Time Limits

Updated 11/19/2023

Time Limit Basics

Federal law sets a 60-month lifetime time limit on receipt of federally-funded TANF benefits; states can extend the limit beyond the 60 months for up to 20 percent of the caseload based on hardship (as defined by the state). States can set their own time limit policies as long as they comply with the federal restrictions.  A state can set a limit that is shorter than 60 months and it can use hardship extensions or state MOE funds to support families beyond 60 months. Some states have two time limits – a lifetime limit and an intermittent time limit, under which a family is eligible for TANF for a period of time followed by a period of ineligibility, after which the family can receive benefits again until they reach the lifetime limit. Nearly all states provide exemptions from or extensions to the time limits. States can also provide cash benefits beyond 60 months by creating a separate state program which uses only state MOE funds that are not comingled with federal funds to provide benefits to families. (See this document for an explanation of which policies apply to separate state programs: Guide-to-Use-of-TANF-Funds.pdf (clasp.org).)

The files attached at the right provide examples of materials to eliminate or extend time limits.

What do we know about families most affected by time limits?

Here is what we know about families reaching the time limits:

  • Many families who reach a time limit experience significant barriers to employment. Numerous studies have found families reaching time limits are far more likely than other TANF recipients to experience employment barriers such as physical and mental health problems, suffer from substance abuse, and to have lower levels of cognitive functioning and education (Pavetti and Kauff 2006; DeMaster 2008; Seefeldt and Orzol 2005).
  • Families that reach a time limit are more likely to have an eligible adult who is a minority and is older than the rest of the state’s TANF population. (DeMaster 2008; Farrell et al 2008)
  • Families that reach time limits have limited employment prospects and few find employment after they lose benefits due to time limits. Researchers from the University of Maryland’s School of Social Work found that compared to other welfare leavers, time limit leavers in Maryland had less employment history while on TANF and worked fewer quarters in the year after leaving assistance. Families who left TANF in Kansas because of a time limit had the lowest rates of employment among all TANF leavers. A Maine report observed that those families who were lucky enough to find employment after reaching the time limit did not see a significant increase in wages or hours worked after losing TANF.   
  • Families that reach time limits are likely to experience high levels of hardship after leaving welfare. In Maine, Butler found that families kicked off due to time limit experienced increased reliance on food banks, inability to pay utilities and other bills, and overcrowded housing conditions or reliance on homeless shelters. A Washington State study also showed an increase in homelessness among families affected by the time limit changes.

Time limit implementation issues

Processes for implementing time limits can have a big effect on the impact of a state’s time limit policies.  Nearly all states have time limit extensions for certain families, and many states have exemptions as well.  Many of families that may reach the time limit are those for whom the time limit is inappropriate.   

Often, the actual details of the policies – the duration of the time limit and the exemption or extension criteria – get close scrutiny and the implementation processes do not get as much attention. It is important to consider whether state policies and procedures provide appropriate services and determinations for families that are approaching time limits, particularly whether those who should receive an extension (or should have been exempted but were not) are not cut off due to time limits. States should also assess whether there are racial disparities in the implementation of time limits.

Here are some questions to consider when thinking about the extension determination process:

  • When and how are families made aware of how many months they have left on TANF?  What steps does the state take in the 3-6 month period before a family reaches the time limit?
  • Does the state review all cases to determine if an extension should be granted before taking closure action or put the burden on the family to apply for an extension?  Are these separate processes rather than leaving a family simply to appeal a closure due to the time limit being reached?  Does a state notify families of what type of information they could submit to support an exemption or extension, in advance of a termination notice?
  • What happens in the situation when the individual should have been exempted from the time limit running, but that did not happen?  Can they later (as time limit is reached) be protected from case closure, whether by exemption or extension?
  • Who makes the determination on an extension?  Is there a staffing that involves review by other persons beyond a single caseworker?
  • What happens when a family that has previously reached a time limit and exited TANF needs aid in the future, perhaps after loss of a job or a change in circumstances?  Does the extension policy and process allow such a family to reapply for benefits after having previously left TANF?

CBPP Papers:

Research Note: Contrary to Maine Officials’ Claims, TANF Time Limit Leaves Most Families Without Work or Cash Assistance | Center on Budget and Policy Priorities (cbpp.org)

Life After TANF in Kansas: For Most, Unsteady Work and Earnings Below Half the Poverty Line | Center on Budget and Policy Priorities (cbpp.org)

Other State Studies

Butler, Sandra (2013).TANF Time Limits and Maine Families: Consequences of Withdrawing the Safety Net. University of Maine.

DeMaster, Dana. (2008). “At the Limit: December 2006 Minnesota Family Investment Program (MFIP) Cases that Reached the 60 Month Time Limit.” Minnesota Department of Human Services. https://edocs.dhs.state.mn.us/lfserver/Legacy/DHS-5092B-ENG

Hetling, Andrea, Kathryn Patterson, and Catherine Born (2006).  The TANF Time Limit: Comparing Long-Term and Other Welfare Leavers.  Family Welfare Research and Training Group. timelimitleavers.pdf (umaryland.edu)

Pavetti, LaDonna and Jacqueline Kauff (2006). When Five Years Is Not Enough: Identifying and Addressing the Needs of Families Nearing the TANF Time Limit in Ramsey County, Minnesota. Mathematica Policy Research, Inc.

https://www.mathematica-mpr.com/our-publications-and-findings/publications/when-five-years-is-not-enough-identifying-and-addressing-the-needs-of-families-nearing-the-tanf-time-limit-in-ramsey-county-minnesota

DSHS Economic Services Administration and DSHS Research and Data Analysis Division (2012). The Circumstances of Families after Time Limits: Adults and Children Terminated from TANF in February 2011. (Washington State)

Benefits: Cash Matters

There is a growing body of research that shows why cash matters for families. The file attached at the right TANF-Talking-Points-For-States.With-Cites.docx (live.com) provides talking points that you can use to make the case for why increasing cash benefits will positively impact children and parents and reduce costs for human service agencies, especially through lower costs in child welfare.

You can find data on state benefit levels in CBPP’s annual paper on benefit levels: Increases in TANF Cash Benefit Levels Are Critical to Help Families Meet Rising Costs | Center on Budget and Policy Priorities (cbpp.org). The tables in the appendix provide a comparison across time and across states. You can also ask an income security staff person if you need more updated data or would like the data in a spreadsheet to make it easier to create visual charts. Comparisons with benefits in neighboring states or states with similar characteristics can be a powerful way to garner support for an increase in benefits.

This CBPP paper also provides a good summary of why cash matters: Economic Security Programs Help Low-Income Children Succeed Over Long Term, Many Studies Find | Center on Budget and Policy Priorities (cbpp.org). (There is more recent data available on this topic. You can check with CBPP staff to see if an updated synthesis of the research on this topic is available.)

This report from the National Academies of Science, Engineering and Medicine is often cited as evidence for why cash matters. The report is quite long, but concludes that “poverty causes negative outcomes for children, especially if it occurs in early childhood or persists through a large part of childhood.” The National Academies Press | A Roadmap to Reduce Child Poverty – Data Explorer

Benefits: Non-Recurrent Short-Term Benefits (NRSTs)

Last Updated: 09/15/2023

Non-Recurrent Short-Term Benefits (NRSTs) are a mechanism that allows states to use TANF funds to provide cash or in-kind services to families with children without triggering behavioral requirements and time limits. NSRTs are not considered “assistance” so they do not trigger time limits or work and child support cooperation and assignment requirements. They also do not trigger the data reporting requirements that is required for assistance. (You can find more on the distinction of assistance vs. non-assistance at this link: Assistance vs. Non-Assistance | Resources for TANF Advocates (incomesecuritycbpp.org)

There are three key requirements that an NRST must meet:

  • It must be designed to address a specific crisis or situation of need. Examples of specific crises or situation of need that NRSTs could be used to address include evictions, utility shutoffs, loss of housing due to a fire or natural disaster, fleeing domestic violence, the birth of a child, a short-term medical issue, among others.
  • It cannot be used to address a chronic or ongoing situation.
  • It cannot be used to provide assistance beyond four months.

NRSTs can be provided to TANF or non-TANF recipients, but they are especially useful for providing help to non-TANF recipients. (Because TANF recipients are already receiving assistance, they are already subject to time limits and behavioral requirements that NRSTs aim to avoid.)

States have complete flexibility to determine the income standards and eligible populations for NRSTs and they may differ for each NRST that a state provides. They also can provide NRSTs to families in the form of cash that goes directly to a family or they can provide an NRST in the form of a voucher that goes directly to a landlord or utility company.

Below are resources that HHS has put out that provide examples of NRSTs. Recent examples include providing cash payments to families during the pandemic (including SNAP recipients who do not receive monthly TANF cash benefits) and using TANF funds to replace cash and SNAP benefits lost due to skimming and other fraudulent activity.

Examples: Non-Recurrent Short-Term Benefits | The Administration for Children and Families (hhs.gov)

TANF-ACF-PI-2021-02 (The Pandemic Emergency Assistance Fund) | The Administration for Children and Families (hhs.gov)

TANF-ACF-PI-2023-02 (Supporting Families Who Are Victims of EBT theft due to card skimming, cloning, and similar fraudulent methods) | The Administration for Children and Families (hhs.gov)

TANF-ACF-PI-2008-05 (Diversion Programs) (AMENDED) | Guidance Portal (hhs.gov)

Benefit Cliffs

Updated 09/14/2023

In recent years, there has been considerable interest among both progressives and conservatives (including from state legislatures) on strategies for reducing “benefit cliffs” – the loss of public benefits due to increased earnings – also referred to as “marginal tax rates”. As the piece from CBPP below lays out, policymakers often overstate benefit cliffs and gloss over the tough tradeoffs in reducing them. Effective marginal tax rates are a natural and inevitable consequence of benefits that target households with low but not middle incomes. Program benefits that cover basic needs are designed to decline as earnings increase. The reality is that most public benefits end gradually so workers actually face a slope rather than a cliff. (The exception is child care which does end abruptly in some states.) Recipients’ experience with and perspectives on benefit cliffs provide important insights into developing effective strategies for minimizing the impact of benefit cliffs.

In addition to the CBPP resources that provide an overview of the benefit cliff, there are lots of other resources available on this topic. In addition to the CBPP resources we provide below, we have also included links to reports that lift up participant voices, an example of a DC initiative explicitly designed to address the benefit cliff, a series of reports produced by ASPE that include estimates of the benefit cliff for various programs and program combinations, state reports produced in response to legislation, and calculators to estimate the impact of earnings increases.

CBPP Overview of Benefit Cliff (i.e., marginal tax rate issues)

Policymakers Often Overstate Marginal Tax Rates for Lower-Income Workers and Gloss Over Tough Trade-Offs in Reducing Them | Center on Budget and Policy Priorities (cbpp.org)

(The CBPP presentation under Additional Files at the right provides a quick overview of Benefit Cliff issues.)

Individual perspectives

Balancing at the Edge of the Cliff | Urban Institute

Strategies to address the benefit cliff – DC’s Career MAP Demonstration Project

Career MAP | dhs (dc.gov)

One of the main goals is of DC’s Career MAP project is to offset the loss of TANF and SNAP benefits as earnings rise, to limit benefit phaseouts and cliffs for families participating in the city’s rapid rehousing program.  A family with zero earnings gets no benefits from Career MAP, but as earnings rise, Career MAP pays them an amount equal to loss of TANF and SNAP, any increase in childcare copays, and health insurance if they lose Medicaid. The value is capped at $833/month or $10,000 per year. Another novel element is that the payment is not made in cash but is used to reduce someone’s rent. This is done so that the payment doesn’t trigger further declines in SNAP and TANF, etc.

ASPE Marginal Tax Rate series

ASPE’s Marginal Tax Rate series examines the range of effective marginal tax rates for low-income households and common benefit program “bundles.”  One of the reports focuses on TANF families and another focuses on families families receiving child care subsidies (CCDF) which is one public benefit program where benefits end abruptly in some states.  

Marginal Tax Rate Series | ASPE (hhs.gov)

State Policy Analyses

Kentucky Benefit Cliffs Task Force Recommendations.09.22.2022

Montana (from the MY Budget and Policy Center)

Benefit Calculators

Kentucky: Family Resource Simulator – Get Started (ky.gov)

Update: A new tool to help Kentuckians understand benefits cliffs — KentuckianaWorks

Family Resource Simulator, National Center for Children in Poverty: Family Resource Simulator – NCCP

Atlanta Federal Reserve: Visual representation of state policies for select family configurations. (The Atlanta Federal Reserve also has developed a benefits cliff tool that can be customized for states or localities.)

Spending: Excess MOE

Last Updated: 09/14/2023

States are required to meet a state Maintenance of Effort (MOE) requirement as a condition of receiving their TANF block grant. When states report spending more state dollars than they are required to spend, this is referred to as “excess MOE.” There are two main reasons why states report more MOE than required: (1) to qualify for additional caseload reduction credits and (2) to qualify for Contingency Funds. We discuss each of these in detail below.

The sources of excess MOE vary by state, but states can count any state funds that meet one of the four purposes of TANF as MOE. Because the purposes of TANF are quite broad, that means that almost any expenditure provided to assist “needy” families can be counted as MOE and some expenditures for purposes 3 and 4 that are not provided to needy families can be counted as MOE. You can find a detailed explanation of how state MOE funds can be used in this document: Guide-to-Use-of-TANF-Funds.pdf (clasp.org). States that have recently enacted child tax credits will be able to count the portion of those expenditures that go to needy families (as defined by the state) towards their MOE requirement. States can also count child support payments that are passed through to families towards their MOE requirement.

Excess MOE and the caseload reduction credit.

Excess MOE can be used to increase a state’s caseload reduction credit which reduces the work participation rate (WPR) that a state must meet. HHS uses a specific formula for translating excess MOE into caseload reduction credits that is based on three key pieces of data: (1) the total amount of excess MOE, calculated by subtracting a state’s MOE requirement (either 75 or 80 percent of historical expenditures) from the total MOE that a state reports on the ACF-196R form; (2) the average expenditure per case calculated by dividing the amount of total federal TANF and state MOE funds reported for basic assistance (line 5 of the ACF-196R form) by the average monthly number of TANF and SSP cases reported to HHS for the comparison year; and (3) the percentage of federal TANF and state MOE funds spent on basic assistance. The actual calculation is:  (The amount of excess MOE multiplied by the percentage of total funds spent on assistance) divided by the average expenditure per case. This construct means that more reported excess MOE, lower average benefits and higher share of expenditures spent on assistance all contribute to a higher caseload reduction credit.

The comparison year is always the year prior to the year for which the credit will be applied. For example, the comparison year used to calculate the caseload reduction credit for fiscal year 2022 is fiscal year 2021. That means you would use the caseload and the expenditure data for fiscal year 2021 to calculate the caseload reduction credit from excess MOE for fiscal year 2022.

You can find details on the calculation and a spreadsheet that allows you to calculate how much of a caseload reduction credit the state receives from reporting excess MOE in these instructions: PI200811_Instructions for Completing Form ACF-202 | The Administration for Children and Families (hhs.gov).

You can find the average monthly caseload data at this link: State TANF Data and Reports | The Administration for Children and Families (hhs.gov). The relevant data is in the table labeled “TANF and SSP-MOE Caseload.” You want to use the fiscal year average for the number of families.

You can find the relevant MOE data at this link: State TANF Data and Reports | The Administration for Children and Families (hhs.gov). You want the expenditure data for the comparison year. You can find all the relevant MOE data in Table C3.

Excess MOE and the Contingency Fund

In order to qualify for the Contingency Fund, states must report MOE expenditures equal to 100 percent of the state’s MOE requirement. You can find that amount in Table C3 in the HHS expenditure reports that HHS publishes. Importantly, not all MOE expenditures that states report are included in the MOE requirement for the Contingency Fund. Any state funds spent on child care or in an separate state program are not counted in the calculation. The 100 percent MOE requirement makes a state eligible to receive Contingency Funds, but once they have received the funds, they are required to spend additional state funds equal to the amount of Contingency Funds to keep the funds. You can find more detail on this Contingency Fund at this link: https://www.incomesecuritycbpp.org/contingency-fund/

Benefits: Special Purpose Payments for TANF Recipients

Last Updated 09/14/2023

One strategy for getting additional cash to TANF recipients to help them meet their basic needs is to provide special purpose payments regularly or at select times during the year. In some states, it may be easier to garner support for special purpose payments than for grant increases. In some states, it may also be possible to authorize such payments administratively without the need for legislative approval. Since TANF recipients are already subject to time limits, work requirements and child support cooperation and assignment requirements, providing these additional payments do not trigger any additional behavioral requirements.

A key advantage of providing special purpose payments to TANF recipients is that they can be administered efficiently with no extra burden placed on recipients to apply for the additional funds or on staff to process the benefits. Special purpose payments can be provided to all recipients or to a subset of recipients with specific characteristics.

Depending on their design, they may, however, be considered as income for purposes of determining SNAP benefits. A quick rule of thumb is that payments that are received irregularly are not considered as income for purposes of determining the amount of a family’s SNAP benefits, but benefits received on a regular basis as cash are considered income for the purposes of determining the amount of a family’s SNAP benefits.

Some examples of special purpose benefits include the following:

Work Requirements: HHS Data

Last Updated: 09/14/2023

Every year HHS publishes state-by-state work participation data.  The data for 2021 can be found at this link:  Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2021 | The Administration for Children and Families (hhs.gov).  You can find the data for subsequent years by going to the link for Data and Reports and scrolling down to the section called “Work Participation Rate Data:” State TANF Data and Reports | The Administration for Children and Families (hhs.gov).

Here is a quick summary to the data in the report:

Table 1A provides data on the calculated rate (i.e., the work rate the state achieved), the adjusted standard (i.e., the rate the state is required to achieve after the caseload reduction credit is applied, also referred to as the “target rate”), and whether or not the state met the rate. The data is provided for the both the all-family and the two-parent rates.

Table 1B provides the rate the state achieved for all cases and for TANF and SSP cases. The SSP cases usually is the rate achieved for working SNAP recipients who receive monthly cash benefits paid with state funds that are not co-mingled with federal or state MOE funds. You can find more information on SSP cases at his link: https://www.incomesecuritycbpp.org/separate-state-programs/.

Table 1C provides information on how the rate for all families and two-parent families has changes since the previous year.

Table 2 provides information on the amount of the state’s caseload reduction credit.

Tables 3A and 3B provide information on which families are included in the denominator of the work participation rate calculation. This table shows the total number of families who are deemed work eligible as well as those who are excluded from the denominator. States have the option to exclude families with a child under the age of 12 months (once in a lifetime), families in the first three months of a sanction and families participating in a Tribal work program.

Tables 4A and 4B are the tables that we use most often. Table 4A shows how many families are counted as meeting the rate in each of the various work activities. Table 4B translates that data into percentages. A family meeting the rate may be counted in more than one category if they are coming activities to meet the rate. Thus, the numbers will most often add up to more than 100 percent. This data is useful for answering a number of important questions including: (1) What share of families meet the work rate through employment; (2) Is the state placing an unusually high share of recipients in unpaid work activities? (3) How does the state fare in placing recipients in vocational education activities? (4) Does the state count few recipients in job search yet spend a lot of staff resources tracking down those hours? The percentages are most useful, especially for seeing how your state compares to other states. The numbers are useful to get a sense of scale. (This data is what we have used to convince some states to reduce the reporting burden on staff and recipients by defining “work” more narrowly and only reporting on a subset of the activities. See the information at this link for more on this topic: https://www.incomesecuritycbpp.org/reducing-administrative-burden-through-simplified-work-verification-procedures/.)

Tables 5A and 5B provide the same information as 4A and 4B for two-parent families.

The remainder of the tables in this document provide more detail on work activities, but we rarely use that information. Some tables of note include Tables 8A and 8B which provided information on participants with some hours of participation, but do not count as meeting the rate because the hours are below the 20 or 20 hour requirement. Table 9 provides the number of families who have been granted a Domestic Violence Exemption. (Those numbers are shockingly low.)

Separate State Programs

States have the option to provide monthly cash payments to families through a Separate State Program (SSP) which is funded only with state dollars that can be counted towards a state’s maintenance of effort (MOE) requirement. (Separate State Programs are not the same as Solely State Funded programs that are funded with state funds that do not count towards a state’s MOE requirement.) There are both advantages and disadvantages to providing monthly cash benefits through an SSP which we highlight below.  

Background: States can provide cash assistance to families in several ways — they can provide them with federal TANF-funded assistance, assistance that is partially funded with TANF or MOE funds, assistance that is MOE-funded but provided within a TANF-funded program, or MOE-funded assistance in a program that receives no federal TANF funds – the latter is what is called an SSP or “Separate State Program.” Historically, HHS has considered everyone receiving assistance (TANF or MOE-funded) part of the cash assistance caseload, but they provide data separately for the TANF and the SSP caseload. That is because SSP technically are not considered part of the TANF caseload and requirements that apply to the TANF caseload do not always apply to SSP cases. This Guide to Use of TANF and MOE Funds | CLASP by CLASP provides a very useful table that shows which TANF provisions do not apply to SSP cases.

States have established SSPs primarily for three reasons: (1) to provide assistance to immigrant families who are subject to the five-year bar; (2) to provide assistance to families who have reached or are close to reaching the five-year time limit and (3) to provide cash payments to SNAP recipients. SSP programs appear to be underutilized, possibly because states prefer to pay for cash payments to families using at least some federal funds.

Key things to know about what TANF requirements do and do not apply to SSP cases:

  • SSP recipients are subject to work requirements and are counted in calculation of the state’s work participation rate.
  • Immigrant status restrictions (i.e., the five-year bar) does not apply.
  • The five-year time limit does not apply.
  • The teen parent residency and school requirements do not apply.
  • The felony ban does not apply.
  • Recipients are not required to meet child support cooperation or assignment requirements.
  • States are not required to screen SSP recipients using the Income and Eligibility Verification System (IEVS).
  • Funds use to provide cash payments count towards a states’ MOE requirement, but they are not counted when determining a state’s eligibility for the Contingency Fund.
  • References in the statute or regs to “the State program funded under this part” does not include separate state programs.
  • Administrative costs count towards a state’s overall administrative cost limitations.
  • Families participating in separate state programs are considered “former” or “never” TANF families (depending on their history of TANF receipt) under the IV-D child support distribution statute. You can find more at this link: at_07_02a.pdf (hhs.gov)

Benefits: Payments to SNAP Recipients

Last Updated 09/13/2013

In recent years, some states have used TANF funds to provide extra cash benefits to SNAP recipients. These benefits serve multiple purposes. First and foremost, they provide additional benefits to SNAP recipients to help them meet their basic needs. Second, they provide a quick and administratively efficient way to provide cash benefits to a large group of families during emergencies such as the pandemic. Finally, they can help states to meet their work participation rate. When states provide these payments, they generally provide them through a separate state program (SSP) using state funds that are not co-mingled with other TANF funds. This is because families that receive benefits through an SSP are not subject to time limits or child support cooperation and assignment requirements. (You can provide more information on SSP programs at this link: xxxx)

Work Requirements: Increase in Deep Poverty

Last Updated: 09/13/2023

Research shows that TANF work requirements led to increases in deep poverty. You can find data and a discussion in these reports produced by CBPP staff. (Some of these reports are older and were done before the Income Security staff stopped using the word “welfare” to describe the 1996 law that created TANF.)

Boost TANF to Reduce Deep Poverty Among Children | Center on Budget and Policy Priorities (cbpp.org)

Deep Poverty Among Children Rose in TANF’s First Decade, Then Fell as Other Programs Strengthened | Center on Budget and Policy Priorities (cbpp.org)

Work Requirements for Cash Assistance Fueled Rise in Deep Poverty | Center on Budget and Policy Priorities (cbpp.org)

Poorest Children in Single-Mother Families Got Poorer Under Welfare Reform | Center on Budget and Policy Priorities (cbpp.org)

Doubling of Extreme Poverty Belies Welfare Reform Success Claims | Center on Budget and Policy Priorities (cbpp.org)

Deep Poverty Among Children Worsened in Welfare Law’s First Decade | Center on Budget and Policy Priorities (cbpp.org)

Fewer Poor Children Under Welfare Law, But More Very Poor Children | Center on Budget and Policy Priorities (cbpp.org)

After Welfare Reform, the Poorest Families Had More Trouble Paying Bills | Center on Budget and Policy Priorities (cbpp.org)

Poorest Children in Single-Mother Families Got Poorer Under Welfare Reform | Center on Budget and Policy Priorities (cbpp.org)