Continued Increases in TANF Benefit Levels Are Critical to Helping Families Meet Their Needs and Thrive

Temporary Assistance for Needy Families (TANF) is the nation’s primary cash assistance program for families who have children and very low incomes. TANF can play a key role in ensuring that eligible families can meet their needs (such as rent, utilities, personal hygiene products, and school supplies). Although some states increased their cash benefit levels between July 2022 and July 2023 — including several states that have policies in place to automatically increase cash benefits —much more can be done to improve TANF benefit levels. States have broad flexibility under federal law to:

• increase benefit levels;
• establish mechanisms such as a cost-of-living-adjustment (COLA) that ensure cash benefits keep pace with inflation over time;
• provide housing supplements and other additional payments; and
• end punitive policies like full-family sanctions and family cap policies that reduce or take away cash assistance.^[2]

Low TANF cash benefit levels, which disproportionately affect the benefits available to Black families and their ability to afford basic needs like housing, are rooted in a long history of racist ideas and policies.^[3] TANF cash benefit levels tend to be lower in states where Black residents make up a greater share of the population, when controlling for other factors, research finds.^[4] In addition, TANF continues to be inaccessible to most recently arrived immigrants, many of whom are people of color.

Twenty-One States and D.C. Raised Benefit Levels Between July 2022 and July 2023

This paper, an annual update on state TANF benefit levels, covers benefit changes that took effect between July 1, 2022, and July 1, 2023. During this timeframe, 21 states and D.C. increased benefit levels. (See Table 1.) Twelve of these increases represent recurring adjustments; that is, these states have policies in place to ensure that their TANF benefit levels periodically increase.

The benefit level (in nominal dollars) in the median state is now $549, an increase from last year’s median state benefit level of $492. (See Appendix Table 1.) Despite recent increases, cash benefits are at or below 60 percent of the poverty line in every state and below 20 percent in 17, mostly Southern, states. (See Figure 1.) The benefit levels cited reflect the maximum monthly benefit for a family of one parent and two children with no other income as of July 1, 2023. However, families often do not receive the maximum TANF benefit; therefore, the cash benefits cited may exceed what many families receive. Benefit levels in seven states (California, Connecticut, Kansas, New York, Pennsylvania, Vermont, and Virginia) vary by geographic region within the state. (For more details on the benefit levels reported, see the footnotes in Appendix Table 1.)

In 2023, cash benefits in only 11 states had a real (inflation-adjusted) value that was the same as or higher than in 1996. At the other end, ten states had the same nominal cash benefits level in 2023 as in 1996, meaning that benefits fell by 46 percent in inflation-adjusted terms. Four states — Arizona, Hawai’i, Idaho, and Oklahoma — cut cash benefits without later restoring them, so these benefits are below their 1996 levels even without adjusting for inflation. In the remaining 26 states and D.C., cash benefit increases were not sufficient to keep pace with inflation, leading to an average value loss of 30 percent. (See Appendix Table 1.)

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Between July 1, 2022, and July 1, 2023, ten states took specific legislative or administrative actions to increase their grant levels. For example:

• Kentucky took administrative action that doubled its benefit level from $262 to $524, its first increase since TANF’s creation in 1996.
• Montana increased its benefit from $588 to $725, a $137 increase from 2022 and its largest increase to date.
• Indiana increased its benefit level from $288 to $320, a $32 increase and its first increase since TANF’s creation.
• North Dakota increased its benefit level from $486 to $872, a $386 increase and its largest increase to date.

Although cash benefits automatically increased in 12 states because of a cost-of-living adjustment already in place, the amount of the COLA varied substantially, from as low as $15 in Texas to as high as $92 in New Hampshire. This reflects variation in cash benefit levels as well as different mechanisms for automatically increasing benefits.^[5]

State TANF Benefit Decisions Have Disparate Impacts on Rent Affordability, Especially for Communities of Color

TANF agencies and state legislatures can also increase benefit levels by starting or strengthening housing supplements for TANF recipients. Federal standards define rent (including utilities) as affordable when it takes up no more than 30 percent of a household’s income. For families whose only source of income is TANF, Fair Market Rents (FMRs) are well over 30 percent of the maximum monthly TANF benefit in every state. (See Appendix Table 3). This poses a significant concern for Black and Latine families with low incomes, who are especially vulnerable to housing insecurity and eviction. Yet only 1 in 4 eligible families receive federal housing assistance due to lack of funding.^[6]

According to a study using 2022 census data, 56 percent of Black renters and 53 percent of Latine renters spend more than 30 percent of their monthly income on rent and utilities compared to 44 percent of white renters. In addition, about one-third of Black renters spend more than half of their monthly income on rent and utilities compared to 24 percent of white renters.^[7] Studies show that Black mothers with young children are more likely than any other group to face eviction.^[8]

Housing supplements remain an effective way to help families, though no TANF programs added new or increased existing supplements between July 2022 and July 2023. A few states provide a housing supplement in addition to the base TANF cash benefit for families who do not receive rental assistance from the Department of Housing and Urban Development or another program. Six states provide such supplements, but in three states — Massachusetts, North Dakota, and Vermont — the supplements are very low, less than $50. The other three states — Hawai’i, Maine, and Minnesota — provide larger supplements that increase a family’s ability to pay for housing without rental assistance. (See Appendix Table 3 for more information).

States Have More Work to Do to Improve TANF and Help Families Thrive

In 2023, many states took steps to get more benefits to families, but a few states implemented restrictions or failed to act to increase access to benefits. For example, six states have yet to remove family cap policies that deny additional cash benefits to families who have children after their initial TANF eligibility is determined: Arizona, Arkansas, Florida, Mississippi, North Carolina, and South Carolina. Policy measures such as family caps attempt to control people’s reproductive decisions and their access to resources, in direct opposition to the goals of reducing poverty and supporting families’ autonomy and well-being.^[9] Further, policymakers in Arkansas significantly curtailed families’ access to TANF by reducing the time limit for households with work-eligible adults from 24 months to 12 months.^[10]

Only 11 states have benefits that have kept up with inflation since 1996, and several of those are only due to recent increases and very low benefit levels. States can do more to make sure families can access TANF and have the assistance they need to meet basic needs and thrive.

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