The Costs of Cutting Cash Assistance to Children and Families: Changing TANF work requirements could cost society up to $30 billion per year
Our benefit-cost work has shown that regularly delivered cash for flexible use by families has the potential to deliver significant economic benefits for society. This analysis illustrates that taking cash away from families implies the opposite effect: proposed changes to TANF work requirements in the Limit, Save, Grow Act (H.R. 2811 in the 118th Congress) that could restrict cash assistance for families with children could come at significant economic and societal cost.
Key Findings
Proposed TANF work requirement changes risk states taking cash benefits for low-income families with children away, with significant potential short- and long-term societal costs.
Every $1 in TANF cash assistance payments lost to families per year would cost society $8 per year.
These costs would come from increased spending on children and parents’ worsened health, increased need for child protective services, and more; this decreased cash in childhood would also result in reductions in children’s future education, employment, and earnings, leading to lower future tax receipts. Children would grow up to need more cash and near-cash benefits later in life.
If 25 percent of families affected by a work requirement lose monthly TANF cash benefits, the economic and societal costs could total $7.4 billion per year; if half of families do, the costs could reach almost $15 billion per year.
If states opt to simply stop providing cash assistance to families affected by a work requirement, the economic and societal costs could be as high as $29.6 billion per year.
Suggested Citation:
Ananat, Elizabeth, Megan Curran, Irwin Garfinkel, Robert Paul Hartley, Anastasia Koutavas, and Buyi Wang. 2023. “The Costs of Cutting Cash Assistance to Children and Families: Changing TANF work requirements could cost society up to $30 billion per year.” Poverty and Social Policy Brief, vol. 7, no. 2. Center on Poverty and Social Policy, Columbia University.
Access at: povertycenter.columbia.edu/publication/costs-of-cutting-tanf
