TANF Cash Benefits as of January 1, 2004

Order Code RL32598
CRS Report for Congress
Received through the CRS Web
TANF Cash Benefits as of January 1, 2004
Updated September 12, 2005
Meridith Walters, Gene Falk, and Vee Burke
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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TANF Cash Benefits as of January 1, 2004
Summary
The Temporary Assistance for Needy Families (TANF) block grant is a major
source of cash assistance — commonly referred to as “welfare” — for low income
families with children. TANF also provides funds to states for a wide range of
benefits and services for both families receiving cash assistance and other families.
Though the federal government provides TANF funds to states, the states themselves
determine cash benefit amounts. As of January 1, 2004, maximum benefit amounts
vary greatly by state: for a family of three, benefits vary from $923 per month in
Alaska to $170 per month in Mississippi.
TANF was created by the 1996 welfare reform law, which ended the Aid to
Families with Dependent Children (AFDC) program. States also determined AFDC
benefit amounts, and most have retained their pre-1996 benefit structure under
TANF. During the debate on welfare reform in the mid-1990s, some feared that
fixed funding would lead states to cut benefits in a “race-to-the-bottom.” The race
to the bottom did not happen. In 24 jurisdictions, there was no change in maximum
benefits from July 1996 to January 2004. Twenty-one jurisdictions increased their
benefits; eight of these had benefit increases sufficient to offset inflation over the
period. Six jurisdictions cut benefits.
Maximum benefits are generally paid to families without a wage earner.
However, almost all jurisdictions have increased rewards for recipients who work,
effectively raising the amount of earnings a recipient may keep before she becomes
ineligible for cash assistance. The percent of adult recipients reported as “employed”
climbed from 11% in FY1996 to 26% in FY2002. State TANF programs generally
disregard a sizable share of earnings for at least a period of time (some disregard
100% of earnings for the first few months on a job).
The rules for treating families with earnings vary greatly from state to state, and
thus the level of earnings at which a family becomes ineligible for TANF varies
greatly by state. A recipient in a family of three (single mother, two children) who
obtains a job and works 20 hours a week at a minimum wage job remains eligible for
TANF in most states, though in some she becomes ineligible for assistance in a few
months. However, in most states her earnings plus the Earned Income Tax Credit
(EITC) and food stamps would be insufficient to raise her total income above the
poverty line. A recipient in a family of three who obtains a job and works 40 hours
per week at the minimum wage remains eligible for TANF in the first month on the
job in 29 states. However, after a year on the job, she would be eligible for TANF
cash in only 17 states. In all cases, with or without TANF, the family with year-
round, 40 hour per week, minimum wage earnings would have total income
(counting federally determined food stamps and EITC) slightly about the poverty
threshold.
This report will be updated when information about January 2005 benefit levels
becomes available.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Maximum Benefit Amounts under TANF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Maximum Benefits by Family Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Maximum Combined TANF and Food Stamps . . . . . . . . . . . . . . . . . . . . . . . 5
Changes in Maximum Benefits from 1996 to 2004 . . . . . . . . . . . . . . . . . . . . 7
From Welfare to Work: Eligibility and Benefit Amounts . . . . . . . . . . . . . . . . . . . 9
Income Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Countable Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Earnings Disregards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Gross Income Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Maximum Earnings Eligibility Thresholds . . . . . . . . . . . . . . . . . . . . . 10
Maximum Hours a Minimum Wage Earner Can Work
and Retain Eligibility for TANF . . . . . . . . . . . . . . . . . . . . . . . . . 16
Family Income by Hours per Week of Work . . . . . . . . . . . . . . . . . . . . . . . . 18
Earnings Disregards and TANF Work Participation Standards . . . . . . . . . . 25
Appendix A. Resource Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appendix B. TANF Exit Points, Monthly Earnings That End Eligibility,
Family of Three, January 1, 2004 ($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix C. State Benefit Computation Methods . . . . . . . . . . . . . . . . . . . . . . . 32
List of Tables
Table 1. Maximum Monthly TANF Benefit for Single Parent Families
of One to Six Persons on January 1, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Maximum Combined TANF and Food Stamps Benefit
for Single Parent Families of One to Six Persons on January 1, 2004 . . . . . 5
Table 3. TANF Maximum Monthly Benefits for a Family
of Three (Single Parent Families): 1996-2004 . . . . . . . . . . . . . . . . . . . . . . . 7
Table 4. TANF Maximum Monthly Benefits, Earnings Disregards, and Exit
Points for a Family of Three (Single Parent Families), January 1, 2004 . . . 11
Table 5. Maximum Hours per Week That a Minimum Wage Earner Can Work and
Retain Eligibility for TANF Cash Assistance (Based on January 2004 Benefit
Levels and Minimum Wages) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 6. Annualized Earnings and Income from Selected Benefit Programs
for a Single Parent with Two Children, Working 20 Hours per
Week at Minimum Wage, in the 13th Month of Work, January 1, 2004 . . . 19
Table 7. Annualized Earnings and Income from Selected Benefit Programs for a
Single Parent with Two Children, Working 40 Hours per Week at Minimum
Wage, in the 13th Month of Work, January 1, 2004 . . . . . . . . . . . . . . . . . . . 22
Table A1. TANF Resource Limits and Vehicle Disregards, January 2004 . . . . 26
Table C1. Benefit Computation Methods Used by States
for TANF Cash Assistance, January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 33

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TANF Cash Benefits as of January 1, 2004
Introduction
The Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA. P.L. 104-193), also known as the 1996 welfare reform law, ended the
entitlement program of Aid to Families with Dependent Children (AFDC) and
replaced it with the state block grant program of Temporary Assistance to Needy
Families (TANF). TANF gives states broad flexibility in the design of their
programs. States have adopted a wide range of financial eligibility and benefit rules
in their cash assistance programs to further the policy objectives of moving families
from welfare to work, supporting work, and moving families off the cash benefit
rolls.
TANF is a major source of cash assistance for low-income families with
children. However, ongoing cash assistance is only one use of TANF funds. States
may use TANF funds on other types of benefits and services, such as child care,
short-term emergency benefits, work programs, or education programs. Following
the state and federal welfare reforms of the mid-1990s, the cash assistance caseload
declined markedly, from a historical high of 5.1 million families in March 1994 to
2.2 million families in September 2003. The shrinkage in the cash assistance
caseload has resulted in a decline in the share of TANF funds devoted to ongoing
cash assistance and an increase in the share of funds spent on other TANF benefits
and services.
This report describes cash assistance benefits paid to families by state TANF
programs on January 1, 2004, with historical data to portray changes in benefit
payments over time. It discusses the rules for determining eligibility and benefit
amounts for a recipient who gets a job, showing the maximum amount of earnings
a family may have and remain eligible for cash welfare. Finally, this report examines
the interaction of TANF with two other federal benefit programs, food stamps and
the earned income tax credit. The report shows total income available from these
sources plus wages at various hours of weekly work, state by state. This report does
not discuss nonfinancial eligibility rules in state TANF cash assistance programs nor
does it cover eligibility rules for the wider range of TANF benefits and services
provided to families.
The information in this report is based on responses to a Congressional Research
Service (CRS) survey of state cash benefit programs. It is possible that in some cases
CRS may have misinterpreted the information provided by the states or failed to ask
the correct questions to elicit the appropriate response.

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CRS-2
Maximum Benefit Amounts under TANF
The pre-1996 program of AFDC entitled families with children who met a
state-determined test of need to cash assistance. Federal funding was unlimited.
States determined the amount of cash paid to needy families, subject to minimal
federal guidelines. The block grant of Temporary Assistance for Needy Families
(TANF) established in the 1996 law (P.L. 104-193) eliminated the entitlement to cash
welfare for needy families as well as those federal guidelines. States are not required
to use the TANF block grant to pay cash welfare — it may be used for other benefits
and services to achieve TANF goals — although all states have continued a cash
assistance program.
Under AFDC, states based benefits on financial “need,” which varied by family
size. Financial need was greater the larger the family. The degree of a family’s need
also depended on its nonwelfare income, so maximum AFDC benefits generally were
paid to those with no income other than the welfare benefit.
Most states continue to pay greater maximum benefits for larger families, but
there are some exceptions. Wisconsin pays benefits based on the work activity of the
adult in the family, and its benefit amount is based on the type and hours of work
performed by the adult, not the size of the family. Idaho has the same maximum
benefit ($309) for families of all sizes. Additionally, a number of states have adopted
“family cap” policies that pay a reduced or zero benefit for a new baby born to a
welfare family. A few states have also restructured their benefits to pay lower
maximum benefits for those families with adults who are expected to work.
Under TANF, the maximum benefit still is paid to a family with no income
other than welfare. However, in order to receive the maximum TANF benefit,
families must also be in compliance with work rules and cooperate in establishing
child support orders, because federal TANF law requires states to penalize families
that fail to do so.
AFDC benefits varied greatly among the states. Large variations in benefits
among the states have continued under TANF. In January 2004, maximum benefits
for a family of three ranged from a low of $170 a month in Mississippi to $923 in
Alaska.
Maximum Benefits by Family Size
Table 1 shows maximum monthly benefits by family size for January 2004.
Maximum benefits are generally paid to a family with no income other than the
welfare benefit. The table shows benefits for a family with a single adult. Some
states pay different benefits to families without adult recipients (the “child-only”
cases) or to two-parent families. Some states vary benefit payments by geographic
locations, usually for differences in housing costs. The table generally shows the
highest benefit paid in the state for recipients expected to work, though benefit
amounts are shown for New York City and Wayne County (Detroit) in Michigan

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CRS-3
because of the size of the caseload in these localities.1 Also shown is whether the
state has implemented a “family cap.”
Table 1. Maximum Monthly TANF Benefit for Single Parent
Families of One to Six Persons on January 1, 2004
Family size
State
Onea
Two
Three
Four
Five
Six
Family cap
Alabama
$165
$190
$215
$245
$275
$305 No
Alaska
514
821
923
1,025
1,127
1,229 No
Arizona
204
275
347
418
489
561 Yes
Arkansas
81
162
204
247
286
331 Yes
California
349
568
704
839
954
1,072 Yes
Colorado
214
280
356
432
512
590 No
Connecticut
402
513
636
741
835
935 Yes. Partial
increase for
additional child
Delaware
201
270
338
407
475
544 Yes
D.C.
239
298
379
463
533
627 No
Florida
180
241
303
364
426
487 Yes. Partial
increase for
first additional
child.
Georgia
155
235
280
330
378
410 Yes
Hawaii 335
452
570
687
805
922 No
Idaho
309
309
309
309
309
309 n/a
Illinois
223
292
396
435
509
572 No
Indiana
139
229
288
346
405
463 Yes
Iowa
183
361
426
495
548
610 No
Kansas
267
352
429
497
558
619 No
Kentucky
220
253
289
325
361
398 No
Louisiana
122
188
240
284
327
366 No
Maine
230
363
485
611
733
856 No
Maryland
213
376
477
577
668
735 No
Massachusetts
418
518
618
713
812
912 Yes
Michigan
276
371
459
563
659
792 No
Minnesota
250
437
532
621
697
773 Yes. (New
policy, first
capped child
would be born
in May 2004)
1 The highest maximum benefits paid in Michigan in Jan. 2004 were in Washtenaw County
($489 per month for a family of three). The highest maximum benefits paid in New York
state in Jan. 2004 were in Suffolk County ($738 per month for a family of three).

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CRS-4
Family size
State
Onea
Two
Three
Four
Five
Six
Family cap
Mississippi
110
146
170
194
218
242 Yes
Missouri
136
234
292
342
388
431 No
Montana
221
298
375
452
530
607 No
Nebraska
222
293
364
435
506
577 Yes
Nevada
230
289
348
407
466
525 No
New Hampshire
489
556
625
688
748
829 No
New Jersey
162
322
424
488
552
616 Yes
New Mexico
231
310
389
469
548
627 No
New York
414
501
691
825
964
1,059 No
North Carolina
181
236
272
297
324
349 Yes
North Dakota
282
378
477
573
670
767 Yes
Ohio
223
305
373
461
539
600 No
Oklahoma
180
225
292
361
422
483 Yes. Increase
paid as a non-
cash voucher.
Oregon
310
395
460
565
660
755 No
Pennsylvania
215
330
421
514
607
687 No
Rhode Island
327
449
554
634
714
794 No
South Carolina
121
163
205
248
290
333 Yes
South Dakota
360
441
493
544
596
649 No
Tennessee
95
142
185
226
264
305 Yes
Texas
90
188
217
261
290
333 No
Utah
274
380
474
555
632
696 No
Vermont
503
604
709
795
885
946 No
Virginia
242
323
389
451
537
587 Yes
Washington
349
440
546
642
740
841 No
West Virginia
349
401
453
512
560
613 No
Wisconsinb 0
673
673
673
673
673 n/a
Wyoming
195
320
340
340
360
360 Yes
Source: Table prepared by the Congressional Research Service (CRS) based on a survey of state
TANF cash assistance programs.
a. A family size of one is a pregnant woman. Two states, Colorado and Texas have separate payment
schedules for cases that consist of a pregnant woman.
b. Wisconsin does not pay a benefit under its regular W-2 (TANF) program for a pregnant woman
with no other eligible dependent children.

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CRS-5
Maximum Combined TANF and Food Stamps
Most households composed entirely of TANF recipients are automatically
eligible for food stamps without regard to food stamp tests of need. The combined
cash welfare benefit plus the food stamp benefit used to be referred to as the
“guarantee” level of income that a family eligible for welfare would receive without
work. In the post-welfare reform era of benefits conditioned upon work, the
combined cash and food stamp benefit refers to the amount of income a family would
receive if it had no other countable income and complied with all program
requirements (including work requirements).
Table 2 shows the maximum monthly combined benefit from TANF and food
stamps in each state on January 1, 2004. The food stamp program treats TANF
benefits as income and reduces food stamp benefits accordingly. The calculations
in the table assume no earned income and no food stamp excess-shelter deduction.2
Hawaii and Alaska have higher food stamp benefit amounts than other jurisdictions.
Table 2. Maximum Combined TANF and Food Stamps Benefit
for Single Parent Families of One to Six Persons
on January 1, 2004
Family size
State
1
2
3
4
5
6
Alabama
$296
$432
$561
$682
$797
$936
Alaska
595
950
1,153
1,344
1,520
1,724
Arizona
324
491
654
803
947
1,116
Arkansas
222
412
554
684
804
955
California
425
696
904
1,098
1,272
1,473
Colorado
331
495
660
813
963
1,136
Connecticut
462
658
856
1,029
1,189
1,377
Delaware
321
488
647
796
937
1,104
D.C
348
507
676
835
977
1,162
Florida
307
467
623
766
902
1,064
Georgia
289
463
607
742
869
1,010
Hawaii
501
759
1,008
1,239
1,454
1,705
Idaho
397
515
627
727
821
939
Illinois
337
503
688
815
961
1,123
Indiana
278
459
612
753
888
1,047
Iowa
309
551
709
857
988
1,150
Kansas
368
545
711
859
995
1,156
2 The excess shelter deduction is for excessively high, but not all, shelter costs. Generally,
these are costs above about one-third of a household’s total cash income.

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CRS-6
Family size
State
1
2
3
4
5
6
Kentucky
335
476
613
738
857
1,001
Louisiana
263
430
579
710
833
979
Maine
342
553
750
938
1,117
1,322
Maryland
330
562
745
915
1,072
1,237
Massachusetts
473
661
843
1,010
1,173
1,361
Michigan
374
558
732
905
1,066
1,277
Minnesota
356
605
783
945
1,092
1,264
Mississippi
251
401
530
647
757
892
Missouri
276
463
615
750
876
1,025
Montana
335
507
673
827
975
1,148
Nebraska
336
504
666
815
958
1,127
Nevada
342
501
654
796
930
1,090
New Hampshire
523
688
848
992
1,128
1,303
New Jersey
294
524
708
852
991
1,154
New Mexico
342
516
683
839
988
1,162
New York
471
649
894
1,088
1,279
1,464
North Carolina
307
464
601
719
831
967
North Dakota
378
563
745
912
1,073
1,260
Ohio
337
512
672
833
982
1,143
Oklahoma
307
456
615
763
900
1,061
Oregon
398
575
733
906
1,066
1,251
Pennsylvania
331
530
705
871
1,029
1,204
Rhode Island
410
613
799
955
1,104
1,279
South Carolina
262
413
554
684
807
956
South Dakota
433
607
756
892
1,021
1,177
Tennessee
236
398
540
669
789
936
Texas
231
430
563
693
807
956
Utah
373
565
743
899
1,047
1,210
Vermont
533
722
907
1,067
1,224
1,385
Virginia
350
525
683
826
980
1,134
Washington
425
607
793
960
1,122
1,312
West Virginia
425
579
728
869
996
1,152
Wisconsina
141
770
882
982
1,075
1,194
Wyoming
317
523
649
749
856
975
Source: Table prepared by the Congressional Research Service (CRS) based on a survey of state
TANF cash assistance programs.

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CRS-7
Note: Food stamp calculations assume that the family does not receive an excess shelter cost
deduction. In very low TANF benefit states, combined benefits shown reflect the maximum food
stamp allotment for the family size, but in some states the excess shelter deduction would
increase benefits by up to $83 monthly — more in Alaska and Hawaii.
a. Wisconsin has no one-person families in its TANF program. Pregnant women without children are
ineligible.
Changes in Maximum Benefits from 1996 to 2004
During discussions of welfare reform in the mid-1990s, it was feared by some
that states facing limited federal funding would engage in a “race-to-the bottom” by
cutting benefit amounts. Some thought that a state that had higher benefit levels than
its neighbors would attract welfare families from other states. These factors would
set in motion a competitive downward spiral, the “race-to-the bottom,” of benefit
levels among the states.
This “race-to-the-bottom” did not happen. Twenty-four states paid the same
maximum monthly benefits in January 2004 as they did in 1996; however, a few
states did reduce benefits. Hawaii reduced maximum benefits for families with an
adult expected to work. Benefits were also cut in the District of Columbia, Idaho,
Montana, Oklahoma, and Wyoming.
Table 3 shows maximum benefits for a family of three (headed by a single
adult) by state for July 1996 to January 2004. Under TANF, benefits generally have
fallen in real value. Twenty-one states have increased benefit levels during the July
1996 to January 2004 period. In eight of these (Alabama, California, Louisiana,
Maryland, Mississippi, New York, West Virginia, and Wisconsin) benefits increased
by more than the increases in prices between July 1996 and January 2004.
Table 3. TANF Maximum Monthly Benefits for a Family of Three
(Single Parent Families): 1996-2004
% Real change
from July 96 to
State
July 96
July 98
Jan. 00
Jan. 02
Jan. 04
Jan. 2004
Alabama
164
164
164
164
215
11.14%
Alaska
923
923
923
923
923
-15.23%
Arizona
347
347
347
347
347
-15.23%
Arkansas
204
204
204
204
204
-15.23%
California
596
565
626
679
704
0.14%
Colorado
356
356
356
356
356
-15.23%
Connecticut
636
636
636
636
636
-15.23%
Delaware
338
338
338
338
338
-15.23%
District of
Columbia
415
379
379
379
379
-22.58%
Florida
303
303
303
303
303
-15.23%
Georgia
280
280
280
280
280
-15.23%

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CRS-8
% Real change
from July 96 to
State
July 96
July 98
Jan. 00
Jan. 02
Jan. 04
Jan. 2004
Hawaii 712
570
570
570
570
-32.13%
Idaho
317
276
293
293
309
-17.36%
Illinois
377
377
377
377
396
-10.95%
Indiana
288
288
288
288
288
-15.23%
Iowa
426
426
426
426
426
-15.23%
Kansas
429
429
429
429
429
-15.23%
Kentucky
262
262
262
262
289
-6.49%
Louisiana
190
190
190
240
240
7.08%
Maine
418
439
461
485
485
-1.64%
Maryland 373
388
417
472
477
8.41%
Massachusetts
565
565
565
618
618
-7.27%
Michigan
459
459
459
459
459
-15.23%
Minnesota
532
532
532
532
532
-15.23%
Mississippi
120
120
170
170
170
20.10%
Missouri
292
292
292
292
292
-15.23%
Montana
438
461
469
494
375
-27.42%
Nebraska
364
364
364
364
364
-15.23%
Nevada
348
348
348
348
348
-15.23%
New Hampshire
550
550
575
600
625
-3.67%
New Jersey
424
424
424
424
424
-15.23%
New Mexico
389
439
439
389
389
-15.23%
New York
577
577
577
577
691
1.52%
North Carolina
272
272
272
272
272
-15.23%
North Dakota
431
440
457
477
477
-6.18%
Ohio
341
362
373
373
373
-7.27%
Oklahoma
307
292
292
292
292
-19.37%
Oregon
460
460
460
460
460
-15.23%
Pennsylvania
421
421
421
421
421
-15.23%
Rhode Island
554
554
554
554
554
-15.23%
South Carolina
200
201
204
205
205
-13.11%
South Dakota
430
430
430
469
493
-2.81%
Tennessee
185
185
185
185
185
-15.23%
Texas
188
188
201
201
217
-2.15%
Utah
416
451
451
474
474
-3.41%
Vermont
633
656
708
709
709
-5.05%
Virginia
354
354
354
389
389
-6.84%

---

CRS-9
% Real change
from July 96 to
State
July 96
July 98
Jan. 00
Jan. 02
Jan. 04
Jan. 2004
Washington
546
546
546
546
546
-15.23%
West Virginia
253
253
328
453
453
51.79%
Wisconsin
517
673
673
673
673
10.35%
Wyoming
360
340
340
340
340
-19.94%
Source: Table prepared by the Congressional Research Service (CRS) based on a survey of the state
TANF cash assistance programs.
Note: The inflation factor used to convert July 1996 dollars to Jan. 2004 dollars was 1.1796
(representing the change in the Consumer Price Index for all Urban Consumers from July 1996 to Jan.
2004).
From Welfare to Work: Eligibility and Benefit
Amounts
The preceding section described cash assistance benefits for families with no
income other than welfare. However, under TANF, more families are combining
cash assistance with work. This section describes the maximum level of earnings a
family may have and retain eligibility for TANF cash aid and shows how the TANF
benefit contributes to total family income as a recipient increases her work effort.
Income Eligibility
Federal law requires that TANF cash be paid to needy families with children,
and all states require that a family have income below specified income eligibility
thresholds to receive cash aid. All states except Ohio and Virginia also require that
a family have assets valued below a certain threshold; see Appendix A for a
discussion of TANF resource limits.
Determining if a family is financially eligible for TANF is often a complicated
process with considerable variation among the states. The majority of states (33)
have different income eligibility rules for initial eligibility (new applicants) and for
continued eligibility for families already enrolled. Most of the differences concern
the treatment of earnings. This report will focus on the rules for families already on
the rolls.
As was generally the case under AFDC, states may determine the eligibility
threshold for cash aid. Further, TANF does not specify federal rules for what types
of income — and how much of each type of income — must be counted in
determining eligibility for cash aid. In particular, states have developed a diverse set
of rules for the treatment of earnings.
Countable Income. Whether a family with a working member remains
eligible for cash assistance often depends on its circumstances: what type of income
it has, what types of expenses (for example, child care) it incurs, and how long

---

CRS-10
working recipients have been on the job. Most states base eligibility, at least in part,
on a family’s countable income. Countable income is the family’s income minus
deductions specified in a state’s program rules for working expenses and a portion
of earnings disregarded as an incentive to work.
Earnings Disregards. In most states, the maximum level of earnings a
family may have and retain eligibility for cash assistance depends on its benefit
amount and “earnings disregards.” Most states reduce benefits for families with
earnings, though the size of the benefit reduction varies by state. States generally do
not count some earnings when determining benefits, sometimes to compensate for
work expenses and sometimes as an incentive for recipients to get a job.
Under AFDC, federal law specified that earnings disregards were provided for
only a short period of time, so that soon after a family member went to work most
families became ineligible for cash assistance.3 Under TANF, states are free to set
their own earnings disregards and, today, almost all jurisdictions have increased
rewards for recipients who work. State TANF programs generally disregard a sizable
share of earnings for at least a year, and some disregard 100% of earnings for new job
holders for the first few months. Higher earnings disregards increase the “exit point”
from TANF, the amount of income recipients can earn before cash benefits are
terminated. (Also, they raise the income eligibility entry point in the18 jurisdictions
that do not have different rules for treating the earnings of applicants.)
Gross Income Test. Some states have adopted a second income test to
determine whether a family with a working member remains eligible for benefits
based on gross income. These “gross income tests” cut off eligibility to a family at
a certain income level, generally without regard to its individual circumstances. That
is, a family is made ineligible at a certain level of income without regard to earnings
disregards that otherwise apply and any deductions allowed for expenses. Federal
AFDC law required states to impose a gross income test. TANF does not require
states to adopt a gross income test, but 26 have retained such tests in their programs.
Maximum Earnings Eligibility Thresholds. Table 4 provides TANF
benefit levels at zero income, earnings disregard rules, and the TANF “exit point” by
state for a family of three as of January 2004. It shows that 33 states now disregard
from 20% to 75% of all earnings in all months, and two states — Connecticut and
Virginia — disregard all earnings until total income reaches the poverty level. Five
states disregard 100% of earnings from one to three months. However, eight states
(three in all months, five after four-six months of work) use flat dollar disregards,
under which extra earnings reduce benefits.
Table 4 shows that in 10 states TANF benefits for a three-person family would
not end until gross earnings exceeded or came very close to the 2004 poverty
guideline of $1,272 monthly for a family of three: Alaska ($1,931 in the first 12
3 Under AFDC, earnings disregards were taken in the following order: both applicants and
recipients received a $90 work expense earnings disregard, then recipients received an
additional $30 earnings disregard for the first 12 months of employment. In the first four
months of employment, recipients also received an additional 33.33% earnings disregard.

---

CRS-11
months of work): California ($1,613); Colorado ($1,227 in the first 12 months of
work); Connecticut ($1,272); District of Columbia ($1,267); Hawaii, ($1,343); New
Hampshire ($1230); New York ($1,272 in New York City); Rhode Island, ($1,258);
and Virginia ($1,262). Higher or equal exit points exist in some other states, for
three to six months (see Delaware, Louisiana, North Dakota, and Texas).
At the other extreme are these low TANF-exit points: Alabama, $256 (after
three months); Mississippi, $441; and Georgia, $534 (after four months); and
Wyoming, $530.
The complexity and variation in policy can be illustrated by considering
hypothetical single-parent families with two children in five states: California,
Connecticut, Louisiana, and New York (New York City), and Virginia. Assume that
each has gross monthly earnings of $1,000. So long as the adult had not reached the
state’s time limit on benefits, the family in Connecticut would receive a full TANF
benefit of $636 monthly; in New York City, a reduced benefit of $245; in California,
a reduced benefit of $316. In Louisiana, the family would receive a full benefit of
$240 for six months in a lifetime, but would be ineligible for TANF after this period.
In Virginia, the family would receive a full benefit of $389 for the first four months
of work, a reduced benefit of $372 for the next eight months and thereafter a reduced
benefit of $342.
Table 4. TANF Maximum Monthly Benefits, Earnings
Disregards, and Exit Points for a Family of Three
(Single Parent Families), January 1, 2004
Benefit
Earnings disregarded
TANF exit point
at zero
and when
(gross earnings)b
State
incomea
Alabama
$215 100%, months 1-3;
No limit, months 1-3
20% after 3 months
$256 after 3 months
Alaska
$923 $150 + 33% of the rest,
$1,961 year 1, dropping
year 1
to $1,363 by year 5
$150 + declining %,
years 2-5.
Arizona
$347 $90 + 30% of the rest
$571
all months
Arkansas
$204 20% + 60% of the rest
$696
all months
California
$704 $225 + 50% of the
$1,613
rest all months
Colorado
$356 66.67% (up to 12
$1,227 (for 12
cumulative months);
cumulative months)
then use old AFDC
dropping to $499 after 2
rules. See Delaware.
years.

---

CRS-12
Benefit
Earnings disregarded
TANF exit point
at zero
and when
(gross earnings)b
State
incomea
Connecticut
$636 100% (up to poverty
$1,272 gross earnings
guideline of $1,272)
limit, all months
all months
Delaware
$338 Old AFDC rules:
$1,520 months 1-4
$120 + 1/3 of the rest,
$1,054 months 5-12
months 1-4; $120,
months 5-12; $90
thereafter
D.C.
$379 $160 + 66.67% of the
$1,267
rest all months
Florida
$303 $200 +50% of the rest
$786
all months
Georgia
$280 Old AFDC rules. See
$740 months 1-4
Delaware
$534 months 5-12
Hawaii
$570 20% + $200 + 36% of
$1,343
the rest all months
Idaho
$309 40% all months
$631
Illinois
$396 66.67% all months
$1,185
Indiana
$288 75%
$1,148
Iowa
$426 20% + 50% of the
$1,040
rest, all months
Kansas
$429 $90 + 40% of the rest,
$788
all months
Kentucky
$289 100% for 2 months in
No limit, months 1 and
lifetime (time chosen
2 (recipient assumed to
by recipient)
make this choice)
$120 + 1/3 of the rest,
$881 months 3-6
months 3-6,
$628 months 7-14
$120 months 7-14
$90 thereafter
Louisiana
$240 $900 (6 months in
$1,250, 6 months in
lifetime)
lifetime. $350
$120 all other months
thereafter.
Maine
$485 $108 plus 50% of the
$1,023, gross income
rest, all months
test, all months
Maryland
$477 40% all months
$778
Massachusetts
$618 $120 + 50% of the
$1,143 gross income
rest, all months
test, all months

---

CRS-13
Benefit
Earnings disregarded
TANF exit point
at zero
and when
(gross earnings)b
State
incomea
Michigan
$459c $200 + 20% of the
$761 (Wayne County)
rest, all months
Minnesota
$532d 36% all months
$914d
Mississippi
$170 $90 all months
$441
Missouri
$292 66.67% + $90 all
$1,116
months
Montana
$375 $200 + 25% of the
$700
rest, all months
Nebraska
$364 20% all months
$751
Nevada
$348 100% months 1-3
No limit, months 1-3
50% months 4-12
$845 months 4-12
New Hampshire
$625 50% all months
$1,230
New Jersey
$424 100%, 1st full month
No limit, first month
of work
$848 after month 1
50% after month 1
New Mexico
$389 $125 + 50% of the
$901 + (in the 1st 24
rest. Plus, for the 1st
months) earnings from
24 months, all
“excess” hours of work
earnings from work
hours above minimum
required
New York
$691e $90 + 51% of the rest
$1,272 (New York City)
all months
(100% of poverty-based,
gross income limit, all
months)
North Carolina
$272 100% months 1-3
No limit, months 1-3
(standard counties)f
$681 after 3 months
27.5% after 3 months
(all counties)
North Dakota
$477 27% or $180 (if
$1,279 months 1-6
greater) plus:
$984 months 7-9
50% months 1-6
$852 months 10-13
35% months 7-9
25% months 10-13
Ohio
$373 $250 + 50% of the
$976
rest, all months
Oklahoma
$292 $120 + 50% of the
$684
rest, all months

---

CRS-14
Benefit
Earnings disregarded
TANF exit point
at zero
and when
(gross earnings)b
State
incomea
Oregon
$460 50% all months
$616 gross income limit,
all months
Pennsylvania
$421 50% all months
$822
Rhode Island
$554 $170 +50% of the
$1,258
rest, all months
South Carolina
$205 50% months 1-4
$1,174 gross income
$100 after month 4
limit, months 1-4
$704 after 4 months
South Dakota
$493 $90 + 20% of the rest,
$694
all months
Tennessee
$185 $150 all months
$1,020
Texas
$217 $120 + (for 4 months)
$1,727 months 1-4
90% of the rest, but
$327 thereafter
disregard (including
the $120) cannot
exceed $1,400.
Utah
$474 $100 + 50% of the
$1,050
rest, all months
Vermont
$683g $150 + 25% of the
$1,082 (in Chittenden
rest, all months
County)
Virginia
$389 Old AFDC rules used
$1,252
to determine
countable income (see
Delaware). Countable
income is subtracted
from poverty
guideline. As long as
countable income +
full benefits (and
gross income alone)
are below the poverty
guideline of $1,252,
full benefits are paid.
Washington
$546 50% all months
$1,072
West Virginia
$453 40% all months
$755, gross income limit,
all months

---

CRS-15
Benefit
Earnings disregarded
TANF exit point
at zero
and when
(gross earnings)b
State
incomea
Wisconsin
$673h No disregards.
Gross income limit:
$628i Recipient cannot work
115% of federal poverty
more than 29 hours
level — $1,462
per week and remain
eligible for the
program. As long as
gross income test is
met and participants
fulfill work hour
rules, benefits are
paid based on number
of hours of
participation.
Wyoming
$340 $200 all months
$530
Source: Table prepared by the Congressional Research Service (CRS) based on a survey of the states.
a. In cases where states differentiate between families required to work and exempt from work, this
column shows benefits for the former group. Similarly, where states pay higher benefits to groups
with greater housing need (no housing subsidy, no sharing of housing, etc.) this column shows these
higher amounts. In some regions of some states, benefits may be different from those shown here.
Note: Table takes no account of child care disregards, which many states provide. They would raise
exit points.
b. Thirty-nine jurisdictions pay no benefit smaller than $10 monthly; one (North Carolina) pays no benefit
smaller than $25 in most counties. The remaining 11 states do not impose a minimum benefit to
qualify for actual cash (Arkansas, Indiana, New Jersey, New Mexico, North Dakota, Connecticut,
Illinois, Minnesota, Montana, West Virginia, and Wisconsin). Calculations in the table reflect state
minimum benefit policies, which lower TANF exit points.
c. Wayne County (Detroit)
d. Minnesota combines TANF and food stamps in a single benefit. This number reflects only the cash
portion of the grant.
e. New York City
f. Standard counties operate programs under state rules. In addition, North Carolina’s program allows
certain “electing counties” to have more flexibility in their program rules. “Electing counties”
decide whether to offer the three-month 100% disregard.
g. Chittenden County
h. For community service (all family sizes).
i. For participation in W-2 transition program (all family sizes).

---

CRS-16
Maximum Hours a Minimum Wage Earner Can Work and Retain
Eligibility for TANF. Another way to illustrate how states treat families with
earners is to consider a minimum wage worker and how many hours she may work
and remain eligible for TANF. That is, in how many states can a minimum wage
earner work 20 hours or 40 hours per week and remain eligible for TANF?
Table 5 shows the maximum number of hours per week a person earning the
minimum wage could work and still retain eligibility for TANF cash assistance as of
January 1, 2004. (For the dollar amounts by month of employment see Appendix B.)
In states where the minimum wage is above the federal $5.15 per hour, the higher
state minimum wage was used in the calculation. The information in the table is
based on the rules for a family of three (the average family size for those on cash
assistance). Because the rules for counting or disregarding earnings sometimes
change depending on how long a recipient has been working — states sometimes
have generous disregards of earnings for the first few months on the job — these
maximum hours are shown for months one through 13 on the job.
Most recipients working 20 hours per week remain eligible for TANF cash. The
table shows that all states except Mississippi allow a minimum wage earner, with a
family of three, working 20 hours per week to have her family remain on TANF in
the first month of employment. However, after the third month on a job, this family
would no longer be eligible for cash benefits in Alabama; after the fourth month on
a job, the family would no longer be eligible for cash benefits in Texas. After a year
working (month 13 on a job) a recipient remains eligible for some TANF cash in 46
jurisdictions.
On the other hand, TANF recipients working 40 hours a week often lose
eligibility for TANF cash — though in a majority of states TANF cash is still paid,
albeit in some states for a short period of time. In the first month on a job, a recipient
who gets a minimum wage job and works 40 hours per week remains eligible for
TANF cash assistance in 29 jurisdictions. However, after a year of work (month 13
on a job), she would remain eligible for TANF cash in only 17 jurisdictions.
Table 5. Maximum Hours per Week That a Minimum Wage
Earner Can Work and Retain Eligibility
for TANF Cash Assistance
(Based on January 2004 Benefit Levels and Minimum Wages)
Month on a job
State
1
2
3
4
5
6
7
8
9
10
11
12
13
Alabama
n/a
n/a
n/a
11
11
11
11
11
11
11
11
11
11
Alaska
63
63
63
63
63
63
63
63
63
63
63
63
57
Arizona
25
25
25
25
25
25
25
25
25
25
25
25
25
Arkansas
31
31
31
31
31
31
31
31
31
31
31
31
31
California
55
55
55
55
55
55
55
55
55
55
55
55
55
Colorado
55
55
55
55
55
55
55
55
55
55
55
55
32
Connecticut
41
41
41
41
41
41
41
41
41
41
41
41
41

---

CRS-17
Month on a job
State
1
2
3
4
5
6
7
8
9
10
11
12
13
Delaware
57
57
57
57
39
39
39
39
39
39
39
39
38
District of
47
47
47
47
47
47
47
47
47
47
47
47
47
Columbia
Florida
35
35
35
35
35
35
35
35
35
35
35
35
35
Georgia
33
33
33
33
23
23
23
23
23
23
23
23
22
Hawaii 49
49
49
49
49
49
49
49
49
49
49
49
49
Idaho
28
28
28
28
28
28
28
28
28
28
28
28
28
Illinois
49
49
49
49
49
49
49
49
49
49
49
49
49
Indiana
51
51
51
51
51
51
51
51
51
51
51
51
51
Iowa
46
46
46
46
46
46
46
46
46
46
46
46
46
Kansas
35
35
35
35
35
35
35
35
35
35
35
35
35
Kentucky
n/a
n/a
39
39
39
39
28
28
28
28
28
28
28
Louisiana
56
56
56
56
56
56
15
15
15
15
15
15
15
Maine
37
37
37
37
37
37
37
37
37
37
37
37
37
Maryland 34
34
34
34
34
34
34
34
34
34
34
34
34
Massachusetts
39
39
39
39
39
39
39
39
39
39
39
39
39
Michigan
34
34
34
34
34
34
34
34
34
34
34
34
34
Minnesota
40
40
40
40
40
40
40
40
40
40
40
40
40
Mississippi
19
19
19
19
19
19
19
19
19
19
19
19
19
Missouri
50
50
50
50
50
50
50
50
50
50
50
50
16
Montana
31
31
31
31
31
31
31
31
31
31
31
31
31
Nebraska
33
33
33
33
33
33
33
33
33
33
33
33
33
Nevada
n/a
n/a
n/a
37
37
37
37
37
37
37
37
37
19
N
ew Hampshire
55
55
55
55
55
55
55
55
55
55
55
55
55
N
ew Jersey
n/a
38
38
38
38
38
38
38
38
38
38
38
38
New Mexico
40
40
40
40
40
40
40
40
40
40
40
40
40
New York
57
57
57
57
57
57
57
57
57
57
57
57
57
North Carolina
n/a
n/a
n/a
30
30
30
30
30
30
30
30
30
30
North Dakota
57
57
57
57
57
57
44
44
44
38
38
38
38
Ohio
43
43
43
43
43
43
43
43
43
43
43
43
43
Oklahoma
30
30
30
30
30
30
30
30
30
30
30
30
30
Oregon
20
20
20
20
20
20
20
20
20
20
20
20
20
Pennsylvania
36
36
36
36
36
36
36
36
36
36
36
36
36
Rhode Island
43
43
43
43
43
43
43
43
43
43
43
43
43
So
uth Carolina
52
52
52
52
31
31
31
31
31
31
31
31
31
South Dakota
31
31
31
31
31
31
31
31
31
31
31
31
31
Tennessee
45
45
45
45
45
45
45
45
45
45
45
45
45
Texas
77
77
77
77
14
14
14
14
14
14
14
14
14
Utah
47
47
47
47
47
47
47
47
47
47
47
47
47
Vermont
37
37
37
37
37
37
37
37
37
37
37
37
37
Virginia
56
56
56
56
56
56
56
56
56
56
56
56
56
Washington
34
34
34
34
34
34
34
34
34
34
34
34
34
West Virginia
33
33
33
33
33
33
33
33
33
33
33
33
33
Wisconsin
29
29
29
29
29
29
29
29
29
29
29
29
29
Wyoming
23
23
23
23
23
23
23
23
23
23
23
23
23
Source: Congressional Research Service (CRS) based on a survey of state TANF cash assistance
programs. Minimum wage data by state are from the Department of Labor (DoL).

---

CRS-18
Family Income by Hours per Week of Work
Most states still base TANF cash welfare payments on the degree of a family’s
financial need, and reduce cash benefits for a family with nonwelfare income such
as earnings. That is, a one dollar increase in earnings often yields a family less than
a one dollar increase in total income. However, the combined family income of
families with the same work effort (20 hours per week, 40 hours per week) varies
widely by state depending on their TANF cash benefit amounts and how they count
the earnings of family workers.
Table 6 shows the net earned income, tax credits, food stamp benefits, and
TANF benefits for a family of three who begin working 20 hours per week at
minimum wage for one year. When a state has a minimum wage rate higher than the
national minimum wage, the state’s minimum wage is used in calculating earnings.
The net earnings column shows gross earnings less employee Federal Insurance
Contributions Act (FICA) taxes. The EITC column shows the effect of the EITC on
gross earnings.4 The TANF column shows the monthly benefit at month 13 of
employment annualized.5 The food stamp column shows the annualized food stamp
benefit based upon monthly gross earnings and TANF benefits. The combined total
column shows the summation of income from the four previous columns. The
columns to the right show the respective dollar amounts on the left as a percent of the
2004 poverty threshold issued by the Department of Health and Human Services.
In month 13 of employment, no TANF benefits are paid to half-time minimum
wage workers in Alabama, Louisiana, Mississippi, Missouri, and Nevada. In seven
states — Alaska, California, Connecticut, Hawaii, Massachusetts, Rhode Island, and
Vermont — the combined total exceeds the federal poverty threshold.
Table 7 shows the same information as Table 6, except that the worker is
employed for 40 hours per week for one year. At this level of income, 17 states pay
a TANF benefit for a family of three in month 13 on a job. Families in every state
have combined total incomes above the poverty threshold based on federally-
determined EITC and food stamp benefits. Earnings plus EITC and food stamps
yield an income for a family of three equal to 105% of the poverty threshold in the
48 contiguous states and the District of Columbia (Alaska and Hawaii have different
poverty thresholds). However, at this level of earned income, the largest component
of income is earnings, followed by EITC.
4 For more information on EITC, see CRS Report RS21477, The Earned Income Tax Credit:
Policy and Legislative Issues, by Christine Scott.
5 Benefits may be zero in some months. In Alabama, for example, a recipient working 20
hours per week at minimum wage would receive a TANF benefit only in months one
through four.

---

CRS-19
Table 6. Annualized Earnings and Income from Selected Benefit Programs for a Single Parent with Two Children,
Working 20 Hours per Week at Minimum Wage, in the 13th Month of Work, January 1, 2004
Net
Food
Combined
earnings
EITC as a TANF as a stamps as a total as a
Net
Food
Combined
as a % of
% of
% of
% of
% of
State
earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Alabama
$4,942
$2,141
$0
$3,648
$10,731
32%
14%
0%
23%
68%
Alaska
6,862
2,972
7,920
1,932
19,686
35
15
40
10
100
Arizona
4,942
2,141
1,164
3,300
11,547
32
14
7
21
74
Arkansas
4,942
2,141
2,448
2,904
12,435
32
14
16
19
79
California
6,478
2,806
6,288
1,356
16,928
41
18
40
9
108
Colorado
4,942
2,141
2,064
3,024
12,171
32
14
13
19
78
Connecticut
6,814
2,951
7,632
864
18,261
45
19
49
6
120
Delaware
5,902
2,556
3,060
2,472
13,990
38
16
20
16
89
District of Columbia
5,902
2,556
3,048
2,484
13,990
38
16
19
16
89
Florida
4,942
2,141
2,160
3,000
12,243
32
14
14
19
78
Georgia
4,942
2,141
816
3,396
11,295
32
14
5
22
72
Hawaii 5,998
2,598
5,040
4,320
17,956
33
14
28
24
100
Idaho
4,942
2,141
1,452
3,204
11,739
32
14
9
20
75
Illinois
5,278
2,286
2,844
2,700
13,108
35
15
19
18
86
Indiana
4,942
2,141
2,112
3,012
12,207
32
14
13
19
78
Iowa
4,942
2,141
2,964
2,760
12,807
32
14
19
18
82
Kansas
4,942
2,141
2,580
2,868
12,531
32
14
16
18
80
Kentucky
4,942
2,141
1,320
3,252
11,655
32
14
8
21
74
Louisiana
4,942
2,141
0
3,648
10,731
32
14
0
23
68
Maine
5,998
2,598
4,836
1,920
15,352
38
17
31
12
98
Maryland 4,942
2,141
2,508
2,892
12,483
32
14
16
18
80
Massachusetts
6,478
2,806
4,620
1,860
15,764
41
18
29
12
101

---

CRS-20
Net
Food
Combined
earnings
EITC as a TANF as a stamps as a total as a
Net
Food
Combined
as a % of
% of
% of
% of
% of
State
earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Michigan
4,942
2,141
3,144
2,700
12,927
32
14
20
17
82
Minnesota
4,942
2,141
3,696
3,840
14,619
32
14
24
25
93
Mississippi
4,942
2,141
0
3,648
10,731
32
14
0
23
68
Missouri 4,942
2,141
0
3,648
10,731
32
14
0
23
68
Montana
4,942
2,141
2,280
2,964
12,327
32
14
15
19
79
Nebraska
4,942
2,141
3,048
2,724
12,855
32
14
19
17
82
Nevada
4,942
2,141
0
3,648
10,731
32
14
0
23
68
New Hampshire
4,942
2,141
4,824
2,196
14,103
32
14
31
14
90
New Jersey
4,942
2,141
2,412
2,916
12,411
32
14
15
19
79
New Mexico
4,942
2,141
2,736
2,820
12,639
32
14
17
18
81
New York
4,942
2,141
6,192
1,788
15,063
32
14
40
11
96
North Carolina
4,942
2,141
1,320
3,252
11,655
32
14
8
21
74
North Dakota
4,942
2,141
3,324
2,652
13,059
32
14
21
17
83
Ohio
4,942
2,141
3,300
2,652
13,035
32
14
21
17
83
Oklahoma
4,942
2,141
1,548
3,180
11,811
32
14
10
20
75
Oregon
6,622
2,868
1,932
2,628
14,050
42
18
12
17
90
Pennsylvania
4,942
2,141
2,376
2,928
12,387
32
14
15
19
79
Rhode Island
6,478
2,806
4,152
2,004
15,440
43
18
27
13
101
South Carolina
4,942
2,141
1,116
3,312
11,511
32
14
7
21
73
South Dakota
4,942
2,141
2,496
2,892
12,471
32
14
16
18
80
Tennessee
4,942
2,141
2,220
2,976
12,279
32
14
14
19
78
Texas
4,942
2,141
0
3,648
10,731
32
14
0
23
68
Utah
4,942
2,141
4,740
2,220
14,043
32
14
30
14
90
Vermont
6,478
2,806
4,596
1,872
15,752
43
18
30
12
103

---

CRS-21
Net
Food
Combined
earnings
EITC as a TANF as a stamps as a total as a
Net
Food
Combined
as a % of
% of
% of
% of
% of
State
earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Virginia
4,942
2,141
4,668
2,244
13,995
32
14
30
14
89
Washington
6,872
2,976
2,820
2,292
14,960
45
20
19
15
98
West Virginia
4,942
2,141
2,220
2,976
12,279
32
14
14
19
78
Wisconsin
4,942
2,141
2,760
2,820
12,663
32
14
18
18
81
Wyoming
4,942
2,141
1,128
3,300
11,511
32
14
7
21
73
Source: Congressional Research Service (CRS) based on a survey of state TANF cash assistance programs.

---

CRS-22
Table 7. Annualized Earnings and Income from Selected Benefit Programs for a Single Parent with Two Children,
Working 40 Hours per Week at Minimum Wage, in the 13th Month of Work, January 1, 2004
Net
Food
Combined
earnings
EITC
TANF
stamps
total
Food
Combined
as a % of
as a % of
as a % of
as a % of
as a % of
State
Earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Alabama
$9,885
$4,282
$0
$2,364
$16,531
63%
27%
0%
15%
105%
Alaska
13,724
4,127
3,708
1,404
22,963
70
21
19
7
117
Arizona
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Arkansas
9,885
4,282
0
2,364
16,531
63
27
0
15
105
California 12,956
4,300
2,772
732
20,760
83
27
18
5
132
Colorado
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Connecticut
13,628
4,149
7,632
0
25,409
87
27
49
0
162
Delaware
11,804
4,300
0
1,860
17,964
75
27
0
12
115
District of Columbia
11,804
4,300
924
1,584
18,612
75
27
6
10
119
Florida
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Georgia
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Hawaii 11,996
4,300
1,716
3,768
21,780
67
24
10
21
121
Idaho
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Illinois
10,557
4,300
936
1,908
17,701
67
27
6
12
113
Indiana
9,885
4,282
780
2,124
17,071
63
27
5
14
109
Iowa
9,885
4,282
828
2,112
17,107
63
27
5
13
109
Kansas
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Kentucky
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Louisiana
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Maine
11,996
4,300
0
1,812
18,108
77
27
0
12
116
Maryland 9,885
4,282
0
2,364
16,531
63
27
0
15
105
Massachusetts
12,956
4,300
0
1,560
18,816
83
27
0
10
120

---

CRS-23
Net
Food
Combined
earnings
EITC
TANF
stamps
total
Food
Combined
as a % of
as a % of
as a % of
as a % of
as a % of
State
Earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Michigan
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Minnesota
9,885
4,282
372
3,840
18,379
63
27
2
25
117
Mississippi
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Missouri 9,885
4,282
0
2,364
16,531
63
27
0
15
105
Montana
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Nebraska
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Nevada
9,885
4,282
0
2,364
16,531
63
27
0
15
105
New Hampshire
9,885
4,282
2,148
1,716
18,031
63
27
14
11
115
New Jersey
9,885
4,282
0
2,364
16,531
63
27
0
15
105
New Mexico
9,885
4,282
2,196
1,704
18,067
63
27
14
11
115
New York
9,885
4,282
3,576
1,284
19,027
63
27
23
8
121
North Carolina
9,885
4,282
0
2,364
16,531
63
27
0
15
105
North Dakota
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Ohio
9,885
4,282
624
2,172
16,963
63
27
4
14
108
Oklahoma
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Oregon
13,244
4,237
0
1,488
18,969
85
27
0
9
121
Pennsylvania
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Rhode Island
12,956
4,300
648
1,368
19,272
83
27
4
9
123
South Carolina
9,885
4,282
0
2,364
16,531
63
27
0
15
105
South Dakota
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Tennessee
9,885
4,282
1,656
1,860
17,683
63
27
11
12
113
Texas
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Utah
9,885
4,282
2,064
1,740
17,971
63
27
13
11
115
Vermont
12,956
4,300
0
1,560
18,816
83
27
0
10
120

---

CRS-24
Net
Food
Combined
earnings
EITC
TANF
stamps
total
Food
Combined
as a % of
as a % of
as a % of
as a % of
as a % of
State
Earnings
EITC
TANF
stamps
total
poverty
poverty
poverty
poverty
poverty
Virginia
9,885
4,282
4,668
960
19,795
63
27
30
6
126
Washington
13,743
4,123
0
1,356
19,222
87
26
0
9
123
West Virginia
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Wisconsin
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Wyoming
9,885
4,282
0
2,364
16,531
63
27
0
15
105
Source: Congressional Research Service (CRS) based on a survey of state TANF cash assistance programs.

---

CRS-25
Earnings Disregards and TANF Work Participation Standards
The adoption of more generous earnings disregards — and consequent
expansion of eligibility for families on the rolls who have earnings — is one of the
most profound changes states made to their cash assistance programs once freed from
federal rules for how they must count the earnings of a family with a working adult.
These more generous disregards have been seen as increasing incentives to work: the
more generous disregards mean that the implicit “tax rate” on earnings (reduced
welfare benefits as earnings increase) is reduced. More generous earnings disregards
also have been seen as part of strategies to help “make work pay,” as continued cash
welfare benefits supplement the earnings of low wage earners. From the state’s
perspective the more generous earnings disregards also have a practical consequence:
they help states meet TANF work participation standards.
TANF law requires states to meet minimum standards of work participation, and
the share of all families (with an adult) who must engage in specified work activities
for minimum hours weekly climbed from a statutory level of 25% in FY1997 to 50%
in FY2002 and following years. One of the specified work activities creditable
toward states meeting work participation standards is “unsubsidized employment,”
combining welfare and work. This differs from the pre-1996 program, the Job
Opportunity and Basic Skills (JOBS) training program, which counted “unsubsidized
employment” only in the first month on a job toward participation standards. In other
months, recipients who worked 35 hours per week or more were excluded from the
participation rate calculation. Under pre-1996 federal rules, recipients who went to
work soon became ineligible for cash assistance.
With the adoption of more generous earnings disregards under TANF, the
proportion of adults who combine welfare with unsubsidized work has risen sharply
from 11% in FY1996 to 26% in FY2002. Combining welfare and work is by far the
most common activity among TANF adults — job search ranks a distant second in
terms of the percent of TANF adults engaged in an activity at 6%.
Though the work reward policies of states help them meet TANF work
participation requirements, reduce disincentives to work, and help “make work pay,”
research shows that they tend to increase the amount of time families spend on cash
welfare.6 Thus, the work reward policies implicitly conflict with TANF time limits
on cash assistance and the federal law’s statutory goal of ending dependence on
government benefits.7 Longer use of cash welfare, even by parents with jobs,
sometimes is viewed as prolonging welfare “dependence.”
6 See U.S. Congress, House Ways and Means Committee, 2004 Green Book, Appendix L,
“Assessing the Effects of Welfare Reform Initiatives,” Mar. 2004.
7 TANF sets a 60-month time limit on the use of federal funds to pay cash assistance to a
family with an adult. To continue the work incentive for more than 60 months, states must
use their own funds — though state funds spent for families who passed the time limit are
counted toward meeting TANF’s maintenance of effort (MOE) requirement.

---

CRS-26
Appendix A. Resource Limits
Under AFDC, states could not set their countable resource limit above $1,000
for both applicants and recipients. Under TANF, states have the flexibility to
establish their own financial eligibility guidelines, and most states have raised their
resource limits. Of the states that raised their resource limits, the majority have
adopted rules similar to that of the food stamp program. The resource limit for most
families in the food stamp program is $2,000 per family.
Although the definition of what constitutes a resource varies from state to state,
it generally includes savings accounts and other liquid assets. States do not count the
primary residence against the resource limit and some states disregard life insurance
policies as an asset. A number of states allow recipients to set up individual
development accounts (IDAs) for specific purposes, such as education, home
purchase, and business start-up capital. The savings in these accounts may be
excluded. Additionally, eight states exclude all vehicles from countable assets and
21 states exclude one vehicle per family. Other states exclude a portion of the auto’s
value.
Table A1. TANF Resource Limits and Vehicle Disregards,
January 2004
State
Resource limits
Vehicle disregards
Alabama
Applicants and recipients:
All vehicles
Household without aged or disabled
member: $2,000
Household with an aged or disabled
member: $3,000
Alaska
Applicants and recipients:
Any vehicle used for
Household without a member 60+
family transportation, to
years: $2,000
produce self-employment
Household w/ a member 60+ years:
income, or participate in
$3,000
an approved work activity
Arizona
Applicants and recipients: $2,000
All vehicles
Arkansas
Applicants and recipients: $3,000
1 vehicle
California
Applicants and recipients:
$4,650 of fair market
Household without aged or disabled
value
member: $2,000
Household with an aged or disabled
member: $3,000
Colorado
Applicants and recipients: $2,000
1 vehicle
Connecticut
Applicants and recipients: $3,000
$9,500 of equity value
Delaware
Applicants and recipients: $1,000
$4,650 of equity value
District of
Applicants and recipients:
All vehicles
Columbia
Household without a member 60+
years: $2,000
Household with a member 60+ years:
$3,000

---

CRS-27
State
Resource limits
Vehicle disregards
Florida
Applicants and recipients: $2,000
$8,500 of equity value
Georgia
Applicants and recipients: $1,000
Employed, engaged in
training, or actively
seeking employment:
$4,650 of equity value
Not employed, in training,
or actively seeking
employment: $1,500 of
equity value
Hawaii
Applicants and recipients: $5,000
All vehicles
Idaho
Applicants and recipients: $2,000
$4,650 of fair market
value
Illinois
Applicants and recipients:
1 vehicle
Family size 1: $2,000
Family size 2: $3,000
Family size 3: $3,050
Family size 4: $3,100
Family size 5: $3,150
Family size 6: $3,200
Family size 7: $3,250
Family size 8: $3,300
Indiana
Applicants only: $1,000
$5,000 of equity value
Recipients only: $1,500
Iowa
Applicants only: $2,000
$4,115 of equity value for
Recipients only: $5,000
each adult
Kansas
Applicants and recipients: $2,000
All vehicles
Kentucky
Applicants and recipients: $2,000
All vehicles
Louisiana
Applicants and recipients: $2,000
All vehicles
Maine
Applicants and recipients: $2,000
1 vehicle
Maryland
Applicants and recipients:
All vehicles
$2,000
Massachusetts
Applicants and recipients: $2,500
$5,000 of equity value and
$10,000 of “fair market
value”
Michigan
Applicants and recipients: $3,000
All vehicles
Minnesota
Applicants only: $2,000
$7,500 of loan value
Recipients only: $5,000
Mississippi
Applicants and recipients: $2,000
Any vehicle used for
personal and household
transportation
Missouri
Applicants only: $1,000
1 vehicle
Recipients only: $5,000
2nd vehicle: $1,500 equity
value
Montana
Applicants and recipients: $3,000
1 vehicle
Nebraska
Applicants and recipients:
1 vehicle
One person: $4,000
Two or more persons: $6,000
Nevada
Applicants and recipients:
1 vehicle
$2,000

---

CRS-28
State
Resource limits
Vehicle disregards
New
Applicants and recipients:
1 vehicle per adult
Hampshire
Received benefits in last 6 months:
$2,000
Applicants only: Received no benefits
in last 6 months: $1,000
New Jersey
Applicants and recipients: $2,000
$9,500 of fair market
value 2nd vehicle: $4,650
of fair market value
New Mexico
Applicants and recipients: Liquid
1 vehicle in areas of
resource limit of $1,500. Non-liquid
public transportation. In
resource limit of $2,000
other areas, 1 vehicle for
each adult.
New York
Applicants and recipients:
$9,300 of fair market
Household without 60+ member:
value if used for
$2,000
employment or seeking
Household with a 60+ member:
employment (localities
$3,000
have the option to set this
limit higher);
$4,650 of fair market
value otherwise.
North Carolina
Applicants and recipients: $3,000
1 vehicle per adult
North Dakota
Applicants and recipients:
1 vehicle
One person: $3,000; Two people:
$6,000, plus $25 per additional family
member
Ohio
No resource limit
No resource limit
Oklahoma
Applicants and recipients: $1,000
$5,000 of equity value
Oregon
Applicants and recipients:
$10,000 of equity value
Someone in JOBS program: $10,000
No one in JOBS program: $2,500
Pennsylvania
Applicants and recipients:$1,000
1 vehicle
Rhode Island
Applicants and recipients: $1,000
One vehicle per adult, not
to exceed two vehicles per
household
South Carolina
Applicants and recipients: $2,500
1 vehicle per driver
South Dakota
Applicants and recipients: $2,000
1 vehicle
2nd vehicle: $4,650 of fair
market value
Tennessee
Applicants and recipients: $2,000
$4,600 of equity value
Texas
Applicants and recipients:
$4,650 of fair market
$1,000
value

---

CRS-29
State
Resource limits
Vehicle disregards
Utah
Applicants and recipients: $2,000
Household with a disabled
member/
transportation:
1 vehicle
No disabled member /
transportation: $8,000 of
equity value
Vermont
Applicants and recipients: $1,000
1 vehicle per adult with a
maximum of 2 vehicles
per household
Virginia
No resource test
No resource test
Washington
Applicants and recipients: $1,000
$5,000 of equity value
West Virginia
Applicants and recipients: $2,000
1 vehicle
Wyoming
Applicants and recipients: $2,500
$12,000 of fair market
value
Wisconsin
Applicants and recipients: $2,500
$10,000 of equity value
Wyoming
Applicants and recipients: $2,500
$12,000 of fair market
value
Source: Table prepared by the Congressional Research Service (CRS) based on a survey of state
TANF cash assistance programs.

---

CRS-30
Appendix B. TANF Exit Points, Monthly Earnings That End Eligibility, Family of Three,
January 1, 2004
($)
State
1
2
3
4
5
6
7
8
9
10
11
12
13
Alabama
n/a
n/a
n/a
256
256
256
256
256
256
256
256
256
256
Alaska
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,961
1,768
Arizona
571
571
571
571
571
571
571
571
571
571
571
571
571
Arkansas
696
696
696
696
696
696
696
696
696
696
696
696
696
California
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
1,613
Colorado
1,227
1,227
1,227
1,227
1,227
1,227
1,227
1,227
1,227
1,227
1,227
1,227
733
Connecticut
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
Delaware
1,520
1,520
1,520
1,520
1,054
1,054
1,054
1,054
1,054
1,054
1,054
1,054
1,024
District of Columbia
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
1,267
Florida
786
786
786
786
786
786
786
786
786
786
786
786
786
Georgia
740
740
740
740
534
534
534
534
534
534
534
534
504
Hawaii 1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
1,343
Idaho
631
631
631
631
631
631
631
631
631
631
631
631
631
Illinois
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
1,185
Indiana
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
1,148
Iowa
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
1,040
Kansas
788
788
788
788
788
788
788
788
788
788
788
788
788
Kentucky
n/a
n/a
881
881
881
881
628
628
628
628
628
628
628
Louisiana
1,250
1,250
1,250
1,250
1,250
1,250
350
350
350
350
350
350
350
Maine
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
1,023
Maryland 778
778
778
778
778
778
778
778
778
778
778
778
778
Massachusetts
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
1,143
Michigan
761
761
761
761
761
761
761
761
761
761
761
761
761
Minnesota
914
914
914
914
914
914
914
914
914
914
914
914
914
Mississippi
441
441
441
441
441
441
441
441
441
441
441
441
441

---

CRS-31
State
1
2
3
4
5
6
7
8
9
10
11
12
13
Missouri
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
1,116
Montana
700
700
700
700
700
700
700
700
700
700
700
700
700
Nebraska
751
751
751
751
751
751
751
751
751
751
751
751
751
Nevada
n/a
n/a
n/a
845
845
845
845
845
845
845
845
845
428
New Hampshire
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
1,230
New Jersey
n/a
848
848
848
848
848
848
848
848
848
848
848
848
New Mexico
901
901
901
901
901
901
901
901
901
901
901
901
901
New York
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
1,272
North Carolina
n/a
n/a
n/a
681
681
681
681
681
681
681
681
681
681
North Dakota
1,279
1,279
1,279
1,279
1,279
1,279
984
984
984
852
852
852
852
Ohio
976
976
976
976
976
976
976
976
976
976
976
976
976
Oklahoma
684
684
684
684
684
684
684
684
684
684
684
684
684
Oregon
616
616
616
616
616
616
616
616
616
616
616
616
616
Pennsylvania
822
822
822
822
822
822
822
822
822
822
822
822
822
Rhode Island
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
1,258
South Carolina
1,174
1,174
1,174
1,174
704
704
704
704
704
704
704
704
704
South Dakota
694
694
694
694
694
694
694
694
694
694
694
694
694
Tennessee
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
1,020
Texas
1,727
1,727
1,727
1,727
327
327
327
327
327
327
327
327
327
Utah
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
1,050
Vermont
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
1,082
Virginia
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
1,252
Washington
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
1,072
West Virginia
755
755
755
755
755
755
755
755
755
755
755
755
755
Wisconsin
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
1,462
Wyoming
530
530
530
530
530
530
530
530
530
530
530
530
530
Source: Congressional Research Service (CRS) based on a survey of state TANF cash assistance programs.

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CRS-32
Appendix C. State Benefit Computation Methods
The formula for computing benefits varies among the states. This appendix
provides a description of benefit computation formulas. Most states pay reduced
benefits to families with nonwelfare income. Generally, countable income is
subtracted from a dollar standard (called the “payment standard”) to determine
benefits. The most common benefit computation formula subtracts countable income
from a payment standard, and the benefit amount is the difference between the
payment standard and income. However, some states have maximum benefit
payments that constrain benefit payment; others pay a percentage of the difference
between the state’s payment standard and countable income. Table C1 provides a
typology of computation methods used by states in their TANF cash assistance
programs.

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CRS-33
Table C1. Benefit Computation Methods Used by States for
TANF Cash Assistance, January 2004
Benefit =
Benefit = the
Benefit =
Benefit = the
Other benefit
payment
lesser of the
payment
lesser of the
computation
standard -
payment
standard -
payment
methods
countable
standard -
countable
standard -
income
countable
income *
countable
income or the
ratable
income *
maximum
reduction
ratable
benefit
reduction or the
maximum
benefit
Alabama
Georgia
North Carolina
Alaska
Arkansas
Arizona
Maine
South Carolina
Delaware
Connecticut
California
Minnesota
Colorado
Virginia
District of
Nebraska
Kentucky
Columbia
North Dakota
Mississippi
Florida
Tennessee
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Louisiana
Maryland
Massachusetts
Michigan
Missouri
Montana
Nevada
New Hampshire
New Jersey
New Mexico
New York
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Dakota
Texas
Utah
Vermont
Washington
West Virginia
Wyoming
Source: Congressional Research Service (CRS) based on a survey of state TANF cash assistance
programs.

---