TANF - Temporary Assistance for Needy Families - is the safety net program targeted towards low-income families with children. TANF provides monthly cash assistance and employment services focused on helping participants get a job quickly. However, many low-income families that are under the income threshold for TANF do not receive any benefits.
Figure 1. Historical and Current TANF Enrollment
Sources (expand section to view sources)
68% of families in poverty received aid from TANF's predecessor Aid to Families with Dependent Children (AFDC) in 1996. By 2019, this has fallen to just 23%. Even more striking, only 15% of New Mexican children in poverty - the target beneficiaries of TANF - received assistance from the program in 2019.
Research shows there are many reasons families experiencing poverty don't receive TANF. Beyond stringent eligibility requirements, it is notoriously difficult to successfully get an application for TANF approved. Only 23% of all applications in NM were approved in 2019. Some families might choose not to even apply for benefits due to stigma against welfare, knowing there are strict requirements, or not knowing whether they are eligible or how to enroll.
There are three key policies that can be implemented to address these issues:
Loosen child support requirements
Single parents who want TANF assistance are required to cooperate with child support which can pose a major barrier to receiving benefits. Seeking child support can strain existing co-parenting arrangements or put single parents at risk of abuse. While there are existing exemptions to this requirement, they can be difficult to obtain and often do not adequately address the concerns of applicants. Since there is room for interpretation in the existing administrative code governing child support cooperation, the Human Services Department should consider allowing eligibility workers to accept participant statements to verify domestic violence rather than requiring documentation from the police, medical professionals, or a domestic violence advocate. As a large portion of TANF applicants are single parents, this change would result in an enrollment increase between 950 and 1,900 families, or a 10-20% increase.
Sources and Calculations (expand section to view sources)
Increase asset limits
Currently, families applying for or receiving TANF must have less than $3,500 in assets - only $1,500 of which can be in liquid assets. This amount has not been adjusted since the policy was originally developed in 1997. Additionally, the liquid asset limit – which includes all types of savings accounts – does not allow families to build stability. In most of New Mexico, $1,500 would only cover one or two months of rent in a two-bedroom home. This means that a family would be kicked off of TANF before they are able to build the safety net needed to avoid returning to assistance if an unexpected financial situation arises.
It's unlikely that raising the asset limits across the board would be politically feasible but a practical alternative is to keep the initial asset limits as they are and increase the limits once a family is enrolled in TANF. This would allow participants to build a safety net without losing the crucial assistance of TANF, prepare them to be successful after leaving assistance, and encourage healthy financial habits. The limits should be raised to $3,000 of liquid assets and $4,000 of non-liquid assets to account for the rising cost of living since 1997. A total limit of $7,000 today has the same purchasing power as roughly $3,900 in 1997. To avoid ongoing lost value as the cost of living continues to rise, the limits should be updated annually.
This policy would not result in an increase of new enrollments since the initial eligibility requirements will not change. It will likely result in households staying enrolled in TANF longer in the short-term. However, this will be offset in the long-term as families are able to build a safety-net to withstand any unexpected circumstances without returning to assistance.
Sources and Calculations (expand section to view sources)
Conduct targeted outreach
Research indicates that many low-income households simply don’t know they are eligible for assistance and some choose to access some public benefits but not others. Specifically, many Medicaid enrollees with children are also eligible for TANF but in 2019, there were 86,404 more children under the poverty threshold enrolled in public health insurance than TANF in New Mexico. To address this gap, HSD should conduct targeted outreach focused on Medicaid enrolled families, provide information about eligibility and program requirements, and provide individualized enrollment assistance to those who choose to apply for TANF. This could take the form of billboards, social media ads, or partnerships with community organizations.
Enrollment assistance is a crucial part of this policy as New Mexico already has a combined application that allows people to submit an application for multiple programs at once so it is unlikely the hesitancy to enroll in both Medicaid and TANF is due to applicants not knowing where to apply. Personalized assistance throughout the application and enrollment process could help families understand the requirements, decide whether they would like to pursue TANF assistance, and submit a successful application. This could have a dramatic impact on TANF access and increase enrollment by roughly 13,190 households, more than doubling current enrollment.
Sources and Calculations (expand section to view sources)
Trade-offs
These policies have the explicit goal of increasing access to TANF, which can be controversial among policy-makers and members of the public who want to decrease use of public benefits. Each option would also increase the costs of the program through this increased enrollment. Additionally, many people have strong opinions about child support and parental responsibility which could create significant backlash to any policy that allows more flexibility in child support cooperation. However, both adjusting child support requirements and conducting outreach require no legislative action and can be implemented on the agency level which can increase feasibility.
Overall, the policy changes outlined here would require substantial investments of both money and staff but are crucial to ensure low-income families have the resources they need.