UI as a Safety Net for Former TANF Recipients. TANF eligibility and benefits


Needy families with dependent children and earnings below the breakeven thresholds listed in Table 1 may have qualified for cash TANF assistance. States set maximum monthly TANF grant amounts and resource levels. Resource limits apply to liquid financial and vehicle assets. There are also employment requirements for continued TANF eligibility. Work is required immediately upon receipt of benefits in 28 states, within six months in 9 states, and within 24 months in 13 states. States also impose lifetime limits between 24 and 60 months on receipt of benefits (HHS 2000).

Regarding earnings, each state sets its own rules. Over half the states disregard a lump sum and a portion of the rest of the earnings up to the breakeven level of income, at which point the household has worked off TANF.(6) Other states disregard a portion of earnings. In addition, these disregards are often time limited. Some states have adjusted parameters to permit continued support with household income at thresholds as high as four times the poverty level. In computing benefits, other disregards may apply, such as for child care. TANF benefits and earnings levels across our cohorts are quite similar for Florida, Michigan, and Ohio. For Texas, benefits are lower but earnings eligibility is much higher for the first four months and severely limited thereafter (Table 1). In some cases, these rules changed over the period covered by this study.

For the present analysis, a key aspect of TANF eligibility in the study states is an administrative requirement that to qualify for additional cash assistance, applicants must claim all other available sources of income. Rangarajan, Razafindrakoto, and Corson (2002) note that New Jersey had such a rule in place under AFDC and continued to apply it under TANF. Similar administrative rules are in place in Michigan, Ohio, and Texas.

The TANF eligibility manual for the State of Michigan, Department of Human Services states that, “clients must apply for benefits for which they may be eligible. ... refusal by a program group member to pursue a potential benefit results in group ineligibility” (State of Michigan 2007, PEM 270, pp. 1-6).(7) The Michigan manual specifically identifies UI as a potential source of cash payments to an unemployed person, and lists instructions on how to file an application for UI.

Ohio administrative rules state that “the assistance group must apply for any monthly benefits to which it is entitled. Ineligibility to participate in OWF results if the assistance group refuses to accept unconditionally available income” (ODJFS 2007, p. 350).(8) Ohio Works First (OWF) is the financial assistance portion of Ohio’s TANF program. Ohio Works First provides cash benefits to eligible needy families for up to 36 months. After 36 months, a family cannot receive additional cash assistance unless the County Department of Job and Family Services approves an extension of benefits.

The Texas Administrative Code permits return to TANF before all other sources of income are exhausted, but application for any other available income must be made within 90 days to maintain TANF eligibility.(9) The Texas Health and Human Services Commission (HHSC) requires TANF applicants/recipients to pursue and accept all income to which they are legally entitled. HHSC does not require a TANF applicant to apply for UI benefits or provide proof that they have applied for UI benefits before their TANF application is approved. The policy guidance suggests that a reasonable time, at least three months, is allowed for pursuit of other income. This particular policy is not recent; it dates to prior administration of the AFDC program.

These rules could lower measured eligibility rates among TANF leaver UI applicants. Some with little expectation of qualifying for UI may be forced to jump this hurdle on their way back to TANF. Knowing this could help us understand an important pattern in the data. Consider the three groups of TANF leavers who experience joblessness: (1) UI applicants who get benefits, (2) UI applicants who don’t get benefits, and (3) non-applicants for UI. Rates of return to TANF are similar for groups (1) and (3), while the return to TANF rates for group (2) are much higher. This result may be partly driven by TANF eligibility requirements to claim UI benefits. It is important to consider these rules when interpreting estimates of the relationship of UI with the rate of return to TANF.

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