	Introduction

The Temporary Assistance for Needy Families (TANF) block grant provides federal grants for a wide range of benefits and activities. It is best known as the major source of funding for cash welfare for needy families with children. The TANF block grant was created in the 1996 welfare reform law ( P.L. 104-193 ). At the federal level, TANF is administered by the Department of Health and Human Services (HHS). It is the states and the tribes that provide TANF benefits and services to families and individuals. This report provides an overview of TANF financing and rules for state programs, describing
federal TANF grants and state funds under a "maintenance-of-effort" (MOE) requirement; how federal TANF and state MOE funds may be used to help achieve the purpose and goals of the TANF block grant; rules that apply when TANF or MOE funds are used to provide "assistance" to needy families with children; rules that apply when TANF or MOE funds are used for benefits and services o t her than assistance; certain accountability requirements, including requirements that states submit plans and report data to the federal government; and provisions of TANF law not directly related to grants to states, such as competitive grants for promoting healthy marriage and responsible fatherhood, and tribal TANF provisions. Contingency funds are only available to the 50 states and District of Columbia. Tribes and the territories are ineligible for contingency fund grants. For FY2018, states are required in the aggregate to spend at least $10.3 billion on specified activities for needy families with children. TANF's purpose is to increase state flexibility to meet specified goals. Its four statutory goals are to
1. provide assistance to needy families so that children can be cared for in their own homes or in the homes of relatives; 2. end dependence of needy parents on government benefits through work, job preparation, and marriage; 3. reduce the incidence of out-of-wedlock pregnancies; and 4. promote the formation and maintenance of two-parent families. Though TANF is a block grant, there are some strings attached to states' use of funds, particularly with regard to families receiving "assistance." Child care and transportation for working parents are explicitly excluded from the definition of assistance. Federal Eligibility Rules for Assistance

TANF requires that a family have a minor child to be eligible for assistance, including ongoing cash welfare. Federal law also prohibits states from using federal TANF funds to provide assistance to the following persons and families:
families with an adult who has received federally funded aid for 60 months (see " The TANF Time Limit "); unwed teen parents, unless living in an adult-supervised setting; teens who have not completed high school, unless they are making satisfactory progress toward achieving a high school or equivalent credential or in an alternative training program; noncitizens who arrived in the United States after August 22, 1996, for the first five years after arrival; fugitive felons and parole violators; and persons convicted of a drug-related felony, unless the state affirmatively opts out of this provision. These are known as "child-only" families receiving TANF assistance. For this requirement, the state is free to determine what constitutes being engaged in work. The work participation standards apply to states, not individual recipients. The standards are that (1) 50% of all families and (2) 90% of two-parent families must meet participation standards. These statutory standards are reduced by "credits" that vary by state and by year. States receive credits for caseload reduction and for spending state funds in excess of what is required under the MOE. Two-parent families must participate for more hours to be counted as engaged in work. Federal law provides a hardship exception to the time limit, allowing federal funds to be used in cases of hardship for up to 20% of the caseload beyond the five-year limit. A few states effectively do not limit the amount of time a family may receive assistance, either providing aid to families beyond five years using state funds (e.g., New York) or eliminating assistance paid on behalf of the family's adults after a time limit and continuing benefits indefinitely only on behalf of the children (e.g., California). These waivers must be reassessed at least every six months. Examples of such benefits and services include short-term, non-recurring aid, child care for families with working members, transportation aid for families with working members, refundable tax credits for working families with children, funding of Individual Development Accounts (IDAs), education and training for low-income parents, youth employment programs, and activities that seek to achieve the family formation goals (goals three and four) of TANF.
The Temporary Assistance for Needy Families (TANF) block grant provides federal grants to the 50 states, the District of Columbia, the territories, and American Indian tribes for a wide range of benefits, services, and activities. It is best known for helping states pay for cash welfare for needy families with children, but it funds a wide array of additional activities. TANF was created in the 1996 welfare reform law (P.L. 104-193). At the federal level, TANF is administered by the Department of Health and Human Services (HHS).
TANF provides a basic block grant that totals $16.5 billion. It also requires states to contribute in the aggregate from their own funds at least $10.3 billion for benefits and services to needy families with children—this is known as the maintenance-of-effort (MOE) requirement. TANF and MOE funds may be used in any manner "reasonably calculated" to achieve TANF's statutory purpose. This purpose is to increase state flexibility to achieve four goals: (1) provide assistance to needy families with children so that they can live in their own homes or the homes of relatives; (2) end dependence of needy parents on government benefits through work, job preparation, and marriage; (3) reduce out-of-wedlock pregnancies; and (4) promote the formation and maintenance of two-parent families.
Though TANF is a block grant, there are some strings attached to the use of its funds. Most TANF requirements apply to families receiving assistance. Assistance is often, but not exclusively, in the form of a cash benefit. Families must be financially needy and have a minor child to qualify for assistance; however, individual states and tribes determine the exact financial eligibility rules and benefit amounts for their programs. Some families have eligible children but the adults who care for their children are ineligible for aid. These are termed "child-only" families because benefits are paid only on behalf of the children.
States and tribes must meet TANF work participation standards or risk a reduction in their block grant. For the states, the law sets standards stipulating that at least 50% of all families and 90% of two-parent families be "engaged in work." Some families receiving TANF assistance are excluded from the calculation. Additionally, these statutory standards are reduced by credits for caseload reduction and state spending in excess of what is required under the TANF MOE. These credits and the effective (after credit) participation targets vary by state and year. Activities countable toward a family being "engaged in work" are focused on employment or working off the cash benefit, or are intended to rapidly attach welfare recipients to the workforce; education and training is countable, but limited. Work requirements for tribal programs are set by negotiation between the tribes operating the program and HHS.
Federal TANF funds may not be used for a family with an adult who has received assistance for 60 months. This is the five-year time limit on welfare receipt. However, up to 20% of the caseload may be extended beyond the five years for reason of "hardship." Each state may have its own definition of hardship. Additionally, funds spent to meet the TANF MOE requirement may be used to provide assistance to families beyond five years.
TANF work participation rules and time limits do not apply to families receiving benefits and services not considered "assistance." Such benefits and services include child care and transportation aid for families with earnings, state earned income tax credits for working families, activities to reduce out-of-wedlock pregnancies, activities to promote marriage and two-parent families, and activities to help families that have experienced or are "at risk" of child abuse and neglect.