#nvleg

Indy Explains: The Temporary Assistance for Needy Families Program (Welfare)

Michelle Rindels
Michelle Rindels
Indy ExplainersLegislature
SHARE
The state seal of Nevada shown on a glass window or door

While welfare -- and paring down the rolls -- was a political preoccupation in the 1980s and 1990s, the program that delivers cash to the most destitute has become mostly an afterthought in the Nevada Legislature.

Lawmakers have had to pay a bit more attention this session to the program, called Temporary Assistance for Needy Families, mainly because the federal government has slapped the state with millions of dollars in penalties for not getting enough of its participants into the workforce.

But the program is a faded one: The number of families receiving cash assistance from the federal government is about one-third of what it was at its peak of 5 million in 1994. The caseload is also down in Nevada, even while the number of people receiving SNAP (Supplemental Nutrition Assistance Program or food stamps) and government-funded health care through Medicaid is far higher and sharply on the rise.

There seems to be little appetite among lawmakers to substantially alter funding to the program which, because of its unique block grant model, has remained virtually unchanged at about $71 million a year for two decades in spite of inflation, a recession and population growth. Even Democrats center their conversations on helping the middle class, raising the minimum wage and attracting businesses to the state rather than tinkering with welfare.

“Certainly not seeing a lot of legislation on it,” said Republican Sen. Ben Kieckhefer. “It’s not where people in this building are focused.”

So what’s going on with the program? Here’s what you need to know.

What is TANF?

Temporary Assistance to Needy Families (TANF) offers what’s most commonly thought of as welfare -- cash assistance to families with low or no income. But it’s much broader than just a monthly payout.

The federal government gives it as a block grant that states can use on a wide variety of programs that meet the four broad goals of TANF: to provide assistance to needy families so that children can be cared for at home; to end the dependence of needy parents on government benefits by promoting job preparation, work and marriage; to prevent and reduce out-of-wedlock pregnancies; and to encourage the formation and maintenance of two-parent families.

Welfare division officials say Nevada spends 51 percent of its TANF money on direct payments to poor families. Nationwide, only 25 percent of TANF spending ($7.8 billion a year) goes to cash assistance; states also put the funding toward child care programs, pre-kindergarten and services to abused and neglected children.

Has it always been this way?

Nope. From the passage of the Social Security Act in 1935 until 1996, welfare came through the Aid to Families with Dependent Children (AFDC) program, which was originally designed to help Depression-era widows stay home and raise their children instead of working. States were entitled to an unlimited amount of federal funds as long as they provided a matching payment at a rate inversely related to the state’s per capita income.

But as social norms changed and more women entered the workforce, support for a program that allowed mothers to stay home with their children waned. President Bill Clinton promised in his 1992 campaign to “end welfare as we know it” and break a cycle of welfare dependency by requiring able-bodied people to work.

In a deal with the Republican-controlled Congress, he signed the Personal Responsibility and Work Opportunity Reconciliation Act into law in 1996. That replaced AFDC with TANF, which focused on getting participants to work and limiting their time on public assistance.

It set levels for block grants that were based on the maximum amount the federal government had spent on welfare between fiscal years 1992 and 1995, and also set amounts of money states needed to provide as a match to keep getting the federal block grant (the state contribution is called “maintenance of effort”).

Those two levels have remained largely unchanged in the past 20 years, in spite of inflation, population growth and fluctuations in caseload.

Has it been successful?

Proponents say the program has been successful in nudging more mothers into the workforce. The number of never-married mothers with a high school education or less who had a job was 51 percent in 1992 before jumping to 76 percent in 2000. It dropped back to 63 percent by 2013.

The welfare rolls have shrunk since the 1996 reform bill.

Nevada had an average welfare recipient count of 40,574 in 1995, and that number dropped to 25,077 in 2016. Over that same time period, Nevada’s population has nearly doubled, from 1.6 million to 2.9 million.

But critics say that shrinking welfare rolls doesn’t mean poverty has gone away or that people are successfully transitioning to the workforce. Some are rendered ineligible for benefits because they hit time limits or are otherwise sanctioned by their state.

Critics also point to a rise in extreme poverty (households bringing in less than $2 per day, per person) as evidence that the program is failing people. In 1996, 1.7 percent of U.S. households were in extreme poverty -- a number that jumped to 4.3 percent in 2011, according to research from sociologists Kathryn Edin and Luke Shaefer. Taking into account transfers such as food stamps and the Earned Income Tax Credit, the share of households in extreme poverty rose from 1.1 percent to 1.6 percent from 1996 to 2011.

Families that are ineligible for TANF benefits and aren’t working find other ways to survive, including piling large numbers of people into a house or apartment or illegally selling a benefit that’s much easier to get -- food stamps. (Nevada has been actively fighting against such activity, which is called trafficking).

Cash is still an invaluable commodity to the poor, but there’s more public appetite to pay for something more specific such as food or someone’s electricity bill.

“I think that there’s certainly sympathy for people who need food and need medical care more than for people who need cash,” Kieckhefer said.

What does it do?

Officials’ first goal when a family enters the TANF program is to stabilize them so the children can be cared for in their home, according to Nevada’s TANF administrators. Caseworkers assess the overall well-being of the family, including whether they’re participating in Head Start preschool programs and have their immunizations.

Caseworkers then work with parents to craft a “personal responsibility plan,” where they strategize about how to get a job, develop a resume, further their education, find child care and seek counseling if they’ve been in an abusive relationship.

Participants then start receiving cash payments.

How much do families get?

A mother and two children receive a maximum of $383 per month, which is less that one-quarter of the income a family of three would need just to hit the $1,702 poverty line. That monthly payout figure hasn’t budged in a decade, when the support for a family of three was raised from $348 a month.

The value of Nevada’s TANF benefit has declined by 27.8 percent from 1996 to 2016 when adjusted for inflation, according to the Center on Budget and Policy Priorities, a progressive think tank.

Participants can make that small amount worth their while if they start making money to supplement the government payment. Once they get a job, they get to keep their full TANF payment and full wages for the first three months in an arrangement called an “income disregard.”

Wages that the participating family earns eventually counts against them and reduces the payout from the government. After three months, the TANF payment declines by a fraction every few months based on how much the family is bringing in.

That “income disregard” is only allowed twice in a person’s lifetime.

Typically, families in TANF also make ends meet with Medicaid and SNAP. A family of three can collect a maximum of $511 a month in food stamp benefits.

Who is eligible?

In general, families must be below the poverty line to qualify, and can only get the maximum payment if they have no countable income. In 2012, only 25 percent of participants nationwide had any cash income aside from TANF, and those that did averaged $600 a month, according to the Congressional Budget Office.

Some assets don’t count against a family that’s trying to qualify for TANF, such as one vehicle.

The “TANF-NEON” program is offered to families where there’s at least one work-eligible adult in the household, while the “TANF Child-Only” program is for households where adults aren’t eligible for work because they’re too old, disabled or are ineligible for work because of citizenship requirements.

For example, a grandparent or aunt could qualify for TANF Child-Only if they’re the guardian of a relative’s child and applying for benefits to care for them.

Nevada also offers TANF benefits to qualifying two-parent families, unlike 26 other states that have stopped offering the program because they know they can’t reach the federal government’s workforce participation goal. All states serve one-parent families, while the federal government doesn’t require states serve two-parent families.

How much does Nevada get?

Nevada spent almost $76 million last year on the TANF program, including nearly $44 million in a block grant from the federal government and $27 million in state general funds. About $42 million a year goes to direct cash assistance, while $2.5 million is set to fund childcare programs that help participants get to work.

How many Nevadans participate in the program?

The state projects it will serve 25,450 individuals by 2019. That means the TANF caseload is one-sixteenth the size of SNAP, which is projected to serve 407,022 people by 2019, and 1/27th the size of Medicaid, which is expected to serve 687,525 Nevadans by 2019.

The size of the TANF program is limited by the size of the fixed federal block grant and doesn’t necessarily reflect the number of people who need the program based on income. In contrast, SNAP and Medicaid are considered “entitlement programs,” which means they go to anyone who meets certain requirements such as income eligibility.

So while the number of households below the poverty line was almost as high in 2013 as it was in 1994, the number getting cash assistance nationwide was down by nearly 70 percent. By 2013, only 25 families were getting cash assistance for every 100 families living in poverty, according to the Congressional Budget Office.

Officials at the Government Accountability Office say declining participation among eligible families could be due to the work requirements, time limits and other policies implemented through welfare reform.

More than half of the people who apply for TANF in Nevada are turned down. In 2016, the state had an average of 3,600 applications for TANF each month; 62 percent of those were rejected.

What work requirements must they meet?

Single-parent families are required to do work activities 30 hours a week in exchange for their TANF benefits. If they have a child under the age of 6 in the household, they only need to work 20 hours a week.

Families with two able-bodied adults in household must work 55 hours a week combined, or 35 hours if they have a child under the age of 6.

Families can meet the requirements by participating in “core activities” (such as a job, community service or on-the-job training) for a minimum number of hours, and meet the rest of the requirement with “non-core activities” (such as finishing high school or getting job skills training).

How long do people receive the benefits?

Caps on how long people could draw welfare were a hallmark of the 1996 reform; Clinton said his goal was to ensure welfare is not a way of life.

A federal rule that limits people to no more than 60 months on welfare in their lifetime has helped reach that goal. The average “regular” TANF case in Nevada, meaning a household that includes at least one work-eligible adult, lasts for seven months.

The average case for the child-only program where the household doesn’t have work-eligible adults is 26 months. That program, unlike the “regular” program, isn’t subject to time limits.

Regular TANF recipients can draw benefits for up to 24 months before they’re booted out of the program and must spend 12 months on the sidelines. After that break, they can spend up to 24 more months on and then must take another 12-month break.

After that, they have up to 12 more months before they’re ineligible for the rest of their lives.

Is Nevada meeting its goals?

No. The federal government requires 50 percent of all participating Nevada families to meet the work minimums, while 90 percent of two-parent families must meet the goal.

Only 38.3 percent of all families are meeting the work participation benchmark, and 48.5 percent of the two-parent households are hitting it.

“Although the workforce participation rate is the measurement by which we have to account, it’s more about families in crisis and sometimes that doesn’t equate to working 30 hours a week,” said Naomi Lewis, Deputy Administrator for the Division of Welfare and Supportive Services.

Not all states have to meet the 50 percent workforce participation baseline. The government lowers the bar for states if they contribute more of their own money to the purposes of TANF.

For example, Florida is getting about 34 percent of its welfare recipients into the workforce, but only has a workforce participation requirement of 2 percent because it’s put so much of its own money toward assistance programs.

Nevada has struggled to invest any more than the bare minimum as it weathered the recession. It’s one of five states that isn’t meeting its “all families” goal, and one of 15 that isn’t meeting the “two families” benchmark.

Nevada started falling short as of 2007, but it wasn’t until about five years later that workforce rates were finalized and it became clear the state wasn’t reaching its goals.

“You see the most people on (TANF) when we’re in recession and trying to get jobs becomes very difficult,” said Democratic Assemblyman Mike Sprinkle, who chairs a subcommittee that reviewed the TANF budget. “And that’s obviously going to have a very negative impact when we’re trying to meet those percentages.”

What are the consequences?

Nevada faces $9.6 million in penalties from the federal government for shortfalls over the years. Other states face penalties too, but none so far have exhausted their appeals and had to pay the fine, Lewis said.

Nevada asked for clemency on the work participation requirement as recently as December, arguing that the state was hard-hit by the recession. The state’s requests for waivers are still pending before the federal government.

Why are TANF recipients falling short?

About 37 percent of recipients aren’t contributing at all to the state’s workforce participation rate, according to state officials. Sixteen percent are in their first month of the program and aren’t yet fully integrated into the program.

Twelve percent are in “sanctioned status,” meaning they failed to meet the work participation goals and are being pushed out of the program. Nine percent have short-term medical illnesses or events that prevent them from work activities.

“The population we serve are not necessarily ready to work,” Lewis said. “Fifty percent of our applicants are first-time, young families that are new to the workforce, new to parenting and the process.”

What is Nevada doing to try to avoid more fines?

One way the state can lower the workforce participation benchmark is by moving people off its rolls and reducing its caseload by 15 percent from 2005 rates. That would be a tough feat as Nevada is trending in the opposite direction: the state counted 7,933 work-eligible TANF recipients in 2005, and had 9,822 of those people in 2016.

Some states have a state-level welfare program, moving recipients off of the federally funded program and onto the state’s accounts, which lowers the workforce participation rate it must achieve.

Nevada has never had such a program and isn’t planning to create one.

Another way to lower the bar is if the state “buys down” its obligation. The state can do that by identifying other expenditures within the state that are serving the purposes of TANF but aren’t already being counted as a state match for other federal grants.

One example is the Department of Employment, Training and Rehabilitation’s Career Enhancement Program. Because spending on that program is helping low-income job-seekers, which is a goal of TANF, it can be considered “excess maintenance of effort” and allows the state a lower workforce participation requirement.

The state needs to find $18 million worth of spending like that to reduce its workforce participation obligation for one year.

Can Nevada pull it off?

“We’re going to try,” said Chrystal Main, spokeswoman for the Nevada Department of Health and Human Services. “We’re going to give it our best shot.”

Other projects backed by TANF this biennium

Aside from the normal cash payments, Gov. Brian Sandoval’s budget calls for spending $2 million of TANF funding over two years to support the Family Preservation Program, which provides financial assistance to low income Nevadans who are caring for people with severe intellectual disabilities. The money will go to 223 families during each year of the biennium with the goal of keeping people with severe disabilities at home rather than in an institution.

Sandoval’s budget also proposes using TANF funding for Food Security One Stop Shops that provide food and assistance getting jobs and applying for other public benefits.

“We used to have multiple partners that we helped, and because of the recession, we pulled it all back and now we are just now starting to feel out if there are ways we can support families outside of our cash assistance program,” Lewis said.

 

SHARE

Featured Videos