Welfare Reform: The Temporary Assistance For Needy Families (TANF) Program
Introduction
Labor representatives involved in workforce development need to know about welfare and related programs. This brief walks through the basics of the federal TANF program and options for using the program to help all working families gain economic self-sufficiency.
What is TANF?
TANF
stands for Temporary Assistance for Needy Families, the welfare
program created in 1996 as part of the Personal Responsibility
and Work Opportunity Reconciliation Act (PRWORA), the primary
federal legislation behind welfare reform. TANF, which consists of
federal block grants to the states, replaced the Aid to Families with
Dependent Children (AFDC) program.
Before the 1996 reforms, AFDC was funded on a matching basis.
The federal government contributed roughly 50 percent of the cost of benefits for whatever number of families received aid in a state and at whatever benefit level the state provided. Under the TANF block grant system, a formula is used to designate the amount each state will receive – a block grant – which will not be affected by how many people are in need of assistance. The amounts were determined in 1996 and will remain fixed for six years. Because caseloads declined over these years, states had a “windfall” or “TANF surplus” from the block grant formula that was based on a much higher caseload. Had caseloads or benefit levels risen, however, states may well have found themselves with a TANF deficit.