The Temporary Assistance for Needy Families (TANF) provides cash benefits to households that meet the eligibility requirements. This program is supposed to help parents regain self-sufficiency (not reliant on government welfare) by bridging the gap between a financial crisis and earning an income that supports their family.
TANF participants use the cash benefits to pay for essentials (rent, utilities, groceries, etc.) and can take advantage of the program’s other non-monetary perks, like job search help, to find employment.
TANF has rules for participants because the program’s ultimate goal is for families not to need financial assistance.
How TANF’s Cash Assistance Differs From Other Benefit Programs
Like most government programs, TANF uses the Electronic Benefit Transfer (EBT) system. This is more convenient and efficient for all parties.
The government sends money automatically, and participants receive payments without needing to cash a paper check and wait for it to clear. Likewise, there is no chance of funds becoming lost in the mail.
The biggest difference between cash benefits from TANF and those from other programs is fewer restrictions.
For example:
- Cash benefits from the Supplemental Nutrition Assistance Program (SNAP) can only pay for SNAP-approved foods, like fruits, vegetables, dairy, and breads. Participants cannot use their EBT card to buy alcohol, tobacco products, supplements, and nonfoods. And many states are restricting more items as of this year. In these jurisdictions, SNAP will not cover junk food like soda, candy, and some processed snacks.
- Likewise, cash benefits from Women, Children and Infants (WIC) are specific to food packages, so WIC enrollees can only use benefits for specific items, like formula, WIC-approved cheese, and WIC-approved cereal.
Neither SNAP nor WIC allows participants to purchase non-food items. They cannot use their cash benefits to cover medication or other necessities.
Cash benefits from TANF, on the other hand, have fewer food-specific restrictions. TANF benefits will not pay for alcohol, tobacco products, or lottery tickets.
But, in addition to groceries, participants can use TANF cash benefits to pay for living costs.
The amount eligible families can receive depends on the number of household members and the state where they live.
For instance, in 2024, the maximum monthly amount for a family of three in Minnesota was $1,370 but only $204 in Arkansas. States have higher maximum amounts for larger families.
The median TANF amount is about $552 a month for a family of three.
Using TANF’s Cash Benefits for Basic Needs
Although TANF participants may use their cash benefits for food, they can often be dual eligible for SNAP and housing assistance.
So, they can use their SNAP benefits for groceries, Section 8 for rent, and reserve their TANF cash benefits for other expenses. But, generally, TANF cash assistance can cover:
- Housing (rent/mortgage) and utilities.
- Groceries and medications.
- Transportation (gas, bus passes, car repairs).
- Household essentials (toiletries, diapers, laundry).
- School supplies and clothing for children.
While every little bit helps families truly in need, TANF benefits rarely cover a family’s cost of living.
The median maximum payment is about 25% of the federal poverty level (FPL). Meaning, the typical payment is well below a full income meant to cover basic living needs.
Also, this is assuming a family is eligible for the maximum amount. TANF decreases monthly benefits based on how much the household earns.
TANF’s Work Requirements
Speaking of household income, TANF comes with a few work conditions. Able-bodied adults must work or participate in work activities or community service for more than the minimum number of hours (per week) set by the state.
Some examples of work activities include:
- Unsubsidized/subsidized employment.
- On-the-job training.
- Job search/readiness.
- Vocational training.
Usually, the minimum number of hours adults need to engage in work activities is 30 each week. However, single parents with children younger than six years old may have a requirement of fewer hours, such as 20.
Likewise, some states set exceptions for parents with very young children (younger than four) and those with severe disabilities.
If an adult does not meet these work requirements each week, TANF can reduce or terminate benefits. This can be a problem if sickness, an emergency, or even a car breakdown stops an adult from going to work or engaging in work activities.
Similarly, some areas require parents to sign a personal responsibility plan that says their children need to attend school and receive immunizations.
TANF’s Asset Limits
To qualify for TANF, a household must show it is in need. While little to no income is one of the financial requirements, the program also has asset limits.
- Savings: Many states require families to have less than $3,000 in countable assets to qualify. Countable assets may include cash on hand, bank accounts, stocks, bonds, and other investments. This means that a family often has to spend their emergency savings to be eligible, which leaves them with no cushion for future emergencies, like car repairs or medical bills.
- Vehicles: Some states count the value of your car toward your asset limit. If your car is worth too much, you might be denied cash assistance, even if that car is your only way to get to a future job.
These asset limits vary by state.
Some may have no asset limits or limits as high as $15,000, while others have low limits, such as no more than $1,000. Likewise, some states allow applicants to have one vehicle (as the primary way to get to work) and only count additional vehicles as assets.
The Temporary Part of TANF
As mentioned, the TANF program’s objective is to help families become self-sufficient and not need cash assistance. It’s such an important goal that the government clarifies that benefits are only temporary by putting that word in the name.
Federal law imposes a lifetime limit of 60 months (five years) for receiving TANF benefits. Once you have used 60 months of benefits (even if those months were spread out over twenty years), you are generally ineligible for life.
Some states are even stricter, setting limits at 24 or even 12 months. From a planning perspective, TANF is a depleting resource. Every month you use it now is a month that won’t be available if you face a worse crisis years from now.
Examples of How TANF Fits Into Household Finances
Let’s look at how TANF and other welfare programs work with a family of three (two adults and a two-year-old child) who experience a job-loss crisis, and how their scenario changes as they try to become more self-sufficient.
Example 1: Both parents recently lost their jobs and have exhausted their savings to cover basics. They have one vehicle, less than $3,000 in the bank, and no incoming paychecks.
- TANF (Cash): Because they have almost no assets and zero income, they qualify for the maximum state benefit of $550 per month, which is only a third of their rent.
- SNAP (Food): They qualify for the maximum food allotment for three people, roughly $785 per month. This money is restricted strictly to groceries.
- WIC: Since they have a two-year-old, they also receive WIC. This doesn’t provide cash but gives them specific EBT credits for nutrient-dense foods like milk, eggs, and fruit, saving them about $60 to $100 on their grocery bill.
- Medicaid: Because their income is near zero, the entire family qualifies for Medicaid. This covers doctor visits, prescriptions, etc. with $0 premiums.
The family may still need to pull from their savings account to cover the remaining amount of their rent and cover their utilities. However, their groceries and health care expenses are covered.
Example 2: One adult finds a minimum-wage job working 40 hours a week (earning about $1,250 a month). The second adult finds a part-time job working 20 hours a week (earning about $625 a month).
- TANF Reduction: As the family’s earned income goes up, the state begins to reduce the TANF cash. Because they are now earning significantly more than the standard, their TANF check might drop from $550 to $150 or even $0.
- SNAP, WIC, and Medicaid: Their SNAP benefits will also decrease as their income rises. However, WIC and Medicaid often have higher income limits (especially for children), so the child might stay covered even if the parents have to pay for more groceries and move to a subsidized plan on the Health Insurance Marketplace.
- Child Care: With both parents working, the two-year-old needs care. Suddenly, that part-time job is costing them $1,000+ in childcare, which is more than the second adult makes. However, they may apply for a state child care voucher (funded by the Child Care and Development Fund), and if they get it, they may only pay a $50 co-pay.
The family has $1,875 of monthly income, but they face a higher risk of a cash shortfall.
Even with the child care voucher, the family is likely still coming up short on rent, utilities, and other living expenses. They may not have money left over for an emergency, like a car repair, or even a typical expense, like car registration.
