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Anti-Racist State Budgets: The Social Safety Net
October 2021


About This Primer

This primer is part of a series on anti-racist state budgets. To understand the concept of creating anti-racist state budgets, it is important to understand the difference between racist and anti-racist ideas and policies. The following excerpts are from How To Be An Antiracist (2019) by Ibram X. Kendi:

Racist vs. Anti-Racist Ideas

A racist idea is any idea that suggests one racial group is inferior or superior to another racial group in any way. Racist ideas argue that the inferiorities and superiorities of racial groups explain racial inequities in society … An antiracist idea is any idea that suggests the racial groups are equals in all their apparent differences—that there is nothing right or wrong with any racial group. Antiracist ideas argue that racist policies are the cause of racial inequities.

Racist vs. Anti-Racist Policies

A racist policy is any measure that produces or sustains racial inequity between racial groups. An antiracist policy is any measure that produces or sustains racial equity between racial groups … There is no such thing as a nonracist or race-neutral policy. Every policy in every institution in every community in every nation is producing or sustaining either racial inequity or equity between racial groups.

For additional race-equity concepts and definitions, please visit the Racial Equity Tools glossary.

Introduction

Latina mother teaches daughter how to wash vegetables in kitchen sink

We all benefit when public policies move us closer to realizing our nation’s promise of full and equal opportunity for all. Social safety net programs that help people get back on their feet during hard times and build thriving communities have proven that ending poverty is within reach. To continue our march toward prosperity for all, we must first confront and dismantle a long history of racism and discrimination in our nation’s response to poverty.

For decades, the modern social safety net has kept millions of Americans out of poverty, many of them children. These public assistance programs represent our shared investment in ensuring that all families, regardless of their income, can keep food on the table and go to work knowing that their children are in a safe and enriching environment. Without our social safety net, 37 million more Americans, including 7 million children, would be living in poverty.

Public assistance programs were originally designed as temporary supports for those who fall on hard times, but more and more, they have supplemented the earnings of workers trapped in a lopsided economy rigged in favor of the wealthy and large corporations at the expense of the working class. Walmart, for example, employs the most workers receiving SNAP, leaving taxpayers on the hook for $6.2 billion annually to help their workers make ends meet and access healthcare, all while using tax breaks and loopholes to avoid an estimated $1 billion in federal taxes each year.

In this report, we consider state policy changes to the Temporary Assistance for Needy Families (TANF) program, the Supplemental Nutrition Assistance Program (SNAP), and the child care subsidy program. Though there are additional safety net policies that state lawmakers can consider, like tax credits for low-income families, school nutrition and early childhood programs, or housing assistance, in this report, we focus on three federally funded, means-tested assistance programs that are generally administered through state human services agencies.

  • Temporary Assistance for Needy Families (TANF) is a federal block grant states can use to provide direct cash assistance to needy families. States must maintain a certain level of state funding toward the program to receive federal funds. With a block grant program, states have significant flexibility in the use of federal and state TANF funds and in the administration of TANF cash assistance benefits. Many states also use TANF funds to support other non-cash assistance programs, including job training programs, childcare, and child welfare services.
  • The Supplemental Nutrition Assistance Program (SNAP) is a federal entitlement that provides nutritional assistance to low-income individuals. Unlike a block grant program, the federal government fully funds SNAP benefits for all eligible enrolled individuals. The federal and state governments are each responsible for half of the administration costs. Compared to other public assistance programs, states have far less flexibility in administering SNAP.
  • The Child Care and Development Fund (CCDF) is a federal block grant that supports state childcare assistance programs and provides subsidies to low-income families. States must contribute a certain level of state matching funds to receive federal funds each year. Access to, and eligibility for, childcare assistance varies significantly across states.

The Pervasive Legacy Of Racism In The Social Safety Net

Exterior of convenience store in philadelphia; signs read "ebt aceptamos" and "atm here" jana shea / shutterstock. Com
Jana Shea / Shutterstock.com

Public assistance programs should be accessible and effective in moving families out of poverty. But since its inception, racism has shredded the nation’s social safety net, weaving in discriminatory policies designed to leave out Black families and other families of color. Over time, these policies have not only failed the people they were intended to exclude, but they have also left all communities worse off for generations.

A Brief History of Racism in the Social Safety Net

The construction of arbitrary obstacles to prevent people of color from accessing social welfare programs is as old as the nation’s first safety net policies. Federal and state lawmakers have turned anti-poverty policy on its head, using it not to help those living in poverty, but as a tool to preserve a racist economic system dependent on the exploitation of Black workers and other workers of color. Though not a comprehensive historical overview, the following racist ideas and movements were instrumental in the design of the modern social safety net:

  • Work Requirements. Work requirements in public assistance programs were born out of the same desire to coerce Black people into the low-wage and unstable labor force that propped up white supremacy. In the centuries after the Civil War, enslavers and the beneficiaries of slavery continued to exploit the labor of Black people through new institutions and policies that were “slavery by another name,” like convict leasing, vagrancy laws, and sharecropping. In 1935, the creation of the first federal welfare program, Aid to Dependent Children (ADC), continued this legacy with language that allowed states to consider “moral character” as an eligibility requirement. In practice, this allowed states to impose de facto work requirements by denying assistance to Black women and forcing them into underpaid and backbreaking jobs, while providing assistance to stay-at-home white mothers. Even as modern federal public assistance programs took shape in the late 1960s, one U.S. senator interrupted Johnnie Tillmon, a Black mother and leading welfare rights activist who was unable to access assistance to feed her children when she fell ill, during a congressional hearing to complain that he could no longer find someone to iron his shirts because of welfare.

Racism Undermines Anti-Poverty Policy

The cumulative result of decades of racist policymaking in the social safety net has undermined its effectiveness in reducing poverty and helping families achieve long-term financial security. The decentralization of TANF administration with the passage of the PRWORA left recipients at the mercy of states with a long history of political and economic disenfranchisement of people of color. Nearly three decades later, the unmistakable legacy of the 1996 reforms was its orchestration of a flawed response to child poverty that disproportionately failed the nation’s Black children. Indeed, research shows that the least accessible and least generous cash welfare programs are in states with higher shares of Black residents. By one estimate, equalizing the differences in how states use TANF funds to address poverty would narrow the Black-white child poverty gap by 15 percent.

While many of the changes contained in the PRWORA had the effect of reducing access to the safety net for Black families and other families of color, the changes have undermined our nation’s efforts to reduce poverty overall. Research shows that in the long term, the changes contained in the PRWORA failed to improve the well-being of families in poverty. Additionally, the work-centric reforms to the social safety net resulted in an alarming long-term trend: growing shares of families living in deep poverty. Fifteen years after PRWORA, the share of households living on less than $2 per day had increased by 153 percent. The rise in deep poverty was especially pronounced for children of color: in the first ten years after the 1996 changes, the percentage of Black children in deep poverty increased from 4.1 percent to 5.8 percent, and from 5.8 percent to 6.8 percent for Latinx children, while the deep poverty rate declined slightly for white children.

Building an Anti-Racist Social Safety Net

Child reaching for strawberries on kitchen counter

We all have a role in ensuring that no child goes hungry, that parents can afford the childcare they need to go to work, and that families living in poverty have what they need to make ends meet. Policymakers have the power to confront and dismantle the legacies of racism in their states’ public assistance programs. At the state level, there are significant opportunities to reverse harmful policies of the past and make investments in policies to strengthen the reach of the safety net:

  • Strengthening the Temporary Assistance for Needy Families (TANF) program, which was significantly weakened when lawmakers turned the program into a block grant in 1996. This led directly to the shrinking of direct assistance to families in poverty. In 2019, only 23 families received cash assistance through TANF for every 100 families in poverty, though some states reached far fewer families. States have considerable flexibility in the use of TANF funds, and lawmakers should prioritize efforts to increase investments in direct cash assistance to families with low incomes and remove barriers to eligibility for assistance.
  • The Supplemental Nutrition Assistance Program (SNAP) reaches an estimated 84 percent of eligible people, though the participation rate in 19 states was significantly lower than the national average. Though some requirements are set at the federal level, state lawmakers can maximize access to SNAP by adopting a range of eligibility and administrative policies that increase the accessibility of the program.
  • The Child Care and Development Block Grant (CCDBG) provides broad flexibility to states in designing their childcare subsidy programs, resulting in significant discrepancies in eligibility requirements from state to state. Nationally, only 12 percent of potentially eligible children received subsidies based on state eligibility limits. State legislators can expand investments in childcare assistance programs and reduce administrative and eligibility barriers to accessing assistance.

When considering ways to build an anti-racist social safety net, state legislators should refer to the following recommendations and work with national and local advocates, especially groups that center race equity, to develop the best policies for their states, which may include administrative solutions in addition to the legislative options highlighted below.

TANF Family Cap

During the height of welfare changes in the 1990s, 24 states adopted “family cap” policies that punished families receiving cash assistance through TANF for having another child. Without any evidence beyond racist and sexist stereotypes of welfare recipients, proponents of family caps falsely claimed that cash assistance programs incentivized low-income mothers to have more children to receive additional public assistance.

Family cap policies are a modern recasting of 20th century eugenics laws that promoted reproductive control and forced sterilization of people of color, people living in poverty, and people with disabilities. Within cash assistance programs, the family cap policy is the latest in a long history of policies intended to exert reproductive control over Black women, including contraceptive requirements“suitable home” lawspolicies barring unwed mothers from eligibility, and even forced sterilization. In spite of its racist roots, family cap policies remain in place today in 12 states, even though conclusive research confirms that the policy drives families deeper into poverty and does not affect or reduce childbearing among recipients.

Lawmakers in California (2016 CA AB 1603), Massachusetts (2019 MA H 4800), Minnesota (2013 MN SF 1034/HF 1233), New Jersey (2020 NJ S 2178/Chapter 99), and Virginia (2020 VA SB 690) recently enacted legislation to repeal the family cap in their TANF programs. Legislators in Georgia considered, but failed to pass, such a bill (2021 GA HB 741).

In Connecticut, families with children born after the initial ten months of receiving TANF cash assistance receive a 50 percent reduction in the benefit. Additionally, families with children born within ten months of program participation are prohibited from qualifying for an exemption from program time limits. A bill (2021 CT HB 6635) that was recently introduced, but failed to advance, would have eliminated both family cap penalties.

Work Requirements

Strict work and reporting requirements within the social safety net ignore steep and multiple barriers to steady employment, which disproportionately affect Black workersBehavioral science research also shows that work reporting requirements add another burden while also promoting harmful narratives among agency staff. The urgency of this failed policy design has been intensified by the pandemic recession, in which the lowest quartile of workers lost 7.9 million jobs, while the highest quartile gained nearly 1 million jobs.

Work requirements and penalties are used more harshly against Black and Latina women than white women, and ample evidence shows that work requirements have failed to increase employment and reduce poverty among participants. For the most part, adults receiving TANF and SNAP are subject to work requirements under federal law, but states have some flexibility in both programs to establish exemptions, set the severity of sanctions, and define work activities.

TANF Sanctions

In the TANF program, states have broad authority to determine sanctions for non-compliance with work requirements that range from an initial warning to penalties as severe as immediate case closure and a loss of benefits. All but three states—California, New York, and Vermont—adopted full-family sanctions that cut off benefits to the entire family. In recent years, several states have repealed these harsh sanctions and no longer prevent children from receiving benefits for work-related sanctions.

The District of Columbia amended (2017 D.C. Law 22-33, § 5002/D.C. Code § 4-205.19f) its TANF non-compliance sanctions to minimize the impact of a benefit reduction on children by capping the sanction at 6 percent of the total benefit amount.

Illinois lawmakers enacted a bill (2019 IL HB 3129) that designated 75 percent of the TANF benefit for the children in a household and 25 percent for adult members, and provided that no part of the benefit designated for children shall be reduced due to a sanction. Under the new law, sanctions for cases of non-compliance are limited to 30 percent of the adult portion of a benefit.

Legislation (2020 MD SB 787/HB 1313) enacted in Maryland establishes a similar designation of benefits for children and adults, and limits the reduction of benefits for non-compliance to 30 percent of the adult portion, and prohibits the reduction or termination of any portion of the child or children’s benefit.

In Maine, lawmakers enacted a bill (2021 ME LD 78) to repeal the state’s full-family sanctions and limit the termination of benefits to the non-compliant adult and allow the children and compliant parents to continue receiving benefits.

Volunteers load food into the trunk of vehicles during a ''let's feed l. A. County'' drive thru food distribution by the los angeles regional food bank, april 23, 2021, in rosemead, california. Ringo chiu / shutterstock. Com
Ringo Chiu / Shutterstock.com

SNAP Requirements and Sanctions

In SNAP, most adults must comply with basic work-related requirements, such as registering for work or not voluntarily leaving a job. States can require participation in job training activities, which range from job search requirements to educational programs, in addition to setting the number of hours required. Employment and training (E&T) programs must meet some federal requirements, but states have broad latitude in program design. Many states enroll participants in E&T programs on a voluntary basis, which is more effective than mandatory programs.

States can also set sanctions and disqualifications for SNAP recipients who fail to comply with work requirements. There are federal minimums for disqualification that apply only to the individual who is out of compliance (which allows the household to receive a reduced benefit amount), starting with a 1-month sanction for the first instance, and escalating to 6 months for the third instance. States can use the minimum, or use some combination of a longer disqualification period, or extend the disqualification to the entire household. The range of sanctions includes 26 states that use the federal minimum, and the most punitive state, Mississippi (Miss. Code Ann. § 43-12-37), which applies sanctions against an entire household and imposes a permanent sanction for non-compliance after the third instance.

Legislation introduced in Texas (2021 TX SB 1912/HB 1353) would roll back the state’s disqualification policy to the federal minimum by allowing a household to continue to receive benefits when an individual is out of compliance.

Similar legislation was introduced, but failed to pass, in Nebraska (2020 NE LB 1037) to limit the disqualification to the non-compliant household member.

TANF and SNAP Bans on Individuals with Prior Drug-Related Felony Convictions

The federal lifetime ban on individuals with drug-related felony convictions gave states the option to opt out of or modify the ban through state legislative action. Not only does the ban establish a lifetime punishment for a drug conviction, but it also effectively extends the punishment to the children and family of the individual, as the household receives a smaller benefit as a result of the ban.

The ban—which applies to no other type of felony conviction—plainly targets Black and Latinx people, who are disproportionately arrested and imprisoned for drug offenses, despite similar drug use rates among Black, Latinx, and white people. Drug arrests of women, who are more likely to be the primary caregivers of children, have increased by 216 percent in the past 35 years, compared to 48 percent for men. Access to TANF and SNAP has been shown to reduce the risk of recidivism within the first year of release by 10 percent.

Many states have lifted the ban in either or both programs, while others have modified their bans to limit those affected by narrowing the types of felonies, shortening the length of the ban, or providing an exception for those that have successfully completed treatment or parole requirements.

Legislators in Illinois (2021 IL HB 88) and South Dakota (2020 SD SB 96) enacted legislation to lift the ban in TANF, lawmakers in Michigan approved a bill (2020 MI SB 1006) to lift the ban in SNAP, while lawmakers in Kentucky (2021 KY HB 497) and Virginia (2020 VA SB 124/HB 566) enacted legislation to lift the bans in both programs.

A bill (2021 NV AB 138) enacted by Nevada lawmakers would lift the bans in both SNAP and TANF. Under current law, the state’s modified bans require participation in, or successful completion of, a substance use disorder treatment program, which can be costly and difficult to access.

Drug Testing for TANF Applicants and Recipients

The passage of the PRWORA also gave states the option to require drug tests for TANF recipients, and to establish penalties for those who test positive for drugs. Eligibility requirements for SNAP are more narrowly prescribed, and state efforts to impose drug testing in the program have been blocked by the federal government. Some states have circumvented the federal prohibition on drug testing in SNAP by requiring drug tests as a part of their modified ban on individuals with drug-related felony convictions, requiring it for unemployed SNAP recipients participating in state employment and training programs, and carrying over drug-testing disqualifications from TANF to those also receiving SNAP.

Drug testing requires a reasonable basis or suspicion; Michigan and Florida enacted “suspicionless” drug testing for TANF applicants and recipients, which required drug testing without reasonable suspicion of drug use, that were later rejected by courts as a violation of the Fourth Amendment. Subsequently, at least 13 states currently require applicants to submit to drug screening questionnaires that are used, along with other information, including criminal history records or even “visual observations” by agency staff, as a basis for reasonable suspicion to require drug testing. Drug screening and testing policies are also costly and ineffective; an analysis of 13 states with existing drug testing policies found that, collectively, the states spent over $200,000 and identified only 338 positive tests, or 1 percent of all applicants.

Legislators in Utah enacted a bill (2016 UT HB 172) that, as introduced, would have repealed the state’s drug screening and testing requirements. As amended, TANF applicants who are screened as likely drug users would be required to take a drug test only upon the recommendation of a licensed clinical social worker.

In Wisconsin, the 2021-23 Executive Budget (2021 WI AB 68/SB 111) proposed by Governor Evers would repeal the state’s drug screening and testing requirements in the SNAP Employment and Training program, but lawmakers declined to include the recommendation in the final enacted budget.

Exterior window of retail store; sign reads, "ebt accepted here! Snap"
Child Support

Cooperation with child support enforcement is required at varying degrees within the social safety net as a cost recovery mechanism, but many non-custodial parents cannot keep up with payments. A quarter of non-custodial parents live in poverty, and 300,000 of them fell into poverty from paying child support. Children with parents living outside of the home are much more likely to be living in poverty and are more likely to be Black or Latinx. As a result, child support enforcement efforts leave low-income children no better off, since the payments collected are oftentimes reimbursed to the state and not the child, while pushing non-custodial parents into financial precarity and debt.

Under federal law, subject to good cause exemptions, families must cooperate with child support enforcement programs to receive TANF benefits. For SNAP and childcare subsidy recipients, states can require both custodial and non-custodial parents receiving benefits to cooperate with child support enforcement and impose their own sanctions for failure to cooperate.

Child Support Pass-Through and Disregard in TANF

As a condition of receiving TANF benefits, applicants must cooperate with child support enforcement agencies in establishing and collecting support. Child support payments collected on behalf of current TANF participants are shared between the state and federal governments, but the federal government waives its share for child support that is passed through to the family and disregarded as income for eligibility purpose, up to $100 per month per child, or $200 for two or more children.

Half of the states keep all of the child support and do not pass it to the family, but in 26 states, the state agency collects child support payments on behalf of children receiving TANF, but then passes the payment, fully or partially, onto the child. Pass-through policies provide a meaningful boost to TANF recipients, who receive benefits that are woefully inadequate and have been declining relative to the cost of living over the years. Research shows that pass-through policies incentivize cooperation for non-custodial parents while also increasing compliance with child support orders among non-custodial parents.

Many states’ pass-through policies reflect the amounts waived by the federal government, while others pass through smaller amounts, and some pass through the full amount collected to the TANF family, above the federal amount waived.

Legislators in Colorado enacted a bill (2015 CO SB 15-012) to allow TANF recipients to receive the full amount of the child support that the state collects on their behalf, in addition to ensuring that the additional payments are not counted as income for eligibility in the program. In a recent study, the state’s Department of Human Services reported that the average family received an increase of $167 per month. The state also reported that monthly child support collections increased by 76 percent in the first 18 months of implementation.

Maryland enacted legislation (2017 MD SB 1009/HB 1469) to allow up to $100 per child, or $200 for two or more children, to be passed through to TANF recipients, and to disregard the payment for eligibility for the program.

In New Jersey, a bill (2021 NJ S 2329/A 3905) that was vetoed by the governor would have allowed a portion of child support to be passed through to TANF families, in addition to excluding the pass-through amount from the program’s definition of income.

Child Support Sanctions for SNAP and Child Care Subsidies

States can also choose to impose child support-related sanctions for SNAP and childcare subsidy recipients. Severe sanctions for non-cooperation can have dire consequences, including a loss of subsidies that help parents afford childcare, or reduced food assistance and increased food insecurity for children. Although most states have good cause exemptions for non-cooperation, such as in cases of domestic violence, concerns about how child support enforcement may affect their family relationships can leave some families reluctant to participate.

In Mississippi, where custodial parents can be disqualified from receiving SNAP for failure to cooperate, and non-custodial parents can be disqualified for being in arrears with court-ordered child support payments, legislators considered, but failed to pass, a bill (2020 MS HB 1319) that would have repealed the state’s SNAP enforcement requirements. The state also requires child support enforcement cooperation for child care eligibility, and failed to advance a bill (2021 MS HB 65) that would have eliminated the requirement in the program.

Kansas legislators are considering a bill (2021 KS HB 2371) that would eliminate the requirement for child support enforcement cooperation for SNAP and child care subsidy applicants.

Time Limits in TANF

The passage of the PRWORA in 1996 instituted a dramatic federal 60-month lifetime limit for receiving TANF benefits, though states can—and several states do—impose a shorter limit. Enabled by racist narratives about welfare recipients, proponents argued that the policy would force recipients to find jobs, ignoring the reality that many TANF recipients, especially Black and Latina mothers, face steep and systemic barriers—employment and skills gapsemployment discriminationlack of access to reliable transportation—to stable jobs that pay enough to make ends meet. Indeed, research shows that time limits are ineffective and do not result in increased long-term earnings.

Black mother and black father playfully hold their toddler daughter in field outdoors

State lawmakers can ease time limit penalties by providing extensions beyond the 60 months for up to 20 percent of the caseload, by stopping the clock on the time limit for certain groups of families, and continuing benefits for children beyond the time limit. Additionally, state TANF funds are not limited by the federal 60-month limit, so states can use funding flexibly to set their own time limit policies. One way to ensure that families are not punished is by using “good faith” extensions when recipients are participating in work activities but are otherwise prevented from working.

In Washington, where researchers found that time limits were most likely to penalize Black and Indigenous families, lawmakers enacted a bill (2019 WA HB 1603/Chapter 343) that expanded good faith extensions for families facing barriers to work, such as the need for mental health or substance use disorder treatment, or homelessness or risk of loss of housing. Under the new law, recipients are also eligible for an extension if they demonstrate that the time limit would cause undue hardship to the recipient or their family.

Another bill (2021 WA SB 5214) enacted by Washington legislators establishes a hardship exemption for all families receiving TANF since March 1, 2020, when the unemployment rate was equal to, or greater than, 7 percent.

A bill (2020 NJ S 2329/A 3905) that was vetoed by the governor in New Jersey would have continued benefits for children and other household members if at least one adult recipient becomes ineligible as a result of the 60-month lifetime limit.

Arizona legislators considered a bill (2021 AZ HB 2253) that would have increased the state’s lifetime limit of 12 months, the most restrictive in the country, to the federal limit of 60 months.

Asset Limits

Today, the average Black household has just 12 percent of the wealth of white households, and early data shows that the pandemic recession threatens to widen the gap. The racial wealth gap has grown over the course of centuries of discriminatory policymaking and institutional practices that built wealth for white families while preventing families of color, especially Black Americans, from achieving the same generational wealth.

States have broad authority to set asset limits in most public assistance programs. Asset limits introduce unnecessary administrative complexity and cost, and research from states that have relaxed asset limits has seen no effect on the number of monthly applicants and no evidence to suggest that applicants shelter significant assets in order to become eligible for assistance.

Included in that broad authority are the states’ abilities to set asset limits for TANF, though in 7 states, the asset limit has remained unchanged at $1,000 in the four decades since it was first imposed at the federal level, while 8 states have eliminated the asset test altogether. While federal rules set the asset limit in SNAP at $2,250 for most households, states can establish their own limit by adopting broad-based categorical eligibility (BBCE); 37 states have utilized this option to eliminate asset tests in SNAP. In the child care subsidy program, Congress established uniformity for asset limits in 2014, when it required states to allow for self-certification that their assets did not exceed $1,000,000.

In Indiana, legislators considered, but failed to pass, a bill (2014 IN SB 413) that would have eliminated asset limits for SNAP and TANF applicants. The state is one of 14 states that has not eliminated the asset test in SNAP, and one of the seven states where the asset limit is $1,000.

Lawmakers in New York are considering legislation (2021 NY S 742/A 2214) to eliminate asset limits across all public assistance programs in the state. The state has already eliminated the asset test in SNAP, and the bill would eliminate the current asset test of $2,000, or $3,000 for households with someone age 60 or older.

Income Eligibility

Public assistance program eligibility requirements often trap people further into poverty instead of sufficiently counteracting multiple economic forces—labor market discriminationstagnating wages, and rising inequality, leaving children in households headed by single mothers, especially single Black, Indigenous, and Latina mothers, most likely to live in poverty.

States have considerable flexibility in setting income eligibility requirements across social safety net programs. Aligning income tests with a living wage ensures that people aren’t turned away from the social safety net, even when their jobs don’t pay enough to make ends meet. Rising child care costs that far outpace wages create significant employment instability for parents, especially mothers of young children. By one estimate, a nationwide increase in income eligibility for child care subsidies would result in 270,000 mothers joining the workforce.

Workers who receive a small raise or extra hours at work can also fall farther behind because they lose more in benefits than they received in increased income, in a phenomenon called the public assistance “cliff effect,” which is particularly pronounced for child care subsidies. The cliff effect forces workers into declining pay increases or promotions to maintain the benefits that allow them to pay the bills. Instead of promoting long-term financial stability, the public assistance cliff effect keeps workers on unstable financial footing, which contributes to increased administrative costs resulting from enrollees cycling on and off programs.

TANF Income Eligibility

States have significant flexibility in determining eligibility criteria for cash assistance programs funded by TANF dollars, resulting in wide variation in eligibility for TANF across the country. For example, a family of three in Alabama can earn no more than $268 per month to be eligible for TANF, while the same family in Minnesota would be eligible with monthly earnings of up to $2,231. States can expand access to TANF cash assistance by increasing income thresholds, adjusting income measurement methods, or allowing some portion of a household’s income to be disregarded in determining eligibility.

Young asian child in wheelchair laughs with caretaker or family member at the park

Lawmakers in Indiana failed to advance a bill (2021 IN SB 233) that would have increased the income threshold for TANF cash assistance to 50 percent of the federal poverty level over the course of 3 years. The bill would increase eligibility while ensuring that the threshold is updated annually as costs rise. Currently, eligibility for TANF in Indiana is based on a fixed dollar amount that was last updated in 1988.

In Maine, legislators enacted a bill (2019 ME LD 1772) to broaden income disregards in determining TANF eligibility. Prior law provided earnings disregards and childcare expenses for calculating benefit levels; the new law applies existing earnings disregards and child care expenses for the purposes of determining eligibility, in addition to significantly expanding disregards for calculating benefit levels.

SNAP Income Eligibility

Within SNAP, states have much less flexibility in setting income eligibility requirements. States that adopt broad-based categorical eligibility can increase the gross income threshold for the program above the federal minimum of 130 percent of the FPL, which 31 states and DC have already done. While some states have considered legislation to accomplish the change, the option can also be adopted through administrative means.

In Illinois, legislators approved a bill (2015 IL SB 1847) to increase the gross income limit in SNAP from the federal minimum to 165 percent of the FPL, or 200 percent for families with an elderly, blind, or disabled household member.

Minnesota lawmakers are considering legislation (2021 MN SF 759/HF 611) to increase the gross income limit for SNAP from 165 percent of the FPL to 200 percent.

Lawmakers in Nebraska overrode a gubernatorial veto to enact a bill (2021 NE LB 108) to increase the gross income threshold from 130 percent of the FPL to 185 percent. As amended and enacted, the threshold is increased to 165 percent of the FPL through September 30, 2023, and includes legislative intent language that the increase shall be funded through new federal funds provided through the American Rescue Plan Act.

Child Care Subsidy Income Eligibility

States also have broad authority to set income thresholds for childcare subsidy eligibility up to 85 percent of the state median income (SMI). Recent federal changes to index eligibility to SMI instead of FPL ensures that the threshold moves alongside economic conditions and costs within the state. There is significant variation across the country in access to child care assistance: a family of three can earn no more than 39 percent of the SMI in Nebraska to be eligible for child care subsidies, compared to 85 percent of the SMI in Arkansas, Mississippi, and Vermont.

Virginia legislators enacted a bill (2021 VA HB 2206) that temporarily increased income eligibility for child care subsidies to the federal maximum of 85 percent of the SMI if “the family includes at least one child who is five years of age or younger and has not yet started kindergarten.” The increased threshold is effective through August 1, 2021, though families who become enrolled continue to be eligible for a year.

In Iowa, lawmakers enacted legislation (2021 IA HF 302) to ease the cliff effect in the child care subsidy program by establishing a gradual eligibility phase-out to allow families to continue receiving assistance if their income is between 225 and 250 percent of the FPL, compared to current law under which families lose eligibility when they earn more than 225 percent of the FPL. The bill also establishes a higher threshold of 275 percent of the FPL for families with children needing special needs care.

The Utah legislature recently enacted a bill (2021 UT HB 277) to increase eligibility for child care subsidies, funded by new federal funds available to states, to the federal maximum of 85 percent of SMI. The bill also eliminates the co-payment obligations for families earning up to 75 percent of the SMI. Under existing law and regulations, the income limit is a percentage of the SMI as determined by the Department, and co-payments are required for any family earning more than 100 percent of the FPL.

State-Funded Programs for Immigrants Excluded from Federal Funds

Many states have established state-funded assistance programs for immigrants who are otherwise ineligible for federally funded programs, including cash assistance and nutrition assistance substitute programs. States can also use their portion of spending on TANF, which is already required to receive federal funds, to provide benefits to immigrants who are federally barred from eligibility until they have been in the country for five years. At least 22 states have a state-funded TANF replacement program and 6 states have a state-funded food assistance program available to some immigrants who are otherwise excluded from federally funded programs.

Legislators in California introduced a bill (2021 CA SB 464) that would extend eligibility for the state-funded California Food Assistance Program (CFAP) to any noncitizen, including undocumented immigrants. Current law restricts CFAP eligibility to specific categories of lawfully present immigrants.

New Jersey legislators enacted a bill (2020 NJ S 2329/A 3905), which received a conditional veto by the governor, that would have expanded access to TANF for lawful permanent residents, individuals granted relief through the federal Deferred Action for Childhood Arrivals (DACA) program, and any other non-citizens who are authorized to live in the United States.

In Washington, lawmakers enacted a bill (2019 WA SB 5164) to extend state-funded food and cash assistance to noncitizen victims of human trafficking and other serious crimes, and asylum seekers and their family members. Under the new law, individuals are eligible if they have filed, or are preparing to file, an application with the appropriate federal agency for their status. Prior legislation created the Food Assistance Program (FAP) and the State Family Assistance Program, which helps lawfully present immigrants who are otherwise ineligible for federally funded benefits.

Increasing TANF Benefits

The dismantling of direct cash assistance with the passage of PRWORA was the latest iteration of a long history of anti-Blackness in public assistance policymaking. In handing over substantial policy and programmatic authority to the states, Congress created opportunities for states to misuse vast amounts of public funds intended to help the nation’s poorest children. States took full advantage of the lax requirements, especially states with higher shares of Black residents, by spending increasingly larger amounts of TANF funds on programs for non-impoverished families that it was never intended to fund, or by accumulating vast slush funds instead of providing direct cash assistance to families in poverty. States now spend just 21 percent of TANF funds on basic assistance, with 14 states spending less than 10 percent. At the same time, in every state except for New Hampshire, TANF benefits still leave families in deep poverty because states have failed to adjust benefit levels alongside increases in the cost of living.  

Decades of systematic efforts to disassemble the social safety net have disproportionately fallen on Black children—41 percent of Black children live in states where TANF helps less than 10 families for every 100 living in poverty, and 55 percent of Black children live in states where TANF benefits are below 20 percent of the federal poverty level. Lawmakers can ensure that their states’ TANF funds are spent effectively toward reducing child poverty by increasing direct assistance to families in poverty and providing for automatic annual adjustments to benefit amounts.

A bill (2021 GA HB 92) that failed to advance in Georgia would have allowed for automatic annual increases to the maximum TANF benefit, which has been fixed at the same dollar amount for 30 years, by amending the definition of cash assistance to being “based on a standard of need that is equal to 50 percent of the federal poverty level for the applicable family size, and which equates to a maximum monthly amount equal to 75 percent of such amount for each such family size.” By tying the benefit to the FPL, which is adjusted annually, lawmakers could have reversed the declining value of benefits in the state, which has decreased by 40 percent since 1996.

Latina custodian wearing mask cleans bathroom sink or washbasin with towel

In Mississippi, legislators recently enacted a bill (2021 MS SB 2759) that raises the maximum monthly TANF benefits. Though the state has the highest child poverty rate in the nation, prior to the passage of the bill, TANF benefits in the state were the lowest in the nation; under the new law, a family of three would receive a monthly benefit of $260, an increase from $170 per month.

Massachusetts lawmakers considered legislation (2019 MA S 36/H 102) to increase the monthly benefit annually by 10 percent until the benefit amount reaches 50 percent of the federal poverty level. The bill also would provide an annual adjustment thereafter to align the benefit level with 50 percent of the federal poverty level. The bill failed to advance, but the final FY 2021 budget included a one-time 10 percent increase to the state’s TANF benefit levels. Similar legislation (2021 MA S 96/H 199) has been re-introduced in the 2021 session that contemplates 20 percent annual increases, which are reflected in budgets proposed by both the House and Senate.

In Minnesota, legislators introduced a bill (2019 MN SF 905/HF 799) to increase the benefit amount by $200 gradually in $50 increments through October 2022, and require 2 percent increases annually thereafter. Though the legislation failed to advance, the final enacted biennial budget included a $100 increase to the monthly benefit amount, the state’s first increase in over three decades.

Virginia lawmakers considered a budget amendment in 2020 that would have increased the benefit amount by 18 percent annually until the standard reached 50 percent of the federal poverty level. Although the amendment was not adopted, lawmakers included one-time increases of 15 percent and 10 percent in the 2020 and 2021 budgets. The 2021 budget bill also requires the Department of Social Services to “develop a plan to increase the standards of assistance by 10 percent annually until they equal 50 percent of the federal poverty level.”

Lawmakers in Washington (2021 WA SB 5092/HB 1094) approved a 15 percent increase to benefits for TANF families in the state’s biennial budget, effective July 1, 2021.

Additional Resources

Center on Budget and Policy Priorities (CBPP)

Center for Law and Social Policy (CLASP)

Center for the Study of Social Policy (CSSP)

National Immigration Law Center (NILC)

National Women’s Law Center (NWLC)

Prosperity Now

The Sentencing Project

The Urban Institute

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