The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements Page: 2 of 25
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The Temporary Assistance for Needy Families (TANF) Block Grant
Summary
The Temporary Assistance for Needy Families (TANF) block grant provides federal grants to the
50 states, the District of Columbia, American Indian tribes, and the territories for a wide range of
benefits, services, and activities. It is best known for helping states pay for cash welfare for needy
families with children, but it funds a wide array of additional activities. TANF was created in the
1996 welfare reform law (P.L. 104-193). Current law funds TANF through March 2013.
TANF provides a basic block grant of $16.5 billion to the 50 states and District of Columbia, and
$0.1 billion to U.S. territories. It also requires states to contribute in the aggregate from their own
funds at least $10.4 billion for benefits and services to needy families with children-this is
known as the maintenance-of-effort (MOE) requirement.
States may use TANF and MOE funds in any manner "reasonably calculated" to achieve TANF's
statutory purpose. This purpose is to increase state flexibility to achieve four goals: (1) provide
assistance to needy families with children so that they can live in their own homes or the homes
of relatives; (2) end dependence of needy parents on government benefits through work, job
preparation, and marriage; (3) reduce out-of-wedlock pregnancies; and (4) promote the formation
and maintenance of two-parent families.
Though TANF is a block grant, there are some strings attached to states' use of funds, particularly
with regard to families receiving "assistance" (essentially cash welfare). States must meet TANF
work participation standards or be penalized by a reduction in their block grant. The law sets
standards stipulating that at least 50% of all families and 90% of two-parent families must be
participating in "creditable activities," but these statutory standards are reduced for declines in the
cash welfare caseload. (Some families are excluded from the participation rate calculation.)
Activities creditable toward meeting these standards are focused on work or are intended to
rapidly attach welfare recipients to the workforce; education and training is limited.
Federal TANF funds may not be used for a family with an adult who has received assistance for
60 months. This is the five-year time limit on welfare receipt. However, up to 20% of the
caseload may be extended beyond the five years for reason of "hardship," with hardship defined
by the states. Additionally, states may use funds that they must spend to meet the TANF MOE to
aid families beyond five years.
TANF work participation rules and time limits do not apply to families receiving benefits and
services not considered "assistance." Such benefits and services include child care, transportation
aid, state earned income tax credits for working families, activities to reduce out-of-wedlock
pregnancies, activities to promote marriage and two-parent families, and activities to help
families that have experienced or are "at risk" of child abuse and neglect.Congressional Research Service
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Falk, Gene. The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, report, November 6, 2012; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc809151/m1/2/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.