Kentucky Response to COVID-19: Help Families With Little-To-No Income Make Ends Meet With Emergency Cash Assistance
March 30, 2020
Kentucky, like all states, receives a fixed annual grant from the federal government called Temporary Assistance for Needy Families (TANF) that can be used to support low-income families with children in a number of ways. In the context of the COVID-19 economic and health crisis, Kentucky should maximize the use of TANF funds to bolster financial assistance to Kentucky children and families.
The state should use TANF funds to provide extra aid to very low-income Kentuckians who currently qualify for cash assistance through the Kentucky Transitional Assistance Program (K-TAP), and also offer help to additional Kentuckians who currently don’t receive K-TAP or qualify for other forms of financial help but badly need support. The state should also loosen rules around reducing or terminating K-TAP benefits as it has already done in other programs.
Provide one-time payments to existing K-TAP participants
The state should provide one-time emergency cash payments to current K-TAP households that live precariously close to destitution and need support now more than ever. As of February, 13,443 households in Kentucky received an average K-TAP basic cash benefit of $218 per month. These households are comprised of 4,533 adults and 25,803 children (many of these children are in an out of home placements with a relative), according to data from the Cabinet for Health and Family Services.
Demonstrating the depth of financial distress these families face, the current annualized income limit for a family of 4 is just $13,152, which is just half of the federal poverty level for a family of that size. And because K-TAP has a built in $2,000 limit on the amount a qualifying family can own in assets, making it difficult for these families to save for an emergency, obtaining extra household resources during this time is especially important.
Provide one-time payments to additional low-income families with children
Because TANF is a flexible block grant, states can adapt it to their needs as they arise. One way Kentucky should quickly utilize TANF funds is by creating a new emergency program that provides cash payments to other low-income families with children who have either been laid off from their jobs or are independent contractors out of work due to the pandemic who do not currently qualify for K-TAP. Whereas unemployment insurance is an effective partial wage replacement for employees with a significant work history over the previous year who have been laid off, Kentuckians with very low incomes often don’t qualify. By using TANF funds to help with a modest, one-time, partial wage replacement, we could help ensure they can make ends meet, while further stimulating their local economies.
Suspend policies that would reduce or end K-TAP benefits
Basic cash assistance through K-TAP has a 60-month lifetime cap, but there are other ways people could lose access to those benefits. To ensure people who qualify continue to receive assistance to meet basic needs, the state has already extended deadlines for verification by three months for TANF and other programs, but more can be done to remove barriers to eligibility for assistance.
Suspend all work requirements for K-TAP. The recent Families First Coronavirus Response Act suspended the three-month time limit for unemployed participants in the Supplemental Nutrition Assistance Program (food assistance) who don’t have dependents or a disability, but it left the work requirement in place for TANF basic cash assistance. Given massive layoffs, child care and school closures, in addition to public health guidelines encouraging families to stay at home, it is impossible to expect parents to be able to secure employment right now (and in some parts of Kentucky it was already difficult). The state can exercise flexibility to cease enforcing this requirement during the state of emergency.
Temporarily stop cutting off families who hit the 60-month limit. States are allowed to exempt up to 20% of their caseloads from the 60-month time limit, and Kentucky is not near that percentage. During the declared emergency, Kentucky should maximize its 20% exemption allowance to prevent families losing this basic cash assistance.
Cease terminations based on procedural issues. Many families have their benefits reduced or cut off because they missed some procedural step – such as missing an interview, failing to return information on time or filling out paperwork incorrectly. Given that the Department for Community Based Services (DCBS), which administers K-TAP, will be stretched thin in the coming months, and most DCBS offices are closed to in-person meetings, loosening procedural requirements would also help reduce the administrative burden on the state, while continuing to provide modest but critical income support to low-income families.
Provide assistance to families that have recently been sanctioned. Along with temporarily suspending the work requirement for K-TAP, the state should notify families who have lost benefits in recent months to inform them they can reapply for benefits given the new economic context. Families may no longer qualify as their circumstances could have changed in the meantime, but for those that do, the extra income would be meaningful.
Federal law gives states added flexibility during disasters to relax the rules around TANF due to “reasonable cause,” which is a “disruptive impact…so significant as to cause the state’s failure” to comply with normal rules. Under this standard, states are not sanctioned by the U.S. Department for Health and Human Services as they normally would be. Certainly, any of these options to provide assistance to individuals who might otherwise have had their benefit reduced or cut off would be considered reasonable under the current circumstances, especially while under state and federal states of emergency.
Although TANF is a very flexible program, due to an increase in relative caregiver payments from the block grant, there isn’t much room in Kentucky’s program for new assistance programs. Kentucky is not alone in this, which is why Congress should do what it did under the American Recovery and Reinvestment Act when it boosted TANF funding by $5 billion through the TANF Emergency Fund. Doing so would allow Kentucky to provide targeted assistance to those who are in most need of it.