Benefit levels for Temporary Assistance for Needy Families in Alabama ranked 50th in the country as a percentage of the federal poverty level, according to a new report from the Center on Budget and Policy Priorities.

Alabama’s TANF benefit is only $215 a month for a family of three, less than half the national median of $492. According to the latest USDA Cost of Food report, the monthly cost to feed a child age 9-11 is about $230.

Only Arkansas offered a lower benefit, at $204 a month.

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The TANF benefit, the main cash assistance program for families with children who are in need or have extremely low incomes, can play an important role in ensuring that these families have enough money to meet their basic needs.

States have control over benefit levels. While a number of states have raised cash benefits since July 2021, and others have systems to automatically increase benefits, others have kept the TANF benefit too low to cover families’ essential necessities, but states have control over benefit levels.

“I’m not sure that it’s politically feasible to make the kinds of changes in Alabama that we probably should with a TANF program,” said Carol Gundlach, Senior Policy Analyst at Alabama Arise.

The Alabama Department of Human Resources, charged with administering the family assistance program, said in a statement that they have not reviewed GBPP’s recent findings, but that the department “is always seeking opportunities to maximize the positive impact of TANF dollars for low-income families, with the goal of helping them achieve self-sufficiency.”

The low benefit in Alabama and across the country was created in part by the federal government, Gundlach said. In 1996, a revised proposal, championed by House Republicans and Republican governors, passed in both chambers of Congress and signed into law by President Bill Clinton, replaced Aid to Families with Dependent Children (AFDC) established in 1935.

TANF, as it was signed into law, is a broad-purpose block grant to help states fund a wide range of benefits, services, and activities to address the effects of, and root causes of, child poverty and economic disadvantage. But as a block grant, spending for TANF was capped at $16.5 billion per year, and that has not changed since its creation in 1996.

The block grant also imposed a five-year limit for receiving TANF benefits, increased work requirements states must meet and gave states more flexibility on program design.

Unlike the cap that TANF imposed, states were previously entitled to unlimited federal cash at “matching” rates, related to state per capita income. And although states defined “need” and established their own benefit amounts, states were required to offer assistance to all individuals who qualified under federal law and whose income were within state-set limits.

Most TANF policy revolves around the cash assistance and work programs that the block grant helps fund. In Alabama, to qualify for TANF benefits, recipients must participate in the JOBS Program, which include job skills training and adult education.

While governments can guarantee families have enough to cover basic needs, they also have a long history of providing insufficient aid, particularly in states with a higher proportion of Black citizens, according to the CBPP report. CBPP said Congress should establish a government minimum benefit to ensure that no family falls below a specified income level.

Other adjustments CBPP suggested are changes to the financing, fix funding disparities, and minimize benefit erosion over time.

“Most importantly, the federal government needs to do everything in its power to require states to direct as much cash as possible to families so they can meet their basic needs and chart their own future,” said Peggy Bailey, vice president for housing policy at CBPP.

A smaller block grant

Gundlach said that when the federal government switched to block grants for TANF, it did two things: First, it set a cap, and the overall size of the block grant, or the amount of money states receive, have not increased since 1996.

The federal government also based the funding formula for states on what states had previously spent under AFDC.

“And what that meant is for Alabama, that has historically had a very small public assistance program and we certainly had a very small AFDC program, “It locked us into a smaller block grant than either our poverty rate, or our comparative size to other states would have entitled us too,” Gundlach said.

But the state government is also to blame for the low TANF benefit. Alabama set its benefit amount at $164 for a family of three. Since then, it has only been raised once, in 2002, to $215, Gundlach said. The Legislature could have passed a bill to raise the benefits in the last 20 years, but to this point has chosen not to.

“We’re struggling to get them to even consider Medicaid expansion, let alone to give people cash assistance,” Gundlach said. “It’s really a very challenging environment.”

And because a state may spend more or less than its yearly block grant allocation in any given year, unspent block grant funds can be carried over to future years. Alabama had amassed $101 million in unspent TANF block grant monies as of 2020.

The unspent grant money has been used in other ways that has helped struggling families, Gundlach said. Alabama has used some of its TANF dollars to bolster spending for the Child Protective Services program, emergency assistance programs and even car repairs that are not monthly cash assistance, but help people get back on their feet.

“That’s a really good example that if somebody can’t go to work because they don’t have transportation, they can apply for, and if they’re eligible, get money to repair a car so they could go to work and not have to rely on the monthly cash assistance,” Gundlach said.