At the federal level, TANF is administered by the Department of Health and Human Services (HHS). TANF programs operate in all 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. American Samoa is eligible to operate a TANF program, but has not opted to do so.¹1 The Social Security Act designates all these jurisdictions as "“states,"” and thus that term will be used for them in this report.²2 Federally recognized Indian tribes may also operate TANF programs. Tribal TANF programs are funded through allocations made from the TANF basic block grant to the state in which the tribe offers TANF benefits and services. It is the states and the tribes that provide TANF benefits and services to families and individuals.

This report provides an overview of TANF financing and rules for state programs, describing

• the following:  federal TANF grants and state funds under a "maintenance-of-effort" (MOE) requirement;
• maintenance of effort (MOE) requirement;  how federal TANF and state MOE funds may be used to help achieve the purpose and goals of the TANF block grant;
•  rules that apply when TANF or MOE funds are used to provide "assistance"assistance to to needy families with children;
• rules that apply when TANF or MOE funds are used for benefits and services other than assistance;
•  how Indian tribes may operate their own programs; and  certain accountability requirements, including requirements that states submit plans and report data to the federal government; and
• provisions of TANF law not directly related to grants to states, such as competitive grants for promoting healthy marriage and responsible fatherhood, and tribal TANF provisions.

. For data and statistics on the TANF block grant, see CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions. For the legislative history of TANF, see CRS Report R44668, The Temporary Assistance for Needy Families (TANF) Block Grant: A Legislative History.

Federal Grants and State Funds

Federal TANF Funds

Basic Block Grant

Federal law provides an appropriation for the TANF basic block grant (formally, the State Family Assistance Grant) of $16.567 billion. Beginning with FY2017, 0.33% of that amount is set aside to fund TANF research; that set-aside reduces the amount available for grants to states and tribes to $16.512 billion.⁷ Table 1 shows how that amount is distributed to the states and tribes. As of October 2017, the states received $16.317 billion and tribes received $195 million for FY2018.⁸

Contingency Fund

The original $2 billion in this fund was depleted in early FY2010.¹¹6 Since FY2010, Congress has provided appropriations that continue to fund the TANF contingency fund. The FY2017 and FY2018Beginning in FY2017, the annual appropriation for the contingency fund washas been $608 million. Contingency funds are only available to the 50 states and District of Columbia. Tribes and Puerto Rico, Guam, and the U.S. Virgin Islands are ineligible for contingency fund grants. Qualifying for TANF Contingency Funds To draw upon contingency funds, a state must meet two conditions: 1. be considered economically needy; and 2. meet a state spending requirement, separate from the state spending requirement under the regular TANF MOE. Economically Needy For purposes of the TANF contingency fund, a state meets the test of economic need if  its seasonally adjusted unemployment rate averaged over the most recent three- month period is at least 6.5% and is at least 10% higher than its rate in the corresponding three-month period in either of the previous two years; or  its number of Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps)7 participants over the most recent three-month period is at least 10% higher than the adjusted number of participants in the corresponding three-month period in FY1994 or FY1995. For this purpose, FY1994 and FY1995 participation numbers are adjusted by subtracting out an estimate of participants who would have been made ineligible for SNAP under PRWORA had it been in effect in those years. The major group made ineligible was noncitizens. State Spending Requirement To receive contingency funds, a state is required to expend within TANF at least 100% of what it spent in FY1994 on AFDC, EA, and JOBS. The expenditures that count toward the contingency fund state spending requirement are the same types of expenditures that count toward the TANF MOE, except for MOE expenditures on child care. The requirement that contingency fund MOE expenditures be within TANF means that MOE spending in Separate State Programs (SSPs) is not countable toward the contingency fund state spending requirement. (For a discussion of expenditures in SSPs, see the “Summing Up the Rules: Financing a Benefit, Service, or Activity” section). 6 For FY2009 and FY2010, states were able to draw additional TANF funds from a temporary emergency contingency fund. 7 For a description of SNAP, see CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits. Congressional Research Service 8 link to page 13 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Amount of Contingency Funds The annual cap on contingency funds is limited to 20% of a state’s basic block grant. The actual amount of contingency funds a state is entitled to for the year depends on (1) how much it spends in advance contingency funds and state funds in excess of the contingency fund state spending requirement, (2) its Medicaid matching rate, and (3) the number of months the state was eligible for contingency funds. For the purposes of determining the annual contingency fund entitlement, expenditures on child care do not count. Given the annual limit on appropriations in recent years, the number of months contingency funds are paid is based on the number of states that seek to draw funds and the total appropriation to the fund. The $608 million appropriated in recent years has not been sufficient to pay contingency funds for the states that received these grants for all 12 months in a year. Pandemic Emergency Assistance Fund The American Rescue Plan Act of 2021 (P.L. 117-2) established within TANF a temporary $1 billion fund to help offset the economic impact of the COVID-19 pandemic. Allocations were made to states, tribes, and territories (including American Samoa and the Commonwealth of the Northern Mariana Islands) according to a statutory formula8 to help them finance short-term, nonrecurrent benefits. No additional spending for states or other grantees is required to receive pandemic funds. Table 3 shows the initial allocations to the states under the Pandemic Emergency Assistance Fund. Table 3. Allocations Under the TANF Pandemic Emergency Assistance Fund Allocation Percentage State (in millions) of Total Alabama $10.182 1.0% Alaska 3.364 0.3 Arizona 14.546 1.5 Arkansas 4.715 0.5 California 203.819 20.4 Colorado 13.503 1.4 Connecticut 7.097 0.7 Delaware 2.076 0.2 District of Columbia 14.740 1.5 Florida 35.508 3.6 Georgia 22.014 2.2 Hawaii 4.217 0.4 Idaho 3.423 0.3 8 The law provides that $2 million is set aside for federal administration, and of the remaining funds, 92.5% is allocated by formula to the 50 states and District of Columbia and 7.5% is set aside for the tribes and territories. After these set-asides, funds are allocated among the 50 states and the District of Columbia based on two formula factors with equal weights: (1) each jurisdiction’s share of the child (under age 18) population and (2) each jurisdiction’s share of total FY2019 TANF expenditures on basic assistance, nonrecurrent short-term benefits, and emergency assistance. Congressional Research Service 9 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Allocation Percentage State (in millions) of Total Il inois 20.440 2.0 Indiana 10.709 1.1 Iowa 6.334 0.6 Kansas 5.142 0.5 Kentucky 17.411 1.7 Louisiana 7.906 0.8 Maine 3.851 0.4 Maryland 17.756 1.8 Massachusetts 27.853 2.8 Michigan 19.002 1.9 Minnesota 14.352 1.4 Mississippi 4.751 0.5 Missouri 14.531 1.5 Montana 2.734 0.3 Nebraska 4.439 0.4 Nevada 6.794 0.7 New Hampshire 4.145 0.4 New Jersey 17.254 1.7 New Mexico 6.385 0.6 New York 128.476 12.8 North Carolina 16.783 1.7 North Dakota 1.355 0.1 Ohio 33.946 3.4 Oklahoma 7.124 0.7 Oregon 12.226 1.2 Pennsylvania 26.444 2.6 Rhode Island 2.703 0.3 South Carolina 10.153 1.0 South Dakota 2.286 0.2 Tennessee 12.995 1.3 Texas 49.519 5.0 Utah 7.335 0.7 Vermont 1.617 0.2 Virginia 15.745 1.6 Washington 22.766 2.3 West Virginia 4.618 0.5 Congressional Research Service 10 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Allocation Percentage State (in millions) of Total Wisconsin 14.523 1.5 Wyoming 1.545 0.2 Total, 50 states and District of Columbia 923.150 92.3 Puerto Rico 18.451 1.8 Guam 0.893 0.1 U.S. Virgin Islands 0.734 0.1 American Samoa 0.495 0.0 Northern Mariana Islands 0.486 0.0 Total, territories 21.059 2.1 Total, tribes 53.791 5.4 Technical assistance 2.000 0.2 Total 1,000.000 100.0 Source: Congressional Research Service (CRS), based on data in U.S. Department of Health and Human Services (HHS), Administration for Children and Families, U.S. Office of Family Assistance, The Pandemic Emergency Assistance Fund, TANF-ACF-PI-2021-02, April 9, 2021. Nonrecurrent short-term benefits are defined as economic aid provided to families to help them address a specific episode of need, one not expected to exceed four months. Grantees may use up to 15% of their grant for the administrative expenses of providing these benefits. Jurisdictions had until September 30, 2022, to expend their initial grant awards. Funds unused as of that date are to be reallocated among grantees that used their full initial grants and also applied for those additional funds.9 Additional TANF Funding in the Past The Pandemic Emergency Assistance Fund was preceded by other additional TANF grants that were targeted toward meeting special needs. In 2009, a $5 bil ion Emergency Contingency Fund was enacted to provide additional funding in response to the recession fol owing the global financial crisis (see CRS Report R41078, The TANF Emergency Contingency Fund). Congress also responded to the economic dislocations along the Gulf Coast caused by Hurricanes Katrina and Rita by converting loans into grants and providing special access to the TANF contingency fund (see CRS Report RS22246, Temporary Assistance for Needy Families (TANF): Its Role in Response to the Effects of Hurricane Katrina). Use of Federal TANF Grants and the Rules for Counting State MOE Expenditures TANF is not a program per se; rather, it is a set of funding streams used at the state and local levels to provide a wide range of benefits, services, and activities with the general aim of ameliorating the effects, or address the root causes, of childhood economic disadvantage. Both TANF and state MOE expenditures can finance many of the same activities for the same 9 U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, The Pandemic Emergency Assistance Fund, TANF-ACF-PI-2021-01, April 9, 2021, https://www.acf.hhs.gov/ofa/policy-guidance/tanf-acf-pi-2021-02. Congressional Research Service 11 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements populations. However, the rules for how states may use TANF funds do differ in some aspects from the rules that govern whether or not states may count expenditures toward meeting the TANF MOE requirement. Using Federal TANF Grants $608 million for each of the years.¹²

State Funds: the Maintenance-of-Effort, or MOE, Requirement

Table 2 shows both federal TANF and state MOE funds. The MOE is shown at both the 75% and 80% rates for each state. Also shown is the percent of total federal and state funds in the TANF financial "system" that is accounted for by federal funds. This percentage varies because the Medicaid matching rate used in the pre-TANF programs varied by state. Mirroring the differences in federal shares under the pre-1996 programs, federal funds account for a greater share of total TANF funding in states with low per-capita income compared to those with higher per-capita income.

TANF Benefits, Services, and Activities

Using Federal TANF Grants

Federal TANF grants may be used for a wide range of benefits and services for families with children. Grants may be used within a state or tribal TANF program-funded programs, or a portion may be transferred to either the Child Care and Development Block Grant (CCDBG) or the Social Services Block Grant (SSBG). Unused TANF funds can also be reserved (i.e., saved), without fiscal year limit.¹⁷

10 Achieving TANF Goals

TANF allows its basic block grant and contingency funds to be spent "“in any manner that is reasonably calculated"” to achieve its statutory purpose within its state TANF program.¹⁸.11 TANF'’s purpose is to increase state flexibility to meet specified goals.¹⁹ Its four statutory goals are to

• 1. four statutory goals:12 1. provide assistance to needy families so that children can be cared for in their own homes or in the homes of relatives;
• 2. 2. end dependence of needy parents on government benefits through work, job preparation, and marriage;
• 3. 3. reduce the incidence of out-of-wedlock pregnancies; and
• 4. 4. promote the formation and maintenance of two-parent families.

The four goals of TANF encompass what is usually thought of as traditional cash welfare for needy families with children and work activities for adult recipients in these families. However, the goals also provide authority for funds to be used to provide a wide variety of benefits and services for welfare families and other low-income families with children The authority to spend TANF grants to achieve its statutory purpose includes traditional cash assistance, but it also gives states the authority to spend TANF dollars on a broader set of activities available to a wider population than targeted cash assistance programs. TANF funds are used to help support work for low-income families through providing child care or, transportation aidaid, and state versions of the Earned Income Tax Credit (EITC). The authority to provide assistance to care for children in the homes of relatives has been used to provide benefits and services to children, and families of children, who have been, or are at risk of, neglect or abuse and are placed in the care of a relative (e.g., grandparent, aunt, uncle). Further, TANF funds have been used for programs and services aimed at accomplishing the "family formation" goals of TANF (goals three and four listed above, and ending dependence through marriage, which is a component of goal two).

"Grandfathered" Activities

Need-Tested and Not Need-Tested Use of Funds TANF is usually associated with needy families, and some uses of it require that a family meet a test of financial need, but other uses do not. Spending to meet the first two statutory goals, providing assistance to needy parents and ending dependence of needy parents on government benefits, must be spent on those in financial need. On the other hand, federal TANF funds used on benefits, services, and activities that aim to reduce the incidence of out-of-wedlock pregnancies and promote the formation and maintenance of two-parent families need not be restricted to those in immediate need. The wording in the statute does not reference financial need for these two goals. Activities related to these goals can be seen as seeking to prevent financial need, and hence are available to the general population in a state. 10 Before the enactment of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5), reserved funds could only be used for the purpose of providing “assistance”. The ARRA eliminated this restriction to the use of reserve funds, so that reserve funds can be used to provide any allowed TANF benefit or service. 11 Section 404(a)(1) of the Social Security Act. 12 The TANF purpose statement is in Section 401(a) of the Social Security Act. Congressional Research Service 12 link to page 24 link to page 24 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Grandfathered Activities In addition to using funds to promote the purpose and goals of TANF, federal law allows states to use TANF funds to carry out any program or activity that a state had conducted under its pre-1996 programs. This provision permits states to continue activities they undertook under the pre-1996 Emergency Assistance (EA)TANF EA program to provide help for foster care, adoption assistance,²⁰13 and juvenile justice programs.

Transfers to Other Block Grants

Federal law allows up to 30% of federal TANF grants (except contingency funds)the SFAG to be transferred to the CCDBG and SSBG combined, with a separate limit of 10% of TANF grants (except contingency funds)the SFAG that may be transferred to SSBG.²¹14 Funds transferred to these other block grants become subject to the rules of the receiving block grant (CCDBG or SSBG), and are not subject to TANF rules. However, TANF funds transferred to SSBG must be used for families with incomes below 200% of the poverty line.

Matching for Job Access (Reverse Commuter) Grants

Job access programs are designed Funds from the TANF Contingency Fund or the Pandemic Emergency Assistance Fund may not be transferred. Matching for Transportation Grants The Transportation Equity Act for the 21st Century (P.L. 105-178,) established Job Access and Reverse Commuter Grants. These grants funded programs to provide transportation assistance for those who need to commute from inner city to suburban areas for their jobs. These programs are were targeted to TANF assistance recipients and other low-income individuals. Federal law also allows allowed federal TANF funds to be used as a state match for reverse commuter grants. The Job Access and Reverse Commuter Grants have been repealed. However, the Department of Transportation’s urbanized area formula grants and formula grants for rural areas can be used for activities previously funded by them.15 Through FY2021, states have continued to report some expenditures on job access and reverse commuter grants.16 If federal TANF funds are used for this purpose, it is counted against the state'’s 30% limit for transfers to CCDBG and SSBG; that is, it reduces the amount of federal TANF funds that could be transferred to those other block grants.

Counting Expenditures Toward the MOE

Most, but not all, benefits, services, and activities that may be funded from Prohibited Use of TANF Funds Though states have broad authority to spend TANF funds, federal law prohibits them from using the funds in certain ways. Most TANF prohibitions are rules that disallow using federal TANF funds to provide assistance to certain populations (see the “Federal Eligibility Rules for Assistance” section). One prohibition applies more broadly: states cannot use federal TANF funds to provide medical services, though the funds can be used for pre-pregnancy family planning services. 13 These are foster care and adoption assistance cases that are ineligible for other federal financing from programs under Title IV-E of the Social Security Act. 14 PRWORA (P.L. 104-193), as modified by technical corrections in the Balanced Budget Act of 1997 (P.L. 105-33), set the limit on transfers from TANF to SSBG at 10% of the TANF block grant. The Transportation Equity Act for the 21st Century (P.L. 105-178) reduced funding for SSBG and the transfer authority from TANF to SSBG to 4.25%, effective FY2001. However, annual appropriation bills and temporary extension legislation (that continued TANF on the terms of previous years) have provided for a 10% transfer limit for FY2001 and each subsequent fiscal year. 15 See discussion on the U.S. Department of Transportation, Federal Transit Administration, website at https://www.transit.dot.gov/funding/grants/grant-programs/job-access-and-reverse-commute-program-5316. 16 See the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance website (Appendix F): https://www.acf.hhs.gov/sites/default/files/documents/ofa/fy2020_tanf_financial_data_table_092221.pdf. Congressional Research Service 13 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements TANF law penalizes states for misuse of TANF grants. Misuse of funds is determined through an audit conducted under the Single Audit Act. The penalty for misuse of funds equals the amount of TANF funding the audit determined was misused. Using Federal Funds to Finance Pre-existing State Spending TANF gives states the authority to spend federal funds to achieve TANF’s statutory purpose, which is a broader set of activities available to a wider population than was targeted in the repealed cash assistance and associated programs. It includes the authority to spend TANF funds on activities that historically had been funded by states and localities themselves, rather than with federal funds. TANF did not include a requirement that federal funds be used to supplement rather than supplant existing spending. That is, it is legal for states to use federal TANF funds to finance activities that previously had been state and local responsibilities.17 Counting Expenditures Toward the MOE Requirement In some respects, there is more flexibility in the expenditures a state may count toward the MOE than in the use of federal TANF grants, though there are a few cases where states have more flexibility in their use of federal TANF grants than in the expenditures that can be counted toward the MOE. General Rules for Counting State Spending States may count qualified expenditures toward the MOE. The main criteria for qualified expenditures is that they be for the following:  Eligible families, which are defined as families that include a child and meet a test of low income. There is an exception to the requirement that the expenditure be for eligible families if it is for an activity related to either responsible fatherhood or healthy marriage.  TANF-related activities, such as cash assistance, administration, child care, education and training (though not educational activities for the general population), and other activities that are reasonably calculated to further a TANF statutory goal. The expenditure of funds in a state’s localities can count toward the MOE as long as they meet the requirements of a qualified expenditure. Under certain circumstances, a state may count as MOE expenditures donations from nongovernmental third parties such as nonprofit organizations.18 This includes the value of in-kind contributions, such as volunteers’ time. These 17 The Government Accountability Office (GAO) examined the degree to which TANF was used to supplant state funding in the early years of the block grant. GAO examined state budgets and found that “supplanting was a common budget practice.” The degree of supplanting state funds with TANF funds varied across examined states. Moreover, the reasons—to provide fiscal relief or to more flexibly address the needs of low-income children—also varied. The study also found that overall, when looking broadly, states increased total funding for programs addressing TANF’s focus on disadvantaged children, particularly in health care and child welfare services. See GAO , Welfare Reform: Challenges in Maintaining a Federal-State Fiscal Partnership, GAO-01-828, August 2001, p. 12. 18 This is not a statutory or regulatory rule specific to TANF. Under the so-called common-rule for federal grant programs, a cost-sharing requirement may be met in whole or in part by third-party contributions. HHS has determined that the TANF MOE is a cost-sharing rule; hence, third party contributions may count toward meeting that requirement. See U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, Clarification that third party cash or in-kind may count toward a State’s or Territory’s maintenance-of- Congressional Research Service 14 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements third-party contributions must be providing benefits, services, or activities that usually count toward the MOE and also must benefit eligible families. In general, state dollars that are used to meet a cost sharing requirement or a matching requirement for other programs—such as Medicaid—cannot be counted as a MOE expenditure. However, there are special rules for child care expenditures because of interactions between the TANF MOE and various state spending requirements related to the Child Care and Development Fund (CCDF).19 Counting MOE Expenditures vs. Use of Federal TANF Funds Most, but not all, benefits, services, and activities that may be funded from federal TANF funds may also be financed by MOE funds. States have additional flexibility in the populations that may be provided assistance with MOE funds. In addition to assisting families eligible for federally funded benefits, services, and activities, states may use MOE dollars to assist two additional groups:  families that have exceeded TANF’s five-year time limit; and  noncitizens who were made ineligible for federally funded benefits in PRWORA.20 Conversely, some benefits, services, and activities that can be financed by federal funds cannot be financed by MOE funding. The major restrictions that apply to MOE (but not federal TANF) funds are as follows:  There is a new spending test for certain expenditures. The new spending test applies to expenditures for benefits, services, and activities that were not authorized under TANF’s predecessor programs (AFDC, EA, JOBS, and AFDC-related child care). If a current state or local program operated in FY1995 for activities that meet the definition of qualified expenditures but were not authorized under TANF’s predecessor programs, then the state may only count expenditures for that program that exceed the FY1995 level. Expenditures for activities authorized under the predecessor programs can be counted without regard to the new spending test.  Expenditures on grandfathered activities are not countable. Expenditures on activities that were part of the pre-1996 programs that are not aimed to achieve a TANF goal—grandfathered as an allowable use of TANF grants—are not countable toward the MOE. effort (MOE), TANF-ACF-PA-2004-01, https://www.acf.hhs.gov/ofa/policy-guidance/tanf-acf-pa-2004-01-clarification-third-party-cash-or-kind-may-count-toward. 19 Funding for the CCDF is fairly complex, with a series of federal and state funding streams that finance subsidized child care for low-income families (see CRS In Focus IF10511, Child Care Entitlement to States: An Overview). One of the funding streams is the CCDF matching grant that requires child care expenditures to meet a MOE requirement (i.e., be at least what they were in FY1994 or FY1995, whichever is higher) and then additional state expenditures to match federal funds up to a maximum. States may count for the purpose of the TANF MOE state child care expenditures up to the MOE threshold (i.e., the amount of expenditures made in FY1994 or FY1995) and state child care expenditures made in excess of state expenditures needed to draw the maximum federal match for CCDF matching grants. 20 For more information, see CRS Report RL33809, Noncitizen Eligibility for Federal Public Assistance: Policy Overview. Congressional Research Service 15 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements  Expenditures on activities to address TANF goals of reducing out-of- wedlock pregnancies and promoting two-parent families must be need-tested and for eligible families, except if they are for responsible fatherhood or healthy marriage activities. Federal TANF funds spent on activities that seek to achieve the goals of reducing out-of-wedlock pregnancies and promoting two-parent families can be available for the general population, not just for families meeting a test of financial need. HHS regulations limit the counting of non-need-tested activities toward the MOE requirement to activities that are described in statute as being for responsible fatherhood and healthy marriage activities.21 Counting MOE Expenditures: Either Comingled with Federal Funds or Separate from Federal Funds A state’s MOE expenditures can be combined (i.e., comingled) with federal funds to finance benefits, services, or activities. For example, a state may choose to have one assistance program (monthly benefit checks) and use both federal and MOE dollars to finance it. Coversely, a state’s MOE expenditures can be expended separately from federal dollars in either a separate program or accounted for separately. In the case of MOE expenditures comingled with federal dollars, the requirements and prohibitions that apply to federal dollars apply to those state MOE expenditures as well. In the case where a benefit, service, or activity is separated from federal dollars, the requirements and prohibitions that apply to it depend on whether the state chooses to count that MOE expenditure in TANF or in an SSP. Counting MOE Expenditures: In TANF or In Separate State Programs To meet the MOE requirements, the TANF statute allows states to count spending in any program that meets the general rules as qualified expenditures. Thus, the MOE expenditures may be counted in TANF or in an SSP. There are two main implications for counting expenditures in TANF or in an SSP:  for assistance, some rules do not apply in an SSP that apply if that MOE spending is counted in TANF; and  dollars spent in SSPs do not count toward the TANF contingency fund state spending requirement. Summing Up the Rules: Financing a Benefit, Service, or Activity The different rules for using federal grants and counting TANF MOE expenditures provide both complication and flexibility when a state decides how to finance a TANF benefit or service.  Federal funds can be either transferred to the other block grants or spent within TANF.  Federal TANF grants and state MOE dollars can be comingled or accounted for separately. If dollars are comingled, in general, the rules that apply to both 21 The Deficit Reduction Act of 2005 (P.L. 109-171) amended TANF law to provide that states could count expenditures related to reducing out-of-wedlock pregnancies and promoting two-parent families toward the MOE requirement. HHS interpreted that provision so that these expenditures would still be required to be spent on behalf of eligible families unless they were spent on activities related to responsible fatherhood and healthy marriage enumerated in Section 403(a)(2) of the Social Security Act. Congressional Research Service 16 link to page 21 link to page 30 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements federal TANF dollars and state MOE dollars apply to the comingled state dollars. For federal grant dollars accounted for separately, only federal rules apply. For state MOE dollars accounted for separately, only rules for counting expenditures toward the MOE requirement apply.  State MOE dollars accounted for separately from federal TANF dollars can either be counted in TANF or in SSPs. Figure 1 summarizes some of the choices states have in using the federal funding stream or MOE expenditure funding streams to finance a TANF benefit, service, or activity. Depending on these choices, different rules apply. Though the rules are complex, they do give states flexibility. Note that these are only the general rules regarding funding streams—there is an additional layer of complexity for expenditures on assistance. Further detail on how federal dollars and state dollars are classified when providing assistance to families is shown in Table 4. Figure 1. Summary of Rules Associated with Using TANF Funds and Counting MOE Funds Source: Congressional Research Service (CRS). Note: Carried over (from previous fiscal year) federal TANF grants cannot be transferred to the Child Care Development Block Grant or Social Services Block Grant. Enforcing Prohibitions and Requirements The prohibitions and requirements for using TANF and counting MOE funds are generally enforced through penalties. These penalties put a state at risk of receiving a reduced block grant, with the maximum penalty generally specified in statute. Many penalties are expressed as a Congressional Research Service 17 link to page 39 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements percentage of the state’s block grant, with the calculation specified in regulation as a percentage of the state’s adjusted SFAG. The adjusted SFAG is the state’s basic block grant allocation minus payments to tribes and transfers to CCDBG and SSBG. By statute, a state’s block grant amount cannot be reduced by more than 25% of its adjusted SFAG. If the total penalties exceed the 25% cap, the excess penalties must be paid out of subsequent years’ grants. If a state’s block grant is reduced by a penalty, it is required to replace the penalized federal funds with state dollars. Many penalties on the state can be waived if the state can establish reasonable cause for not complying with a prohibition or requirement. States can also avoid many of these penalties by entering into a corrective compliance plan and subsequently come into compliance with the law. The penalties that are not subject to reasonable cause and corrective compliance are those that relate to funding. For a detailed list of TANF penalties, see Appendix B. Limits on Federal Regulation Federal law limits the ability of HHS to regulate the conduct of states with respect to TANF: No officer or employee of the Federal Government may regulate the conduct of States under this part or enforce any provision of this part [Part A, Title IV of the Social Security Act, or TANF] except to the extent expressly provided in this part [TANF].22 HHS, in promulgating regulations, interpreted the statute as allowing regulation (1) where Congress explicitly directed HHS to issue regulations and (2) where HHS was charged with enforcing penalties.23 As noted above, many of the penalties relate to policies around providing assistance to families. HHS has noted that some cross-cutting laws do apply to TANF and MOE activities regardless of this limitation of regulation. For example, civil rights laws, the Fair Labor Standards Act, and the Cash Management Improvement Act (CMIA) apply to TANF. TANF’s Definition of Family The concept of family naturally is central to a block grant called Temporary Assistance for Needy Families. Yet the term family—like many terms used in TANF—is left undefined in statute. While HHS defined some terms in regulation, it explicitly gave states the freedom to come up with their own definition of family. For example, states have the flexibility whether to include noncustodial parents in a family. Note that specific definitions of family are used for specific purpose (e.g., the requirement that TANF MOE funds be spent on eligible families and what constitutes a two-parent family for the purpose of the TANF work standards). However, for general purposes, the definition of family is left to the states. In promulgating regulations, HHS said it defined only specific terms because “excessive definition of terms could unduly and unintentionally limit State flexibility in designing programs that best serve their needs” (see U.S. Department of Health and Human Services, "Temporary Assistance for Needy Families Program," 62 Federal Register 62131, November 20, 1997). 22 Section 417 of the Social Security Act. 23 U.S. Department of Health and Human Services, “Temporary Assistance for Needy Families Program (TANF); Final Rule,” 64 Federal Register 17725, April 12, 1999. Congressional Research Service 18 link to page 25 link to page 25 link to page 33 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements TANF Requirements for States When Funds Are Used to Provide Assistance The TANF statute applies most of its specific requirements to funds that are used to provide assistance to needy families with children. Assistance provided to families triggers TANF’s work requirements, time limits, child support requirements, and most of its data reporting requirements. Yet the TANF statute itself does not define the term assistance. Given the central role that assistance plays in TANF’s policies, HHS did define the term in regulation. Definition of Assistance HHS, in regulation, defined assistance as follows: The term “assistance” includes cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs (i.e., for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses).24 A benefit that meets the above definition that is paid in cash or a voucher is considered assistance. Additionally, a benefit that meets the above definition that is paid either directly to the family or to a third party on behalf of that family is considered assistance. Child care assistance and transportation for nonworking parents is also considered assistance. The definition of assistance encompasses the traditional cash assistance as was paid under AFDC. However, it also includes benefits that go beyond traditional cash assistance. For example, states have used MOE funds to provide SNAP benefits to noncitizens made ineligible by PRWORA as allowed by law. Such benefits are considered assistance. States have also created work supplement benefits. These are sometimes comparatively small benefits (e.g., $10) paid as nutrition assistance for parents who receive SNAP, have earnings, and meet TANF rules for being engaged in work. Such benefits are also considered assistance. Funding these benefits from TANF as assistance helps some states meet their work participation standards. (For the rules regarding being engaged in work, see a summary in the “Work Participation Standards” section or more detail in Appendix A.) What is Not Considered Assistance? The regulation also lists benefits and activities that are not considered assistance. Explicitly excluded from the definition of assistance are nonrecurrent short-term aid for an episode of need expected to last four months or less; employment subsidies; child care and transportation for a working parent; refundable earned income tax credits; contributions to Individual Development Accounts; and counseling, case management, peer support and similar services. States may explicitly design a TANF benefit in a way that does not meet the definition of assistance and hence does not trigger the TANF work requirements, time limits, child support enforcement requirements, and most reporting requirements. For example, a state may use TANF funds to provide temporary help in paying rent for a family that is homeless or at risk of homelessness.25 If the state limits that type of help to four months or less, the benefit would be 24 45 C.F.R. §260.31(a)(1). 25 Lauren Dunton and Cara Sierks, Approaches to Assisting Families Experiencing or At Risk of Homelessness with TANF Funds, U.S. Department of Health and Human Services, Administration for Children and Families, Office of Congressional Research Service 19 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements considered a nonrecurrent short-term benefit and hence not be considered assistance and not trigger TANF requirements. A wide range of other TANF- and MOE-funded activities that do not provide ongoing economic support are also considered not to be assistance. This includes employment services, services for families where children are at risk of abuse and neglect, funding for activities for youth, and most activities to promote responsible fatherhood and healthy marriage. These activities are also not subject to the rules triggered when a family is provided assistance. TANF Expenditures on Assistance and Other Benefits and Services: FY2021 Though most TANF policy relates to when funds are spent on assistance for families with children, that assistance accounts for only a fraction of how federal TANF and state MOE dol ars are spent. Among all categories of spending, basic assistance (the category that most closely corresponds to spending on cash assistance programs) was the largest category. However, the $6.9 bil ion in federal and MOE funds spent on basic assistance accounted for about 22.6% of the total $30.3 bil ion in total expenditures. TANF funded a wide range of benefits, services, and activities other than assistance—child care subsidies; work, education, and training (for both recipients of assistance and others); child welfare related to children at risk of, or who have been victims of, abuse and neglect; and emergency and short-term benefits. In general, the TANF rules that apply when funds are used for assistance do not apply when funds are used for these other activities. Source: Congressional Research Service (CRS), based on data from the Office of Family Assistance, U.S. Department of Health and Human Services. Federal Eligibility Rules for Assistance TANF requires that a family have a child or a pregnant individual to be eligible for assistance, and federal TANF funds cannot be used unless the family includes such individuals. The law defines minor child as a person under age 18 or age 18 and still in school. TANF MOE funds may be used to assist families with a pregnant individual or who have a child living with a custodial parent or other caretaker. In defining child for the purpose of MOE expenditures, a state may use the federal definition of minor child or use another definition under state law.26 A state must also Planning, Research, and Evaluation, OPRE Report 2021-192, https://www.acf.hhs.gov/sites/default/files/documents/opre/tanf-assisting-families-experiencing-homelessness-oct-2021.pdf. 26 U.S. Department of Health and Human Services, “Temporary Assistance for Needy Families Program (TANF): Final Rule,” 64 Federal Register 17817, April 12, 1999. Congressional Research Service 20 link to page 27 link to page 33 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements impose a financial need test for assistance, and require that family income be below a specified level, though the level is determined by the state. Federal law also prohibits states from using federal TANF funds to provide assistance to the following persons and families:  families with an adult or minor child head of household who has received federally funded aid for 60 months (see the “The TANF Time Limit” section);  unwed teen parents, unless living in an adult-supervised setting;  teens who have not completed high school, unless they are making satisfactory progress toward achieving a high school or equivalent credential or in an alternative training program;  noncitizens who arrived in the United States after August 22, 1996, for the first five years after arrival27; and  fugitive felons and parole violators. States may use MOE funds to assist these families and individuals. Additionally, PRWORA provides that persons convicted of a drug-related felony may be denied assistance under TANF, unless the state affirmatively opts out of this provision.28 Aside from the requirement that TANF assistance be restricted to needy families with children and the listed statutory prohibitions on the use of federal funds, states have broad leeway to set eligibility rules for the assistance. States determine actual income eligibility standards (to determine whether a family is needy) and can determine other conditions and criteria for eligibility. States also determine benefit amounts paid to families.29 TANF Work Requirements With respect to families receiving assistance, TANF requires states to meet work participation standards; assess the employability of adult recipients and those under 18 who do not have a high school diploma and are not in school, engage parents and caretakers in work or activities within 24 months, and sanction families with a member who refuses without good cause to engage in work or activities. States have considerable latitude when implementing these requirements. Work Participation Standards The TANF work participation standards are numerical performance measures, computed in the aggregate for each state, which require that a specified percentage of families receiving assistance with a work-eligible individual30 be considered engaged in specified activities for a minimum number of hours.31 The participation standards encompass those families in TANF and SSPs. 27 These prohibitions are generally found in Title IV of PRWORA. 28 This provision is not in TANF law, but is in Section 115 of PRWORA. 29 For detail on state rules, see Ilham Dehry, Sarah Knowles, and Katie Shantz et al., Welfare Rules Databook:State TANF Policies as of July 2020, U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research, and Evaluation, OPRE Report 2021-147, January 2022, https://wrd.urban.org/wrd/Data/databooks/2020%20Welfare%20Rules%20Databook%20(final%2002%2023%202022).pdf. 30 For the definition of who is a work-eligible individual, see Appendix A. 31 Section 407(a) of the Social Security Act. Congressional Research Service 21 link to page 29 link to page 33 link to page 9 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Statute sets nominal standards that specify numerical targets of 50% of all families and 90% of two-parent families be either working or engaged in specified activities for a specified minimum hours of work per week. However, those targets are reduced by caseload reduction credits, where a state gets a credit toward its work standard by reductions in the number of families receiving assistance since FY2005. Caseload reductions caused by policy changes are not counted toward this credit. In addition to receiving credit toward its work standard for fewer families receiving assistance, under a regulatory provision a state can count as caseload reduction spending in excess of that state’s MOE requirement.32 The Caseload Reduction Credit and Effective (After-Credit) Standards in FY2021 The caseload reduction credit reduced the 50% all family standard for all but six jurisdictions in FY2021. The credits reduced that all family standard to 0% for 32 jurisdictions, effectively permitting them to have no families engaged in work or activities but stil be in compliance with their work participation standard. The effective standard was less than 25% in 47 states. Understanding the effective standards for two-parent families is more complex. Only two states (Alabama and Pennsylvania) had a caseload reduction credit of 90% that itself reduced the standard to 0%. However, 26 jurisdictions reported no two-parent families in TANF or SSP-MOE programs. Such states often aid families in solely state funded (SSF) programs (discussed in the “Choice of Funding Stream and Rules for Assistance” section) and effectively avoided the two-parent standard through that means. To determine whether a state meets the work participation standards, two work participation rates (WPRs) are calculated: one for all families and another for two-parent families. The WPR for all families is the fraction of families with work eligible individuals who meet the criteria of having such individuals engaged in work. States that have a WPR at or above their effective (after-credit) standard meet the standard. States with a WPR that falls short of the standard are considered not to have met their minimum work rate and are at risk of being penalized. A separate WPR is calculated for the fraction of two-parent families with work-eligible individuals who meet engaged in work criteria. The law specifies the activities that count toward being engaged in work, which include unsubsidized employment (i.e., work in a regular job); subsidized employment (i.e., work in a job subsidized by TANF or other governmental funds); work experience and community service programs; and pre-employment activities such as job search and job readiness assistance, vocational educational training, and other forms of education and training. There are time limits for how long job search and readiness assistance and vocational educational training may be counted toward the standard. There are also limits to the circumstances for which participation in other educational activities is counted. In addition, federal law sets minimum hours by family type. (Details of the TANF work participation standards are provided in Appendix A). States are also required to have systems in place to verify work participation of individual recipients.33 A state that does not meet both of its numerical performance standards is at risk of being funds may also be financed by MOE funds. States may count toward the MOE any expenditures made for TANF-eligible families for any program that provides cash assistance, administration, child care, education, and training (though not educational activities for the general population), and other activities to further a TANF purpose. States may also count toward the MOE any expenditures made for the general population on healthy marriage and responsible fatherhood activities.

Table 3 provides a brief summary of the types of benefits, services, and activities that may be funded by federal TANF funds and with state MOE funds.

TANF Requirements for States When Funds Are Used to Provide "Assistance"

Definition of Assistance

Assistance Provided in the TANF Program or in Separate State Programs

As discussed above, states may count toward meeting the MOE requirement their expenditures in any program providing specified benefits and services to TANF-eligible families. Programs other than TANF that contribute toward the MOE are known as "separate state programs." Table 4 summarizes the application of TANF requirements for assistance recipients based on whether a benefit was financed from federal funds, state funds within the "TANF program," or separate state programs. Before FY2007, the major distinction in the rules for using state MOE funds under TANF and separate state programs was that the TANF work participation standards and child support requirements did not apply to families in separate state programs. Beginning in FY2007, work participation standards do apply to families in a separate state program. This leaves the major distinction that child support requirements do not apply to states for families in separate state programs.

Federal Eligibility Rules for Assistance

TANF Work Requirements

Federal TANF Work Standard

The TANF Work Participation Rate

Most welfare-to-work activities are on the list of 12 activities that count toward the participation standards, including educational and rehabilitative activities. The statute lists the 12 activities; the Deficit Reduction Act of 2005 (P.L. 109-171) required HHS to define each of the 12 activities. Table 5 shows the 12 TANF work activities and their regulatory definitions.

Penalties for States that Fail the Work Participation Standard

Verifying Work Participation³⁷

penalized by a reduction in its block grant. The penalty for not meeting the performance standards can be waived for reasonable cause, and states can also avoid the penalty if they come into compliance with the standard through a corrective compliance plan. However, a state that does not meet one or both of the work standards is subject to a MOE nonfederal spending requirement at 80% of the historical level of spending, rather than at 75% of the historical level of spending (see the “Maintenance of Effort Requirement” section). 32 45 C.F.R. §261.43(b). 33 Section 407(i) of the Social Security Act. Congressional Research Service 22 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements States have flexibility in how to meet the work participation standard. The work and participation requirements that apply to individual recipients and families are determined by the states. Employability Assessments States are required to assess each recipient who is an adult (age 18 or older) or has not completed high school and is not attending secondary school. The assessment is required to be made within 90 days of determination of the recipient’s eligibility for assistance.34 States have the option to develop an Individual Responsibility Plan (IRP) setting forth employment goals for the individual, the obligations of the individual, and the services the state will provide the individual to be able to obtain and keep employment. Engagement Within Two Years States are required to engage each parent or caretaker adult in work, as defined by the state, within 24 months. For this requirement, the state is free to determine what constitutes being engaged in work.35 Sanctions for Refusing to Engage in Work or Activities States are required to sanction a family with a member who refuses to comply with its work requirements without good cause. States are free to determine the sanction amount, and whether to reduce benefits or terminate benefits for families that fail to comply with work requirements (i.e., a full-family sanction). States also determine what constitutes good cause for not complying with work requirements. States are prohibited from sanctioning a family with a single parent with a child under the age of six if he or she refuses to comply with work requirements because he or she cannot find affordable child care.36 Non-displacement Requirement An individual in a federally funded TANF work activity cannot displace a regular employee. That is, a participant cannot be placed in federally funded work activity to fill a vacancy that exists because (1) another person is on layoff from the same or equivalent job, (2) of an involuntary reduction in the employer’s workforce, or (3) of firing another employee for the purpose of filling the vacancy with a TANF participant. States are required to maintain a grievance procedure for resolving complaints of regular employees. The TANF Time Limit The TANF Time Limit

States may not use federal TANF funds to provide assistance to a family containing an adult or minor child household head who has received five years (60 months) of assistance.³⁸ The federal TANF time limit does not apply to families without an adult recipient, the "child-only" cases.

federally funded assistance.37 The federal five-year time limit is a prohibition on states'’ use of federal TANF funds, not a direct limitation on how long a particular family may receive welfare. How time limits affect families is determined by states, which have wide latitude in implementing them.

assistance. 34 Section 408(b)(1) of the Social Security Act. 35 Section 402(a)(1)(A)(ii) of the Social Security Act. This requirement is a part of the TANF state plan, and there is no specific penalty for a state that fails to engage a parent or caretaker in work by the 24-month deadline. 36 Section 407(e) of the Social Security Act. 37 Section 408(a)(7) of the Social Security Act. Note that this prohibition on use of federal funds also would apply to assistance paid using comingled state MOE funds. Congressional Research Service 23 link to page 29 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Federal law provides a hardship exception to the time limit, allowing federal funds to be used in cases of hardship for up to 20% of the caseload beyond the five-year limit. Further, federal law explicitly allows a state to use state MOE funds to aid a family beyond the time limit.

TANF penalizes states that have more than 20% of their caseload on the rolls for more than five years.³⁹ The penalty is a 5% reduction in the block grant. Many states have adopted the five-year limit as their own; others have shorter States that do not comply with the time limit (e.g., exceed the 20% cap) would be subject to a penalty of up to 5% of their adjusted SFAG.38 States have flexibility in how they implement the time limit as it applies to individual recipients and families. Many states have adopted the five-year limit as their own; others have shorter time limits and, thus, in practice must track time as it accrues to both the federal and state time limits. A few states effectively do not limit the amount of time a family may receive assistance, either providing aid to families beyond five years using state funds (e.g., New York) or eliminating assistance paid on behalf of the family'’s adults after a time limit and continuing benefits indefinitely only on behalf of the children (e.g., California).

Child Support Enforcement Requirements

Families receiving cash assistance are often headed by a single mother. In most of these families, there is In single-parent families receiving cash assistance, such as those headed by a single mother, there may also be a noncustodial parent who is also likely to be financially responsible for the children'children’s economic well-being. TANF has requirements that assistance recipients cooperate with child support enforcement and assign their child support to the state as a condition of receiving assistance within the TANF program. As discussed in "Assistance Provided in the TANF Program or in Separate State Programs," these requirements do not apply if assistance is provided through a "separate state program."

These requirements do not apply if assistance is provided through an SSP (see the “Choice of Funding Stream and Rules for Assistance” section). Families receiving TANF assistance must cooperate with the state in establishing the paternity of a child and in establishing, modifying, or enforcing orders that the noncustodial parent pay child support.⁴⁰39 Federal law requires states to penalize families who do not cooperate with child support enforcement requirements by cutting their benefits at least 25%. States could penalize families by more, and even end assistance for failure to cooperate with child support enforcement requirements.

Families receiving TANF assistance must assign (i.e., legally turn over) any child support they receive from noncustodial parents to their state as a reimbursement for welfareassistance costs.⁴¹40 The federal government and the states split the receipts from assigned child support. A state has the option of passing through assigned child support to TANF families. The federal government shares in the cost of passing through child support paid to TANF families as long as the child support is also disregarded in determining TANF eligibility and benefit amounts.⁴²41 State expenditures from the pass- through of child support, if disregarded in determining a welfare family's ’s assistance benefit, are countable toward the TANF MOE.

MOE requirement. Special Provisions for Victims of Domestic Violence

Sexual Harassment and Domestic Violence Federal law requires states to certify that applicants and recipients of TANF assistance are notified of help available to victims of sexual harassment and survivors of domestic violence, sexual assault, and stalking. States must also certify that caseworkers and TANF administrators 38 Section 409(a)(9) of the Social Security Act. 39 Section 408(a)(2) of the Social Security Act. 40 Section 408(a)(3) of the Social Security Act. 41 The amount of the pass-through that the federal government will share the cost of is limited to $100 for families with one child and $200 for families with two or more children. Congressional Research Service 24 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements are trained in understanding the nature of sexual harassment, domestic violence, and sexual assault; state standards and procedures relating to the prevention of help for victims and survivors; and methods for ascertaining and keeping confidential personal information and documentation of those who have provided notice of their experiences with sexual harassment, domestic violence, sexual assault, and stalking. Federal law provides for an optional certification that a state has procedures in place to screen for and identify victims of domestic violence, refer such victims to supportive services, and waive certain program requirements.⁴³42 The program requirements that may be waived include work requirements, the time limit, and cooperation with child support enforcement rules.

Though thea state may waive certain program requirements for victims of domestic violence, federal law does not exclude them from the TANF work participation rate standard calculation or from the 20% limit on hardship cases that exceed the five-year time limit. However, HHS regulations allow a state to provide victims of domestic violence with a federally recognized good cause domestic violence waiver, and provide that a state would have "goodreasonable cause" for failing the requirements if that failure was due to providing such waivers.⁴⁴

43 A federally recognized domestic violence waiver must identify program requirements that are being waived;, be granted based on an individualized assessment;, and be accompanied by a services plan. These waivers must be reassessed at least every six months.

Restrictions on Cash Withdrawals at Certain Establishments

States generally pay assistance benefits by placing funds on Electronic BenefitBenefits Transaction (EBT) cards to be used by recipients making withdrawals from Automated Teller Machines (ATMs) or making purchases at point-of-sale terminals. Federal law requires states to maintain policies and practices to prevent TANF assistance funds from being used in an EBT transaction in liquor stores, casinos or gaming establishments, and strip clubs.⁴⁵44 States must prevent TANF cash withdrawals at ATMs in such establishments, and prevent purchases using TANF assistance on EBT cards at point-of-sale terminals in such establishments.

States had two years after the enactment of P.L. 112-96 (enacted February 22, 2012) to implement these policies. Additionally, TANF state plans are required to ensure that recipients (1) would have adequate access to their benefits; (2) would have access to their benefits at minimal fees or charges, including free access; and (3) are provided information on applicable fees and charges.

Rules When TANF or MOE Funds Are Used for Benefits and Services Other Than "Assistance"

State Accountability

TANF State Plans

Choice of Funding Stream and Rules for Assistance As discussed previously, a state may use federal TANF dollars or state MOE dollars in several ways. With respect to assistance, this report discusses an additional option: using state funds on TANF-related populations and not counting those funds toward the MOE requirement. These types of expenditures are classified as Solely State Funded (SSF) programs. Families assisted in SSFs are not subject to any of TANF’s requirements or prohibitions. The most common use of SSFs is to provide assistance to two-parent families, and hence avoid the higher two-parent work participation standard. Moreover, TANF funds can be used to indirectly finance SSFs. 42 Section 402(a)(7) of the Social Security Act. 43 See regulations at 45 C.F.R. §§260.50-260.59. 44 Section 408(a)(12) of the Social Security Act. Congressional Research Service 25 link to page 30 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements How TANF Funds Can Indirectly Finance Solely State-Funded Programs When a state decides to assist a family in an SSF—using only state dol ars—it nominally chooses to bear the cost of that assistance within the state budget. However, TANF dol ars can indirectly finance SSF programs. One way is that the state finds other expenditures in its budget that meet the broad definition of qualified expenditure (including certain expenditures above the FY1995 spending level) and use those dol ars to meet the MOE requirement, effectively replacing dol ars that otherwise would be counted by the SSF. Federal TANF dol ars can be used on a wide range of benefits and services related to children—including benefits and services that historically have been funded by states. While certain MOE dol ars are subject to a new spending test (spending above FY1995 levels), this is not the case for federal TANF funds. TANF does not include a requirement that federal funds cannot be used to finance existing state spending, so a state can legally use federal TANF dol ars to reduce state costs, as long as those state costs reflect an activity that states may use TANF grants to finance. That is, the cost of serving families in SSFs can be offset by having TANF funds pay for other benefits and services that the state historically paid for by itself. Hence, TANF is indirectly funding that SSF program. Table 4 summarizes the application of TANF requirements for assistance recipients based on whether a benefit was financed from federal funds, MOE funds, or SSFs. Table 4. Summary of TANF Requirements that Apply to Recipients of Assistance, by Funding Source of the Benefit State MOE Dollars State MOE Solely Funds Not State- State Comingled Funded Funds with Programs Comingled Federal Separate (SSFs) Federal with Dollars but State Not TANF Prohibition or TANF Federal Expended Programs Counted Requirement Funds Dollars In TANF (SSPs) as MOE Work participation standards Yes Yes Yes Yes No Time limit on assistance Yes Yes No No No Prohibition on providing assistance to Yes Yes No (children No (children No a family without a minor child (minor must live with must live child defined as under age 18 or age a custodial with a 18 and stil in school) parent or custodial other parent or caretaker but other no explicit caretaker but age limit) no explicit age limit) Requirement that families receiving Yes Yes Yes No No assistance assign their rights to child support to the state and requirements to penalize families that do not cooperate with child support requirements Prohibition on providing assistance to Yes Yes Yes No No unwed teen parents, unless living in in an adult-supervised setting Congressional Research Service 26 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements State MOE Dollars State MOE Solely Funds Not State- State Comingled Funded Funds with Programs Comingled Federal Separate (SSFs) Federal with Dollars but State Not TANF Prohibition or TANF Federal Expended Programs Counted Requirement Funds Dollars In TANF (SSPs) as MOE Prohibition on providing assistance to Yes Yes No No No teens (i.e., under age 20) who have not completed high school, unless they are making satisfactory progress toward achieving a high school or equivalent credential or in an alternative training program Prohibition on providing assistance to Yes Yes No No No fugitive felons and parole violators Source: Table prepared by the Congressional Research Service (CRS). Tribal TANF Federally recognized Indian tribes and certain Alaskan Native organizations have the option to operate their own TANF programs for needy families with children.45 Tribes are entitled to receive a grant equal to the amount of FY1994 federal expenditures in pre-TANF programs attributable to Indian families residing in the area to be served by the tribal program. This is financed by a reduction in the state’s block grant amount. States may, but are not required to, provide tribes with MOE funds. Tribes seeking to operate TANF programs must submit plans to the HHS Secretary for approval. The HHS Secretary, with the participation of the tribes, establishes work requirements and time limits for each tribe operating its own TANF program. Additionally, tribes that operated pre-TANF work and education programs are provided grants to operate tribal work programs that total $7.6 million per year. The amount of each grant equals what the tribe received in FY1994 under pre-TANF programs. TANF State Plans States are required to submit state plans every three years as a condition of receiving TANF block grant funds.⁴⁸46 The bulk of these plans is an "outline"outline of the program the state "intends"intends to operate. The Secretary of HHSHHS Secretary cannot disapprove a state plan based on its content. Rather, the role of the Secretary is to determine whether the state has included information on all required elements of the plan. State plans have no set format, and vary greatly in their content and detail.

States may submit their TANF state plan either separately or as part of a combined state plan under the Workforce Innovation and Opportunity Act (WIOA). WIOA is a federal grant program to state and localities for workforce services. The WIOA state plan is intended to outline a state’s 45 Section 412 of the Social Security Act. 46 Section 402 of the Social Security Act. Congressional Research Service 27 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements four-year strategy for workforce development. Submission of the TANF plan as part of the WIOA combined plan does not alter the statutory requirements for the TANF state plan, and HHS must still determine that the TANF portion of the plan is complete for the state to receive TANF grants. Data Reporting Data Reporting

TANF law and regulations require states to provide information on families receiving assistance.⁴⁹47 States must provide both caseload counts and family- and recipient-level information on families receiving assistance. FamilyThe family- and individual-level information that states must report includes basic demographic information, the work activities hours of adults, and the financial circumstances of families and individual recipients receiving assistance. Neither caseload counts nor characteristic information is required to be reported for families receiving TANF-funded benefits and services that are not considered assistance. P.L. 112-96 requires the Secretary of HHSHHS Secretary to issue a rule to create standards for data required to be reported under TANF to better facilitate its exchange with other data systems. As of March 2023, no such rule has been promulgated, but HHS does have an Interoperability Initiative.48 47 Section 411 of the Social Security Act. 48 For more information, see https://www.acf.hhs.gov/opre/project/acf-interoperability-initiative. Congressional Research Service 28 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Appendix A. The TANF Work Participation Standard This appendix describes the detailed rules of the TANF work participation standard. TANF Work Participation: Glossary of Terms The language of TANF work requirements and the work participation standard has its own nomenclature. The fol owing are some of the key terms used in discussions of TANF work participation.  Work-eligible individual: generally a parent (either a recipient or nonrecipient) of recipient children and nonparent caretakers of recipient children who themselves are recipients of TANF. Certain parents (discussed in detail below) are excluded from the definition of work-eligible individual. Nonrecipient, nonparent caretakers are not considered work-eligible individuals.  TANF work participation standard: the official assessment of state work programs under TANF. It comprises (1) a statutory target rate of work participation, (2) the caseload reduction credit that reduces the statutory target rate to an effective target rate, (3) a list of activities countable in the work participation rate, and (4) the average minimum number of hours per week of participation required in a month for counting activities toward the work participation rate.  Caseload reduction credit: a reduction in the target rate of work participation granted for reducing the cash assistance rol s since FY2005, not counting caseload reduction due to federal or state eligibility changes since that year. States can also count as caseload reduction families aided by state spending in excess of the MOE requirement.  Countable activities: a list of 12 activities (listed in law, defined in HHS regulations) that a work-eligible individual may engage in to have her or his participation counted toward the TANF work participation standard. Some activities are subject to certain limits in terms of how long and under what circumstances they may be counted.  Engaged in work: a family with work-eligible individuals participating in countable activities for at least the minimum number of hours.  Family included in the TANF work participation rate: a family with at least one work-eligible individual who is not disregarded from the participation rate. The statute provides that certain families with a work-eligible individual are or may be disregarded.  Work participation rate: a fraction (expressed as a percentage) derived by dividing the number of families considered engaged in work by the number of families included in the participation rate. It is the work participation rate that is compared to the target rate of work participation that determines whether a state has met the TANF work participation standard. The Numerical Participation Standard TANF sets a minimum work participation standard that a state must meet or risk being penalized through a reduction in its block grant. The standard includes performance measures that apply in the aggregate for each state. The TANF statute stipulates that 50% of all families and 90% of two-parent families included in the WPR calculation must be engaged in work to meet the standard. Included in the calculation are families with a work-eligible individual (in the case of a two-parent family, families with two work-eligible individuals) minus families disregarded from the calculation by statute (discussed later in this Appendix). The WPR itself is calculated as the percentage of such families engaged in work. This percentage is determined each month, and the WPR for a fiscal year is the simple average of the WPR in each month. However, few states have ever had to meet the full standard because the percentages are reduced for caseload reduction or state spending in excess of what is required under the TANF MOE. The caseload reduction credit lowers a state’s 50% and 90% standards based on caseload reduction Congressional Research Service 29 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements measured from FY2005, not counting caseload reduction due to federal or state eligibility changes since that year. Additionally, under HHS regulations promulgated in 1999, states may also receive credits for spending in excess of what they are required to spend under the MOE requirement.49 States may consider families assisted by spending in excess of MOE as caseload reduction, and hence receive extra caseload reduction credits for such families. Regulations promulgated in 2008 established a formula for determining this excess MOE portion of the caseload reduction credit; before those regulations, states had used different methods.50 The caseload reduction credit reduces a state’s work participation standards by one percentage point for each percentage point in the credit. For example, if a state has a caseload reduction credit (including the effect of caseload reduction from excess MOE) of 25%, the state’s work participation standard for the all-family standard is reduced by 25 percentage points—from 50% to 25%. If a state has a caseload reduction credit of 50%, its all-family standard is reduced by 50 percentage points—from 50% to 0%. A similar calculation applies for the two-parent standard. In determining the effective (after-credit) two-parent standard, the state has a choice of using the two-parent caseload reduction calculation or the calculation used for the all-family standard. Definition of Work-Eligible Individual51 A TANF work-eligible individual is a recipient of assistance who is an adult (age 18 or older) or a minor head of household. Some assistance recipients are excluded from that definition:  a minor parent (under age 18) who is not the head of a household;  at state option, and on a case-by-case basis, (1) a parent who is a recipient of Social Security Disability Insurance (SSDI) benefits; (2) a parent who is a recipient of Supplemental Security Income (SSI, public assistance for those who are age 65 or older, have a disability, or have blindness); or (3) a parent who became eligible for SSI during the year (excluded retroactively); and  a parent needed to care for a disabled family member, provided there is medical documentation to support that need. Household members living with assistance recipients who are not parents and not recipients themselves are not considered TANF work-eligible individuals. This generally includes nonrecipient, nonparent relatives caring for children; noncitizens who are ineligible for TANF assistance because of their immigration status, and SSI recipients (parents and other relatives). The definition of work-eligible individual includes some nonrecipient parents living with a child receiving assistance. For example, parents sanctioned off of benefits for failure to meet a program requirement or parents who (under state policy) ceased receiving benefits because of a time limit while benefits were continued for the children are considered work-eligible individuals. 49 These regulations are at 45 C.F.R. §261.43. 50 U.S. Department of Health and Human Services, Administration for Children and Families, “Reauthorization of the Temporary Assistance for Needy Families Program,” 73 Federal Register 6807-6808, February 5, 2008. Note that the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) effectively delayed the implementation of these rules until FY2012. 51 The definition of work-eligible individual is found in regulation at 45 C.F.R. §261.2(n). Congressional Research Service 30 link to page 35 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Families Included in the TANF Work Participation Rate Only families receiving assistance from federal TANF or state MOE funds that include a work-eligible individual are included in the participation rate calculation. However, some such families are or may be excluded by statute. Excluding these families means the state may exempt them from work requirements without creating the potential for their nonparticipation to result in a lower participation rate. The families excluded from the participation rate are those  (at state option) with a single parent caring for a child under the age of one—this exclusion is limited to a maximum of 12 months in a lifetime for the family;  (at state option) participating in a tribal TANF or tribal work program; or  subject to a sanction for refusal to comply with work requirements, for up to 3 months in a 12-month period.52 Engaged in Work Work-eligible individuals must participate in specific activities during a month to be considered engaged in work. Work-eligible individuals must also participate in activities for a minimum number of hours per week in a month to be considered engaged in work. Activities That Are Countable Federal law lists 12 categories of activities creditable toward meeting the TANF work participation standard. HHS regulations define what specific types of activities count under each of the 12 categories. Table A-1 lists the 12 creditable categories of activities and the HHS regulatory definition for each. As shown in the table, the specific activities included in the 12 categories are fairly comprehensive, and include education (including attendance at four-year colleges) and rehabilitative activities. However, as will be discussed below, the pre-employment activities of job search and readiness assistance and education activities are limited in terms of how long or under what circumstances they can be counted toward the official participation standard. Table A-1. TANF Work Activities and Their Definitions Activity Definition Unsubsidized employment Ful - or part-time employment in the public or private sector that is not subsidized by TANF or any other public program. Subsidized private sector Employment in the private sector for which the employer receives a subsidy employment from TANF or other public funds to offset some or all of the wages and costs of employing an individual. 52 Guidance from HHS notes that a family is not subject to a sanction until the sanction is actually imposed. The state may not disregard the family from the WPR during the period of time after which notice is given that the family is not in compliance or during a period of conciliation, but before the financial sanction is imposed. U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, Policy on “subject to a penalty” for refusing to participate in work activities, TANF-ACF-PI-2007-05, October 1, 2007, https://www.acf.hhs.gov/ofa/policy-guidance/tanf-acf-pi-2007-05-policy-subject-penalty-refusing-participate-work-activities. Congressional Research Service 31 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Activity Definition Subsidized public sector Employment in the public sector for which the employer receives a subsidy employment from TANF or other public funds to offset some or all of the wages and costs of employing an individual. Job search and readiness The act of seeking or obtaining employment, or preparation to seek or obtain assistance employment, including life-skil s training and substance abuse treatment, (participation in this activity mental health treatment, or rehabilitation activities. Such treatment or may be counted for six therapy must be determined to be necessary and documented by a qualified weeks, or 12 weeks in medical, substance abuse, or mental health professional. certain circumstances, in a 12-month period) Community service Structured programs and embedded activities in which TANF recipients perform work for the direct benefit of the community under the auspices of public or nonprofit organizations. Community service programs must be limited to projects that serve a useful community purpose in fields such as health, social service, environmental protection, education, urban and rural redevelopment, welfare, recreation, public facilities, public safety, and child care. A state agency shall take into account, to the extent possible, the prior training, experience, and skil s of an individual in making appropriate community service assignments. Work experience A work activity, performed in return for assistance that provides an individual with an opportunity to acquire the general skil s, knowledge, and work habits necessary to obtain employment. The purpose of work experience is to improve the employability of an individual who cannot find unsubsidized ful -time employment. On-the-job training Training in the public or private sector that is given to a paid employee while he or she is engaged in productive work, and that provides knowledge and skil s essential to the ful and adequate performance of the job. Vocational educational Organized educational programs that are directly related to the preparation training of individuals for employment in current or emerging occupations. (participation in this activity is limited to 12 months in a lifetime) Caring for a child of a Providing child care to enable another cash assistant recipient to participate in recipient in community a community services program. This is an unpaid activity and must be a service structured program to improve the employability of participating individuals. Job skil s training directly Training or education for job skil s required by an employer to provide an related to employment individual with the ability to obtain employment or to advance or adapt to the changing demands of the workplace. Education directly related to Education related to a specific occupation, job, or job offer. employment (for those without a high school or equivalent degree) Completion of a secondary In the case of a recipient who has not completed secondary school or school program (for those received such a certificate, this means regular attendance, in accordance with without a high school or the requirements of a secondary school or course of study, at a secondary equivalent degree) school or in a course of study leading to a certificate of general equivalence. Source: Table prepared by the Congressional Research Service (CRS) based on U.S. Department of Health and Human Services (HHS) regulations. See Federal Register, vol. 73, no. 24, February 5, 2008, pp. 6772-6828. Congressional Research Service 32 link to page 37 link to page 37 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Engaged in Work: Hours of Participation To be considered a participant and counted by a state toward meeting its work participation standard, a family member or members must be engaged in work activities for a minimum number of hours per week in a month. The required minimums vary by the family’s composition. Table A-2 outlines the TANF work participation hours standard. For meeting the all family standard, the hours requirement varies depending on family type and the age of the youngest child. The general hours requirement is an average of at least 30 hours per week during the month. However, for single parents caring for a child under the age of 6, an average of 20 hours per week during the month is needed in work activities for a state to deem them participants. More hours are required for two-parent families to meet the standard. For these families, the combined hours of both parents are considered in determining whether they can be considered participant families. Table A-2 shows that certain hours of participation must be in core activities, while remaining hours may be in supplemental activities. The core activities are (1) unsubsidized employment, (2) subsidized private sector employment, (3) subsidized public sector employment, (4) job search and readiness, (5) community service, (6) work experience, (7) on-the job-training, (8) vocational educational training, and (9) providing child care to a recipient in community service. The supplemental activities are (1) job skills training directly related to employment, (2) education directly related to employment, and (3) completion of a secondary school program. Note that the effect of these rules on single parents with a child under 6 effectively narrows the number of countable activities from the full 12 to the 9 core activities for the purposes of meeting the work standards. That is, to meet the 20-hour per week requirement, only core activities count for single parent families with a child under 6. Table A-2. TANF Hours Requirements for the All-Family Rate and the Two-Parent Family Rate, by Family Type (Excludes special rule for teen parents) Two-Parent Family Rate All-Family Rate (parents may combine hours) Two-Parent Two-Parent Single-Parent Families Families Not Families with a Receiving Receiving Child Under Other Federally Funded Federally Funded Age 6 Families Child Care Child Care Total hours An average of 20 An average of 30 An average of 55 An average of 35 requirement hours per week hours per week hours per week hours per week during the month during the month during the month during the month Required hours An average of 20 An average of 20 An average of 50 An average of 30 in core activities hours per week hours per week hours per week hours per week during the month during the month during the month during the month Allowable hours Not applicable An average of 10 An average of 5 An average of 5 in supplemental hours per week hours per week hours per week activities during the month during the month during the month Source: Table prepared by the Congressional Research Service (CRS). HHS regulations clarify that only actual hours of participation count toward meeting the work participation standard; however, there is an excused absence policy. For paid activities, states are credited for all hours for which an individual is paid, including any holidays or paid leave (e.g., Congressional Research Service 33 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements paid sick leave). For unpaid activities, the regulations allow for up to 10 holidays plus 80 hours of other excused absences over a year. The regulations require that hours in unpaid activities be supervised on a daily basis. The daily supervision requirement means that a responsible party has daily oversight of an individual’s participation, not necessarily daily in-person contact with the participant. Special Rules for Teen Parents Without a High School Diploma Teen parents who are included in the TANF work participation rate calculation have a special rule for determining whether they are engaged in work. A state may deem a teen parent who lacks a high school diploma as engaged in work if she or he is participating in education directly related to employment for an average of at least 20 hours per week during the month or is making satisfactory progress toward completion of a secondary school program, including a program leading to a General Educational Development diploma. However, such participation of a teen parent may not count toward the participation standard if a state exceeds a cap on participation in education. The education cap requires that no more than 30% of those considered engaged in work may be individuals in vocational educational training and teen parents deemed engaged in work through education. Verifying Work Participation53 States are required to have procedures to verify recipients’ work participation: identifying who is subject to or excluded from work standards, how a recipient’s activities represent countable TANF work activities, and how to count and verify reported hours of work. HHS regulations require that descriptions of these procedures be included in a state work verification plan. States that fail to comply with these work verification requirements are subject to a penalty of between 1% and 5% of the state’s block grant. 53 Section 407(i) of the Social Security Act. Congressional Research Service 34 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Appendix B. Detail on Penalties for Failure to Meet TANF Requirements Table B-1. TANF Penalties on States (Statutory references are to sections of the Social Security Act) Subject to Corrective Compliance and Reasonable Cause Penalized Action Description Penalty Exception? Misuse of TANF grant Based on an audit, the Equal to the amount of Yes (Section 409(a)(1)) state used a grant in TANF funds misused. If violation of TANF rules. the violation is found to be intentional, an additional penalty equal to 5% of the state’s adjusted SFAG is assessed (adjusted SFAG is the amount of the basic block grant allocated to the state minus payments to tribes minus transfers to the Child Care and Development Block Grant and the Social Services Block Grant). Failure to submit required The state failed to submit TANF SFAG block grant Yes. Additionally, the reports the quarterly report on is reduced by an amount penalty is rescinded if the (Section 409(a)(2)) families receiving equal to 4% of the state’s state files the report by assistance by the filing adjusted SFAG. the end of the fiscal deadline. quarter fol owing the fiscal quarter in which it was due. Congressional Research Service 35 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Subject to Corrective Compliance and Reasonable Cause Penalized Action Description Penalty Exception? Failure to satisfy minimum The state has not For the first year of falling Yes work participation rates achieved minimum work short on participation (Section 409(a)(3)) participation rates for standards, a state’s families receiving adjusted SFAG is reduced assistance. by a maximum of 5%. For each subsequent year of falling short of the standard, the penalty is increased by 2 percentage points. The penalty is based on the degree of noncompliance. For example, if a state fails to meet the two-parent standard only, the maximum penalty is pro-rated based on the percentage of two-parent cases receiving assistance as a share of the total caseload (42 C.F.R. §261.5). Maximum penalty is 21% of the state’s adjusted SFAG. Failure to participate in The state failed to The state’s SFAG is Yes the Income Eligibility participate in IEVS. IEVS reduced by a maximum of Verification System (IEVS) requires states to operate 2% of its adjusted SFAG. (Section 409(a)(4)) a computer matching system to verify income eligibility for selected federal and state programs. Failure to comply with The state did not comply The state’s SFAG is Yes paternity establishment with child support reduced by a maximum of and child support requirements. States must 5% of its adjusted SFAG. enforcement require that families requirements receiving assistance (Section 409(a)(5)) cooperate with establishing the paternity of dependent children. They also must enforce penalties on TANF assistance recipients who do not cooperate. Congressional Research Service 36 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Subject to Corrective Compliance and Reasonable Cause Penalized Action Description Penalty Exception? Failure to repay in a The state did not repay The state’s SFAG is No timely way a loan loans from the TANF loan reduced by the amount of (Section 409(a)(6)) fund based on the terms the outstanding loan plus of its loan. TANF allows interest. states to take out loans to help finance unanticipated costs. These loans must be repaid with interest, within a maximum of three years. Failure to meet the TANF The state failed to meet The state’s SFAG is No maintenance of effort the requirement that reduced dol ar-for-dol ar (MOE) requirement nonfederal spending in the by the amount of the (Section 409(a)(7)) state on TANF-eligible shortfall between families be a specified required spending and percentage of historical actual nonfederal (FY1994) spending. spending. Failure to achieve certain The CSE program For the first year of Yes performance levels and establishes certain noncompliance, the other requirements in the performance measures in state’s SFAG is reduced Child Support terms of paternity by not less than 1% and Enforcement (CSE) establishment, and has not more than 2% of the program, Title IV-D of the other requirements. state’s adjusted SFAG. Social Security Act Failure to meet the This penalty is increased (Section 409(a)(8)) performance measures, to not less than 2% nor submitting unreliable data more than 3% for the to evaluate performance, second consecutive year or not complying with of noncompliance, and to other CSE requirements not less than 3% nor is enforced through a more than 5% for the penalty in TANF. third or subsequent years of noncompliance. Failure to comply with the The number of families The state’s SFAG is Yes five-year time limit that include the head of reduced by 5% of the (Section 409(a)(9)) household receiving state’s adjusted SFAG. assistance in the state beyond 60 months exceeds 20% of the total number of families receiving assistance. Failure to meet the 100% The state received TANF The state is required to No of historical state contingency funds but return all TANF spending requirement for nonfederal funds spent on contingency funds it has TANF contingency funds eligible families in the received. (Section 409(a)(10)) state (on activities other than child care) were less than 100% of historical state spending (on activities other than child care). Congressional Research Service 37 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Subject to Corrective Compliance and Reasonable Cause Penalized Action Description Penalty Exception? Failure to maintain The state is prohibited The state’s SFAG is Yes assistance for a family from sanctioning a single reduced by a maximum of with a single parent and parent family with a 5% of the state’s adjusted child under age 6 who preschool (under age 6) SFAG. cannot obtain affordable child who receives child care assistance for not (Section 409(a)(11)) complying with work requirements if the family cannot obtain affordable child care. Failure to replace States are required to The state’s SFAG is No penalized funds replace penalties levied on reduced by the amount (Section 409(a)(12)) federal funds with state the state was required to funds. A state that does replace plus a maximum not do this is subject to of 2% of the state’s an additional penalty. adjusted SFAG. Failure to sanction States are required to The state’s SFAG is Yes families for recipients who sanction families receiving reduced by not less than refuse without good assistance if a member 1% but not more than 5% cause to work refuses without good of its adjusted SFAG. (Section 409(a)(14)) cause to work or engage in job preparation activities. States that are found in violation of this requirement are penalized. Failure to establish or The state has not The state’s SFAG is Yes comply with work submitted a plan, or is not reduced by not less than verification procedures complying with the 1% but not more than 5% (Section 409(a)(15)) requirement that it of its adjusted SFAG. submit a plan, to verify work participation of assistance recipients. Failure to enforce States must maintain The state’s SFAG is Yes prohibition on policies and practices to reduced by a maximum of withdrawals of TANF prevent TANF cash 5% of its adjusted SFAG. cash assistance in certain assistance funds from establishments being used in an EBT (Section 409(a)(16)) transaction in liquor stores, casinos or gaming establishments, and strip clubs. Source: Congressional Research Service (CRS), based on Section 409 of the Social Security Act and applicable regulations. Note: Penalties expressed as “a maximum of” indicate a penalty that may be reduced by the severity of the violation. Congressional Research Service 38 The TANF Block Grant: A Primer on TANF Financing and Federal Requirements Author Information Gene Falk Specialist in Social Policy Disclaimer This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material. Congressional Research Service RL32748 · VERSION 38 · UPDATED 39 reported under TANF to better facilitate its exchange with other data systems.

Other TANF Provisions

Healthy Marriage and Responsible Fatherhood

Healthy Marriage Promotion Initiatives

Responsible Fatherhood Initiatives

Tribal TANF