Understanding the AFDC/TANF Child-Only Caseload: Policies, Composition, and Characteristics in Three States. The 1996 Welfare Legislation


PRWORA changed the direction of the nation's welfare system by replacing Aid to Families with Dependent Children (AFDC) and the Job Opportunities and Basic Skills Training (JOBS) program with the TANF program. PRWORA imposes federal requirements on time limits, work participation requirements, and sanctions. However, with the new welfare legislation, states have been given broad latitude to design their own welfare policies, which include policies that affect child-only cases. In some cases, states that wish to deviate from federal policies must use state funds (which can count towards the maintenance of effort requirement); in other cases federal funding can be used. Five policies that affect child-only are worth noting:

  • Sanction policy. Under federal TANF, states must sanction families for refusing to comply with work requirements or not cooperating with child support, although states have substantial leeway in deciding what constitutes noncompliance, the severity of the penalty, and the appeals process which restores benefits.(2) These policies may include removing the parent's benefits from the TANF case (which converts the case to child-only), reducing the overall benefit, but keeping the adult in the assistance unit, or closing the TANF case.
  • Alien policy. PRWORA distinguishes between "qualified" aliens, a category which includes permanent residents, refugees, asylees, and certain others granted conditional entry, and "non-qualified" aliens, which includes both undocumented aliens and those in PRUCOL (permanently residing under color of law) status, among others.(3) In general, the federal block grant does not fund TANF benefits for most qualified aliens who entered the country after August 1996 for five years after entering the country or unqualified aliens. However, in both cases, the children may receive assistance if they are United States citizens (often because they were born in the United States). Federal funding can be used to provide assistance to qualified aliens who entered prior to this point in time, while states may use their own funds to extend TANF benefits to qualified aliens entering the country after August 1996.(4)
  • Treatment of SSI. Individuals who are aged, blind, or disabled and who have little or no income and resources are eligible for SSI benefits. As was true under the AFDC program, SSI recipients may not receive TANF assistance for themselves, but can apply for their children. In almost all states, the SSI income is excluded when calculating TANF benefits. A small number of states have opted to include SSI benefits in the TANF benefit calculation; in these states, it is less likely that an SSI recipient's family will be eligible for a child-only TANF grant.
  • Non-parental caregivers. Unlike parents who are caring for their children, in most states, non-parental caregivers may choose to apply for cash assistance for children under their care and themselves or for the children only. Non-parental caregivers are most often caregivers related to the children, although some states allow non-relative caregivers who have legal custody or guardianship to receive cash assistance. There are several reasons a non-parental caregiver may choose to be excluded from the assistance unit. First, most states exclude the income of non-parental caregivers who are not in the assistance unit. Thus, unlike parental cases, a non-parental caregiver can have income that would make them ineligible for cash assistance but obtain the assistance for the children. Second, requirements in PRWORA may discourage providers from being included in the assistance unit. The five-year federal time limit on assistance would apply to a case with a non-parental caregiver included in the unit since there is an adult receiving assistance. PRWORA also imposes work participation requirements on states and since non-parental caregivers who are in the assistance unit count toward a state's participation rate, states might have a difficult time meeting work participation rates if they exempted large numbers of these providers from work requirements. Finally, other factors such as welfare stigma may discourage some caregivers from applying for themselves.
  • Time limit policy. The federal block grant can be used to provide assistance to families that include an adult or teen parent head-of-household (or spouse) for up to five cumulative years. Some states have indicated that they may decide to apply time limits to the parents only, which would transform the case to a child-only case at the time limit. States may also impose a time limit that is shorter than five years. Time limits that terminate the entire household's cash benefits may result in a greater number of child-only non-parental caregiver cases if the parents reach the time limit and cannot care for their children, placing the children in the care of relatives or other caregivers.

In addition, many states are creating alternative programs for relative caregivers, offering higher payments than TANF, which may result in a shift of cases from TANF into the alternative programs. Depending on state financing choices, these cases may or may not be counted as TANF child-only cases. (5)

Recent regulations clarified ambiguities in the law that dealt with child-only cases and definitions of "family." States have the flexibility to develop their own definition of family, with the qualifier that HHS "will consider proposing appropriate legislative or regulatory remedies if [HHS] finds that States are using the flexibility under the rules to avoid work requirements or time limits or otherwise undermine the goals of TANF."(6) For example, states that encourage parents to remove themselves from the grant in order to avoid a time limit or meet a participation requirement are violating the spirit of the law. HHS will be monitoring trends, especially practices of converting regular TANF cases to child-only cases.