, articulate pathways, facilitate transitions between public assistance programs, and eliminate redundancies that strain already limited resources.
Congress and the Biden administration should work with states to shift from the constant verification and compliance model of TANF welfare-to-work programs to a model that centers on barrier reduction, career pathways, and intensive case management. Coordinating TANF employment programs with federal workforce development services is vital to helping TANF participants secure family-sustaining work, expanding employer access to potential talent, and ensuring all communities can rebound and recover.
Read additional posts from the TANF Modernization Series:
Part 1 | Part 2 | Part 3 | Part 4 | Part 5