Survey highlights link between reduced TANF spending and child welfare outcomes

This piece originally appeared in APHSA’s Winter 2023 Policy & Practice.

Last year, Congress passed the Fiscal Responsibility Act of 2023, a bipartisan bill that paired raising the debt ceiling with the implementation of spending cuts and new work requirements on the Temporary Assistance for Needy Families (TANF) program. The bill, which was signed into law shortly after its passage, is expected to reshape how states manage their TANF programs and affect such items as the level of work requirements imposed and the number of families who will continue receiving benefits. This impact will be felt differently across states, as each state government takes its own bespoke approach to TANF spending.

Complicating the picture is recent research finding a strong correlation between increased restrictions on TANF spending and increased rates of children placed in foster care, which has child welfare implications for states as well. This piece will delve into some of the topline findings of that research, the new TANF rules that went into effect last fall, and how one may potentially impact the other.

Background

Since the passage of the Deficit Reduction Act in 2005, states have been under greater pressure to reduce overall TANF caseloads, by moving TANF recipients off assistance and into full-time employment. For example, across 2012 to 2016, Kansas reduced the time limit on TANF benefits from 60 months down to 24. Although some states, like Minnesota, eased work requirements, more than two dozen have implemented tighter restrictions that more selectively limit access to TANF benefits.

But as a recent study highlights, narrowing access to TANF benefits, while intended to transition more families into more robust employment situations, has also had ripple effects on child welfare outcomes.

A studied relationship between TANF cases and child welfare outcomes

That study, led by Dr. Michelle Motoyama-Johnson of the Ohio State University College of Social Work, unearthed some significant findings on the link between TANF and child welfare. The TANF policy restrictions implemented by states between 2004 and 2016 correlated with a 13% reduction in caseloads, which in turn led to “statistically significant increases in neglect victims, total case care placements, and foster care placements for reasons of neglect.” This included:

• Significant increases in neglected victims, with more than 44 additional neglect victims per 100,000 people.
• Significant increases of foster care placements, by 14 to 22 per 100,000 people.
• In the two years following the implementation of TANF restrictions, foster care cases increased by as much as 20%.
• Conversely, the study authors determined that, when "extrapolating these numbers to the 2015 U.S. child population of 73.7 million,” easing TANF restrictions could have resulted in more than 29,000 fewer children being admitted into the foster care system.

New TANF requirements passed by Congress

This research was released in July 2022, less than a year before Congress passed the Fiscal Responsibility Act. So, what does that mean for TANF recipients? As the Washington Post notes, while states design their own programs for administering TANF benefits, they are “required to make sure that at least 50 percent of recipients are working.” Previously, states were allowed to reduce that threshold based on how caseloads had fallen since 2005; the new law changes that comparison year to 2015, which will mean more states will now “have to boost their work requirements accordingly.”

States will have two years to put the new requirements into action, and can reduce the work participation requirements by directing more state funding into their TANF programs. But the fact is, every state will now be embarking on discrete methods for overhauling their TANF work requirement frameworks, which will very likely lead to reductions in their TANF caseloads – and consequently, as the aforementioned study suggests, potentially higher rates of foster care placements, neglected children, and other negative child welfare outcomes.

Navigating the new TANF landscape

Do changes to state cash welfare policies mean child neglect and foster care rates in states will definitively increase? The research can only point to correlation, not causation. But it is important context as agencies begin reexamining their TANF programs and look at potentially shifting many more benefits recipients off the program.

With each state taking its own approach, it’s critical that HHS agencies that administer programs like TANF and manage in-state child welfare assistance are taking a holistic approach to families and children. If a family is going to lose their TANF benefits, knowing that and knowing the resilience of the family and their situation will enable the agency to proactively offer needed support. This approach requires team collaboration across benefits and services, and a platform solution purpose built for understanding these HHS nuances to help make collaboration and data sharing easier. This study is an early warning on the importance of agencies taking a holistic, collaborative approach with supporting families.

There’s no one-size-fits-all way to navigate the new TANF landscape. As states embark on their own journeys for creating benefits experiences and mitigating child welfare outcomes, they must also adopt, deploy, and customize these solutions in a way that best meet the unique needs of their agencies and their constituents.