Summary of Policy Issues

Separate State Programs and Segregated State Funds within TANF

Under TANF, a state can choose to satisfy its Maintenance of Effort (MOE) obligation, in whole or in part, through the use of separate state programs, i.e., programs for needy families that meet an allowable MOE purpose, but which receive no federal TANF funds. Most TANF requirements – e.g. federal participation rates, time limits, requirement to turn over child support – are inapplicable to families receiving assistance in separate state programs. A state might use a separate state program, for example, to provide access to postsecondary education outside of the TANF structure.

In addition to (or instead of) using separate state funds, a state may provide assistance to a family or groups of families in the states TANF program with state funds that are segregated from federal TANF funds. One reason a state might wish to do so is that any month in which a family is assisted with segregated state funds does not count against the 60 month limit on use of federal TANF funds. In addition, certain prohibitions that apply to use of federal TANF funds don’t apply to assistance with segregated state funds. A state might use segregated state funds, for example, in order to implement a policy under which families in which a parent is working in unsubsidized employment can receive TANF without having those months count against the time limit. Or, a state might wish to use segregated state funds to provide assistance to teen parents who are not able to satisfy the requirements for school attendance or living arrangements in order to receive federally funded TANF assistance.

States’ utilization of segregated state funds and separate state programs to better meet state policy objectives is an area of rapidly evolving policy. For this reason we have supplemented data collected through SPDP surveys with information included in HHS’s Second Annual Report to Congress on the TANF Program. (HHS August 1999) Even with such supplementation, however, this report should be viewed as a partial listing which may not accurately reflect all of the state activities in this area at the current time.

SPDP has identified 26 states that have established one or more separate state programs to provide cash income support to families. The most common categories of families served under such programs are two-parent families, families in which a parent or child is disabled, and families in which a parent is participating in an approved postsecondary education program.

SPDP has also identified 15 states that provide cash assistance to some families with segregated state funds within the state’s TANF cash assistance program for categories of families, including for example, those in which an adult is employed, participating in an approved postsecondary education program, certain categories of immigrants.