Virtually All Welfare Benefits Are Now Worth Less Than In 1996


Welfare Reform 3x2


The value of benefits from the Temporary Assistance for Needy Families (TANF) program, formerly known as welfare, continued to fall this year, and for 99 percent of recipients, their purchasing power is less than it was in 1996 after adjusting for inflation, according to a new report from the Center on Budget and Policy Priorities.

A family of three that relies solely on TANF cash benefits won’t be able to meet market rent prices for a two-bedroom apartment in any state. Worse, in 25 states the benefits cover less than half of rent.

The benefits are now worth at least 20 percent less than in 1996, adjusted for inflation, in 37 states. While no states reduced the amount they give out in benefits, most left them unchanged, which meant that inflation continued to erode their value. Seven states — Connecticut, Maryland, Montana, New York, Ohio, Texas, and Wyoming — increased benefits this year, but most were small cost of living adjustments.

Given the erosion in value, the benefits for a family of three will only put it at 50 percent of the federal poverty line in every state, or $9,765 a year. In 32 states and Washington, DC, the benefits put that family at less than 30 percent of the poverty line, and in 16, benefits are at 20 percent of the poverty line, or less than $326 a month. More than 80 percent of families who receive TANF also receive food stamps through the Supplemental Nutrition Assistance Program (SNAP), but even those families who get both will still fall below 75 percent of the poverty line in 48 states and DC.

CBPP also notes that the declining value of welfare benefits comes after bigger drops between 1970 and 1996, when the cash assistance fell by more than 40 percent in two-thirds of the states.

Worse, many low-income families don’t even receive TANF benefits. Last year, just a quarter of poor families got benefits, compared to 68 percent in 1996. The number of families on the rolls has steadily declined since the mid-90s thanks to dramatic changes in the program during welfare reform. Those changes also meant that the program wasn’t able to keep up with the increased need created by mass unemployment during the recession.

Other barriers have been erected that serve to keep people from getting on TANF’s rolls. At least eight states have laws that require drug tests for applicants to public benefits despite the fact that they have found little evidence of widespread drug use, cost thousands or even millions to administer, and have been blocked by a bunch of recent court rulings. Tennessee even proposed tying benefits to children’s grades, meaning that families could lose them if kids don’t perform well.