Kentucky currently utilizes federal dollars through the Temporary Assistance for Needy Families (TANF) program to provide modest but critical cash assistance to more than 27,000 very poor kids. House Bill 3 proposes to change how the state uses these funds, which would result in a huge cut to financial benefits for these Kentucky kids and families. The majority of those who could be harmed by this reduction are children being raised by grandparents or other relatives.
Bill slashes only source of cash assistance
Each year, the federal government sends a TANF block grant to states to support very low-income families with children. States can use this money for a number of things as long as they fall under four broad categories, but are required to spend some of the funds for cash assistance — and it is the only source that can be used for that purpose. As of February, 5,083 adults and 27,782 children (though likely more because some children in kinship care receive TANF cash assistance but are not included in this number) received cash assistance of an average of $98 per person per month.
Already, TANF rolls are shrinking, and the benefit amount hasn’t changed since its initial implementation in 1998, meaning it has lost 36 percent of its purchasing power. TANF reaches very few poor families in Kentucky; for every hundred families in poverty, only 24 actually receive TANF cash assistance.
By requiring that Kentucky spend no more than 15 percent of federal TANF funds on cash assistance, HB 3 cuts funds for cash assistance by a dramatic 79 percent. These funds are then redistributed for other purposes. Because the cut is so radically deep, there would be no way to keep children from losing a vital and flexible form of assistance under this proposal.
Most children likely to be harmed are being raised by a relative other than a parent
As of 2017, just over 53 percent of all families receiving TANF cash assistance in Kentucky were led by a caretaker relative other than a parent. The data shows 35 percent of all children who received cash assistance in 2017 were being cared for by their grandparents and 19 percent live with someone else, like uncles and aunts. The majority of TANF cases in Kentucky are child-only cases (where there is no adult receiving assistance) and in four out of five of those, the child lives with a caretaker relative.
Many of these families are unlikely to benefit from the ways which HB 3 redistributes resources away from cash assistance toward job training and education, work supports and child care. Many grandparents are retired and are on a fixed income that cannot support the additional cash expenses of raising a child.
It is worth noting that these children are the very same children focused on in HB 2, another priority of the House of Representatives. That bill is meant to assist relatives taking care of children who would otherwise be in the foster care population, but it provides no new funds for that purpose even while HB 3 would steeply reduce dollars to those families.
Evidence from past income support programs show that children who received cash or near cash (such as food assistance) benefits had better educational, health and financial outcomes later in life. Other research has found that children in families who lose TANF cash assistance are at a higher risk of being food insecure and going to the ER, and struggle more in school than similar kids who don’t lose cash assistance. Deeply reducing the share of fixed TANF dollars that go toward cash assistance would have a lasting effect on these Kentucky children.