Temporary Assistance for Needy Families (TANF) is a federal assistance program administered by the U.S. Department of Health and Human Services. Established in 1996 as a replacement for Aid to Families with Dependent Children (AFDC), TANF is designed to provide struggling families with financial assistance, childcare support and job preparation to achieve self-sufficiency. Under TANF, states receive block grants from the federal government to operate their own programs to meet the following objectives:

1. “Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives”
2. “End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage”
3. “Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies”
4. “Encourage the formation and maintenance of two-parent families”¹

The amount of the TANF block grant is based on states’ expenditures for AFDC during the fiscal year (FY) 1992-1995 period, when the number of public assistance recipients was relatively high.² The total annual TANF block grant amounts to nearly $17 billion, with SLC states receiving grants from a high of $538,595,947 in Texas, to a low of $62,839,408 in Arkansas during FY 2018.³

As a condition of receiving the block grants, states must contribute their own funding – known as the maintenance-of-effort (MOE) obligation – dedicated to achieving TANF’s four stated objectives (see above). The MOE must be at least 75 percent to 80 percent of state contributions to AFDC in FY 1995.^*  Once the TANF block grants are distributed, states have wide latitude in determining how they are spent. Cash assistance, child care, education, job training, transportation and support for children at risk of abuse all meet TANF eligibility.⁴  

States are permitted to transfer up to 30 percent of their annual funding to the Child Care and Development Fund and 10 percent to the Social Services Block Grant.⁵ Since FY 2010, Florida and Oklahoma have transferred the most funding to the two programs as a percentage of their annual TANF grants, transferring an average of nearly 29 percent during the period, followed by Mississippi and North Carolina at 25.9 percent and 24.8 percent, respectively. 

States are not required to spend a specified amount of annual TANF funding each year. According to federal guidelines, it is permissible for states to carry over remaining balances into the next fiscal year, either to be spent on eligible programs or placed in reserve for future needs, such as an increase in the number of recipients during an economic downturn. As a result of this flexibility, SLC states historically have carried over significantly different annual TANF balances. In FY 2018, for example, Tennessee had a remaining balance of $570,718,889, while Missouri had a remaining balance of $5,317,646. Similarly, in FY 2017, Virginia had a remaining balance of $121,984,621, compared to $9,506,845 in Texas.

Between FY 2010 and 2018, there were 37 instances when SLC states had a remaining TANF balance at or near $0. Louisiana used all available federal funding eight out of the nine years during the period, followed by Oklahoma (seven), Texas (six), South Carolina (five), Florida (four), North Carolina (three), Missouri (two), Alabama (one) and West Virginia (one).⁶

^* The MOE is set at 80 percent of FY 1995 AFDC contributions. However, the requirement is reduced to 75 percent for states that meet the work participation rate (WPR), which is the ratio of the number of adult TANF recipients who are working or in designated work-related activities compared to the total number of families receiving TANF-related cash assistance. To meet the WPR, half of families receiving TANF cash assistance must be engaged in work activities for at least 30 hours per week, and 90 percent of two-parent families must be engaged in work activities for at least 35 hours per week.

Summary of Federal TANF Funds, SLC States, FY 2010-2018

• FY 2010
• FY 2011
• FY 2012
• FY 2013
• FY 2014
• FY 2015
• FY 2016
• FY 2017
• FY 2018

Source: Office of Family Assistance, U.S. Department of Health and Human Services, https://www.acf.hhs.gov/ofa/programs/tanf/data-reports.

¹ TANF Statute, Social Security Act, Title IV, accessed January 7, 2020, https://www.ssa.gov/OP_Home/ssact/title04/0401.htm.  

² Congressional Research Services, accessed December 17, 2019, https://fas.org/sgp/crs/misc/RL32748.pdf.

³ Office of Family Assistance, U.S. Department of Health and Human Services, accessed December 19, 2019, https://www.acf.hhs.gov/ofa/programs/tanf/data-reports.

⁴ Center on Budget and Policy Priorities, accessed January 7, 2020, https://www.cbpp.org/research/family-income-support/policy-basics-an-introduction-to-tanf.

⁵ Center on Budget and Policy Priorities, accessed December 19, 2019, https://www.cbpp.org/research/family-income-support/how-states-use-funds-under-the-tanf-block-grant.

⁶ Office of Family Assistance, U.S. Department of Health and Human Services.