TANF's Golden Birthday is a Golden Opportunity for Reform

Wednesday, August 22, 2018

By Jessica Fraser

Here at the Indiana Institute for Working Families, we have been researching, thinking about, and advocating for Temporary Assistance for Needy Families (TANF) for over a decade. As the program turns 22 today, it seems to be a good time to talk about the purpose of the program, how its falling down on the job here in Indiana, what needs to be done to reform the current program in our state, and how the next congress could create a better program as it tackles TANF’s reauthorization.

Temporary Assistance for Needy Families (TANF) is a federal block grant program that has the stated goal of helping needy families achieve economic self-sufficiency. This is the program that people depend on when it’s difficult to find work like when Hoosiers have past criminal history or low literacy, or when a high-risk pregnancy means a single mom can no longer work. The primary goals of the program are to allow children to be raised at home, to promote job preparation and work, and to encourage marriage. It is the Institute’s position that the promotion of job preparation is the lynchpin to achieving all the other goals of the TANF program.

States are given block grants that require maintenance of effort (kind of like a match) and guidelines for the use of the funds. However, states have broad flexibility on how TANF funds (both federal and state maintenance of effort) are spent. Additionally, accountability for spending is limited to how much was spent in which category and the amount of time TANF participants spend in “work participation.” The fact that these accountability measures are input-driven and not outcome-driven has led to a policy of not just “work first” but ANY work first. For most TANF recipients who experience numerous barriers to work, this mentality is in direct contrast to the stated goal of achieving self-sufficiency. The only thing these approaches to work participation seem to be achieving is getting families to earn enough to be off of TANF, but not nearly enough for self-sufficiency –OR – they simply bide time until a recipient hits the time limit and leaves TANF no more prepared for work than when they started.

Indiana’s TANF program has many challenges. One striking one is that our income eligibility guidelines are set numbers in statute and they have never been adjusted for inflation. Current eligibility guidelines for a family of 3 are $288/month. Benefit levels match this “statement of need.” We need to adjust eligibility guidelines and benefit levels to catch up with 22 years of inflation and then do cost of living adjustments regularly moving forward.

Extremely low eligibility guidelines, asset tests, job search requirements before enrollment, and work requirements after enrollment have led to a steep decline participation and subsequently in the amount of TANF spending going to cash assistance and other core services. Meanwhile, the state increasingly claims funds as “maintenance of effort” that are spent on populations other than our state’s actual TANF participants.

While Indiana’s TANF spending on childcare is vital - the cost of childcare is a key barrier to both work and skills training - the state is not spending nearly enough on core services like basic assistance and skills training. Policymakers in Indiana should take a close look at Indiana’s TANF spending, particularly the 32% or funds spent on “other services.”[i]

We can’t just increase eligibility and benefits alone, we also have to transform the work related aspects of TANF so that people are entering into a program that is actually improving outcomes and their future prospects. The take up rate of TANF adults in job or skills training is very low, despite a fairly high percentage that do not have a high school diploma or equivalency. Nearly 38% have less than 12 years of schooling and yet only .02% [ii]participated in the activities we think of has skills training (‘job skills training’, ‘Satisfactory school attendance’, ‘vocational education’, and ‘education related to employment’). Employers are demanding a more skilled workforce and non-academic barriers hold back low-income adults without credentials from improving their skills the flexibility in TANF makes it a perfect program to come to the rescue.

For this upcoming legislative session, IIWF plans to continue our efforts to reform TANF policy at the state level. For the past two years we have supported legislation that would raise and index Indiana’s eligibility levels and guidelines (SB 527-2017 and SB 79-2018). This upcoming session we will be supporting State Senators Jon Ford (Terre Haute) and Mark Stoops (Bloomington) in a similar effort. When these measures pass, more Hoosiers will have access to the core and supportive services that TANF can provide. IIWF has put together a short video that explains TANF and the changes that state can make to transform TANF into a program that works!

Changes are need at the federal level, too, and there has been talk about reauthorizing TANF for a few years. The House bill on reauthorization made it out of committee earlier this summer. However, it is unlikely the bill will finish its way through the House in this congress, much less have any action over in the senate. Federal reform to the TANF program will have to wait until next year and when that time comes, we will be encouraging federal lawmakers to:

A) Base accountability in the program on outcome measures (jobs gained, wages, credentials earned) and not input-measures (number of participants).
B) Create more transparency about where the funds go and whether the funds were spent on ACTUAL TANF cash participants or spent on "federally eligible TANF participants."
C) Require more to be spent on core services.

There should be no difference in core and non-core activities in terms of fulfilling the work participation rate. This would allow participants to get the education and training they need to be successful. There should also be no time limit or caseload limit on education and training, currently participants can only participate in training for one year and only 30% the total number counted in a state’s work participation rate can be participating in eligible education and training activities. Anyone in TANF who needs training should be able to get it and since TANF is already time-limited (federal limit is 60 months but Indiana’s is only 24 months). There is no need to limit time spent in education and training the program is already self-limiting, especially in Indiana.

As this 22^nd birthday passes and we head towards number 23, IIWF will continue to advocate for stronger state and federal policies for our most vulnerable Hoosiers. Stay tuned to our newsletter for ways you can help support these efforts and please share our video on “Transforming TANF into a Program that Works!”