Many families struggle to make ends meet without support from social assistance programs. Temporary Assistance for Needy Families (TANF), a cash assistance program for families with low incomes, can be an essential support, yet most eligible families don’t participate in the program.

One reason for TANF’s low participation rate may be that it’s a block grant program. That means the federal government allots a set amount of funding for each state to provide cash assistance or other services to eligible families, regardless of the state’s current need.

TANF’s block grant structure is a significant shift in how cash aid has been administered in the US. TANF replaced the Aid to Families with Dependent Children (AFDC) program when the Personal Responsibility and Work Opportunity Reconciliation Act established the program in 1996.

Under AFDC, cash assistance was an entitlement, meaning if the number of eligible applicants increased, the amount of federal funding automatically increased to meet that need. States had flexibility to set policies, such as benefit levels, under AFDC, but the TANF block grant created some new federal requirements and gave states almost complete discretion to establish rules on who would be eligible and how much assistance they could receive.

Since TANF’s establishment, cash assistance caseloads have decreased (PDF). Nearly three decades later, the portion of eligible families who actually receive TANF is lower than ever.

A recent Urban analysis estimates the benefits families would receive if TANF cash assistance and other safety net programs were fully funded and everyone eligible participated. These insights can help policymakers and government agencies understand the potential impact of full participation in TANF cash assistance.

How have cash assistance participation rates changed over time?

Participation rates for cash assistance haven’t always been low. From the early 1980s through the mid-1990s, about 77 to 86 percent of families eligible for AFDC received assistance. However, the share of eligible families who received cash assistance fell from 84 percent under AFDC in 1995 to 69 percent in 1997, the first full year TANF was in place.

TANF’s participation rate continued to drop over the following years. (The only exception occurred between 2009 and 2011, when the rate increased slightly from 32 to 34 percent.) In 2020, only 20 percent of eligible families received cash assistance.

TANF isn’t the only safety net program that fails to reach all eligible people, but participation rates are lowest for block grant programs like TANF. Participation rates for six other safety net programs in 2022 ranged from 19 percent among families eligible for the Low-Income Home Energy Assistance Program, which is a block grant, to 61 percent among people eligible for Supplemental Security Income, which is an entitlement program. (The overall participation rate for TANF in the recent analysis is about one-fifth; because the analysis used a different data source than that used to estimate the cash assistance participation rates above, the specific numbers cannot be directly compared.)

Urban researchers found that if TANF were fully funded and all eligible people participated in 2022, the total amount of benefits paid would increase by $18.2 billion—about three times what people actually received. However, TANF’s block grant structure means federal funding for all eligible families is not guaranteed. If all eligible families applied, states would have to devote more of the block grant funds to cash aid or contribute more of their own funds. (In fiscal year 2021, only 23 percent of TANF funds were used on cash assistance.)

Why don’t all eligible families receive assistance?

Families eligible for TANF may not receive benefits for several reasons. They may not apply because they are unaware of TANF or because they have misconceptions about the program requirements. Other families might forgo cash assistance because they feel they don’t need help or because they’ve had negative experiences with government programs.

Other reasons qualifying families don’t participate may be specific to their state, because the block grant structure gives states discretion to set benefit amounts and some program requirements. In July 2021, the maximum TANF benefit for a family of three with no income ranged from $204 in Arkansas to $1,098 in New Hampshire. Families in some states may feel that benefit amounts are too low given the requirements they must meet.

Certain policies, like work requirements or sanctions, could also discourage families from seeking the help they need. With federal rules restricting cash assistance to 60 months and some states imposing even shorter time limits, families may opt out of assistance to avoid reaching that limit.

TANF could better support families with low incomes

TANF’s low participation rates mean families may miss out on benefits that could help them pay for food, housing, or other basic needs. Low participation has also left money on the table; about $6.2 billion in TANF funds went unspent across 43 states in 2021.

Though some of these funds may be committed to other uses, states with more unspent funds may have greater capacity to provide cash assistance to additional eligible families who aren’t currently receiving benefits. But because block grant programs do not provide guaranteed federal funding, some states still wouldn’t be able to provide TANF cash benefits to all eligible families without increasing their own spending.

Within the current funding structure, policymakers and government agencies can consider strategies to boost TANF participation, such as linking eligibility and enrollment across social assistance programs, streamlining the application renewal process, or partnering with other organizations for outreach.

Evidence shows full funding of and participation in safety net programs—including TANF—could significantly reduce poverty across states. Though TANF is one of many programs that make up the social safety net, with more funding and higher participation rates, it could play a significant role in improving the lives of Americans with low incomes.