The bill, known as the “Preventing Waste, Fraud, and Abuse in TANF Act,” aims to strengthen the Temporary Assistance for Needy Families (TANF) program. It introduces measures to prevent improper payments, including aligning with the Payment Integrity Information Act of 2019. The bill also establishes a threshold for families in need by requiring states to use grants only for families with income less than twice the poverty guidelines. Furthermore, it imposes deadlines for fund obligation and expenditure and limits the use of federal funds to supplement rather than replace state spending. The amendments are set to take effect on October 1, 2027.
Preventing Waste, Fraud, and Abuse in TANF Act
This bill limits how and when states may use Temporary Assistance for Needy Families (TANF) funds and establishes an eligibility threshold for all TANF-funded assistance and services.
Currently, each state sets its own eligibility threshold for TANF-funded cash assistance. The bill establishes an upper limit on eligibility applicable to all assistance and services (including non-cash benefits) funded by TANF family assistance grants. Under this provision, only families with income under 200% of the federal poverty guidelines may receive TANF-funded assistance and services.
Further, the bill generally requires states to obligate TANF funds by the end of the fiscal year after they are paid and to spend funds by the end of the second fiscal year after they are paid. However, states may reserve a specified portion of their TANF funds for future use. (There is currently no requirement to use TANF funds within a specified period.)
The bill also explicitly requires states to use federal TANF funds to supplement, not replace, state and local funding for TANF-supported programs. (Current law requires states to spend a specified minimum amount on TANF-eligible activities and populations, known as the maintenance of effort requirement.)
States must also take specified steps to track and report on improper payments of federal funds (e.g., overpayments, underpayments, payments to ineligible recipients). Within one year of enactment, HHS must submit to Congress a plan to reduce or eliminate improper payments made by states under the TANF program within 10 years.
