Teens Children and Money - Forms Of Aid To Children

Welfare Reform, Aid to Families with Dependent Children (AFDC), and Temporary Assistance for Needy Families (TANF)

Many programs exist in the United States to assist families and children living with economic hardship. Some of these programs are federally run, and others are run at the state level. In many cases the programs are mandated at the federal level and administered by the states, which can make tracking them complicated.

In 1996 the U.S. Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PL 104–193) to reform the welfare system. The primary goal of the legislation was to get as many people as possible into the paid labor force and off welfare rolls. The law set limits on how long welfare recipients could receive

FIGURE 4.1

FIGURE 4.2

assistance, encouraging them to seek gainful employment. Aid to Families with Dependent Children (AFDC), a guaranteed assistance program for low-income families,

FIGURE 4.3

was eliminated and replaced with the Temporary Assistance for Needy Families (TANF) program. Under TANF, states receive a fixed amount from the federal government based on what they spent on welfare programs in 1994 without regard to subsequent changes in need. TANF frees the states from many federal constraints on how they manage the funds. The program reduced the federal welfare

TABLE 4.1

Total number of families and recipients of Temporary Assistance for Needy Families (TANF), September 1996 and September 2003
	TANF families			TANF recipients
	Total families 4th qtr FY03	Change from September 1996 to Sep-03		Total recipients 4th qtr FY03	Change from September 1996 to Sep-03
State	3-Sep	Sep-96 families	% change	3-Sep	Sep-96 recipients	% change
SOURCE: Adapted from "Temporary Assistance for Needy Families: Total Number of Families and Recipients, July–September 2003," in Welfare Rolls Drop Again, U.S. Department of Health and Human Services, March 30, 2004, http://www.acf.hhs.gov/news/press/2004/TANF_TOTFAM_4th2003.htm (accessed August 24, 2004)
Alabama	19,228	40,708	−52.80%	45,528	99,818	−54.40%
Alaska	4,909	12,319	−60.20%	13,650	36,033	−62.10%
Arizona	51,336	61,787	−16.90%	121,271	167,410	−27.60%
Arkansas	10,745	22,109	−51.40%	24,469	56,470	−56.70%
California	449,275	870,343	−48.40%	1,099,695	2,550,032	−56.90%
Colorado	14,210	33,554	−57.70%	37,114	93,282	−60.20%
Connecticut	20,967	57,103	−63.30%	43,844	158,454	−72.30%
Delaware	5,699	10,474	−45.60%	12,951	23,743	−45.50%
Dist. of Col.	16,825	25,139	−33.10%	42,980	68,858	−37.60%
Florida	58,555	200,292	−70.80%	121,921	531,485	−77.10%
Georgia	56,496	120,914	−53.30%	134,819	323,471	−58.30%
Guam	3,072	2,254	36.30%	10,783	8,364	28.90%
Hawaii	9,367	21,887	−57.20%	24,384	66,510	−63.30%
Idaho	1,727	8,393	−79.40%	3,175	21,142	−85.00%
Illinois	34,688	217,815	−84.10%	87,545	635,538	−86.20%
Indiana	51,711	49,747	3.90%	135,339	131,775	2.70%
Iowa	20,135	31,088	−35.20%	52,528	84,556	−37.90%
Kansas	15,859	23,386	−32.20%	41,288	62,466	−33.90%
Kentucky	35,252	70,442	−50.00%	77,697	169,822	−54.20%
Louisiana	23,069	66,542	−65.30%	58,504	225,498	−74.10%
Maine	9,196	19,745	−53.40%	28,195	53,205	−47.00%
Maryland	25,678	68,931	−62.70%	61,168	189,342	−67.70%
Massachusetts	50,875	84,333	−39.70%	112,810	225,439	−50.00%
Michigan	78,549	167,529	−53.10%	210,154	494,991	−57.50%
Minnesota	36,096	57,248	−36.90%	93,508	167,362	−44.10%
Mississippi	19,722	45,223	−56.40%	45,182	120,626	−62.50%
Missouri	41,494	79,100	−47.50%	102,031	219,651	−53.50%
Montana	5,465	9,812	−44.30%	15,017	28,299	−46.90%
Nebraska	11,049	14,379	−23.20%	27,533	38,914	−29.20%
Nevada	9,547	13,210	−27.70%	22,874	32,803	−30.30%
New Hampshire	6,077	8,915	−31.80%	14,044	22,340	−37.10%
New Jersey	43,656	100,806	−56.70%	105,702	269,632	−60.80%
New Mexico	17,421	32,974	−47.20%	45,885	98,427	−53.40%
New York	145,627	412,720	−64.70%	331,144	1,127,888	−70.60%
North Carolina	39,201	107,483	−63.50%	80,956	263,093	−69.20%
North Dakota	3,336	4,668	−28.50%	8,667	12,748	−32.00%
Ohio	85,008	201,945	−57.90%	188,226	541,055	−65.20%
Oklahoma	15,154	35,299	−57.10%	37,169	94,239	−60.60%
Oregon	18,093	28,525	−36.60%	41,302	74,320	−44.40%
Pennsylvania	84,288	180,123	−53.20%	220,136	509,430	−56.80%
Puerto Rico	18,601	49,511	−62.40%	52,295	149,944	−65.10%
Rhode Island	12,961	20,489	−36.70%	34,187	55,953	−38.90%
South Carolina	19,266	42,906	−55.10%	46,281	110,837	−58.20%
South Dakota	2,690	5,698	−52.80%	5,919	15,384	−61.50%
Tennessee	72,345	96,206	−24.80%	191,652	251,717	−23.90%
Texas	117,532	238,757	−50.80%	281,765	638,119	−55.80%
Utah	8,944	14,044	−36.30%	22,944	38,564	−40.50%
Vermont	4,815	8,680	−44.50%	12,243	24,045	−49.10%
Virgin Islands	526	1,348	−61.00%	1,591	4,808	−66.90%
Virginia	8,225	60,455	−86.40%	23,527	148,529	−84.20%
Washington	53,534	96,801	−44.70%	131,721	266,591	−50.60%
West Virginia	16,405	37,595	−56.40%	41,750	84,911	−50.80%
Wisconsin	21,708	49,932	−56.50%	52,280	142,746	−63.40%
Wyoming	388	4,343	−91.10%	694	11,783	−94.10%
U.S. totals	2,006,597	4,346,029	−53.80%	4,880,037	12042462	−59.50%

commitment by $55 billion. Total TANF expenditures for fiscal year 2002 were $23.4 billion.

Since the inception of TANF, the number of welfare cases has declined. The total number of welfare recipients fell from 14.4 million in March 1994 to 5.3 million in September 2001, a drop of 63%. Between September and December 2001, due in part to the terrorist attacks of September 11, 2001, AFDC/TANF recipient rolls increased by two hundred thousand. At the end of 2001 there were 5.5 million participants. But by September 2003 the number of recipients had once again declined, to about 4.9 million. (See Table 4.1.)

When welfare caseloads are counted by the number of recipient families instead of individual recipients, the same pattern of decline is seen. Participating families peaked at 5.1 million in March 1994. At the end of 2001 there were 2.1 million families enrolled, a 59% decrease. By September 2003 there were only two million families enrolled. (See Table 4.1.) This represents the largest welfare caseload decrease in history, the smallest number of people on welfare since 1968, and the lowest percentage of the population on welfare since 1965. The strong economy and job market during the 1990s played a role in reducing caseloads.

Under TANF each state decides what categories of children receive aid. AFDC required states to aid all families with children eligible under federal rules unless their income was above state-set limits. TANF, on the other hand, requires that a recipient work in exchange for time-limited assistance. Because of this requirement, the number of working recipients reached an all-time high of 34% in 2000, compared with less than 7% in 1992.

Despite such improvements, welfare reform has been attacked for its coercive aspects. The new standards set a number of ineligibility rules. For example, states are not permitted to use TANF to aid unwed mothers under the age of eighteen unless they live in an adult-supervised setting and, if not already a high school graduate, attend school. Mothers are in most cases barred from receiving TANF assistance unless they are willing to name the fathers of their children. And Congress used the welfare law to launch a campaign against "illegitimacy"—and not only among TANF recipients. In both 2000 and 2001 the Department of Health and Human Services offered an award ($100 million in 2000 and $75 million in 2001) to states that had the greatest decrease in their ratio of births to unmarried mothers to total births without an increase in abortion rates.

CHARACTERISTICS OF TANF RECIPIENTS. One of the primary goals of the welfare reform laws enacted in the mid-1990s was to help people receiving public assistance get back into the paid labor force. A count of how many current and former welfare recipients are employed is, therefore, an important measure of the success of welfare reforms. Analysis shows that the employment rate of current and former TANF recipients has increased significantly. In fiscal year 2001 working recipients accounted for 26.7% of adult TANF recipients, compared with 11.3% in fiscal year 1996 (Indicators of Welfare Dependence, Annual Report to Congress, U.S. Department of Health and Human Services, 2003).

Consequently, income levels of TANF recipients also rose. Average monthly earnings of employed adult TANF recipients increased from $466 in fiscal year 1996 to $533 in 1998, $598 in 1999, $668 in 2000, and $686 in 2001—an increase of 47% between 1996 and 2001.

According to the U.S. Department of Health and Human Services, the average number of people in a TANF family was 2.6 in 2001, down from an average of 2.8 in 1996. Almost half (44.8%) of TANF families in 2001 included one child recipient, 28.5% included two child recipients, and 24.7% included three or more child recipients. Two-thirds (66.9%) of these families were headed by a single adult. Only 11.7% of recipients were married.

The average monthly benefit per TANF recipient in 2001 was $137, down from a high of $221 (in 2001 dollars) in 1978 under the AFDC program. The average monthly benefit per family was $351, down from a high of $766 (in 2001 dollars) in 1969. (See Table 4.2.) Benefits included cash assistance, food stamps, and health insurance under Medicaid.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC), originally approved by Congress in 1975, reduces the amount of taxes owed by working people with low incomes and can result in a tax refund. To receive the EIC for 2003, a single person with no children must have had an adjusted gross income of no more than $11,230, with one child no more than $29,666, and with two or more children no more than $33,692. The adjusted gross income levels were $1,000 higher for married couples filing jointly. The maximum credit in 2003 was $2,547 for a family with one child and $4,204 for a family with two or more children. The maximum credit for those without qualifying children was $382.

In 2004 employees with at least one child living with them could file an Earned Income Credit Advance Payment Certificate with an employer to receive the advance EITC payments. The employer paid part of the credit to the employee in advance throughout the year, and the taxpayer could claim the rest when filing a 2004 federal tax return.

The Special Supplemental Nutrition Program for Women, Infants, and Children

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides food assistance and nutritional screening for low-income pregnant and postpartum women and their infants and children under the age of five. Congress appropriated almost $5 billion for WIC in fiscal year 2004. Participants must have an income below 185% of the poverty level and be nutritionally at risk. The 2004–05 eligibility guidelines stated that a family of one could earn up to $1,436 a month and still qualify for WIC. A family of four could earn $2,907 a month and participate in WIC.

Recipients receive food items or vouchers for purchases of certain items in retail stores. The WIC program is federally funded but administered by state and local health agencies. In April 2002 about eight million women

TABLE 4.2

Trends in average monthly payment for Aid to Families with Dependent Children (AFDC) and Temporary Assistance for Needy Families (TANF), 1962–2001
	Monthly benefit per recipient		Average number of persons per family	Monthly benefit per family (not reduced by child support)		Weighted average1 maximum benefit (per 3-person family)
Fiscal year	Current dollars	2001 dollars		Current dollars	2001 dollars	Current dollars	2001 dollars
1The maximum benefit for a 3-person family in each state is weighted by that state's share of total AFDC families.
2Estimated based on the weighted average benefit for a 4-person family.
3The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 repealed the AFDC program as of July 1, 1997 and replaced it with the Temporary Assistance to Needy Families (TANF) program.
Note: AFDC benefit amounts have not been reduced by child support collections. Constant dollar adjustments to 2001 level were made using a CPI-U-X1 fiscal-year price index.
SOURCE: "Table TANF 6. Trends in AFDC/TANF Average Monthly Payments, 1962–2001," in Indicators of Welfare Dependence, Annual Report to Congress, U.S. Department of Health and Human Services, 2003, http://aspe.hhs.gov/hsp/indicators03/index.htm (accessed August 24, 2004)
1962	$31	$168	3.9	$121	$634	NA	NA
1963	31	166	4	126	650	NA	NA
1964	32	167	4.1	131	670	NA	NA
1965	34	174	4.2	140	705	NA	NA
1966	35	178	4.2	146	716	NA	NA
1967	36	179	4.1	150	716	NA	NA
1968	40	188	4.1	162	746	NA	NA
1969	43	198	4	173	766	1862	854
1970	46	200	3.9	178	753	1942	848
1971	48	200	3.8	180	730	2012	840
1972	51	207	3.6	187	732	2052	828
1973	53	205	3.5	187	701	2132	824
1974	57	202	3.4	194	670	2292	816
1975	63	206	3.3	209	658	243	791
1976	71	216	3.2	226	665	257	782
1977	78	220	3.1	241	662	271	768
1978	83	221	3	249	644	284	756
1979	87	213	2.9	257	609	301	735
1980	94	207	2.9	274	583	320	703
1981	96	192	2.9	277	536	326	651
1982	103	192	2.9	300	543	331	617
1983	106	190	2.9	311	537	336	600
1984	110	189	2.9	321	534	352	602
1985	112	186	2.9	329	527	369	610
1986	115	186	2.9	339	529	383	618
1987	123	193	2.9	359	546	393	617
1988	127	192	2.9	370	541	404	609
1989	131	189	2.9	381	531	412	593
1990	135	185	2.9	389	516	421	577
1991	135	176	2.9	388	490	425	554
1992	136	172	2.9	389	477	419	530
1993	131	161	2.8	373	444	414	509
1994	134	160	2.8	376	437	420	497
1995	134	157	2.8	376	425	418	487
1996	135	152	2.8	374	410	422	478
19973	130	144	2.8	362	405	420	464
1998	130	142	2.7	358	406	432	469
1999	133	142	2.7	357	439	452	481
2000	133	138	2.6	349	428	453	468
2001	137	137	2.6	351	351	456	456

and their children participated in WIC, an increase of 2% since April 2000 (WIC Participant and Program Characteristics, 2002, U.S. Department of Agriculture, Food and Nutrition Service, September 2003). About two-thirds (75.8%) were infants and children. Two-thirds of WIC participants were at or below the poverty line.

The Food Stamp Program

The food stamp program, administered by the U.S. Department of Agriculture (USDA), provides low-income households with online electronic benefit cards that can be used at most grocery stores much like debit cards in place of cash. Food stamps are intended to ensure that recipients have access to a nutritious diet. They are available to households that have a gross monthly income of no more than 130% of the poverty line and a net monthly income at or below the poverty line. Almost all households that received food stamp benefits in 2002 lived in poverty.

The amount of money a family receives on their benefit card is based on the USDA's estimate of how much it costs to provide households with nutritious, low-cost meals. This estimate changes yearly to reflect inflation. In fiscal year 2002 the maximum monthly benefit for a family of four was $452, while the average monthly benefit for all households was $173. Food stamp households containing children received an average of $254 in benefits per

TABLE 4.3

Average values of selected characteristics of food stamp households, 2002
	Average values
Households with:	Gross monthly income (dollars)	Net monthly income (dollars)	Monthly food stamp benefit (dollars)	Household size (persons)
*Households not containing children, elderly persons, or disabled persons.
SOURCE: Randy Rosso and Melissa Faux, "Table 3.4. Average Values of Selected Characteristics by Household Composition, Fiscal Year 2002," in Characteristics of Food Stamp Households: Fiscal Year 2002, Report No. FSP-03-CHAR02, U.S. Department of Agriculture, Food and Nutrition Service, Office of Analysis, Nutrition and Evaluation, 2003, http://www.fns.usda.gov/oane/MENU/Published/FSP/FILES/Participation/2002Characteristics.pdf (accessed August 24, 2004)
Total	633	355	173	2.3
Children	747	436	254	3.3
Single-adult household	676	381	247	3.1
Male adult	681	387	223	2.9
Female adult	676	381	249	3.1
Multiple-adult household	1022	649	298	4.4
Married head household	1057	667	299	4.5
Other multiple-adult household	945	610	295	4.3
Children only	512	253	190	2.2
Elderly	646	368	64	1.3
Living alone	589	316	50	1.0
Not living alone	876	582	121	2.4
Disabled	739	454	106	2.0
Living alone	596	311	50	1.0
Not living alone	942	657	187	3.3
Other households*	198	67	128	1.1
Single-person household	174	53	122	1.0
Multi-person household	472	219	201	2.2
Single-person households	460	229	73	1.0

month, in part because households with children tended to be larger (3.3 people) than households in general (2.3 people). (See Table 4.3.)

The majority of households that received food stamps in 2002 contained children—54.1%, or 4.4 million households. Two-thirds of these households (34.5%) were headed by a single parent, usually a single mother (32.8%) (Characteristics of Food Stamp Households: Fiscal Year 2002, U.S. Department of Agriculture, Food and Nutrition Service, Office of Analysis, Nutrition and Evaluation, 2003).

Supplemental Security Income (SSI)

The SSI program was enacted in Public Law 92–603 on October 30, 1972, to provide a minimum income for blind or disabled individuals. For children to qualify for SSI, their parents must meet the income requirements, they must be neither married nor the head of a household, must be under the age of eighteen (or under the age of twenty-two if a full-time student), and must meet the SSI definition of disabled. Children are considered disabled if they have "marked and severe functional limitations" because of a physical or mental impairment. Many of these children are automatically eligible for food stamps and Medicaid coverage.

In 1974 70,900 disabled and blind children received SSI benefits, representing 1.8% of all recipients. The program has since expanded to include a greater proportion of disabled children. In 1996 the number of children receiving benefits peaked at 955,174, or 14.4% of all SSI recipients, and then dropped to 846,784 in December 2000. (See Table 4.4.) In December 2002 914,821 children received SSI payments averaging $487.73 per month. These children made up 13.5% of SSI recipients in 2002. By July 2004 the maximum monthly payment per child was $564.

Other Forms of Assistance

The federal government spends billions of dollars on behalf of low-income children. Most services are spread over several major income-tested programs (meaning the family income cannot exceed a certain limit). Many programs are for noncash assistance. These include Medic-aid, subsidized housing, and free or reduced-price school lunch and breakfast programs.

The National School Lunch Program provides millions of children with nutritious food each day. Children whose families earn no more than 185% of the poverty level are eligible for reduced price school lunches; children whose families earn no more than 130% of the poverty level are eligible for free school lunches. In fiscal year 2003 the U.S. government spent $6.3 billion for the National School Lunch Program and another $1.7 billion on the school breakfast program. In that year 28.4 million

TABLE 4.4

Supplemental Security Income (SSI) recipients by age, December 1974–2002
		Under age 18		Aged 18–64		Aged 65 or older
Year	Total	Number	Percentage of total	Number	Percentage of total	Number	Percentage of total
SOURCE: "Table 3. Recipients by Age, December 1974–2002," in Supplemental Security Income Annual Statistical Report, 2002, U.S. Social Security Administration, 2003, http://www.ssa.gov/policy/docs/statcomps/ssi_asr/2002/ssi_asr02.pdf (accessed August 24, 2004)
1974	3,996,064	70,900	1.8	1,503,155	37.6	2,422,009	60.6
1975	4,314,275	107,026	2.5	1,699,394	39.4	2,507,855	58.1
1976	4,235,939	125,412	3.0	1,713,594	40.5	2,396,933	56.6
1977	4,237,692	147,355	3.5	1,736,879	41.0	2,353,458	55.5
1978	4,216,925	165,899	3.9	1,747,126	41.4	2,303,900	54.6
1979	4,149,575	177,306	4.3	1,726,553	41.6	2,245,716	54.1
1980	4,142,017	190,394	4.6	1,730,847	41.8	2,220,776	53.6
1981	4,018,875	194,890	4.8	1,702,895	42.4	2,121,090	52.8
1982	3,857,590	191,570	5.0	1,655,279	42.9	2,010,741	52.1
1983	3,901,497	198,323	5.1	1,699,774	43.6	2,003,400	51.3
1984	4,029,333	211,587	5.3	1,780,459	44.2	2,037,287	50.6
1985	4,138,021	227,384	5.5	1,879,168	45.4	2,031,469	49.1
1986	4,269,184	241,198	5.6	2,010,458	47.1	2,017,528	47.3
1987	4,384,999	250,902	5.7	2,118,710	48.3	2,015,387	46.0
1988	4,463,869	255,135	5.7	2,202,714	49.3	2,006,020	44.9
1989	4,593,059	264,890	5.8	2,301,926	50.1	2,026,243	44.1
1990	4,817,127	308,589	6.4	2,449,897	50.9	2,058,641	42.7
1991	5,118,470	397,162	7.8	2,641,524	51.6	2,079,784	40.6
1992	5,566,189	556,470	10.0	2,910,016	52.3	2,099,703	37.7
1993	5,984,330	722,678	12.1	3,148,413	52.6	2,113,239	35.3
1994	6,295,786	841,474	13.4	3,335,255	53.0	2,119,057	33.7
1995	6,514,134	917,048	14.1	3,482,256	53.5	2,114,830	32.5
1996	6,613,718	955,174	14.4	3,568,393	54.0	2,090,151	31.6
1997	6,494,985	879,828	13.5	3,561,625	54.8	2,053,532	31.6
1998	6,566,069	887,066	13.5	3,646,020	55.5	2,032,983	31.0
1999	6,556,634	847,063	12.9	3,690,970	56.3	2,018,601	30.8
2000	6,601,686	846,784	12.8	3,744,022	56.7	2,010,880	30.5
2001	6,688,489	881,836	13.2	3,811,494	57.0	1,995,159	29.8
2002	6,787,857	914,821	13.5	3,877,752	57.1	1,995,284	29.4

children took part in the school lunch program, up from 26.9 million in 1999. (See Table 4.5.)